Buying Insurance

January 14, 2012

Insurance has become a necessity. With health and life insurance and automobile and homeowners’ premiums, the monthly cost of insurance can be quite high. Comparison shopping for the best deals has become just as necessary as buying the insurance itself.

Start with major insurance carriers. Most offer free quotes that you can complete online or over the phone within minutes. Get a quote from every major carrier and take note of how easy it is to use their website or get in touch with a customer service representative. The last thing you want is cheap insurance with a company that is going to make your life miserable when it comes to making a claim. Paying a little extra for a reputable service that will be there when you need it is always better in the long run.

Figure out what your state requires. There are many aspects to auto insurance and some states require more coverage than others. A good insurance agent will be happy to inform you which lines of coverage are optional, helping you to save money.

When buying homeowners insurance, think about ways in which you can reduce your home’s insurance risk. You may be able to lower your premiums by installing more smoke detectors, updating an old heating system, or even rewiring the house. Installing a security system or high-grade siding and roofing will also lower costs. Some of these upgrades can be costly, but an agent should be able to let you know what can be done in order to bring your premiums down.

Check for insurance carriers that offer discounts. You can often get a discount on auto insurance, for example, by buying homeowners or renters insurance through the same carrier. There may also be discounts available based on your age, driving record, or even club memberships. Some companies even base their costs on your credit history, so try to bump up that credit score if this is the case.

Consider raising your deductible in order to make lower monthly payments. You also want to make sure that you will be covered for any possible disaster, so read the conditions and coverage terms carefully before signing anything. For example, some insurance companies will void your policy if you own what is considered to be a dangerous breed of dog. They may even do this if you own a trampoline or swimming pool. Always read the fine print in order to protect yourself and ask questions if you aren’t sure about what is considered risky.

As for health and life insurance, buying when still young will save money because you’re considered at less risk for illness or death. Smoking will drastically raise your insurance prices, so kick the habit. You also need to make sure that your health insurance never lapses, because you could end up paying for pre-existing conditions, which will only drive up your insurance premium.

Don’t buy more insurance than you need. Flood insurance is not usually included in homeowners insurance, but don’t purchase it if you don’t live in a flood zone or know that it is highly unlikely that your home will ever flood. If you are concerned about potential water damage from backed up drains or sewage systems, talk to an insurance agent about other options.

When getting a new mortgage, see if the homeowners insurance can be bundled with the home loan so that you are making one monthly payment for both. Sometimes, this can turn out to be a much better deal than buying insurance separately, but comparison shop anyway. You never know where the best deal might be.