12th December 2008
Worried consumers are cutting back on everything these days — including insurance.
But there are a number of steps they can take to lessen the impact of an auto, homeowners or life insurance policy's costs and still keep their coverage.
"The way to get the most bang for your buck is to raise your deductibles," said Ken Daveler of Stafford County, who's in a good position to know. He's president of both Alliance Insurance & Financial Services in Washington and the Professional Insurance Agents Association in Virginia and the District of Columbia.
People who haven't updated their car or homeowners insurance policies in a while may still have deductibles as low as $100 or $200, whereas most people now put that figure at $500 or even $1,000, he said. Raising deductibles can bring down the cost of insurance.
People who have older vehicles, which is more common today partly because new cars are expensive to insure, also might consider eliminating the physical damage portion of their coverage, he said.
"Beyond that, the next thing is to make sure their home is insured for the true replacement cost rather than for what it is worth," Daveler said.
The total value of a house includes the land it's on, but land isn't at risk from theft, windstorm, fire and other perils covered in a homeowners policy. Factoring in its value when deciding how much homeowners insurance to buy means the premium will be higher than it should be.
Other tips from the Insurance Information Institute, which is based in New York, and AccuQuote, an online life insurance company, include:
• Buy your home and auto policies from the same insurer. Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies.
• Maintain a good credit record. Insurers are increasingly using credit information to price auto and homeowners insurance policies.
• Stay with the same insurer. If you've kept your coverage with a company for several years, you may receive a special discount.
• Seek out discounts. Companies offer discounts to auto-insurance policy holders who have not had any accidents.
Source: dailypress.com
