Some folks see insurance as a complicated and necessary evil. Others see it as a must-have form of protection and stability. Love it or hate it, we can all agree that the cost of protecting our loved ones and stuff is expensive.

Unfortunately, insurance isn’t getting any cheaper. In 2020, the average driver will spend a record-breaking $1,548 on car insurance.¹ What if you own a home? That means you need homeowner’s insurance, and the average annual homeowner’s insurance premium is about $1,211.²

And don’t get us started on health insurance! In 2019, if you were paying for single coverage, your annual health insurance premiums were $7,188. If you get insurance through work, your employer will probably foot most of the bill . . . but you’ll still be on the hook for about $1,242.³ So much for affordable!

Fed up with paying through the nose for insurance premiums? We’re right there with you. But you need to have the right insurance in place to protect everything you’ve worked so hard for. We all hate paying those premiums . . . until we go through that bad car wreck or house fire. Then you’ll be very happy you have insurance!

That being said, you don’t need to put up with sky-high rates from insurance companies. There are plenty of ways to save some money on your premiums. You just have to know where to look!

1. Change How You Pay Your Premiums

Insurance companies love when you make their job a little easier for them, and they’ll thank you with discounts and lower premiums for doing so. One of the easiest ways you can do that is to change how (and when) you pay for your insurance.

Here are a few easy changes you can make that will save you money on premiums:

• Pay in full: Instead of sending premium payments each month, you might want to think about paying for your insurance in full once a year or every six months. It’s almost always cheaper to get off a monthly payment plan since it costs the insurance company to process your payments every single month. Just make sure you’re setting aside some money each month so you’re not left scrambling when the bill is due.

• Set up automatic payments: Some insurance companies will give you a discount for setting up automatic payments or going paperless. Doing so also helps you avoid missing payments and gives you one less piece of mail to go through. Win-win!

• Pay in advance: Don’t procrastinate! If you pay your premiums for an upcoming policy period a month or so in advance, that could be another easy discount right there.

2. Increase Your Deductible

One of the fastest ways to lower your insurance premiums is by raising the deductibles on your policies.

But wait . . . what’s a deductible again? Your deductible is simply the amount you’d pay out of pocket before your insurance kicks in. So, let’s say you get in a car accident that leaves you with $2,000 in repairs, and the deductible on your policy is $500. That means you’d pay your $500 deductible, and the insurance company would pick up the remaining $1,500.

The lower your deductible is, the more risk your insurance company takes on to insure you. And that means they’ll charge you higher premiums for that extra risk. Now, if you have a fully funded emergency fund (that’s 3–6 months of living expenses saved up) or a sinking fund set aside for car or home maintenance and repairs, you can probably afford to take on more of that risk yourself by raising your deductible.

Even raising your deductible by a few hundred dollars can make a big difference. By raising your auto insurance deductible from $500 to $1,000, for example, you could save around 13% on your premiums.⁴ So if you’re paying $1,500 each year on car insurance and raise your deductible from $500 to $1,000, you could end up saving around $200 every single year. Nice!

3. Bundle Your Policies

Have a car and a boat and a home? Some insurance companies will reward you with lower premiums just for keeping multiple policies under the same roof. If you can’t find a better rate with another insurance company, bundling your policies together might be a quick way to save 15-20% off your insurance bill without breaking a sweat.

And if your family has two or three cars in the driveway, you could earn a multi-car discount by having them all covered under the same policy.

4. Take Advantage of Discounts

Are you a straight-A student? Did you serve in the military? Have you never been in an accident? There’s probably a discount out there for you! There are potentially dozens of discounts you might qualify for—you just have to see what’s available.

Here are some of the most common discounts you might find:

• Good student discount
• Safe driver discount
• Low mileage discount
• Defensive driving discount
• Affiliation discount (Military, AARP, university alumni, etc.)

That’s just for starters! Reach out to your insurance company or talk to an independent insurance agent and ask what discounts you might be able to claim on your policy.

5. Get Rid of Coverage You Don’t Need

While having the right insurance in place is crucial to your financial plan, you don’t want to go overboard and sign up for coverage you don’t really need.

For example, if you have a paid-for car you’ve been driving around since the Clinton administration (in other words, it’s really old), you might consider dropping collision coverage on your policy if your car is basically worth nothing (although in most cases collision coverage is so affordable that it’s worth having anyway).

You’ll also want to beware of unnecessary “riders” (optional add-ons to an insurance policy) that some insurance salesman might want to attach to your policy—a lot of them aren’t necessary. Do you really need a rider on your homeowner’s policy to cover landscaping and home renovation projects? Probably not. Dump it!

6. Look for an Older, Reliable Vehicle

A lot of folks shopping for a car get so caught up with all the bells and whistles of a new car that they forget to factor in how much it costs to insure it. Don’t make that mistake! Since new cars are more expensive to repair and replace, that means it costs more to insure them too.

And if you think all those advanced safety features in newer models will lead to insurance savings, think again. While blind-spot warning devices and rearview cameras might help you avoid getting into a nasty accident, they’re also a major pain to fix or replace—so don’t expect much of a discount (if any) from your insurance company.

In fact, you’d save about 18% on car insurance if you bought a five-year-old vehicle instead of the brand-new model.⁵ So keep that in mind when you’re out there looking for a new set of wheels!

7. Work With an Independent Insurance Agent

There might only be one thing worse than paying high premiums for insurance, and that’s shopping around for insurance in the first place. Whether it’s because it takes too much time or we just don’t want to deal with the paperwork, one-third of Americans with homeowner’s or car insurance have never shopped for better coverage.⁶

Shopping around for insurance and comparing quotes once a year could lead to hundreds of dollars in savings. Think of it like an insurance checkup. Saving money definitely makes it worth taking a look around!

Working with an independent insurance agent like an insurance Endorsed Local Provider (ELP) can make the process easy. They’ll shop around for you to find the right coverage at the best price, which will save you time and money!

How to Save Money on Insurance Premiums
Ramsey Solutions
https://www.daveramsey.com/blog/how-to-save-on-insurance