Stop sticker shock: Five tips to help policyholders keep insurance costs down
Rising insurance premiums mean increased efforts by agents are necessary to help save policyholders money. The industry average cost of homeowners and auto insurance increased 7.4 and 7.8 percent, respectively, in 2003 and future increases are forecast for 2004. The Insurance Information Institute estimates homeowners will pay an average of $608 to insure their property and $871 to insure each of their vehicles this year.
“Reminding insureds that they can save money by modifying their insurance coverage can help both agents and policyholders. The agent will gain the confidence of his or her customers. Customers will save money while still receiving thorough coverage,” said Dan Kovac, personal lines manager at General Casualty Insurance Companies. “There are several simple ways policyholders can save on both home and auto insurance.”
Here are five money-saving tips from Kovac and General Casualty that agents can share to help their insureds save on insurance coverage. General Casualty insures homes, autos and businesses.
- Think twice before buying. The type of car or home can affect the price of coverage. Purchasing a house that’s close to a fire hydrant, in a community served by a professional fire department, or with newer electrical, heating and plumbing systems can lead to savings. Auto policy discounts for features that reduce the likelihood of injuries or theft, such as air bags or anti-theft devices, may also be available.
Extra amenities on a car or around the home can also affect insurance coverage. “Policyholders are liable for anything that happens on their property. Potentially dangerous additions to their homes, such as swimming pools, trampolines or even an exotic pet, could make insurance more expensive or harder to find,” said Kovac. “Sports cars or high-performance motorcycles or watercraft could also lead to higher premiums.”
- Compare coverages and prices. Get at least three price quotes before purchasing insurance coverage. An independent insurance agent represents multiple companies and can gather this information in just one visit. In addition to shopping for a good price, look for a company that handles claims fairly and efficiently and has a good rating from an industry analyst, such as A.M. Best (ambest.com) or Standard and Poor’s (standardandpoors.com). This rating indicates the company has financial strength and will be able to pay potential claims in the future.
- Buy home and auto coverage from the same company. Inquire about premium discounts if multiple policies, such as home and auto, are purchased. Some insurance companies, including General Casualty, will reduce premiums by 5 to 15 percent if two or more policies are purchased.
- Raise insurance deductibles. For consumers willing to risk more out-of-pocket costs if they suffer a loss, choosing a higher deductible will lower premiums. Raising the homeowners deductible, for example from $500 to $1,000, could save insureds up to 25 percent annually. A higher auto deductible could save 15 to 30 percent or more each year. Often this savings more than covers increased deductible costs.
- Look for other ways to save. Investigate additional homeowners discounts based on the insured’s age or working status. Those age 55 years or older and retired may qualify for up to a 10 percent discount at some companies. Home security devices, such as a smoke detector or burglar alarm, could also save money. Consider reducing coverage on older or seldom driven cars, especially if they’re worth less than 10 times the amount currently paid for coverage. Good students with a 3.0 grade point average may also earn a discount. A strong credit rating may also help lower insurance costs.
To find the greatest savings and most thorough coverage for their money, Kovac recommends policyholders consult with their insurance agents. They can help ensure policyholders receive adequate protection for their individual needs. |