5 Ways to Lower Your Insurance Rates
Consumers often call our department to ask how to save money on insurance, and it’s an important topic to discuss. Our mission is to educate consumers on insurance and also show them ways to save money when purchasing policies.
Insurance companies consider many factors when determining your rate. While many of those factors are out of your control, here are a few ways you may be able to lower your premiums.
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Shop around!
This point cannot be stressed enough. It takes time and effort to shop for insurance from different companies, but it will pay off. The Oklahoma Insurance Department website offers information on typical rates charged by major insurers and questions to ask potential agents before receiving quotes.
Also, check consumer guides, recommendations from friends and family and what insurance agents have to say. Before making a choice, you should have a good idea of price ranges and what companies are offering the lowest prices for the insurance coverage you need. Ask agents what they would do to lower your costs. Price is not the only factor to consider, however. Keep in mind the quality of service for when you need assistance with filing a claim. You should also check each company’s complaint history through the National Association of Insurance Commissioner’s Consumer Information Source, https://content.naic.org/cis_consumer_information.htm.
Raise your deductible.
It is often recommended to have a deductible of at least $500 on your homeowners policy. The deductible is the amount of money you will pay in the event of a loss before your insurance company pays the claim. If you can afford to pay more money towards a loss in the form of a deductible, raising it to even $1,000 can save quite a bit on your premium. Keep in mind that policies often have separate deductibles for wind and hail losses. Typically, the deductible is one or two percent of the insured value of the property.
Bundle, bundle, bundle!
Buy your home and auto policies from the same insurer. Insurance companies that offer homeowners, auto and liability coverage will generally give a discount anywhere from 5%-15% off your premium if you buy two or more policies. This does not guarantee a lower price overall, so make sure that the premiums with the discount do not total more than if you bought policies from different companies.
Grab your discounts!
Improve home security and ask about other discounts. Don’t be afraid to ask your insurance company about available discounts. Companies often offer several different types, but not all offer the same discounts. Common discounts include a percentage off for installing smoke detectors, burglar alarms, monitored security systems and deadbolt locks. A high-end sprinkler system could also trim your premium, but they can be expensive. Find out what type of sprinkler system your insurer recommends and if the annual insurance savings will offset the cost.
Review the limits in your policy and the value of your possessions at least once a year.
Bottom-line, you want to have the coverage you need but do not want to spend money on coverage you do not need. Your policy should cover your house and major purchases that are inside of the house. Whether those items are covered at replacement cost or actual value will affect your premium. And, if you have items, such as jewelry, technical equipment and art covered under a separate endorsement, consider whether those items have gone down in value since you insured them. If so, you may want to reduce or cancel that extra coverage from your policy. You do not want to run into a problem with too little coverage, but by reviewing your possessions and policy each year, you can save some money and be protected from a loss.
For a quick glance at how to find the best rate for your homeowners policy and to better understand rates in Oklahoma, visit the Oklahoma Insurance Department online at https://www.oid.ok.gov/insurance-basics/.
AUTO
Remember the factors that determine the price.
Many factors determine the cost of an auto insurance premium. Some factors, such as driver’s age, gender and location, cannot be changed, but do come into play when the premium is determined. Other factors may be adjustable and can help lower the cost, such as driving record, frequency of vehicle use, credit score and the type of vehicle being driven. When looking to lower premium costs, lowering or improving any of those four factors may help cut the cost.
Shop and compare.
Different insurance companies charge different rates for the same coverage, so it is important to shop around. Get quotes from several companies before buying, and make sure to compare equivalent policies. To give you an idea of the differences in cost, take a look at the rate sample comparison available at www.oid.ok.gov under the “Consumers” tab.
It is also important to consider other factors, such as financial strengths and customer service when shopping for insurance providers. A.M. Best (www.ambest.com) and Standard & Poor’s (www.standardandpoors.com/ratings) are two of several rating companies that can be checked for the financial health of insurance companies. Obtaining an inexpensive policy when trying to save money will do no good if the insurer is not financially sound. Even before buying a car, getting quotes for specific vehicles is a good idea. Auto premiums fluctuate depending on the car’s features, the cost to repair it, its overall safety record and the likelihood of theft.
Raise deductibles
Increasing policy deductibles can save money on premiums. A deductible is the amount paid out-of-pocket on a claim before the policy pays the loss. For example, increasing a $500 deductible to $1,000 could significantly reduce the premium. Check with your insurance agent to determine how much you’ll save with a higher deductible. Remember, raising the deductible will mean paying more out-of-pocket when you have a claim. Also, keep in mind that filing multiple claims, even small ones, may result in larger premiums due to applied surcharges.
Reduce coverage on older vehicles.
Another way to decrease costs when reviewing coverage is to consider dropping comprehensive and collision coverage on older cars. It is often not cost effective to purchase full coverage on cars worth less than 10 times the premium.
Bundle and check out available discounts.
Many insurers give discounts when two or more types of insurance are purchased, which is called bundling. Purchasing homeowners and auto insurance from the same insurer is one example. A reduction may also be offered if there is more than one vehicle insured with the same company. Other optional discounts may be available for anti-theft devices, anti-lock brakes, airbags or daytime running lights, good student grades, driver education courses, defensive driving courses, no accidents or moving violations in three years and good credit records.
For more information on auto or other insurance products, consumers are urged to call the Oklahoma Insurance Department’s Consumer Assistance Division at 1-800-522-0071.