There is constant talk today about cutting costs. Here are two options that might help you save a few dollars on your insurance in this rough economy.
1)Raise your deductibles:
A typical homeowner policy has a deductible of $500 and a typical auto insurance policy has $100 for comprehensive and $250 for collision deductibles. One way to help save a few dollars on your annual insurance bill is to increase your homeowner deductible to $1000 and your comprehensive and collision deductibles on your auto to $500 each. Note that when you do this you bring a little bit of the financial risk back on yourself. A good rule of thumb to help figure out if the deductible change is worth the risk is to take the savings you will get for increasing your deductible and multiply it by three. If that number is larger than the difference between your old deductible and your new deductible in my opinion you are taking on an appropriate amount of risk for the savings.
2) Drop physical damage on your old vehicles.
If a car is 10 years or older it is probably worth researching whether you should have comprehensive and collision coverage on your car (many people know this as "full coverage"). Two ways to help you decide if dropping comprehensive and or collision from your car is worth it are:
1. The Insurance Information Institute says that if your car is worth less than 10 times the amount you pay annually for comprehensive and collision coverage it isn't worth keeping the coverage.
2. Another way to analyze if it is worth keeping the coverage is to take the premium you pay for collision and add it to your deductible amount. That is the total amount that it costs you to insure your car. (i.e. Your annual collision premium is $250 and your collision deductible is $500. If you total your car you will have paid $750 ($250 in premium and $500 in deductible) before you received any money from your insurance company) If in your mind it isn't worth spending that kind of money to save your vehicle if it was totaled than you might want to consider dropping that coverage.
