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Comparison shopping is one of the best ways to lower your costs for insurance, but you have probably heard that before. But you may not have considered the other six strategies outlined below.

#1 Insurance Comparison Shopping

We’ve all heard that we should shop around for coverage every so often. So, let’s not spend too much time on this one.

About three years ago this writer had a personal, and due to my profession almost embarrassing, experience due to a failure to do any car insurance comparison shopping. I had failed to shop around for years. I was eventually contacted by my auto insurance agent when he changed companies. He offered me a much lower insurance rate. (I was not selling auto insurance myself at that time.)

I was pleasantly surprised that I was able save over $500 a year between my auto and homeowners insurance policies. I was happy about that but at the same time I realized that I could have probably saved $500 each year for the previous three or four years. Shopping around for a better insurance policy or rate quote is simple and obvious, but this idea should not be overlooked.

Please call 203-374-3645 if you would like us to help you with your home or car insurance comparison shopping. Starting in January of 2017 we will have 27 auto and homeowners companies, so there is a good chance that we can lower your rates.

#2 Raising your Deductible or other Cost Shares

Consider raising your deductible to the next highest level. This will reduce your monthly premium; it will also reduce your coverage and increase your exposure. However, your premium will likely go down by a much greater percentage than your coverage will.

This strategy works differently with different types of policies. Auto and homeowners policies have deductibles for the collision and comprehensive coverage. Medical policies have deductibles, copays and/or coinsurance. (You might consider a high deductible health plan with a health savings account. You might reduce your costs and manage exposure by combining an inexpensive accident policy with a health insurance policy with a higher deductible.) Disability insurance policies will have waiting periods than can be increased.

Increasing your cost shares usually makes sense from a statistical or mathematical standpoint. However, you should only go as far as your comfort level allows. If using this strategy will affect your peace of mind, don’t do it.

#3 Take Advantage of Insurance Discounts

Not every type of policy offers discounts but many do. You will typically get a substantial discount when you have your auto and homeowners policies with the same insurer. (You don’t even have to own a house. Companies will often offer this discount to renters. Since renters insurance is so inexpensive, you may, in effect, get a free renters policy by using this strategy.) You may get a lower rate on a Medicare Supplement when you have coverage for both you and your spouse. The same may be true for long-term care insurance.

Life insurance will typically cost less per thousand when the amount of coverage exceeds certain breakpoints. For example, a $100,000 life insurance policy might cost less than a $95,000 policy.

#4 Reduce Your Use

The whole point of insurance is to reduce your financial exposure relating to things you cannot control or predict. However, often we do have some degree of control and can reduce our potential exposure. Do we really need to drive to the store when it’s snowing just because we are out of our favorite food?

An accident can increase the cost of your insurance policy, or worse it can cause a permanent injury or worse…. By all means don’t lose your job by staying home every time it rains, but be thoughtful about the times when you might expose yourself to unnecessary risks to your health and property.

#5 Compare Apples to Oranges.

Your Medicare Supplement plan may be better or worse than a Medicare Advantage plan. These different types of plans cover medical expenses for Medicare beneficiaries very differently but they are both designed to reduce your financial exposure when you have a medical expense. One category may be better for you than the other.

Other apples to oranges comparisons include dental insurance and dental discount plans. Dental insurance typically offers better coverage but the full benefits of a non-insurance dental discount plan start sooner and these plans are less inexpensive than dental insurance.

There are other pairs of fraternal insurance twins. Short term health insurance plans offer less coverage in some ways and most policyholders will pay the “Obama Care” tax penalty, but many are choosing them over traditional health insurance plans. As mentioned above, many are combining accident plans with medical insurance policies.

#6 Don’t Buy Unnecessary Insurance

Not every kind of insurance policy is crucial. You probably want a substantial amount of life insurance if you have young children. The state requires that you have auto insurance on any car you drive. If you have a mortgage, your lender will require you to maintain homeowners insurance.

But other types of insurance are less crucial. Paying for a root canal can be almost as painful as the procedure itself. However, if money is tight you may want not want to get dental insurance or pet insurance.

#7 Buying More Expensive Insurance

Buying more expensive insurance certainly doesn’t sound like a strategy for saving money but bear with me for a minute. There are many cases where paying more to the insurance company can result in your paying less overall.

Quite a few of my clients have serious medical issues. The math often tells them that it is in their best interest to purchase a plan with one of the highest monthly premiums.  (Shopping around comes into play here. The most second or third most expensive plan is often as good or better than the most expensive plan.)

There are many ways of lowering your cost for insurance. Although comparison shopping is the strategy touted the most often, and possibly deservedly so, there are many other strategies that can help you keep more money in your pocket.

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Alston

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