Insurance is that rare product you buy hoping you never have to use it.
This protection usually isn’t cheap, either.
Here are some ways to trim insurance premiums:
- Reshop car insurance: The insurer that had the best rate when you bought your coverage might not be the most competitive after you move, get married, add a teenage driver, buy a new car or improve your credit score.
It’s a good idea to reshop your auto insurance every year or so even if nothing has changed.
In a study by the Texas Insurance Department, people saved an average of $125 per year just by calling other insurers to compare rates. Weigh any premium savings against long-term customer discounts you might be earning.
Tell your company about a better quote before switching; it might reduce your rate to keep you as a customer.
Ask your insurer for a list of discounts to see if you qualify for breaks you’re not receiving. If you have safe driving habits and low mileage, you might save up to 50 percent by signing up for a data-tracking program, such as Progressive’s Snapshot, State Farm’s Drive Safe & Save or Allstate’s Drivewise.
- Increase your homeowners deductible: Raising your deductible from $250 to $500 or $1,000 can cut your premiums by 15 percent or more.
It also makes you less likely to file small claims that could boost your premiums or lead to cancellation of your policy.
Don’t forget to ask your insurer about discounts for home improvements that reduce claim risks, such as installing storm shutters or impact-resistant glass. You also could snag a discount for a home generator.
- Save in a health savings account: If your family is in relatively good health, you can save money on premiums — and benefit from an HSA’s triple tax benefit — by signing up for a high-deductible health insurance policy.
To be eligible for an HSA in 2018, your deductible must be at least $1,350 for self-only coverage or $2,700 for family coverage.
Your contributions are tax-deductible or pretax (and you may get an employer match), and the money can be used tax-free for medical expenses in any year.
If you don’t have an HSA but your employer offers a flexible spending account, you can contribute up to $2,650 in 2018, and the money escapes federal income and Social Security taxes.
FSA funds can be used tax-free for eligible medical expenses.
But you must use the cash in your account by Dec. 31 or March 15, depending on your employer, or you’ll lose it. (Some employers let you roll over $500 to the next year.)