- Posted By steve
- 5 years ago
3 Ways To Pay Less & Get More Out Of Your Insurance
There are 3 simple ways to pay less and get more for your insurance.
But before you proceed you should keep this one principle in mind. This is a fundamental principle that we should all be taught in school (but most aren’t).
Here it is.
Insurance is designed to work infrequently and when damages are large.
Think about that for a second. That means you should NOT use it often and when you do, the claim should be large(r) in nature. (that said, always consult with your Agent on potential claims, not turning one in timely can jeopardize coverage)
Now if you’ve had a chance to REALLY digest that, for most people, that should forever change the way you set up (and use) all your insurance.
You should be thinking, how can I set up my insurance so it works with how it is actually designed to work?
That is tough for many to think, because many have been programmed to think that low deductibles are great. That’s simply not true.
Let’s take a deeper look at what you can do to maximize your coverage and keep more of your own money.
A New Approach (You can implement immediately)
1. Deductibles- carry the highest deductibles you can reasonably afford to pay for if you had a loss. This helps in two ways:
- You pay less for your insurance over the long term.
- This also discourages you from filing smaller claims that most often end up hurting you more than had you paid out of pocket. Companies rating systems look at frequency, type, and severity of claims. While filing a single small comp claim usually has a minimal impact, you will many times lose a claims free discount, and subsequent claims filed in the next 3-5 years can have a multiplier effect.
2. Liability Limits- buy as much as you can reasonably afford- this is your first line of defense in a lawsuit. It is what protects people from coming after your personal assets. Read more here:
3. Claims- Insurance works best these days filing low frequency and high severity claims. Meaning don’t file claims often, but when you do, try your best to verify that coverage is likely and that the claim is larger in terms of damages. It works worst when there are multiple small claims of any type.
This is the EXACT same strategy I use in my own life, on my own insurance policies. After all, even me, as a long time Agent, would rather not have to call in a claim. It’s disruptive, there’s never guarantees, I know it can (most likely will) have some effect on my renewal. But that said, when I finally do call them, I want have as much coverage in place and available as possible, so I can can be fairly compensated for whatever the loss may be.
Use this as starting point for building a long term plan that keeps your coverage high, more money in your pocket, and fewer disruptive claims in your life.
And be sure to find a good, experienced Independent Insurance Agent to help your specific needs.
Questions? Email me: