If there’s one thing you can predict, it’s that the world is unpredictable. Thankfully, there’s likely an insurance policy to cover the “what ifs” of life. However, the price of coverage, your insurability, and claims history play a role in what you can cover. Learn how to make yourself an attractive customer and get the best rates for the coverage you need.
1. Keep Your Credit Score in Check
Your ability to pay for any product or service greatly impacts your attractiveness as a client. In any insurance engagement, providers will need to establish a client profile for you. After gathering your basic information, they’ll ask questions to establish your income and creditworthiness.
An insurance agent will typically run a verification of income to confirm your employment and monthly income. To learn more about that process, click here. They’ll also do a credit check to determine your reliability and habits with other financial institutions. This is typically a soft pull, so you shouldn’t expect a hard inquiry on your report while you’re getting quotes.
Strive to maintain a good or better credit score by paying your bills on time and keeping your credit utilization under 30%. Apply for new credit only when you truly need it to avoid unnecessary dings to your score and account age. Lastly, be mindful of your credit mix and maintain a diverse range of accounts that match your needs.
2. Shop and Compare Rates
Price compare to get a range of options to choose from. Check with friends, family members, and colleagues to get a pulse on which providers are fairly priced. Ask for candid feedback about the claims process, as cheap coverage and denied claims won’t help after a car crash.
Let the agent know you’re shopping around and be ready to share your current coverages. Save your current declarations page and coverage limits so you’re getting an apples-to-apples comparison.
When you receive their quote, review each line item. They may propose different coverage limits based on their actuarial valuations or company policy. Pay special attention to tricky things like replacement costs, which can vary by industry and claims volume. For homeowners insurance, this can make roof and basement backup coverage different between providers.
3. Bundle Policies for Major Price Breaks
Buy more, save more isn’t always the rule, but in insurance, it can mean big savings. Get quotes for everything you want and need to be covered to see if there are price breaks from bundling.
One provider may charge more for auto insurance but much less than your homeowners’ policy. Other providers give price cuts for adding umbrella coverage, which can close the gap on major claims or personal liability.
4. Consider a Higher Deductible
The $500 deductible you’ve kept since you were in your 20s may not be as necessary today. If you keep enough set aside in savings to be able to shoulder a higher deductible, it could mean big savings over time.
Ask for quotes that include varying deductibles to see how you can save. While filing a claim is never the goal, it’s smart to consider its likelihood, the cost, and your annual premium. If you haven’t had a car accident in years and you drive infrequently, increasing your deductible can mean saving on your regular payments.
Some providers require different deductibles for certain claims, like roof coverage. Hail and wind damage are among the most common homeowners insurance claims. Many providers require two times the deductible for their coverage. If you’re budgeting for this amount, it may make sense to match it to your overall policy deductible.
5. Opt-In to Discount Programs
Many insurers offer discounts for customers who agree to certain programs and account settings. Several discountable activities are ones you’d do anyway, like opt-in to paperless billing or auto-pay. These programs can provide a few dollars’ savings each month, doing what you already do.
Other programs require a little more legwork and willingness to share data. One popular discount is a safe driving discount, which goes beyond avoiding speeding tickets. Customers typically receive a Bluetooth device that syncs with their vehicle and phone. The device reports driving behavior like braking, cornering, and even phone usage.
To qualify for this discount, you’ll need to be comfortable allowing certain access to your device and report mileage periodically. Many clients save hundreds of dollars a year through these programs, so they’re worth considering as you shop.
6. Get Accurate Coverage
If it’s been a while since you’ve shopped insurance rates, it’s possible your coverage types need a review, too. Examine your current coverage and life needs to pinpoint current needs. If you’ve expanded your family, you may need additional life insurance and lower home and auto deductibles. With more demand on your income, these changes can ease your stress during a claim.
Conversely, you may have forgotten to add basement backup coverage, which is often an add-on to homeowners’ policies. If your car is paid off, you may or may not need replacement coverage on it. Your coverage needs will be unique to you; take time to review quotes and imagine the impact of a claim on your life and your wallet.
Get the Coverage You Need for a Fair Price
The monthly premiums can add up, but when you need them, they’re there. Do your research, get multiple quotes, and compare coverages, rates, and deductibles across the board. Strive to choose a provider whose reputation, claims process, and service match the price you pay. Schedule time each year before your policy renews to check and compare rates among other providers. By being vigilant, you can ensure you’re paying a fair price to cover the people and things that matter most.
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