We all love hacks (tips, inside scoops). Here are some insurance hacks I’ve learned during my 17 years in this business.
Stop looking for the cheapest policy.
- You’re not buying a burger. Don’t be fooled into thinking you can make an “apples-to-apples” insurance comparison. There are always differences. Sometimes the difference is in coverage, but more often the differences are the intangible aspects of service and ease of use. (You can eat cheap from a vending machine, but you’re on your own if you have questions or concerns about the food!)
- Talk to a Pro: Insurance is a serious contract. Make sure you talk to a professional agency that can help you understand your unique risks. They can help you choose a plan that fits your needs. You can do-it-yourself, but who can you hold accountable if things go wrong?
- If you don’t understand your insurance plan, you won’t trust any insurance company or anyone selling it. The cost of your insurance makes more sense when you understand the value of the protection your insurance is providing.
Bundle your policies with one insurance company and, (more importantly) one AGENCY.
- If you think you can beat the system by mixing and matching your policies with different companies, you can try. In the long run, how much have you really saved? Enough to splurge on a pepperoni pizza once a month? Plus, you’re doing the work an insurance agent will do for free. (Remember, you don’t pay an insurance agent, they’re paid by the company.)
- The more insurance policies you have with one company the longer you are likely to stay with that company. Therefore, they will provide very generous discounts to their customers who “bundle” all of their insurance with them.
- This will build stability in your plan. When you file a claim (and you will), having multiple lines of business with the company gives you a little more “clout”. It certainly will give you more clout with your insurance agent (if you have one).
Carry high limits of liability coverage.
- This is the only part of your insurance policy that protects you in a lawsuit. You don’t have to be a millionaire to be sued!
- The average injury claim in Oklahoma results in over $65,000 in medical bills. If you are carrying state minimum insurance, you are going to be in the hole $40,000. (But don’t worry, they can put you on a payment plan.)
Carry a high deductible.
- Insurance is meant to be used in a financial emergency. Unfortunately, insurance has come to be a “maintenance plan” to many consumers because they don’t have a thousand bucks in the bank.
- Think you can’t save any money to put in an emergency fund? A high deductible will reduce your insurance cost significantly. Start there. Take that savings and start actually saving it. A little bit of something is better than a whole lot of nothing!
Have an emergency fund for financial emergencies that will no doubt arise. (If you don’t do this, you can’t do number 4 and this list loses a lot of punch!)
- Remember, your insurance coverage starts with your deductible.
- It doesn’t matter what your insurance deductible is if you don’t have any emergency money saved up.
- This “emergency fund” isn’t always for emergencies. Think about how many financial opportunities people have to walk away from because they don’t have any extra money.
Every part of our life has an economic component.
Being honest about what are economic needs and what are unnecessary “wants”, is a difficult conversation to have with yourself, let alone with someone else.
But if you are always looking for ways to reduce your costs on things like:
- Cell phone service
- Television/entertainment services
…you’re ignoring the elephant in the room…YOU (and me, if I’m being honest).
See, most of us want to look at the price we are being charged for professional services instead of looking at our own purchases on things which are completely unnecessary.
Pay yourself first: The first “payment” you should make with every paycheck is to yourself. Call it your savings account, emergency fund, whatever. Unfortunately, most of us save only if we have something “left over”.
The average 44 year-old in America has a savings account balance of $5,000. That’s not too bad, right?
If that sounds like you, then why do you still have a $500 deductible on your car or home insurance? I’ll tell you why. You have probably looked at the savings to be had by carrying a higher deductible and decided the savings “wasn’t enough”.
So, you spend more on your insurance premiums.
Statistically, a person will have an auto accident once every 17 years! Home insurance claims are filed about once every 10 years. So, why the fear of a higher deductible? Most of us are pretty pessimistic, apparently.
Some people fear having a claim.
Most of us will file an insurance claim, there is no question about that. But if you have the proper plan, and you have an emergency fund, your fear is unfounded.
Please don’t misunderstand. Insurance is a serious and necessary part of our life. But the need for balance between excellent coverage and affordability is something which takes more thought than some people are willing to invest. It’s also a more complex issue for some than others. So, professional advice is something I would absolutely recommend.
We would love to help you create the most efficient insurance plan for your family. We can even help you establish a consistent savings plan, if you want to have that conversation.
Call us at 405-340-0606
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