Avoid premium pitfalls and save big bucks!

Are you overpaying for insurance?

A recent survey by insurer ACE Private Risk Services suggests that most of us shell out more than we need to for the auto, homeowner’s and other policies we buy—and might actually get better coverage for less if we purchased more wisely.

Here are a few tips to try.

1 Shop Around

But most people still prefer to buy from a local professional who knows them.
Today the Internet makes it easy to compare premiums, as sites such as 2insure4less.com and insurancequotes.com let you plug in your data to request a quote.

“Gather as much knowledge as you can,” advises Bill McCarthy, president of 71-year-old McCarthy Insurance in Hawthorne.

2 Bundle Your Coverage

More and more insurance companies are offering discounts if you buy home, auto and “umbrella” (supplemental liability) policies from the same carrier, says McCarthy. And if you own a condo, check what carrier your condo association uses—buying from that company may help you save.

3 Pay in Full

Insurance companies want to save on the costs of mailing out monthly invoices.
Some insurance carriers give discounts to those who pay all at once, rather than in monthly installments, for a policy that covers six months or a year. Even if you don’t pay in full, look into paying by automatic electronic transfer rather than with a check—it may help you avoid a monthly fee of $5 to $8.

4 Choose a Higher Deduction

The deductible, of course, is the amount you must pay on a claim before coverage kicks in. And you can save big-time on premiums if you’re willing to pay for small losses yourself and use your insurance as protection against a major catastrophe.

For example, homeowner’s insurance typically features a $250 deductible, but you may save up to 24% if you choose a policy that starts at $1,000 instead. “There’s a book called Don’t Sweat the Small Stuff,” says McCarthy. “Now, I wouldn’t call fixing a $500 ding on your car ‘small stuff.’ But people often worry too much about their cars, even older ones, and too little about liability. Remember: Our area is one of the most litigious parts of the country.”

5 Look Into Special Auto Discounts

You may save on your auto insurance if you’re retired (insurers figure you’ll drive less), if you’ve passed a defensive-driving test, if your car has safety features such as antilock brakes or an alarm system, or if your licensed-driver son or daughter has good grades or moves 100 miles or more away to college (companies figure they’ll drive less).

Be sure to ask about other discounts.

6 Review Homeowner’s Coverage Annually

Without realizing it, you may have made changes during the past year that qualify you for lower premiums. Did you install a backup generator? Put in a leak-detection system? Begin to store jewelry in a safe with an alarm? All these things may qualify for credits or reduced rates.

7 Keep a High Credit Rating

The culprit? Different credit scores!
Sounds like a no-brainer, but did you know your good credit rating could save you on insurance?

“If two people in the same zip code with the same kind of car and the same driving record apply for auto insurance from the same company, their rates could be $200 to $300 apart,” says McCarthy. “The culprit? Different credit scores!”

If you know your credit rating has been excellent lately, he says, it’s a good time to check with your carrier to see if that rating entitles you to lower premiums.