Cut insurance costs with 3 simple practices

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By: anonymous
on 4th May,2012

The income to expenditure ratio keeps changing as the average income per household grows more and more inadequate to keep up with rising prices.
Cut insurance costs with 3 simple practices

The income to expenditure ratio keeps changing as the average income per household grows more and more inadequate to keep up with rising prices. Inflation and economic instability has added to the financial woes of the average citizen to the extent that more than 93% of the American households carry a debt load of at least $7000. In these trying times, it is imperative to micromanage your finances so such a degree that enables you to strengthen your future plans as far as money, savings and retirement is concerned.

One of the most important items that make its presence felt on your personal yearly budgets and personal finance plans is insurance. It is one of the most significant consumer purchases you make in the course of your life. All the basic forms of insurance are absolutely necessary and there is a few which you need to purchase by law.

Insurance is necessary but its quiet an unfortunate fast that if you add up all your monthly premium bills, you will find that you are spending almost $10,000 a year on insurance alone. Statically speaking, the average yearly insurance spending was $8304 per person in the year 2011. So how do you manage such spiraling costs and get a grip over the bills? Here are a few ways through which you can cut back on your insurance cost.

    Understand the product, shop and compare quotes - It is quiet understandable that shopping for insurance is not the most enjoyable or exciting prospect on the planet but that doesn't make the activity any less important. The first thing that you will need to understand is the product and the companies who are selling it. Neither does every auto insurance policy cover the same things, nor do insurers follow a standardized pricing and coverage model. You will need to do your homework, check up on the policies offered by different insurers, carefully study the extent and type of coverage that each one provides and finally, ask for quotes. Once you have the quotes from at least 3 different insurers, you can compare and contrast the options and find out which policy suits your needs the best.

    Shop and compare quotes before renewal - There are many reasons why insurance prices fluctuate. Federal policy changes, inflation, market hardness and general risk statistics may influence insurers into increasing or decrease coverage costs and premium rates. Some insurers may even choose to pull down their prices below the average cost of insurance just to capture a greater share of the market quickly. Don't make the mistake of sticking to the same insurer when the time comes to renew your policy. Do a little shopping and compare quotes a few weeks before your renewal period. You can take advantage of the situation in case you find out that you can avail cheaper rates or better coverage at the same price.

    Tweak your coverage - Set the highest deductible you can afford. The higher the deductible, the lower the premium rates. Don't set the deductible too high simply because it will be impossible to make small claims. Remember to set the deductible yourself because the default deductible amount is very small. When you are not planning on driving your car or going on a long holiday, you can drop collision coverage and save a significant amount of money. You can choose to fund a HSA account with pre-tax dollars. The money can then be withdrawn, tax free, to cover qualified medical expenses. In the long run, the HSA can also act like an emergency fund which you can use in case of major medical agencies. Make sure that you take advantage of the various discounts that insurers regularly offer which may include rebates for making payments electronically or buying combined coverage for multiple things, like auto and home, from the same insurer.

Insurance is utterly important and the stress of buying the right kind of coverage is obviously necessary. Even through financial conditions doesn't always allow you to make ‘extra' expenditures, there are simple and straightforward ways of balancing your bills and saving money at the same time.

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