Ways to Save Money When Buying Insurance

Knowing what insurance you need is often a confusing prospect for people, who are never really sure if they are getting the best value for money. Here are a few tips for saving some money when purchasing insurance.

Increase excess payments
The excess is the amount of money you pay to make a claim and increasing these means the insurance company will reduce your premium. This will be the biggest saving for any kind of insurance taken out.

Unless you are really unlucky there probably won’t be the need to make a claim more than a couple of time over a period of 30 years or so. As a result you will have to pay more for each claim, but this will have been more than compensated for through lower premiums in the years where no claims have been made.

Using the same company for each policy

Insurance companies invariably offer policies for different types of insurance such as home, car, health and travel amongst others. Taking out more than one policy with the same company can often lead to large reductions on premiums.

This is worth investigating when shopping around for insurance, as some companies will offer discounts for having more than one policy, and in some cases the more policies the bigger the discount. Reductions may also apply when multiple people are insured under the same policy.

Having multiple policies with the same insurer can also be logistically easier.  For example it will be easier to make a claim across all policies should a car crash causing serious injury or death occur as one loss adjuster will be involved in the case as opposed to two or three from other companies.

Getting insurance at an early age

The earlier you get insurance the better as it can save a lot of money in the long run. Premiums for life and health insurance will be lower as the insurer will consider you to be low risk.

Premiums will increase as you get older, but starting your policy from a relatively low age means you are more likely to be given concessions and discounts earlier. Insurers often provide concessions and discounts to long-term policy holders, so the earlier you qualify for these, the more money you will save.

Car insurance can seem to be very high when you are still a teenager, but again it pays to have comprehensive insurance at that young age. Assuming your licence is clean some drivers will qualify for Rating 1 from the age of 25 to 30 through to the rest of their driving days.

No matter how many accidents you have as a lifetime Rating 1 customer, you will still always qualify for the cheapest car insurance. This could potentially save a driver thousands of dollars.

Getting the right insurance

It is important to know what your insurance needs really are in relation to life style or type of possessions amongst other things. Having the wrong insurance or not being covered for what you need can mean getting far less than you expect when a claim is made.

For example if you travel a lot of times throughout the year it is cheaper to have annual multi-trip insurance than keep paying for travel insurance each time you go. It pays to be as specific as possible when taking out policies, as their may be concessions available to suit your requirements, either saving money or providing more comprehensive cover.

Annual payments

Whilst making monthly premium payments can be more convenient to some, it works out much cheaper to pay them annually. This is not always the case in other countries, but certainly in Australia taking the annual option over many years can save thousands of dollars.

Looking out for policy sundries

Some insurance policies offer sundries that can often add great value such as courtesy cars, discounted cinema tickets or discounted gym membership. The value of these additional benefits in some cases might end up equating to the value of the annual premium.

Using the benefits will not have any bearing on your premiums as the insurer will have negotiated wholesale deal with the various service providers. In fact the insurance company will often get commission for the sundry services you use, and will encourage you to use them albeit within a set annual allowance.

Understanding the policy

It is crucial to read through your policy carefully, including all the small print as this can include important exemptions that may have serious implications for a future claim. It is easy to overlook this when signing your policy agreement, and in fact 90 percent of people have no idea what they are signing when they put pen to paper on a legal document.

Ignorance through not reading a policy thoroughly and understanding what it contains is not an excuse if your claim has been turned down because you weren’t covered. This can be a very costly mistake as the premiums paid over a period of time will have been a complete waste of money.

Insuring valuables

Insuring valuable jewellery or an expensive painting may not be the first thing you think of when shopping or at an auction. However, just as you would when buying a car, it is important to bear the cost of insuring the item in mind as this can make a serious dent in your monthly outgoings, and may make you think twice about purchasing the item.

It is important to insure valuable individual pieces as the cost of replacing them if they were stolen or damaged could run in to thousands of dollars. Buying items that fit your insurance budget will ultimately save you money.

Using Superannuation

It is possible to pay for insurance using superannuation, even though it is strictly speaking sitting there doing nothing until your retirement. If you have a Self Managed Superannuation Fund or are employing the services of an insurance broker, this is a much easier process.

Even your employer’s superannuation can be used to pay for life insurance, which means less disposable income being wasted on insurance. It also takes away the pressure of making the payments yourself as this is done by the superannuation company.

Employing an insurance broker

Finding the right insurance in amongst the 5,000 or so products in Australia is time consuming and often confusing. Employing the services of a reputable insurance broker can save a lot of time and money as they understand and know all the fine details of each insurance plan, the companies and how to make and follow up on a claim.

On average, having an insurance broker on board with a claim can produce results 40 percent quicker than a normal retail claim. Not only that, but a broker can probably negotiate huge discounts as they can get wholesale rates by committing many policies to a specific provider each year.