Playing with your insurance premiums

I sat down one night and looked into my insurance bill and figured out how to lower my bill by leveraging my emergency fund to reduce some of my expenses, I didn’t want to lose the coverage I had but tweak with my deductible to lower my costs and move most of that money into either savings or other investments.

My insurance is astronomically high because I have a family of six and with varied ages. I have a great insurance provider which gives you the cheapest rate and best coverage, but that doesn’t mean I cant squeeze a few more dollars out of them. I really hated the fact of paying $2910 for my car insurance and $1250 on my home insurance because it seemed an unfairly high, but what can you do? its INSURANCE, peace of mind and all that other blah we get pitched about every day.

The Strategy Explained

If you have a small emergency fund set up this is the opportunity for you to really start making money in the bank passively begin working for you in a number of different ways. Insurance is the transfer of risk and you must pay a premium for that risk to be taken by your insurance provider.

If you have $1,000 or $10,000 dollars saved in your bank account, its time to earn more than 0.02% interest.

Step 1: Review your insurance carrier and shop around every year for a new one carrier 

Every business is competing for your money and why should you be loyal to a company if at the first insurance claim they begin to raise your rates. So, feel free to shop around and now that everything is alone it is very convenient too! Ask for the same coverage you are currently provided and try to beat that price!

Step 2: Adjust the deductibles and take out any unnecessary coverage you don’t need

Deductible affects the price of your premiums and while no one wants to get in an accident tomorrow you need to ask yourself how likely you are to get into an accident and if a higher deductible make sense. If you can save $50-100 dollars per payment then you could cover the cost of the deductible in a year if you had chosen the $1,000 deductible.

Also, look at services you wouldn’t need a rental car or towing services. I personally don’t need those services because I have a large family and we can manage without a car for awhile and I have a lot of friends in the towing industry that can give me a reasonable rate.

Step 3: Don’t underinsure yourself just to save a buck on the big-ticket items

Your house is your base of operations for everything and that type of insurance requires you to understand the vulnerabilities of your home, but if you raise the deductible for this could translate into a lot of cost savings in the long run.

Step 4: Move the money saved into another income producing vehicle or emergency fund

The last step is the most important and the reason we are changing insurance companies in the first place. Usually from the money saved you can move the money into the emergency fund to keep it at an acceptable level in case something goes wrong or move it to an investment vehicle that produces more money for you in the future like a higher yeilding savings account.


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