Yes, inflation has returned, especially in the cost of building materials, which have risen 20.4% which is twice the overall CPI. If it cost more to fix your home if it’s damaged, your insurance is going to go up too.
So what can you do minimize the rate change, or even reduce your rates? Here’s 5 great tips, in no particular order.
#1 – Improve your insurance (credit) score.
An “Insurance Score” and a “Credit Score” are not the same thing, but they are pretty similar. Just as having a good credit score lowers your interest rates and hundreds of other things, it lowers you insurance cost too. This can take some work, but it is something you have a tremendous influence over and it will make a big difference for you in the long run. I personally recommend the app Rocket Money and/or a Laura Sanford at Renewed Hope Financial Coaching.
#2 – Review your coverages with a trusted advisor.
If the last time you quoted your insurance you got an “apples to apples” quote, you probably overpaid for the wrong coverage. Don’t feel bad, it happens way too often. Many agents put a lot of extra coverages on a policy so they never have to tell you something isn’t covered, even if it is a small loss. All those extras add up, and some are just plain expensive. If you are willing to take some small risks yourself, and you understand this because your advisor is really interested in getting you the best possible value, you can save a lot of money.
#3 – Take a higher deductible if you can afford it.
This actually goes along with the previous tip. Insurance is designed for large losses that are unlikely to happen – like your house filling with smoke…or worse. Most people have a $1000 deductible, which is the max out you pay if you make a claim. But if you can afford a 2500 deductible or higher, this potentially will save alot of money. You need coverage for things that will cause a serious financial burden for you. If you can keep some money in a savings account for those smaller emergencies, you’ll end up with more money in your pocket.
#4 – Do NOT shop around for your insurance every year!
The practice of getting comparison quotes for your insurance (auto, home and almost everything else) seems like a good practice because when you do it, you often can save a small amount. However, almost every personal insurance company considers how long you were with your previous company when they calculate your rates. If it has only been a couple years, the rates are higher than if it has been 3 – 5 years or longer. Companies want long-term relationships and they’ll give you a better rate if that is the kind of client you are. The reason you get a slightly lower rate when you shop every year is that every company is giving you a higher rate. Most companies also have “longevity” discounts they give to people who have been with them for 5 years or more. If you change companies too often you’ll never get any company’s best rate.
#5 – Put your insurance all together with someone you trust.
We may have saved the best for last. Most companies offer 10% – 15% discounts when you put your auto, home, umbrella and even life insurance all together. And besides just those savings, when you have a trusted advisor who regularly reviews your coverage take care of this, they’ll help you when your life changes (like having a child, remodeling your home, you get a new job…) and it will save you time, aggravation and worry. Who doesn’t want that?
Yes, of course we think Preferred is the best team to help you with all these, so give us call.
