Saving on Insurance: The multi-line discount and higher deductibles

Every year we spend a lot of money on insurance. We have to carry health, life, homeowners (or renter's), auto, and the list can go on. The rates can vary widely and it is definitely worth shopping around annually to get the best rate. You should also compare rates with higher deductibles to save money.

The best method for shopping for insurance is to start your search for auto insurance. It tends to be the most expensive and varied of all the types of insurance. Once you have located the best rate be sure to compare the rates at a $500 versus $1000 deductible. I have found that the difference in the annual price is $500 or even more. You are better off putting the $500 difference in savings so you earn interest on it instead of needlessly spending it on insurance premiums.

Once you have located the best auto policy for you the next step is to have them quote you on homeowners (or renter's) insurance, life, and liability then ask for a multi-line discount. Having more than one type of insurance at the same company will save you money on both! The other types of insurance rates do not vary nearly as much so you do not have to worry about getting the best deal one each one. Focusing on auto and a multi-line discount will ensure you a good deal all around.

Raising deductibles on all types of insurance will lower the premiums. The best strategy is to raise the deductible and put the difference in premium into emergency savings until you build up enough "self insurance" to get back to the original deductible. Once you have built up enough to cover the amounts you can take the difference and add it to other goals such as retirement savings and debt payments.

Suggested Deductibles by Insurance type:

  • Auto: $1000 - This can be the biggest money saver!
  • Homeowners: $2500 - Claims are rarely made. Be sure that the deductible meets the requirement of your mortgage holder but no less!
  • Health: This really depends on your current state of health but I suggest no lower than $1000 for relatively healthy people.
  • Renter's: $1000 0r higher - Furniture and appliances are expensive. In case of fire or theft this is worth the negligible monthly premium.
Following the above method will most certainly save most people money in one way or another. The multi-line discount tied in with higher deductibles can save hundreds per year. We are all looking to cut expenses and this is one easy way to do so. Getting quotes on insurance is free and does not take a really long time to do. Start today and you will be pleased with your efforts!