The Expert Podcast

so in the days of rising interest rates rising taxes rising fuel prices you may look at ways to try to reduce some costs what about your insurance. can you reduce your insurance. maybe it's for auto your homeowner's your business insurance today were gonna talk about ways you can reduce your cost of insurance your annual premiums. let's talk about home owners but some of this may apply to vehicle auto and also commercial lines insurance. one thing to look at is your deductible. if you're carrying a very low deductible that's gonna affect your premium quite a bit. let's say for example you have a two hundred and fifty dollar deductible on your homeowners or on your auto that means is if you have a claim you'll pay the first two fifty and then the insurance company pays the rest. so if you have a five thousand dollar claim they will give you four thousand seven hundred fifty dollars you pay the difference. that low deductible might be jacking up your premium quite a bit. what if you went to a thousand dollar deductible. well you pay the first thousand dollars well instead of getting four thousand seven hundred fifty you'll get four thousand yeah you have to come out of pocket more money but you have to weigh the odds. if you have some cash if you have the thousand dollars liquid cash if you're not just living paycheck to paycheck because you might find that raising your deductible to a thousand can really cut your premium quite a bit. the other reason why a deductible is in play is if you intend to make a claim for a low amount. what if you have a seven hundred dollar six hundred dollar damage to your car or to your house well in reality if you have a claim that low you probably don't want to put in a claim anyways because all it's going to do is get you a very small amount of money and it's gonna raise up your rates you'll now have a claim on your policy on your claims history. insurance companies run clue reports which are claims history reports even if you change insurance companies. so it usually is not a good idea to put in claims for small amounts of money. doesn't benefit you that much. remember we're insurance agents and brokers but we're not your insurance agent so before you take action on any of this advice make sure you get good feedback from your insurance agent in your area that covers your property or maybe get legal advice from an attorney. this is just general advice it doesn't apply to everybody but it's just a good rule of thumb. also make sure you're not putting yourself in financial harm it remember the reason you have insurance to protect you from having an expense you can't afford. so if you can't afford paying seven hundred dollars for damage to your car to your house you probably don't want to have a high deductible. but in most cases if you have the money you'll save a significant amount and remember you don't have claims every year you probably shouldn't have. what about your homeowners are there any coverages that you have you may not need. do you have any high value items camera jewelry that have scheduled coverages how much does that add and is it worth it. maybe it is maybe it isn't. one thing you might want to add if you're worried about catastrophic claims is adding coverages on the other end the high end. if you have let's say a one million dollar limit on your policy you might want to add an umbrella policy that raises it up to five million. for most consumers if you add on an umbrella policy to your existing homeowner's or auto even if your commercial lines insurance it might only a few hundred dollars a year to have broad coverage in and over and above a million. because here's the thing think about your claims if you have an eight hundred dollar claim it's not going to bankrupt you it's not gonna put you out of business but if you have a three million dollar claim and you only have a million dollars in coverage that could be a deal breaker. so look at if you're gonna spend the extra money put on the back end of your policy put it on the top and and ask your broker or agent about an umbrella policy even a commercial umbrella. because those are the things that can really help you avoid a catastrophe. the three or four or eight hundred dollar claim is not good catastrophe. as a matter of fact I just had a an incident back a few months ago where the driving down the road truck went by a big rock flew off the truck smashed a window of my vehicle. now some states have automatic glass coverage on policies in this particular instance there was no coverage. the windshield will cost six hundred I have a five dollar deductible I could have put in a claim and they were paid a hundred dollars is it worth it no so I just came out of pocket and bought me a new windshield. and those are the kind of long term decisions to make because putting in a claim to get me a hundred dollars is not going to really affect the finances but it will affect my rates going forward. are you driving less maybe you can have a mileage adjustment to your policy. what about your homeowner's are there any endorsement that you're not using for additional coverages. what about on your commercial policy are you at the same location do you have the same square footage. during the pandemic many people downsize less simple less office space less retail space those can cut your premiums. go through with your agent what the if there's any line items that can change that would reduce your premium you might find some savings there. you don't want to reduce coverage beyond what you really need but there may be things that are just costing you money without having a benefit to you. remember rates are gonna go up generally anyways with inflation. once the insurer start to see claims come in at the higher prices for repairs for materials they're gonna have to factor that into your premium so that's gonna start happening anyways in the next couple years. so you may want to do some things to offset some of that increase to keep the money in your pocket.