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Cutting Cost: Find the Best Deals on Insurance

Updated on January 26, 2010

 Finding the best deal on insurance is not as simple as choosing the company with the lowest price. You need to make sure the company meets your needs, offers coverage in the state where you live, and has a good reputation.

Check Reputation

One way to check the reputations of the companies you are considering is to ask friends, relatives and co-workers who have filed claims, what their experiences were. Another way, according to Alessandro Luppa, president of the national Association of Insurance Commissioners and superintendent of insurance for the state of Maine, is to check their complaint ratio, if your state keeps a log of complaints. If a company has a high complaint ratio, consider looking elsewhere.

You also need to see that the companies from whom you are considering purchasing insurance are licensed in your state. This information can be found through the NAIC Web site.

Since insurance it to protect your big investments and may not be needed for a long time, it is essential that the company you work with is financially sound. A company’s financial rating can be checked through A.M. Best.

How To Save on Insurance

Auto Insurance: There are many ways to save on auto insurance, from knowing the amount of coverage you need on your vehicle to how often you pay your premium. Many companies charge less if you pay for six months of coverage at a time.

If you hold the title to you vehicle, full coverage is not a must, nor is it always beneficial. If your vehicle has a low blue-book value, compare the price and coverage of different types of insurance before making a decision. Also, shop around. Insurance premiums for the same coverage on the same vehicle can vary widely. Collecting quotes from different companies may be worth your time.

By increasing your deductible, you may be able to reduce your annual premium by 10%. Having a higher deductable is a gamble, since you will have to make up the difference out of pocket, in the case of an accident.

Homeowner or Renters Insurance: As a home owner, you want to make sure that your property is covered. If your home burnt down, would the insurance pay enough for you to rebuild the exact house in the same spot? This amount is not the same as what you paid for it. It must cover the cost of new construction in your area. It needs to cover renovations you have made, and the ability to redecorate in the same manner.

As a renter or a homeowner, you want to make sure that your possessions are covered. If something happens, will you get enough to cover the cost of replacing what you own? Beware of policies that promise ‘fair market value’ or ‘cash value,’ of what you own. This means they will only cover what you could have sold the item for, not what it costs to replace it with a new version. Another consideration is whether or not you actually have to replace the item in order to be reimbursed for it. Read the policies carefully, and don’t be afraid to ask questions.

To search for the best rates in your area, for any type of insurance, visit Insure Me.

(c) Copyright text and photo Christa Dovel 2010

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    • amulets profile image

      amulets 7 years ago from Singapore

      Good tips! My dad has been buying insurance for car, home, personal, accident, education, etc. So, guess your tips can help in a way. Thanks!

    • Christa Dovel profile image
      Author

      Christa Dovel 7 years ago from The Rocky Mountains, North America

      Shopping for insurance is no fun, but getting a good deal, one you are happy with, is worth the effort.

    • LiftedUp profile image

      LiftedUp 7 years ago from Plains of Colorado

      My sister and brother-in-law had an unhappy experience with their insurance recently when they needed a new roof for their home. They found out precisely what you stated above, that they were not to be paid for what a new roof would cost, but only for an older value. They also found that they had made a mistake in turning in some smaller claims over the years, as these ran up their insurance rates, but their agents had never pointed this out to them. If it is possible for you to work with an agent you really trust, all the better!

    • Christa Dovel profile image
      Author

      Christa Dovel 6 years ago from The Rocky Mountains, North America

      That is too bad, LiftedUp! I know when my husband and I bought our home it was hard to find an insurance company that would cover us for replacement value, not just the price of the loan. I visited three different offices before I found a policy I liked.

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