- Investigate coverage and product options with your independent agent: The biggest advantage of using an independent agent is the access to a number of insurers with different products that can be tailored to your particular risk. This allows clients to purchase a product that is the right coverage at the right price. It is always important to remember that a lower price isn’t the most important aspect of your insurance. The most important part is that you are adequately covered for your unique risk.
- Consider Increasing Deductibles: Increasing a deductible can save money but it’s important to do it at the right time. Don’t raise the deductible past the point of a sensible savings in premium. The appropriate approach is to increase the deductible during good economic times when you can afford a $2,500-$5,000 loss while accumulating a deductible fund that can be used during hard times if a loss occurs.
- Multiple Policy Discounts: Having all of your personal policies with one carrier will likely save you money and perhaps will lower your exposure to coverage gaps. Likewise in business insurance, having general liability and auto coverage in the same insurer is often critical.
- Ask For Credits: Consumers are entitled to discounts for alarms, extinguishers, a good student driver or a credit for a child who is away at college. Talk to your agent to see what credits you are eligible for. If you never ask you'll never know! Ask your agent for a list of everything that could reasonably reduce your premium and see if you meet the criteria for a reduced premium. A good example is how your auto is rated for use. If you’re rated for work but you take the bus to work make sure your vehicle is rated for pleasure only to lower your premium.
- Carefully Consider Dropping Physical Damage Coverage on your vehicle: This isn’t a good idea unless you can absorb a significant loss. Keep in mind what you can afford to lose, if your car was destroyed and you could not replace it, how would that affect you financially?
- Do Not Cut Back on Maintenance: Maintenance and loss control procedures prevent losses and usually maintenance is excluded from most homeowner policies.
- Seek Expert Advice: Start with your independent insurance agent who is familiar with you and your particular risk portfolio. Do not seek counsel in a consumer web site or publication that presents hyper generalized information that isn’t specific to your particular situation. You want to seek counsel from someone who has completed the appropriate training and has experience to provide sound insurance advice.
- Question any advice you get! It may not be right for you. Before you make any changes to reduce or eliminate insurance coverage’s, assess your risk of loss. What are your exposures? What can you lose? What exposures represent losses you cannot afford? What exposures can you retain? The quality of your decisions could be the difference between economic survival and bankruptcy. Carefully chose an insurance representative that can help assess risk with a degree of sophistication and business acumen.
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- Posted on Friday, March 29, 2013