How Do I Lower an Insurance Premium?

Lowering an insurance premium can be a good way to cut household costs without losing vitally important insurance coverage. There are many different strategies that can help lower insurance costs, depending on the type of the insurance and even the lifestyle of the policy holder. With a little careful research, it may be possible to lower insurance premiums on home, life, medical, and even automobile insurance.

Whatever the variety of insurance at hand, one of the best ways to lower an insurance premium is to comparison shop before switching companies or buying a new plan. Insurance plans offer widely varying packages, rates, and discounts, so it is important to search for the best bargain. There are many websites that allow users to do comparisons on the benefits and premiums of multiple plans at once, making it easy to compare plans at a glance. Spending a little time comparison shopping instead of sticking with one plan out of familiarity or brand recognition can end up saving a lot of money.

To help reduce automobile and medical insurance premiums, some lifestyle changes may be necessary. People who smoke, for instance, are considered an extremely high risk for medical problems and may face higher insurance premiums as a result. Those with a long history of speeding tickets and car accidents are also likely to end up with higher premiums as a result of the higher risk an insurance company takes on by providing coverage. Giving up smoking and improving driving skills may not only help reduce insurance premiums, it may actually reduce health and injury risks as well.

Another good way to lower an insurance premium is to do a personal assessment on insurance needs. A relatively healthy person who rarely needs to go to the doctor and isn't on prescription drugs may save a bundle by forgoing comprehensive coverage in favor of catastrophic or emergency coverage only. This level of coverage is often far less expensive, yet still covers the high medical costs that often accompany a serious medical condition. Those considering insurance plans may be able to lower their premiums by examining household costs that may drop with time, such as through paying off a mortgage, or moving into a reduced-rent area for seniors, and taking out a plan that considers these expense reductions.

One of the best ways to lower any kind of insurance premium is to accept a higher deductible. A deductible is the amount that a policy holder must pay fully out of pocket before the insurance benefits can be utilized. The higher the deductible, the lower the risk for the insurance company, meaning that rates for high deductible plans can be considerably lower. On the other hand, if a person does not have sufficient funds to cover the high deductible amount, choosing this strategy can result in a serious financial crisis in the event of an emergency, sudden illness, or severe accident.