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How can your auto and home insurance save you money as inflation is destroying your budgets?

As Inflation Ravages Budgets, How Can Your Car and Home Insurance Save You Money?

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As Americans become more concerned about an impending recession, people may be looking for ways to save money without cutting back on the things that matter most. Surprisingly, only 20% of Americans surveyed in the recent Country Financial Survey Index checked in with their home and auto insurance companies to see if they could lower their rates.

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Often, though, it’s enough to save money on auto and auto insurance by switching carriers or asking your insurance agent if there’s a better deal available. “That’s the value of a trusted insurance representative who will help you assess your needs and make sure coverage is the right size for you,” said Jeremy Brewer, director of National Property Product at Country Financial.

In addition to shopping for a cheaper policy, there are several ways you can save money on your home and auto insurance.

Only pay for the coverage you need

Whether you’re evaluating your home or car insurance, it’s important to make sure you have the right coverage. “Often the easiest way to lower rates is to simply limit the coverage you pay for. However, it’s important to understand what that might mean at the point of loss,” Brewer said.

You may be able to lower your insurance bills by increasing your deductible, but make sure you have money in the bank to cover any losses. You don’t want to be hooked on an expensive deductible that could keep you from getting the repairs you need.

Also, review your home insurance policy and decide if there is any coverage you don’t need.

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Coastal Insurance, an insurance agency based in Long Island, NY, lists mechanical breakdown coverage, water backup from sewers and drains, and identity theft coverage as three approvals, or additions to your policy, which can be a waste of money.

For example, identity theft coverage is often available for free through your credit card company.

Coastal stresses that your home insurance is designed for catastrophic loss and points out that it is generally better to pay for minor home repairs and mechanical breakdowns out of pocket rather than making a claim.

Choose the right car

“Important Factors Affecting Insurance Costs [are] where you live, what type of vehicle you drive… your previous claim history and the choices made around your policy coverage,” Brewer said.

If you are looking for a new or used vehicle, consider the cost of auto insurance when comparing the total cost of ownership. Remember that if you take out a loan for your vehicle or lease a new car, you will have to pay collision insurance and liability, which can increase your premiums significantly.

Be a safer driver

You can’t go back and change your claim history to enjoy lower insurance rates, but you can try to be a safer driver in the future. Ask your insurance company about a defensive driving course that can help you save money on your auto insurance. According to QuoteWizard, some states offer a defensive driving course discount worth as much as 20% off your premiums.

Brewer said avoiding speeding tickets can also help you keep your auto insurance rates low.

New technology makes it easier to prove you’re a safe driver. Country Financial offers its customers an automatic telematics app that tracks your driving behaviour. “Some of our customers are seeing discounts of up to 25% by using our automated telematics app, DriverIQ,” Brewer told GOBankingRates. “It’s a win-win situation. You may become a safer driver and save money.”

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Ask about discounts

While a good insurance agent should guide you to the levels of coverage you need and can afford to pay for home and auto insurance, it also helps to take a proactive role in seeking out discounts.

“Consumers can make the difference by pre-paying their insurance, taking advantage of discounts by bundling multiple products with the same carrier, and taking actions to reduce their risks,” Brewer said.

For example, ask about discounts for home monitored alarm systems, upgraded electrical, plumbing or heating systems, and water leak and fire prevention systems, including alarms and sprinklers.

If your insurance agent doesn’t list these discounts — including prepay savings — ask about additional ways you can save money, Brewer said.

Bundle policy for even more savings

Bundling your home, car and life insurance policies with one company has several advantages. One point of contact for all your insurance needs can save time and help you build a relationship with one broker for better service. Having a single invoice to pay also saves time and reduces the risk of late payments. Finally, there can be significant cost savings in bundling your policies.

“Many insurance companies offer discounts if you bundle both your home and auto insurance together with every other insurance product you may need,” Brewer said.

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About the author

Dawn Allcot is a full-time freelance writer and content marketing specialist who is passionate about finance, e-commerce, technology, and real estate. Her long list of publishing credits includes Bankrate, Lending Tree, and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology and entertainment website. She lives on Long Island, New York, with a veritable menagerie consisting of 2 cats, a rambunctious kitten and three lizards of varying sizes and personalities – plus her two children and husband. Find her on Twitter, @DawnAllcot.