1. Review every insurance policy every year
Before you even start looking for savings, it’s important to understand exactly what your current policies cover. Even though insurers try to make their documentation relatively easy to grasp, policy paperwork can still be confusing.
Don’t be afraid to speak with your insurance agent every year to go over your coverage, because you may find that your policies go beyond what you need.
You also want to be on the lookout for hidden fees.
For example, paying in monthly installments might end up costing you more. There are admin fees that come with processing payments, so see if you can pay quarterly or even semiannually instead.
Life insurance policies might come with a few potentially costly add-ons — called riders — that you can drop. A few examples include the "waiver of premium rider," which relieves you of premium payments if you become critically ill; and the "accelerated death benefit rider," which allows you to receive a portion of the death benefit while you’re alive, if you become terminally ill.
2. Raise your insurance deductibles
How much risk are you willing to take on?
You can lower your auto, home and health insurance premiums by agreeing to higher deductibles — amounts of money you'll pay out of your own pocket toward a claim before insurance picks up the rest.
Ask your agent how your costs might be affected by larger deductibles. If you have some money on hand to contribute toward your claims, you might be able to achieve decent annual premium savings.
Just don’t forget about the long-term implications: You might save money now in exchange for facing a big bill when you have to make a claim.
3. Always shop around for the best rates
Better deals may be out there — you just have to look.
Whenever it's time to renew your policies, make sure to shop around for better rates — and don’t be shy about letting your insurance company know that you're checking out the competition.
One of the most reliable ways to save on your current premium is to quote your insurance company a lower rate that one of its competitors has offered you. The insurer won’t want to lose you as a customer and will likely match the other rate.
4. Bundle your insurance policies
Have your finances gone into a deep freeze? It's time to bundle up.
Insurance bundling means buying more than one product or policy from the same insurance company.
Why? Because often there's a discount. A company that offers both home and auto insurance will usually be happy to cut the cost if you double up. Not only can you save money, but you'll also simplify things by dealing with just one agent or insurer.
But be careful: Though you might get a discount by bundling, you may not get the best rates out there. Be sure to compare the bundled prices to what other insurance companies charge.
5. Look for insurance discounts
Auto and home insurance companies offer loads of discounts to lure and keep customers, and you could easily be missing out on one or two.
If, for example, you’re a senior or a member of the military, or if you haven't filed a claim in a long time (or ever), you could be in line to cut your costs substantially.
And while comparison shopping is your best path to reducing costs, companies will reward you with a loyalty discount if you stick around for a while.
Insurers' websites typically have sections devoted to the discounts they offer. If you spot one you ought to be getting, contact your insurance company or agent.
6. Switch from permanent to term life insurance
Many people choose permanent life insurance, which covers a person's entire life and has a savings feature. A permanent policy is good if you want a guaranteed death benefit to provide for your loved ones, or if you want to leave cash to pay your outstanding debts after you're gone.
For many others, term life insurance is plenty.
Term life is famously cheap and cost-effective. It’s designed to protect your dependents and family members if you pass away prematurely, by providing a safety net for a limited period of time — usually 10, 20 or 30 years.
Your rate is locked in for the entire term, so it’s best to get term life insurance when you’re young and healthy.
7. Improve your credit score
Insurance companies have found that people with lower credit scores are more likely to file claims. That’s why they may take your credit rating into account when determining your premiums, by creating and using something called your insurance credit score.
Some states (Massachusetts, Hawaii or California) have banned the practice for calculating auto insurance rates, and others (Maryland and Hawaii) don't allow insurers to use credit information when setting homeowners premiums. But in the rest of the states, you’ll want to focus on building your credit score to get the best rate possible.
The first step toward boosting your score is to check it often.
Today, it's easy to get a free look at your credit score and free credit monitoring from online providers.
8. Shore up your home
Your home insurance will cover you from most of what Mother Nature can throw at you, including wind, hail, lightning and wildfires.
If you spend some time on a bit of DIY home protection, your insurance company is likely to reward your efforts with a lower premium.
Consider adding storm shutters, fortifying the roof, or taking on other high-impact renovations to reinforce your home.
You also can expect discounts if you improve your home’s security, such as by installing a burglar alarm or dead-bolt locks. Talk to your insurer to see if the company recommends a specific security system; some insurers will cut your rate by as much as 20% if you install a sophisticated system.
9. Move somewhere with cheaper insurance rates
We’re not recommending that you move across the country to chase after the best insurance prices. But if you have a few locations shortlisted for your next move, it could pay to check how the local insurance rates compare.
Geography can play a big role for a variety of reasons, including traffic, economic conditions, weather or even just competition.
When it comes to auto insurance, you’ll find the cheapest rates in Maine and New Hampshire, U.S. News found.
With health insurance, rural areas tend to have higher rates than suburban and urban areas, because of the difficulties of providing coverage to smaller numbers of people spread out over a large area.
10. Get a job that covers health insurance premiums
The most common way to get health insurance in the U.S. is through an employer.
But while some businesses cover the bulk of their workers’ health care premiums, others require employees to pick up more of the expense.
If the out-of-pocket health insurance costs are stiff where you work, you might look around for a new job that pays a higher share of your family coverage.
Some large companies, like Starbucks and UPS, even offer medical coverage to their part-time employees.
If you're a part-timer without health insurance, you can use an insurance comparison site that will sort through hundreds of offers to find you a policy with the best rates for your area.
11. Let your auto insurer see that you're a good driver
Want to prove to your car insurance company that you pose little risk?
Some insurers will offer better rates if you let them monitor your driving via a gadget placed in your vehicle, or an app on your phone. The better the driver, the cheaper the insurance.
You also can take an approved defensive driving course to get a discount — and to lessen the chance that you'll get into a costly accident.
The classes can cost anywhere from a few dollars on up to $100. You can find one online, or in-person at a driving school where you live.
Compare insurance quotes and save money
Did you know that you could be saving some serious money just by switching insurance companies?
It’s true. You could be paying way less for the same coverage. All you need to do is look for it.
But don’t waste your time hopping around to different insurance companies. Use a website called SmartFinancial to see all of your options at once.
SmartFinancial will provide you with a tailor-made list of possible policies from all major and most relevant insurance carriers.