It was a year ago when I first wrote about insurance and how we needed to call up our insurer every year and ask for a reduced premium, the argument being that what we were insuring was now worth less given its depreciation in value.
Back then we thought things were tough and likely to get tougher. But wow, it got way worse than expected so I want to return to insurance as this is one area I suspect many are having a hard look at.
First, still call up your insurer and ask them to reduce your rate and see how that works. But there are other tips we can consider.
Have a look at the excess. Increasing the insurance excess will reduce your monthly payment. However, make very sure you can cover that increased excess with money you have in an emergency fund.
Bundling is also interesting. I would assume that having more products with the same insurer will save you money, but it may not. Just as it is worth shopping around for your overall insurance needs, also compare individual product insurance. Maybe insuring your car at one company and your home contents at another could work out cheaper.
Just as it is worth shopping around for your overall insurance needs, also compare individual product insurance
Some insurance companies will also offer discounts if you drive well (no hard braking or wild cornering) while others will let you pause your policy if you’re not using the car.
What I like is insurance for specific dates. For example: I own expensive camera gear and all-risks insurance is very expensive. So rather than always having it insured when it is safely stored away I insure the kit only when I am using it, usually on holiday. It seems expensive as a one-off, but it works out cheaper than insuring what is usually safe at home.
Then there’s life insurance: do you still need it and how much do you need? The simple rule here is: are there people who are financially dependent on you? A spouse, children or maybe elderly parents whom you support every month, say. If not, then you really don’t need any life insurance. If yes, then check the value of the policy against what they may need. Also check if your work offers life insurance; when I was in corporate part of my package was that if I died they’d pay out twice my annual salary, which reduces what you need to pay for.
If you have a bond on your home you’ll have taken out building insurance when the bond was granted. Very possibly you’d have taken that insurance with the bond issuer just for convenience. But though you are required to have building insurance when you have a bond, it does not have to be with the company providing the bond. Again, shop around to see if you can get a better deal.
Clearly, insurance is important, but have a hard look at what you pay for and spend some time seeing if you can reduce the cost. You likely can.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.