There are more polite ways of saying this, but any way you slice it, customers want to pay less for insurance. After all, it is not a candy bar or a new car – those things are fun! No, it is a lot like death and taxes, an inevitable hole in your wallet every year that you will never enjoy. You don’t enjoy paying for it (but you must) and you’ll enjoy it even less when it comes to help you (because something bad happened, didn’t it?)
There are ways anyone can save money on their insurance, no matter what it is.
Most insurance comes with deductibles, so when you have a claim, you will have to pay a portion of that claim in the form of a deductible. There are two important facts about deductibles: 1. A lower deductible will always cost you more money and 2. Those who make claims because it is “over their deductible” will make a claim and pay more money for that in renewal premiums.
Always take as high a deductible as you feel reasonably comfortable paying. Enjoy the annual savings and avoid making small claims. Don’t think that you can find another insurer after you have had a few claims to save. They will want you less than your current insurer, guaranteed.
One final point is that some products have a threshold where a deductible will not have to be paid after it hits that threshold.
The NUMBER ONE way to quickly find yourself in trouble with insurance is having too many claims. Insurers do not have to continue to provide coverage, they can increase your deductibles to a painful point as well as increase your annual premiums considerably. If you get cancelled for a poor claims record this is a very serious situation. Once you have been cancelled it will be almost impossible to find good insurance at a reasonable price. No one will want you.
Insurers know that people lie about their claims history all of the time. That is why they will do a pre-coverage claims background check, even if you click the “No Claims” button. When you have a claim, the investigation will get thorough if there is any suspicion. When you lie about claims in your application for insurance, if you have a claim it can be legally denied outright due to that lie.
The best thing to do to save money on insurance is to NEVER HAVE A CLAIM! I know that isn’t possible but at least don’t make unnecessary claims and understand the consequences. Let insurance be just that, insurance for when something truly BAD happens and enjoy the benefits of low insurance premiums until then. Even then, if you have a clean claims record, your insurer will recognize that and not penalize you over your misfortune.
A lot of insurance customers aren’t aware that there are a number of reporting bureaus that insurers will (voluntarily or from regulations) report claims to. This includes reporting claims of a suspicious nature.
Keep up with your premium payments. Insurers are selling a non-tangible product of a promise to pay in the event of a claim. If a payment is missed, they have no option but to cancel you for non-payment. They can’t repossess it like a car, so their only remedy is to cancel you as a customer. A warning must be issued here. Like claims, cancellation for non-payment is a serious offence. It will not be easy to find insurance from any other insurer if you have been cancelled for non-payment.
There is a reason why one of the very first questions on almost any insurance application, “Have you ever been cancelled, non-renewed or declined by any insurer?” Lying about this can cause you many issues, especially if you have a claim.
It Pays to Shop Around
You should be shopping around and comparing insurers on an annual basis. At the very least your broker should do that for you. However, if you are like most people, you just take your renewal documents and don’t think about the size of hole in your wallet. However, if you do shop around there is always a great chance you can find a better deal out there, especially if you are free from claims or other issues.
Most people don’t understand the effect that commissions have on your annual insurance premium. In property & casualty insurance (Home, auto, business, etc.) commissions can range between 10% and 20% but overall industry statistics show commissions average 19% with most business insurance commissions at 20%. That isn’t 20% on new business and less on renewals. That is 20% tacked on annually.
We think that insurance brokers should charge less in commissions but don’t doubt the work that they do for their clients. Which is why Awywi uses technology to reduce insurance premiums by the total amount of commission. Not only that, we’ll shop around for you every year to ensure that you are always getting the best deal on insurance and you don’t lift a finger but to count the money that you will be saving year after year. Give us a try…