Saturday, January 14, 2012

New Years Financial Resolutions: Save on Insurance

New Years is a great time to access your finances and start taking the steps necessary to improve your financial position. You should map out a plan for the year to raise your income, lower your expenses, and avoid traps such as splurging if you receive a healthy tax refund. This can really set you back in the long run.

Insurance costs are a major expense. Whether it is insurance for your home, your car, your health, or life, or other types of insurance, these costs can really add up. This is especially true as health insurance rates rise for many Americans. Cars are also a major insurance expense. Based on a survey commissioned by, the average American driver spends more than $1,500 annually on auto insurance.

Comparison Shop Regularly for the Lowest Rates

When you are purchasing insurance, it is important to get quotes from different companies so you can compare rates. There are insurance matching websites that allow you to compare multiple rates. You want to get the best car insurance you can for the money without compromising the amount of coverage. But price alone should not be a deciding factor.

Just because your policy is for 6 months or 1 year doesn’t mean that you can’t change it during that premium to another that offers a lower price. Prices fluctuate regularly and there is no penalty for canceling before your policy term expires. You could save hundreds of dollars on your policy by just taking a few minutes of time to research companies and check rates.

Also, think about what coverage you really need. Each state has different laws on the minimum requirements but there are certain types of auto insurance you may be able to skip out on such as gap, collision, or comprehensive, depending on your vehicle and your particular situation.

Consider Claims Service, Financial Strength and Discounts

In the case of auto insurance, be sure to examine the company’s level of claims service and A.M. Best Rating. These are important factors beyond just their rates. You want your company to quickly and reliably process your claim. Also be sure to see what discounts you qualify for as many insurance companies offer a wide range of rate reductions.

These discounts include having anti-theft devices, being a “good driver”, good student, being in the military, car safety features, taking a mature driver’s improvement course, insuring multiple cars, and having multiple policies with the same company, but vary by company and by state. These savings can really add up and help improve your financial health for the new year.

This guest post was provided by financial writer Jason Nelson.

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