source:SEIA1. Increase Your Excess
This will give you the biggest saving for any kind of insurance you take out. The excess is the amount of money you pay to make a claim. By increasing this, the insurance company reduces your premium. This is good for you as it means you pay more for insurance when you actually need it. Over the course of 30 or 40 years there may be only a handful of times you need to make an insurance claim. Increasing the excess means you pay more for each claim but you have saved money on premiums over many, many years.
2. Take Out Multiple Policies
Most insurance companies offer different kinds of insurance; home insurance, car insurance, health insurance, travel insurance and any other kind you can think of.
If you take out more than one policy you can realise reductions of up to 40% on your premiums. The principle behind this is that you are wholesaling your insurance needs to one company.
These reductions often apply if you are insuring multiple people under the same policy. Investigate what reductions can be made as the offers differ widely between providers. Some offer discounts if you have more than one policy, others offer more significant discount but you need 4 or 5 policies.
The other benefit to this is that if a significant incident occurs like a car crash that causes a fatality it is far easier for you to make a claim across all the policies, car, life, and health insurance in this case as one loss adjuster will be assigned to your case instead of 3 people from 3 different companies.
3. Start Young
Starting young in insurance will save you thousands of dollars. In terms of life insurance and health insurance you are considered a low risk to the insurer. This means your premiums will be very low, equating to only a few cents per day. As you get older premiums increase. If you started young you will be able to qualify for concessions and discounts offered to people who have long-term policies. This will save you a lot of money.
Even if car insurance seems astronomically high when you are young, it pays to be insured early. If you are comprehensively insured from 18 years of age. You can be a Rating 1 driver by the time you are 25. Some insurers offer ‘Rating 1 for life’. By the time you are 30 you will easily qualify for that if you keep clean. That means regardless of the number of accidents or difficulties you have you will always qualify for the lowest price insurance. Over your driving life this will save you tens of thousands of dollars.
4. Recognise What You Need
Recognising how you live, and what you do, can save you plenty of money on your insurance. Just settling for standard cover when you need something far different is a waste of money. Primarily because when it comes the time to make a claim you will get far less than you expected and in some cases nothing.
If you travel extensively throughout the year then get annual multi-trip insurance. It would be far cheaper and give you better cover than numerous one-off insurances. If you spend a lot of time visiting clients as part of your business, you may want to consider public liability insurance that covers your visits. If you have a large outdoor entertaining area to your house you need a home insurance policy that covers that area too.
When you take out your insurance policies you should try and be as specific as you can as their may be concessions available that suit you. This could either save you money or give you more comprehensive cover.
5. Pay Your Insurance Annually
With many insurance companies you have the option pay your premiums monthly or annually. If you pay monthly you do have the ability to manage your money better in relation to your income but if you pay annually your premium is lower. Sometimes the difference can be up to 10%. For many the convenience of paying monthly outweighs the saving but over many years you could have saved thousands of dollars.
In other countries like the UK where insurance is very competitive, monthly and annual premiums add up to the same amount. In Australia, you are penalised for taking the monthly option.
6. Utilise The Extras That Are Available.
With many insurance policies available there are extras that add tremendous value. In many cases utilising these extras would pay for the annual premium. Extras that some insurance providers provide include courtesy cars, discounted document reproduction, discounted gym membership, sports massages, cheap cinema tickets, aromatherapy and much more.
With these extras you have a set allowance for each category each year. Using these benefits does not affect your premiums as the insurer has negotiated wholesale rates with the member service providers. Often they receive a commission for each extra you use so they encourage you to use your allowances as you feel as though you have received massive value.
Using these extras could save you an amount equivalent to your entire annual premium if not more.
7. Read Your Policy
It has been recorded that 90% of all people that sign legal documents have no idea what they have just signed for. They have some idea but they don’t know the finer points or the small print. Understanding the small print is crucial in insurance. The small print covers exemptions that you will not know existed and will cover reasons that an insurer can refuse to fulfil a claim.
If you have not read your policy and you regularly break terms that are covered in the policy you will be refused your claim when you make it. Because you didn’t read the policy is not an adequate excuse when arguing your case. If you cannot make a claim for this reason then the thousands of dollars you spent on premiums over the last few years would have been a complete waste.
8. Purchase items with insurance in mind
This sounds like a very boring and unrealistic way to save money on your insurance but it is an unconscious decision you make daily. When you buy an item you weigh up its running costs when considering to purchase it. Factor insurance into those running costs. You definitely consider insurance when you buy a car. You buy a less powerful car if you want cheaper insurance. The same is true for artworks and jewellery. If you cannot afford to insure the items then you cannot afford the items.
If you choose not to insure these sorts of purchases you could lose hundreds, if not thousands, of dollars. You cannot predict storm damage, or fire damage or theft. That is why insurance exists. To protect you when you are least expecting it. You will save money on insurance by purchasing items that fit your insurance budget.
9. Pay for your insurance with your superannuation
Most Australians don’t even know you can do this. Superannuation is locked away until retirement and to many it just sits there doing nothing until retirement. Even if it is just sitting there you can use it to pay for insurance. This is much easier to administer if you have a Self Managed Superannuation Fund or have engaged in the services of an insurance broker.
Even through your employer’s super you are able to pay for life insurance at the very least. That is one less insurance policy you will have to pay for with your disposable income. This can save you hundreds of dollars from your disposable income and also you yourself are not relied upon to make the payment. They are debited directly by the super company. That also gives you piece of mind.
10. Use an insurance broker
The thought of an insurance broker is expensive, however, the truth is the opposite. They can save you a lot of time and a lot of money. There are more than 5,000 registered insurance products in the Australian marketplace. Do you have the time or the inclination to find the right insurance product for you? As insurance brokers are trained financial professionals they understand the finer details of all the insurance plans. They understand the policies, the companies that hold the policies, the claim schedule and the amount of time it takes to fulfil a claim.
You do want to make a successful claim after years of paying premiums? Insurance brokers know the claim process backwards and it would be wise to utilize such services if they are available. On average a claim pursued by an insurance broker is realized 40% quicker than a normal retail claim.
Can you get insurance cheaper by not going through a broker? Insurance brokers can commit hundreds of insurance policies per year to a certain provider. Because of this they can negotiate massive discounts because of wholesale rates.
An insurance broker can save you a ton of money and can make sure you get the money you deserve when the time comes to make a claim.
