When it comes to trimming the budget, most people start with line items like food and entertainment. Line items like insurance, which can account for a sizeable percentage, can often go overlooked. Since insurance renewals only come once a year, it’s easy to be lazy and to just renew with same provider. Sticking to the status quo can be costly. Here are a few lessons learned that have helped me cut my insurance premiums down.

Compare Quotes

If you’re up for a renewal, it is important to shop around and compare quotes; call the competition for quotes or conduct an online comparison at a website like www.kanetix.ca. I stubbornly spent years with the same provider thinking my loyalty was being rewarded- which it wasn’t. When I finally looked around, I found that similar coverage was readily available for 30% less. Suffice it to say, I dropped that insurer and went with one that offered the same coverage for less.

Ask for a Discount

Insurance companies offer different types of discounts depending on your situation. For example, some companies offer reduced rates for anti-theft devices installed on the car or a discount when multiples vehicles are covered by the same policy. Drivers over age 25 and seniors can also qualify for certain discounts. Discounts vary from provider to provider, but most will offer some kind of discount that result in a significant decrease; all you need to do is ask.

When I finally switched insurance companies, I opted for an insurance provider that offered two discount programs: a multi-product discount and a membership affiliation discount. Through the first program, I was able to save 15% on my policy through combining home and auto insurance with the same provider. The second program allowed me to take advantage of alumni membership rates, courtesy of an agreement with my alma mater. This discount resulted in a 50% deduction off the rates I was previously paying (seriously, I went from paying $3721 to $1840). When I received my Professional Engineer accreditation, my premium was further reduced.

Maintain a Clean Record

A couple years ago, I was pulled over for speeding and received a ticket for the offense. The ticket- a blemish on my driving record- increased my insurance premium by a couple hundred dollars. Speeding tickets generally impact premiums in Ontario by a 5-15% increase depending on the severity of the offence and the insurance provider. Maintaining a clean driving record keeps the premium low.

The financial impact of the offence on the insurance premium decreases as time progresses. Speeding tickets stay on the record for three years from the time of conviction. Next year, my record will be clean and my premium will decrease.

Question Everything, Again.

Another way to exercise some control over the amount of the premium is to inspect the details of the insurance policy. My home insurance premium renewal saw a 20% increase this year. After a detailed inspection of the policy, I noticed the coverage limits had increased by 5%. I contacted my provider to question the difference and was informed that the amount covered is adjusted each year for inflation. As none of our belongings have appreciated in value, I reverted the coverage limit back to what it was in the previous year. In addition to questioning the limits, I had the agent explain the details of each item in the policy. We identified an item for roof damage coverage, which is not applicable to condo living, and removed it from the policy. By reviewing the insurance policy in detail and questioning its line items, I was able to reduce my home insurance premium by $70.

Take Advantage of Points

I previously paid for my insurance on a monthly basis via automatic withdrawals from our chequing account. When I was offered the option to make an annual payment for the full year’s premium with a credit card, I jumped at the opportunity. This allowed for me to collect travel points on the insurance payment. It can be beneficial to use credit cards to reap in the rewards since insurance payments are typically a big amount (just remember never to carry a balance on a credit card!)

The Last Word

For the better part of my twenties, I paid a high premium for car insurance without thinking twice when paying the bill. However, with age comes wisdom, and eventually realized that the premium can be trimmed by simply conducting a due diligence and questioning the coverage policy. When I noticed a 20% increase in my insurance policy, I immediately called the insurance provider. After a 40 minute phone conservation, the home insurance premium was reduced by 12%. It took me a while to learn this lesson, but when it comes to insurance, being lazy means you’re probably paying a higher premium. Taking the time for a quick call can mean hundreds in savings.

What tricks do you use to save on insurance?