Insurance is a necessary expense, but that doesn’t mean you have to overpay. If you’re wondering how to get cheaper car and home insurance, you’re not alone. Many people are looking for ways to lower their premiums without sacrificing essential coverage.
Fortunately, there are several effective strategies to reduce your insurance costs while ensuring you remain fully protected. From bundling policies to improving your credit score, this guide will walk you through the best ways to save money on your car and home insurance.
Why Are Insurance Costs Rising?
Before diving into cost-saving strategies, it’s important to understand why car and home insurance rates may seem high. Several factors contribute to rising insurance premiums, including:
- Increased Claim Costs – More expensive repairs and home rebuilding costs drive up insurance rates.
- Weather-Related Disasters – Natural disasters like storms, floods, and wildfires lead to higher claims, affecting premiums.
- Rising Auto Accidents – More traffic and distracted driving incidents increase accident rates, leading to higher car insurance costs.
- Personal Risk Factors – Your credit score, driving history, and even your ZIP code can influence how much you pay.
Understanding these factors can help you take steps to lower your car and home insurance premiums effectively.
1. Bundle Your Car and Home Insurance
One of the easiest ways to get cheaper insurance is by bundling your car and home policies with the same provider. Insurance companies often offer multi-policy discounts when you purchase both policies from them.
Benefits of Bundling
- Saves up to 25% on your total insurance costs.
- Simplifies policy management with one insurer.
- May include extra perks like accident forgiveness or deductible reductions.
If you currently have separate policies with different insurers, get a quote for bundling to see how much you can save.
2. Shop Around for Better Rates
Insurance rates vary by company, so comparing multiple quotes is essential. Many people stick with the same provider for years, but loyalty doesn’t always mean savings.
How to Compare Quotes
- Get at least three to five quotes from different insurers.
- Use online comparison tools to speed up the process.
- Check for customer reviews to ensure the company provides good service.
Even if you’re happy with your current insurer, it’s a good idea to check rates annually to ensure you’re still getting the best deal.
3. Increase Your Deductibles
Your deductible is the amount you pay out-of-pocket before your insurance kicks in. Raising your deductible can significantly lower your monthly premiums.
Example Savings:
- Increasing your home insurance deductible from $500 to $1,000 can save up to 20% annually.
- Raising your car insurance deductible from $250 to $500 can lower your premium by 15% or more.
Just make sure you have enough savings to cover the higher deductible if you need to file a claim.
4. Maintain a Good Credit Score
Many insurance companies use credit scores to determine premiums. A higher credit score can mean lower insurance rates because insurers see you as a lower-risk customer.
Ways to Improve Your Credit Score
- Pay bills on time every month.
- Keep credit card balances low.
- Avoid opening too many new accounts at once.
- Regularly check your credit report for errors and dispute any mistakes.
A good credit score can save you hundreds of dollars per year on both car and home insurance.
5. Take Advantage of Discounts
Most insurance companies offer various discounts that can significantly reduce your premiums. Some of the most common discounts include:
Car Insurance Discounts
- Safe driver discount – If you have no accidents or tickets.
- Low mileage discount – If you drive fewer miles per year.
- Anti-theft device discount – If your car has security features.
- Good student discount – If a young driver in your household has good grades.
Home Insurance Discounts
- Home security system discount – If you install an alarm system.
- New home discount – If your home is newly built.
- Loyalty discount – If you stay with the same insurer for several years.
- Claims-free discount – If you haven’t filed any claims in a set period.
Ask your insurer which discounts apply to you and make sure they are applied to your policy.
6. Avoid Unnecessary Coverage
While it’s important to have adequate protection, some add-ons may be unnecessary. Review your policy to see if you’re paying for coverage you don’t need.
Car Insurance Coverage to Consider Dropping:
- Roadside assistance – If you already have coverage through an auto club.
- Rental car reimbursement – If you don’t need a temporary car after an accident.
- Comprehensive coverage on an old car – If your car is worth less than $2,000, the extra coverage may not be worth it.
Home Insurance Coverage to Review:
- Flood insurance – Not needed unless you live in a flood-prone area.
- High-value item coverage – If you don’t own expensive jewelry or art.
Adjusting your coverage can help you save without sacrificing necessary protection.
7. Improve Home and Vehicle Safety
Insurance companies reward risk reduction with lower premiums. Improving your home and vehicle’s safety can help you qualify for discounts.
For Your Home:
- Install smoke detectors, deadbolts, and security systems.
- Upgrade to a storm-resistant roof or reinforced windows.
- Maintain your home to reduce risks of claims.
For Your Car:
- Install anti-theft devices and GPS tracking.
- Park in a garage or secure location.
- Take a defensive driving course to qualify for discounts.
Small upgrades can make a big difference in lowering your premiums over time.
Frequently Asked Questions
1. How often should I shop for new insurance rates?
It’s a good idea to compare rates annually or whenever there’s a major life change, such as buying a new car or home.
2. Is bundling car and home insurance worth it?
Yes, bundling can save 10% to 25% on your total premium, making it one of the best ways to reduce costs.
3. Will filing a claim increase my insurance rates?
Yes, filing a claim can cause your rates to go up. Consider whether the claim amount is worth the potential rate hike before filing.
4. Can I lower my insurance costs if I work from home?
Yes, if you drive less due to remote work, you may qualify for a low-mileage discount on car insurance.
5. Does home insurance cover all types of damage?
No, home insurance typically excludes flood and earthquake damage. You may need a separate policy for these risks.
Conclusion
If you’re looking for how to get cheaper car and home insurance, these strategies can help you reduce costs while keeping your coverage strong. Bundling policies, improving your credit score, increasing deductibles, and shopping around for discounts are effective ways to save money without compromising protection.
By being proactive and regularly reviewing your policies, you can keep more money in your pocket while ensuring your home and vehicle stay protected.
