Three ways to use insurance to cut costs in your budget

An illustration of a red piggy bank with dollar bills and coins nearby, and a circle and bar charts display increases.

Looking to cut costs in your budget, but don’t know where to start? It can be a daunting task, especially if you opt to cut the wrong things.

One thing to consider for saving some dough is buying products and services that are worth paying more for at the outset. Sound a little nuts? It’s not. The reason is that cheaper alternatives will end up costing you more in the long run.

Spend a little extra money on these things to save more long-term:

Auto Insurance

An insurance company telling you to spend more on auto insurance? Not surprising.

What is surprising is that people pay more over time if they opt for the minimum auto insurance coverage mandated by the state in which they live. Yes, opting for the state minimum auto coverage will make it less expensive to own a car. Yet, if you get in an accident, that cut-rate coverage may not cover everything, leaving you holding at a very hefty repair bill.

In some states, for example, you may have the state minimum coverage; say $25,000 for property damage. You get into an accident and total the other person’s new vehicle worth $50,000. There is a very good possibility that you’d be expected to cover the difference and would be out an additional $25,000. Where would you come up with that?

Keep your costs down by bundling auto and home insurance policies with the same company. Ask your insurance agent about discounts for a good driving record or good grades in school.

Supplemental Homeowners Insurance – Flood Coverage

You don’t often think about flood coverage living in our area. Cue Lake Ontario’s rising water level and the subsequent flooding and resulting damage.

A 2016 survey by the Insurance Information Institute shows that just 12 percent of homeowners nationwide have flood insurance policies. According to FEMA the average flood insurance policy costs about $700 annually. Is that expensive? It may be. But it is likely less expensive than the cost to replace everything damaged by a flood.

Outside of the Lake Ontario shoreline, our area isn’t as high-risk as others when it comes to flood coverage. FEMA says you could get coverage for as little as $137 annually living in areas that aren’t considered high-risk.

Renters Insurance

Renting an apartment or a house? Don’t skimp on renters insurance. All of those valuables you have could be stolen and you’d have no recourse. Don’t bet on your landlord’s insurance policy covering your possessions either. It most likely doesn’t.

A renter’s policy would cover your stuff if it was damaged or stolen. And the small monthly premium of between $15 and $30 or so along with the modest deductible is a pittance compared to the cost of buying all new items to replace those that were damaged or stolen.

Contact us to learn more on how our insurance options can help you become a budget champion.

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