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Tightening Your Financial Belt? Tips for Managing Your Personal Insurance

oswaldcompanies August 7, 2013

With an increasingly unpredictable economy, the topic of reducing the cost of home and auto policies is front and center.

Of course, it’s never prudent to cancel your home or car insurance poli­cies or let them lapse. That is not only risky, it could invite trouble.

However, by implementing a few measures around your home or “self-insuring” some of the risk on your home and auto policies, you can reduce your premiums, while protecting yourself against the biggest losses.

On Your Homeowner’s Policy

Increase your deductible. Data suggests that people who currently have a low deductible can reduce their premium by 15-25 percent by switching to a higher deductible. We normally recommend a deductible of $1,000; however, you can reduce your premium by increasing the deductible to $2,500 a quarter.

Home security credits. Living in a gated community can reduce your costs, as will living in a development or building with security patrol or a 24-hour security guard. You may be able to reduce your premium even more if you install one or more of the following:

  • Smoke detectors and deadbolt locks throughout the home
  • Central station fire and burglar alarm
  • Interior sprinkler system
  • Temperature monitoring system
  • Back-up generator
  • Water leak detection system
  • Outdoor security TV cameras and/or a motion control system.

On Your Vehicle Policy

Increase your deductible. This may reduce your premium cost by 10-20 percent.

Job or commuting status changes. If you no longer commute to work, or you work at home, you could quality for a premium reduction up to 20 percent. You may also qualify for a discount if you carpool to work.

Discounts for younger drivers. Your children who drive might qualify for discounts if they have good grades (“B” grade or 3.0 av­erage), or have completed a defensive driving course in addition to a standard driver training class. If your child attends college more than 150 miles from home and does not have a car with them, you will qualify for a premium reduction.

Reduce coverage on older vehicles. If you own a vehicle worth less than 10 times the cost of your collision coverage, you might want to drop that coverage and retain only liability coverage. The reason? If you have a good driving record, data suggests you’ll be involved in an accident only once in every 11 or 12 years. You can determine the value of your car by contacting a used car dealer, or check automotive websites such as Kelley Blue Book ( or Edmonds (

Safety and security discounts. Verify that you are receiving discounts for factory-installed safety options such as: anti-theft devices, air bags, anti-lock brakes, and daytime running lights. If an after-market safety or anti-theft device was installed on your ve­hicle, such as a LoJack™ system, you may be eligible for a premium reduction.

Loyalty discounts. Ask if your carrier offers a loyalty discount. It could save you 5 percent, after you have been with the same carrier a minimum of three to five years, and up to 10 percent after longer periods.

For Both Home and Auto Policies

We encourage you to pay every one of your bills—utility, credit card, mortgage, etc.—on time, in order to prevent your insurance premiums from increasing because of “insurance rating” factors. Some carriers use insurance credit scores of current policy holders because docu­mented evidence shows that people with good bill-paying habits are better insurance risks than those with negative payment histories. This practice varies from state-to-state.

Another item of importance: Clerical errors or identity theft can adversely affect your credit score. It’s recommended that you verify your personal credit information with all three major credit agencies (Experian, TransUnion, and Equifax) every year by visiting or the individual websites of all three credit agencies. By law you are permitted one free report from each agency per year.

Whenever possible, we encourage you to purchase your home and auto insurance from the same carrier. Most carriers offer a package discount to customers who purchase both policies from them.

Contact us here to discuss more.