Saving a Pretty Penny on Insurance: Six Tips to Slash Your Premiums
Many of us enjoy the security that comes with multiple insurance policies. However, it's crucial to remember that too much coverage isn't always beneficial. With some tweaks, you can shave a significant portion off your insurance bills without sacrificing essential coverage. Here are six strategies to help you get started:
1. Ditch Unnecessary Policies
You might find yourself with numerous insurance policies, each costing a few euros per month. Have you ever checked if you really need all these covers? Insurance is meant to protect against substantial financial losses, and minor mishaps like a broken phone or damaged TV usually don't fall under this category. Kathrin Gotthold, an insurance expert at the consumer advisory firm Finanztip, recommends scrutinizing your policies to determine whether they're truly necessary.
2. Embrace the Annual Switch
Switching providers annually can lead to substantial savings, particularly in car insurance. Insurance companies typically hunt for new customers during the fall season. New customers often receive much better offers than long-term clients. If you don't want to switch, you can still leverage competitive offers to bargain for better terms from your existing provider.
Insurance experts recommend reviewing other policies as well. For example, new liability insurance contracts often come with improved coverage and better deals. Always keep an eye out for improved tariffs that cater to newer risks, such as damage caused by drones in personal liability insurance.
3. Set a Deductible Amount
If you shoulder some financial responsibility for each claim, you'll be more cautious about making frivolous claims. This is the reasoning behind a deductible. Insurance companies save money and reduce their premiums due to the reduced administrative costs associated with claiming.
Deductibles are frequently used in liability tariffs, personal health insurance, and motor vehicle policies. For instance, Finanztip estimates that a 300 euro contribution can reduce partially comprehensive car insurance by nearly a third. It's essential to determine an appropriate amount that won't leave you financially strapped in case of a major claim, especially if you have high-deductible health insurance.
4. Pay Once a Year
Some expensive insurance policies, such as occupational disability and car insurance, are often paid on a monthly basis. If you pay your premiums yearly, you stand to benefit from minor discounts. Even if it's only a few percentage points, this can add up to significant savings over the course of a year.
5. Avoid Overloading on Protection
Insurance providers often offer higher protection options (like premium, comfort, and plus tariffs). Evaluate your needs carefully before opting for more extensive coverage. For example, passenger accident insurance for cars is generally considered unnecessary, and household contents insurance may cover damages that you don't need.
6. Combine Policies for Couples
When significant life events occur, such as marriage or the birth of a child, it's essential to re-assess your insurance needs. In some instances, combining policies can lead to substantial savings. For couples, this means you can cancel one of the two policies and switch to a family tariff. If you and your spouse share a joint address, the younger individual often has the right to terminate their policy, leading to potential savings.
In conclusion, implementing these budget-friendly insurance tips can help you save money while maintaining necessary coverage. By canceling unnecessary contracts, regularly switching providers, agreeing on deductibles, paying annual premiums, avoiding excessive coverage, and considering family policies, couples and families can keep their premiums in check.
