How to Save Money on Your Insurance is a must-have financial safety net, but that doesn’t mean you have to overpay. By making smart choices, you can reduce your insurance costs while still enjoying comprehensive protection. Whether you’re dealing with car, home, or health insurance, small changes can lead to big savings over time.
Understanding your options and being proactive about your insurance policies can help you cut down on unnecessary expenses. From comparing quotes to reassessing your coverage needs, a few simple steps can lead to significant financial relief without compromising your security.
Ways to Save on Insurance
- Compare Insurance Providers – Don’t settle for the first quote you receive. Use comparison tools like Consumer NZ and Market Scan to find the best rates.
- Increase Your Excess – A higher excess can reduce your premiums significantly.
- Look for Discounts – Many insurers offer discounts for bundling multiple policies.
- Assess Your Coverage Regularly – Make sure you’re not over insured.
- Maintain a Good Credit Score – Some insurers offer better rates based on financial responsibility.
- Pay Annually – Paying in lump sums can often reduce costs compared to monthly payments.
- Install Security Features – Homes with alarms and cars with tracking devices often qualify for lower premiums.
- Avoid the Loyalty Trap – Regularly compare your policy to ensure you’re getting the best deal.
How Much Money Can You Save on Your Insurance? Savings vary based on individual circumstances, but research shows that proactive customers can save hundreds or even thousands of dollars each year. For example, simply shopping around can lower premiums by 20% or more.
By taking the time to optimize your coverage, you can ensure you’re not wasting money on unnecessary costs while still maintaining solid protection.
Watch Out for the Loyalty Tax—It Could Be Costing You Many insurers increase premiums for long-term customers, banking on the fact that they won’t switch providers. This is known as the ‘loyalty tax.’
Instead of automatically renewing your policy, compare quotes before your insurance renewal. Providers like AA Insurance and AMI Insurance might offer better deals to new customers than existing ones.
Stop Overinsuring More coverage doesn’t always mean better protection—it can just mean unnecessary expenses. Many people overestimate the value of their possessions, leading to inflated premiums.
Tools like Cordell Sum Insured and Trade Me’s Car Valuation App can help you determine the right level of coverage, ensuring you’re not paying for more than you need.
Check Your Excess—It Could Save You Money The excess is the amount you pay before your insurance kicks in. Choosing a higher excess can lower your insurance premiums significantly.
However, ensure you have enough savings to cover the excess in case you need to make a claim. Finding the right balance is key to maximizing savings.
Go for a Higher Excess A higher excess means lower monthly costs. If you rarely file claims, this could be an excellent way to save money.
For example, increasing your car insurance excess from $500 to $1,000 could lower your annual premium by 10–20%.
Shop Around Don’t just accept the renewal price from your current insurer. Use services like Consumer NZ and Market Scan to compare rates.
You’d be surprised at how much you can save simply by switching providers or negotiating a better rate with your current insurer.
Consider an Alarm Installing security systems can significantly lower your insurance costs. Many insurance providers, such as FMG and AMI Insurance, offer discounts for homes with monitored alarms or vehicles with anti-theft devices.
Even basic security measures like deadbolts and smoke detectors can contribute to lower premiums.
Pay Annually Many insurers charge extra for monthly payments due to processing fees. Paying annually can reduce your overall insurance costs.
If an annual payment isn’t feasible, check if your insurer offers discounts for quarterly or semi-annual payments instead.
Reassess Your Needs As your circumstances change, so should your insurance coverage. Maybe your car has depreciated, or your home’s value has changed. Reviewing your policies annually ensures you’re not overpaying.
Use tools like Quashed to track your policies and ensure they still align with your current needs.
Consider Third-Party For older vehicles, comprehensive insurance might not be worth the cost. A third-party policy can provide the protection you need at a fraction of the price.
Check your car’s value using Trade Me’s Car Valuation App to determine if third-party insurance is a viable option.
Have Policies with the Same Insurer Bundling policies—such as home and car insurance—can often lead to substantial discounts. Many insurers, including AA Insurance and AMI Insurance, offer discounts for multiple policies.
Always confirm that the bundled price is genuinely lower than purchasing separate policies from different providers.
Consider a Bare-Bones Policy, If You Really Need To If you’re on a tight budget, a no-frills policy might be the best option. While it may not include extras like rental car coverage or roadside assistance, it provides essential protection at a lower cost.
Make sure to evaluate the risks and benefits before opting for a stripped-down policy.
Conclusion Saving money on insurance doesn’t mean sacrificing protection. By shopping around, reassessing your needs, and taking advantage of discounts, you can enjoy substantial savings without compromising coverage.
Stay proactive, and make sure your policy serves your best interests. With the right strategies, you’ll not only save money but also gain peace of mind knowing you’re adequately protected.
FAQs
- How often should I review my insurance policies? Review your insurance annually to ensure it still meets your needs and budget.
- Can loyalty to an insurance provider save me money? Not always. Many insurers increase prices over time, so shopping around can often yield better deals.
- What’s the best way to lower my insurance premiums? Raising your excess, bundling policies, and installing security measures are great ways to cut costs.
- Is third-party insurance a good option? For older vehicles, third-party insurance can be a cost-effective alternative to comprehensive coverage.
- How do I know if I’m overinsured? Use valuation tools like Cordell Sum Insured and Trade Me’s Car Valuation App to ensure you’re not paying for unnecessary coverage.