Be proactive about what you insure and how you insure it.
You can have an impact on the cost to insure for damage to your property, vehicles or watercraft to help save money by taking a look at how you insure them, whether you:
- Are looking at personal or business insurance; or
- Buy your insurance on-line or from your local independent agent
Remember, we’re talking about the damage to your things, not the Liability coverage you may need if you injure someone else or damage their property.
First, do you need to insure your property, vehicles or watercraft at all?
- If there’s a loan involved, then you probably do. The lender will generally require it so they’re protected in the event of a loss.
- On buildings, unless you would not rebuild or could easily replace one yourself, you generally want insurance, even if you own them outright. The same is true for personal property. Most of us cannot afford to rebuild or replace contents without the help from our insurer if the building is destroyed.
- When it comes to vehicles and boats, there are some things to consider if your loan is paid off. What is its current value? Not what you paid for it! We all know these kinds of items usually lose value quickly. If you’re lucky enough to own a 1956 Thunderbird that only cost you $2,600 new, but is worth $45,000 today, insuring it is a no-brainer. However, what if your car is 15 years old and while you paid $15,000 new, is now only worth $1,500? Is that car worth insuring? The cost to insure a vehicle is generally based on the Cost New and decreases each year as the vehicle gets older, until it passes its 10th year. Every year afterward, the cost stays flat. What about that old boat or trailer? Ask yourself if what you pay for insurance makes sense:
- Compared to what you’d get if the item is damaged or destroyed; AND
- Whether you can afford to absorb the cost to repair or replace it yourself
Decide if you should continue to purchase insurance on your car or boat only after you’ve considered these issues. Just because you always have insured it, doesn’t mean you should continue to do so. (Remember though, I am just addressing coverage for damage to your own vehicle. Make sure to check your state laws regarding requirements for carrying liability insurance for damage to others while using your car or boat).
Next, what are the deductibles on the policy?
Deductibles can be zero or thousands of dollars, depending on what is being insured. The lower the deductible, the higher the premium is going to be, up to a point. It’s nice to only have to pay a little when you have damage, but what is that costing you? Remember that for most people, these are not regular events and by picking a low deductible, you will be paying for it, whether you use your insurance or not.
Get quotes at various deductible levels
Consider a deductible amount you can pay without causing yourself too much financial stress:
- Decide what amount you could handle if your property is damaged; then
- Compare the cost at different deductible levels, with the highest one being the most you can handle
You may find that over only a few years with a lower premium, you can save enough money to more than pay for that higher deductible when you have the occasional insurance claim.
So, by spending a little time or by talking to your live independent insurance agent, you may find ways to cut your insurance costs and save money. When was the last time you took a close look at your policies?
Acadia is pleased to share this material with its customers. Please note, however, that nothing in this document should be construed as legal advice or the provision of professional consulting services. This material is for general informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness. Distribution of this information does not constitute an assumption by us of your obligations to provide a safe workplace. Maintaining a safe workplace in accordance with all laws is your responsibility. We make no representation or warranty that our activities or recommendations will place you in compliance with law, relieve you of potential liability or ensure your premises or operations are safe. We exercise no control over your premises or operations and have no responsibility or authority to implement loss prevention practices or procedures.