“Chains of habit are too light to be felt until they are too heavy to be broken.” -Warren Buffett

Choices: Insurance

After a small delay, we're continuing with the series on making choices to move your financial life ahead. This week's topic is Insurance! If you own a house, car, or pet, or rent a place to live, you likely have some kind of insurance. For many this is a big
monthly item in your budget. We've found by using a few simple steps we've saved hundreds (likely thousands) of dollars on something you are likely spending money on anyway!

Tip #1: Call around for quotes at renewal time. Each year when we get our renewals we call a broker and a couple of companies directly for quotes. Many people will tell you a broker is cheapest. We have not found that to be the case, but we continue to call in case that changes. When you are calling, check into companies where you might have alumni, union or member discounts. This can make a significant difference. We have had quotes from two different companies vary by more than $1700 for a year for the same product/limits/coverage. Imagine how that adds up over even 5 or 10 years!!

Tip #2: Review and raise your deductibles. Early on when our cash flow was very limited we had lower deductibles on everything. However as our financial position has changed we raised them to $500, then $1000. Realistically we are not going to put in an insurance claim for something that is $600, we'll cash flow it in our budget. This tip can save loads of money as each increase in your deductible lowers the cost of premiums.

Tip #3: Ask about discounts for lump sum payments. We used to pay monthly for our car and home insurance. Then we switched companies and realized the new company charged a fee and a percentage for the privilege of paying monthly. Ultimately this was adding around 5% to the cost of our insurance! We made a few adjustments and now pay a lump sum annually. If things change during the year and our premiums lower, they cut us a cheque or we pay an additional amount. Now we just know that at a certain time each year we'll be putting a chunk of money towards insurance. Our mortgage product gives us that flexibility that it isn't an issue, and we budget a certain portion each month to have it covered off by the time it's due.

There you have it! Our best tips to save on insurance!

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