Refinancing and Insurance Guide

Choosing Your Deductible

• The deductible on an insurance plan is an upfront cost you must pay before the insurance company will pay you. A low deductible means you won't have to pay much out of your own pocket if a loss occurs. On the other hand, lower deductibles typically mean your insurance plan has higher premiums. Choose to take higher deductibles to reduce the cost of you insurance plans, especially if you only plan to use to make a claim in the event of an emergency or accident.

Read Plan Terms Carefully

• Read the terms of any insurance plan thoroughly so that you understand what the plan covers and to what extent. For instance, you might assume that any damage to your home is covered by a home insurance plan, but often, damage caused by certain events such as floods or earthquakes require additional insurance. Always check the limits of an insurance plan before agreeing to the terms. Limits indicate the maximum amount the insurance company will pay you for a loss. Limits should exceed the value of the asset you are protecting with the plan.

  
  

  Shopping for Insurance

  • When you shop for insurance, look at several different plans from different insurers to find the plan that meets your needs for the best price. The Insurance Information Institute recommends that you get several price quotes. Some insurance companies offer price quotes online. Ask friends and family members about their insurance plans to get an idea of what types of plans are available.

  Reduce Your Risk

  • The likelihood that you will file an insurance claim affects the cost of insurance. If you can demonstrate that you are not risky to insure, you may pay less on your insurance. For instance, driving safely and avoiding accidents and traffic violations will tend to reduce the cost of auto insurance. Installing home improvements that increase security and safety such as burglar alarms and new smoke detectors can reduce the cost of homeowners insurance.

    
    

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