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Most of us know that the first step in saving money on home and auto insurance is to bump up the deductible. But a higher deductible can go beyond saving money. It can save you from losing your coverage altogether.
Insurance companies no longer simply consider the value of your property or where it’s located to determine their risk. “Some companies evaluate as many as 700 different criteria to calculate your premiums,” explained Brad Rupp, an Ohio home and auto insurance agent for more than 30 years.
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Frequent Claims Are an Industry No-No
Claims frequency is one of those criteria, and it’s playing a larger role in whether you’re even offered coverage. You can also lose your home or auto insurance if you file too many claims.
The definition of “too many claims” varies, Brad told us. “Generally, multiple claims within a three-to-five-year window will raise a flag with most companies,” he said. “The more claims you file, the bigger a risk you represent.” That’s why increasing your deductible has a double benefit:
- You assume more of the risk, so you are rewarded with lower premiums.
- You are more likely to handle small repairs yourself instead of filing claims to have the insurance company pay to fix them. That keeps your premiums low and keeps you from losing your coverage.
More Tips to Help You Save
Brad offered a few more suggestions to help you cut down on home and auto insurance costs.
- Since you’re no longer using credit cards, make sure you close your accounts. Some companies consider open credit card accounts as a sign that you don’t have enough cash on hand to handle smaller emergencies and that you might be more likely to file multiple smaller claims. You’ll receive higher quotes on your premiums as a result.
- Buy your home and auto insurance from the same company. Not only could you get a 10–20% discount, but having two policies can also help you keep your coverage if you’ve filed multiple claims in the past.
- Some insurance companies offer a nice discount if you pay your premiums annually instead of monthly or quarterly. You could save an additional 5–7% a year by paying upfront.
Shop for the Best Rates
The best way to keep from paying too much while making sure you have the coverage you need is to shop for policies with an independent insurance agent. Independent agents aren’t limited to one company’s coverage options, so they can offer you the best choices from many different insurers.
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You want an agent like Brad who will make sure you have the coverage you need by explaining it in terms you can understand. That way, there will be no surprises when you do have to file a claim.
Brad’s experience and knowledge of the insurance industry have earned him Dave’s recommendation through his nationwide Endorsed Local Provider network. You can find an insurance ELP with the heart of a teacher in your area as well . Contact your ELP today!