How to Slash Your Insurance Costs When You’re Unemployed
Posted on Monday, October 19th, 2009 at 8:43 am in Financial Planning
When you’ve lost your job, chances are you’re trying to save money wherever you can. Insurance premiums account for a sizeable portion of most people’s monthly outgoings, but you’ll be pleased to learn that there are ways to cut your costs without sacrificing vital coverage.
You can save hundreds or even thousands of dollars a year by asking for discounts and making other wise choices. Even if you’re not unemployed you can use many of these tricks to keep a lid on your insurance costs. Check out comparison sites such as NetQuote.com and Insurance.com to hunt down the best deals on the coverage you need. Here are some other useful tips:
Medical insurance: If you lose your job, you can keep paying for your health insurance yourself via the Cobra scheme for up to 18 months. Your premiums can be pretty expensive, especially if you’re living on your unemployment check, but you must try to keep your coverage in case you need medical care. However, the government stimulus package is now picking up part of the tab. You’ll get a 65% price reduction for the first 9 months, which will bring average monthly premiums down to $140 for an individual and $377 for a family.
Car insurance: Get rid of unnecessary coverage, and you’ll save a bundle. If you’re not driving to work, you could be in line for a low mileage discount of 10-20% if you let your insurer know you’re putting much fewer miles on your vehicle. Is your car more than eight years old and worth only a few thousand dollars? If yes, you can save $200 to $1,000 a year if you drop your collision coverage. Take a defensive driving class and you could slice 7-10% off your auto insurance. Or you might get up to 15% off when you purchase all your insurance products from the same company.
Homeowners’ insurance: You might not know that when estimating your home’s value for insurance purposes, you should focus on the cost of rebuilding the house in its present location. Therefore, you don’t need to include the value of the land, which could save you hundreds of dollars a year. Installing safety and security devices will also earn you discounts, on top of providing peace of mind for your family. Get a smoke alarm, fire extinguisher, deadbolt or home alarm system put in and your insurance company might cut 5-10% off your premium.
Life insurance: if you make an effort to improve your health and your habits, your life insurance company might reward you with a hefty discount. Give up smoking or reduce your cholesterol level and you could save as much as 40% on your monthly payments. In most cases, you’re required to have a policy that’s been active for at least a year, and you’ll have to produce your medical records or submit to a health check in order to prove your claims.
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