Three Insurance Policy Discounts Which Can Save You Money, Part One

Betcha Never Knew About These Three Insurance Policy Discounts

“Bundling and saving”, is not the only method to save money on your home and automobile insurance policy. There’s a better way to realize massive insurance policy discounts.

Generating insurance policy discounts using shears to cut insurance costs
Use insurance policy discounts to cut your home and automobile insurance costs!

Improve your Insurance Credit Score. Not A Discount, But It Will Still Save Your Money

This is the easiest way in the world to lower your home and auto premiums. Companies place you in excellent, good, fair, poor, and ‘forget about it’ pricing tiers. So, if you begin with a poor score, do all you can to pay bills on time, lower your credit utilization, and give the five (5) major insurance credit score no-no’s a chance to come off your credit record.

What are these five (5) no-nos?

  • Judgments
  • Foreclosures
  • Repossessions
  • Liens
  • Bankruptcies, or going into or coming out of a bankruptcy

    Don’t forget, these no-nos will affect your insurance credit score for Five (5) years.

    Hey, five and five. How about that?

Now, on to the three insurance policy discounts.

How Much Can These Three Insurance Policy Discounts Save You?

Based on your insurance company, you can actually save up to 40% on your annual homeowners’ insurance premium. So, imagine your annual premium is $2000. Using these three insurance policy discounts could help you realize an annual savings of $800. And that is not chicken feed.

Fire Extinguishers, Smoke and Carbon Monoxide Detectors, Deadbolt Locks 

Some companies give you an immediate five percent (5%) discount when you keep functioning fire extinguishers, smoke and carbon monoxide detectors, and deadbolt locks. Fire extinguishers and smoke and carbon monoxide detectors are required in many cities. So, you actually benefit from obeying the law.

Alarm Systems

You can realize additional discounts up to 20% of your annual premium by installing a central-station monitored alarm system. It’s like getting paid to protect yourself and your loved ones.

Claim-Free Discounts

I’ve always questioned the sanity of people who say, “I’ve been paying this policy for ten years and never put in a claim. I think it is time for me to put in a claim and get some of my money back!”

Okay, first off, you’ve just informed your agent you intend to commit fraud. So, when you go to trial, I will testify against you. Purposely screw up my great loss ratio? I don’t think so.

Better you should just maintain your home to prevent losses and get a part-time job to supplement your income. Why? Because many insurance companies offer what is called a”Claim Free Discount” when you don’t have claims. 

How Much Can A Claim Free Discount Save Me?

One of the insurance companies I work with as an independent insurance agent offers an annual Claims Free Discount of ten percent (10%).

Let’s imagine your annual homeowners’ insurance premium is $2000 at this years’ renewal. With just a Claims Free Discount, you would automatically qualify for the ten percent (10%) discount of $200. Now your annual premium drops to $1800.

What Should You Do With All The Money You Save With These Three Insurance Policy Discounts?

I learned long ago what you earn isn’t as important as how you use what you earn. So, you’ve perhaps saved up to 40% of your annual homeowners’ premium. You can choose to use the money for a new bag, a vacation, or a fabulous pair of shoes. Or, you can use your savings to enhance your insurance portfolio. You can purchase additional

  • life insurance to pay your mortgage or rent should you die;
  • disability insurance to provide an income when you are too sick or injured to work;
  • long term care insurance to get skilled nursing care not covered in your health insurance policy. And, it will also to protect your home from Medicaid’s dreaded, “Five Year Lookback.”;
  • increase your automobile insurance; and
  • add a Personal Umbrella Liability policy for greater protection from lawsuits.

My next post will cover other insurance policy discounts. 

 


About the author

Eustace L. Greaves, Jr., LUTCF is an NYS-licensed Independent Insurance Agent and Broker with over 38 years of experience. He is celebrating 25 years as an Independent Insurance Agency Owner.

Like to speak with Eustace?

Eustace is ready to assist you with your life, disability, home, flood, renters, auto, cooperative and condominium, and wedding insurance needs. He can be reached at 718-783-2722, or by email at eustace@insuremeeg.com. You can also contact him by going to his website, https://greavesinsurance.com, and completing any of the available “Contact Us” forms.

How to subscribe to his newsletter

If you’d like to subscribe to his monthly newsletter, “Health, Safety, and Good News You Can Use,” go to his website, https://greavesinsurance.com, and click on any of the “Subscribe” buttons.

Have insurance, income tax, real estate, mortgage, or home inspection questions for Eustace? He’ll be happy to provide the insurance and income tax answers and will continue to call on his expert contacts for help in the other areas. Just email him at eustace@insuremeeg.com with the subject line, “Ask Eustace.”

Automobile Insurance Policy Danger In The Details

automobile insurance policy
Good auto insurance is hard to beat!

Automobile Insurance Policy Details Are Fraught With Danger

I enjoyed a great conversation with a nice gentleman the other day. He’d been referred to me for an automobile insurance policy. He readily admitted his last automobile insurance company dropped him back on July 1, 2020, for having two (2) “incidences” during the past three (3) years.

He tried, without success,  to acquire new coverage for two (2) months prior to his prior company’s non-renewal date. After many tries, he simply couldn’t understand why no one would take him up as his one accident was not-at-fault and the other incident, a moving violation, resulted only in a ticket, no points.

I ran him through one of my preferred companies and discovered why no one wanted to take him.

How Automobile Insurance Policy Owners Put Themselves In Danger

 

Auto and home insurance are analogous to term life insurance. Basically your coverage, unlike whole or permanent life insurance, runs out after a certain number of years. If your policy allows the coverage to continue, the premium skyrockets to an amount that becomes untenable to maintain. So you wind up losing your “cheap” insurance, usually at the same time it is most important for your family’s financial well being.

In New York State, auto and home insurance companies write you policies with a term of three (3) years. So, if you maintain a good auto driving record, for example, renewal is a no-brainer. Too many “incidences” though, and renewal may come at a hefty price, or not at all.

So. several years ago you called one of those over-the-phone, direct-to-a licensed advisor automobile insurance companies and got a terrific rate.

You just weren’t aware it could have even been better.

You didn’t know your new policy contained a ticking time bomb.

So you contacted your independent agent or broker who’d been through hell, high water, and even a couple of claims with you, canceled your current policies, and moved to your new company.

Which Rating Factors Matter Most To Automobile Insurance Companies When You Want To Move Your Policy?

How long you’ve been licensed.

Your gender and age.

Your insurance credit score.

How many current moving violations (with some companies, during a period of as many as five (5) years) are on your record when you apply.

Policy lapses for non-payment of premium.

License suspension or revocation.

The length of time you were without auto insurance. Nowadays, the lack of a personally owned auto insurance policy for more than 30 days even if you didn’t actually own a vehicle, will disqualify you from getting insurance from many companies. 1

And Finally, The One Factor Most Consumers Know Nothing About

Few, if any, of the major preferred companies take new business coming from indemnity or non-standard insurance companies.  

And that is where your company placed your coverage. Its indemnity or non-standard insurance company. The nice person on the phone never suggested you could request quotes for their Preferred or Standard companies. Or, even if you didn’t qualify for those companies now, you weren’t advised to try again in six (6) or twelve (12) months.

For this reason, you’re basically stuck with your automobile insurance company.

Your Policy Is Emblazoned With An Automobile Insurance Scarlet Letter

 

For this reason, and this reason alone, I couldn’t offer this gentleman a quote from any of my preferred companies. So, I took the only choice open to me. I gave him a quote from the New York Automobile Insurance Plan (NYAIP).  In many cases, the NYAIP is the last resort for those needing automobile insurance. 

The NYAIP quote? Close to $6,295 for one year, about $4,500 more than the quote I would have been able to get him from one of my preferred companies.

I called him back.

Told him the quote.

He said, “Forget it,” and hung up.

Why Do Some Automobile Insurance Companies Engage In These Practices?

Short answer? Got me. 

For many companies, the name of the game is increasing market share, no matter the immediate cost. So, if your profile permits, you will be placed into their Indemnity or Non-Standard company, offering you a competitive, lower premium just to get your business. Then as claims from other drivers in your Indemnity company roll in, your premium begins to increase. This increase will be imperceptible at first. Then one day, you will open your renewal envelope and receive the shock of your life. 

Even if your record is perfectly clean, when you begin calling other insurance companies to secure a lower-cost automobile insurance policy, your current indemnity policy status will prevent you from doing so.

What You Should Do Today

Find your automobile insurance policy and call the insurance company or agent. Ask whether you are in an Indemnity or Non-Standard automobile insurance company. If you are, request they requote your policy for either their preferred or standard company.

Now, when you want to switch companies, it won’t be the type of company preventing you from moving your coverage.


Notes:

1. In my previous post “8 Tips To Save Money On Your Automobile Insurance, (https://brooklyncovered.com/8-tips-to-save-money-on-your-automobile-insurance/)”,  I wrote about the good old days when most auto insurance companies allowed you to go from one to up to three years owning a personal auto insurance policy without extra premiums or flat-out rejection. Some companies didn’t even factor in the lack of automobile insurance, as long as you didn’t own a car in your own name. In either case,  I suggested the purchase of a monthly zip car membership where your membership automatically provided you with liability insurance coverage. This removed the necessity of maintaining a non-owned auto insurance policy. Thus, when you decided to purchase your own vehicle, the money you’d spent on the zip car membership:

Wound up saving you money on your new auto insurance policy as you’d been continuously insured, and,

Enabled you to qualify for a better or preferred company in an insurance company’s member companies. 


Eustace L. Greaves, Jr., LUTCF is an NYS-licensed Independent Insurance Agent and Broker with over 38 years of experience. Eustace is ready to assist you with your life, disability, home, flood, renters, auto, cooperative and condominium, and wedding insurance needs, and can be reached at 718-783-2722, or by email at eustace@insuremeeg.com. You can also contact him by going to his website and completing any of the available “Contact Us” forms.

If you’d like to subscribe to his monthly newsletter, “Health, Safety, and Good News You Can Use,” go to his website, https://greavesinsurance.com, and click on any of the “Subscribe” buttons.

Have insurance, income tax, real estate, mortgage, or home inspection questions for Eustace? He’ll be happy to provide the insurance and income tax answers and will continue to call on his expert contacts for help in the other areas. Just send him an email to eustace@insuremeeg.com with the subject line, “Ask Eustace.”