Reduce your insurance cost to payoff debt

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Insurance is an expensive yet necessary financial tool that we need to carry in the modern time. Insurance protects us from contingent financial losses from unforeseen events. Hence, insurance premium consumes a large portion of our budget. But there are ways that can help you in lowering the cost of coverage without sacrificing the protection and the money thus saved can be used in repaying debt.

This write up would discuss few such tips that can help you in reducing your insurance expenses successfully.

Reducing auto insurance costs

If you are driving, you must have auto insurance. Most of the states have mandated auto insurance for the drivers and so there are no ways you can avoid buying it. Now here is how you can reduce the premium you pay on the policy without compromising on the coverage.

  • Check your policy for unnecessary coverage. Ask yourself whether you really need the windshield and towing coverage on your car.
  • If you’re driving an old paid off car, you may forgo collision coverage on it. Check the car's value in the blue book and decide if it would really worth after paying the premium and deductible.
  • Ask the insurer about all sorts of discounts. Teen drivers are expensive but most insurers also offer discounts on teen drivers based on their grades. Also there are incentives of good drivers.
  • High deductible lowers the premium. Hence, check out for higher deductible. But at the same time remember that you would need to come up with the deductible amount when needed.
  • If you already have health insurance you might not need PIP and/or Medpay on your auto policy. But you must consult your state laws before dropping them.
  • If your carrier is charging high, shop around for lower rates. Its competitive market and you may get rates that would suit your pocket.
  • Reducing life insurance costs

    Life insurance expenses can also be reduced and the saving can be put towards debt repayment. Check out the following tips.

    • Shopping around applies even for life insurance policies. So, get quotes from different life insurance carriers before buying.
    • Start early since life insurance premium depends on your age. The older you are, higher would be your premium. Also your lifestyle and health would affect the premium rate. Quit smoking, stay in shape and follow a healthy lifestyle for better rates.
    • Assess you life insurance need. Both underinsurance and overinsurance can upset your financial future. Cut costs on the riders that are redundant. Accidental death and dismemberment rider is one such example.
    • Your mode of premium payment can also help you in reducing cost. Try to opt for annual mode of paying premium. This way you can cut the cost of paying administrative fees every time. Also, chose a longer tenure for the policy as it'd help you in lowering premium.
    Getting out of debt means scrapping money from every possible source to pay down the debt burden. The steps taken towards reducing insurance expenses would allow one to save money which then can be put towards repaying debts.

Last Updated on: Wed, 16 Jan 2013

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