budgeting

Reducing FAITH Expenses: Insurance

This is the third in a series of money saving strategies for reducing your FAITH expenses. FAITH = food, apparel, insurance, transportation, and housing.

Reducing Insurance Costs

Insurance costs can really creep up if you’re not careful. I have to force myself to really look at the statements and keep track of what the policies cost and how much the costs increase (it seems like they all regularly go up, doesn’t it? ) A regular check-in and price comparison is a good place to start.

My trick for doing this? I have an annual date. No, not a romantic one (although, a glass of wine after wading through insurance policies is completely acceptable!) but a date that I go through the policies, make sure our deductibles make sense, and that we’re not over-looking any discounts.

Automobile

Shop around, raise your deductible, and drive the speed limit. Yes, this sounds goofy but speeding tickets are expensive and they make your insurance costs go way up.

I’m about to shop around for our automobile insurance. Soon, we’ll have a teenage driver and our insurance company doesn’t give a discount for completing a driver’s education course. How do I know this? “The Mom Network,” of course! Don’t be afraid to ask around and see what companies your friends or neighbors recommend.

Homeowners and Renters

Have you done upgrades to your home? This may mean lower premiums. New furnace installed or have an old house and you’ve replaced the plumbing? Check with your agent and ask for a discount. Remember, it never hurts to ask.

If you’re a renter, it’s smart to have a policy even if you don’t “own” your home. If something happens to your belongs inside your home, you’ll want to be covered. Renter’s insurance isn’t very expensive and is worth looking into.

An easy way to keep track of all of your belongings whether you own your home or rent is to make a video of every room in your home. Place this in your safe deposit box or in a fire-proof safe in your home. If anything happens (heaven forbid!) you have a visual record that will help you remember.

Life

Go with a term policy. It’s the least expensive and for a set period of time. There’s no investments or cash back attached to it. It’s simple. We all need life insurance in case of death but don’t use insurance as your retirement savings account.

When my husband and I had kids, one of the first things we did was to increase our life insurance policies. This brings up another point – have a policy for both spouses. We pay our policies annually and consider them a “gift” for our family.

Medical

If you’ve recently lost a job don’t automatically go with COBRA. It’s expensive and you do have other options. Check out individual policies.

If you’re healthy, consider a low monthly premium with a super high deductible. Our individual policy allows us to have 6 doctor visits/year with a $25.00 co-pay. My husband and I have yet to use all of the visits during a calendar year.

Dental

Dental insurance – not a good deal – even our dentist said it’s not worth it. If you have good home care (which means you floss daily and brush regularly), pay out of pocket. We also only go to the dentist once-a-year.

Work with  your dentist, too. Our dental office will let us skip extra treatments and not see the dentist unless it’s necessary. Having teeth cleaned by a hygienist and not seeing the dentist has proven to be a lot less expensive.

Make a date with your insurance policies and make sure the deductibles are correct and you’re not overpaying. We all need insurance but we don’t have to overpay. Take the time and make sure policies are correct. It can really save in the long run.

Go Gingham related links:

Budgeting and how to track expenses – Part 1
Budgeting and how to track expenses – Part 2
Budgeting and how to track expenses – Part 3
How finances figure in frugality
What does it mean to budget? Find out here!
Why we all need to balance our checkbooks regularly – checking your balance online doesn’t count!
Frugal living secrets: Reducing FAITH (food, apparel, insurance, transportation and housing) costs

16 thoughts on “Reducing FAITH Expenses: Insurance

  1. I did not see prescription medicines addressed. Ask your doctor to write the prescription for the largest day supply allowed. Typically this is a 90-day supply; then ask for three refills. This will give you a year’s supply without paying for another doctor visit.
    Ask that the prescription be written to allow substitution by a generic equivalent if one is available.
    Finally, check into the big chain store prescription plans. Some will charge as little as $4.00 for a 30-day supply without using your prescription insurance.

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    1. Good point, Karen! You are right – I completely overlooked that aspect. Thanks for the information, too. I’ve also noticed that you can’t get fewer pills than what your doctor prescribes – I tried that recently and was shut down. I had to buy the amount my doctor listed even though I knew we wouldn’t use all of the medicine.
      Thanks, Karen. As always – helpful points. 🙂

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    2. Also – there are time when mail order pharmacies can be less expensive – sometimes it depends on your medical insurance.

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  2. I’m anxiously waiting for Oregon’s health insurance exchange to open Oct. 1.
    We were just notified that our individual policy monthly premiums are increasing by 60% next month!

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    1. Auntie M,
      Me, too! Our policy renews in September and I’m curious to see what the exchange will do for us as well as ObamaCare. It seems like we should have other options….
      Sorry to hear your monthly premiums are going up by 60% – yikes! That is a rate hike. Keep me posted on what you go with…Thanks!

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  3. About a year ago my husband and I decided to go with auto and homeowners insurance that had lower monthly premiums and higher deductibles.
    Some people get in trouble with this approach because an accident happens and they don’t have money for the deducible. We didn’t want to find ourselves in this situation, so we committed to saving enough money to cover the homeowner’s deductible and the deductible for the car.
    In doing this, we don’t pay as much each month, but if we do ever have an accident, we know we’ll still be able to pay the deductible so things can be repaired or replaced.

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  4. When our oldest son turned 16 in February (and we bought him a modest car), our auto premiums with the company we were with tripled! I spent much time and effort shopping around. We were finally able to settle on a $150 monthly increase to our premium after reducing coverages on our other two paid-for, older model vehicles. He contributes $75 a month toward the increase. We have decided to try and sell one of our other vehicles. (We live in a very large, spread out, southern city where a car is not a luxury). We were also just notified that our homeowner’s insurance will increase $214 upon renewal. We have had no claims but the State of Florida approved a rate increase! I will be shopping this policy now. All insurance is expensive!!!

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    1. Mandy,
      That sounds like a good plan getting your 16-year-old to contribute towards his policy but I’m sorry to hear that there was a rate increase! Smart move shopping around… 🙂 I’d love to know who you end up with. Thanks for leaving a comment.

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  5. Sara- What I found out in this process is different companies value drivers differently. My husband and I had reasonable rates with Auto Owners. Then, when we added our 16yo son, they lost their minds!!! After much shopping around, GEICO didn’t mind a 16yo, male driver nearly as much as Auto Owners did. However, GEICO wasn’t as cheap as Auto Owners when it was just my husband and me. So, you can’t assume anything until you have then actually run the numbers. Before we left Auto Owners, I had our agent give us 9 different quote scenarios. In the end, GEICO was less expensive. Males also cost considerably more (hundreds of dollars) than females. It’s a lot of work, but lots of dollars are at stake over the same amount of coverage! Now, I’m off to shop our homeowner’s policy. Difficult in Florida because so many companies pulled out years ago.

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  6. Sara, unfortunately I have had to learn how to work the prescription medical plans the hard way. It can become quite a juggling act.

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  7. I agree with shopping around, but you do have to think about your entire family budget and financial structure. We have relatively low deductibles on our autos, but that’s because for us, it’s easier to pay an extra $10-20 per month, than to come up with $1,000 if there’s an auto accident. A neighbor of ours had shopped around for homeowners insurance, and got a really good rate by having a $15,000 deductible. They had a pipe burst when they were on vacation a few years ago. She admits now that in hindsight, she wished that she had paid the extra few dollars every month for a much lower deductible. Their repairs totaled almost $20,000, and they were out of pocket for 3/4 of it.

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  8. Very impressive how much you’ve saved in this category! I am the queen of dental problems, so dental insurance is a must for me…hopefully that won’t always be the case.

    How are your children insured, health insurance-wise? Do they have the same plan w/ high deductible & low premiums? Or do you have something different for them. With young kids, as you know, we are at the Dr all the time…but I have no idea about teenagers so just curious…

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