Managing one’s finances can be a challenge for anyone, but that’s especially true if you’re newly living on your own. Assuming you were previously covered by your parent’s policies, you may feel a bit of “sticker shock” as you encounter higher premiums for new auto or renter’s insurance. Fortunately, following a few smart tips can ensure you get the best coverage for your dollar.
Check for Education-Related Discounts
A June 2015 NerdWallet article explains that because insurance companies factor in a driver’s educational level when they calculate that individual’s risk and offer a policy. Although this may be due to insured motorists with higher education and higher incomes paying for smaller repairs out of pocket, which can affect the number of overall claims they file.
Given the pushback from some consumer advocacy groups, it’s unclear how much longer some insurers will continue offering discounted rates to people with undergraduate or advanced degrees. If you’re still in school, however, you may also qualify for a good student discount based on your academic performance. Either way, you want to ask about these types of savings when you talk to your local insurance agency about coverage.
Consider Your Deductibles
You may be able to keep costs down by choosing a higher deductible, according to a 2016 Consumer Reports guide. The tricky part is balancing the savings you get from lower premiums with your ability to pay that deductible out of your own pocket. Depending on the amount you select, you could save between 30 and 40 percent, especially if your driving record is already clean and claim-free. Nevertheless, make sure you can comfortably pay that deductible in case you do end up in a wreck.
Add a Renter’s Policy to Your Coverage
Many landlords and property companies now require tenants to carry renter’s insurance as a condition of their leases. Even if yours doesn’t, it’s still a smart idea to add rental insurance to your total indemnity package. The Muse clarifies that these policies typically cover belongings inside your unit and pay for financial losses from fire, theft, or other types of claims, as well as liability for damage resulting from negligence. Keep in mind that they may not reimburse for some kinds of losses, such as:
- “Acts of God” including flooding, earthquakes, mudslides, or nuclear accidents
- Items that cost significantly more than your policy’s coverage limit, such as pricey jewelry or custom equipment
- Injuries caused by certain breeds of dogs, such as Rottweilers or Doberman Pinchers
Purchasing both auto and rental products from the same company will likely net you some savings, which is why shopping for both simultaneously is a wise idea.
For Seniors, Don’t Rely on Social Security, Get Supplemental Health Insurance
Before social security poverty in the United States was heavily concentrated among seniors. Social security reform in the 1930s helped put a big dent in this. That said, seniors are still a vulnerable population. Seniors have less time to make up for periods of low income and are often less capable of earning money due to aging related conditions than younger people, as a result its a prudent idea to carry state supplemental insurance when medicare or social security isn’t able to cover everything. Supplemental insurance regulations vary a lot by state so you’ll need to research this. For example, medicare insurance in New York isn’t the same as California, etc.
Smart Shopping Can Lead to Savings
Insurance coverage is a must if you drive or rent an apartment, but it pays to do your homework when you shop. Ask about education-related discounts or potential savings from bundling auto and rental policies. While you’re at it, consider choosing a higher deductible but make sure you can pay if you end up with a claim. With money-saving moves like these, you won’t have to empty your wallet each month to pay for coverage.