Saving Tips to Combat Skyrocketing Insurance Costs

For a variety of reasons, insurance premiums for homes, cars, jewelry, artwork, collectibles and pets are climbing. But smart insurance shoppers can take steps to trim these skyrocketing costs. Some are increasing their deductibles to save, while others are unbundling jewelry insurance from their homeowners policies to cut costs.

The costs for two of the most common types of insurance demonstrate the trend toward higher premiums. Homeowners insurance premiums spiked 10.7% in the first quarter of 2022 compared with the same period a year earlier, according to data from S&P Global Market Intelligence. Meanwhile, the average premium for auto insurance has jumped by 4.9% in 2022, S&P reported in June.

When it comes to car and homeowners insurance costs, premiums are going up for several reasons. For example, insurers are compensating for big financial losses arising from claims related to disasters like wildfires, floods, tornadoes and hurricanes. On top of that, the cost to repair homes and cars has climbed for reasons such as supply chain bottlenecks and inflation.

Jewelry, Artwork, Collectibles and Pets Also Are Becoming More Expensive To Insure:

• Jewelry insurance premiums are going up primarily because the cost of jewelry is going up. From July 2021 to July 2022 alone, the price of jewelry inched up by 0.8%, according to the U.S. Bureau of Labor Statistics. Looking at it another way, the average cost of an engagement ring increased from $5,900 in 2019 to $6,000 in 2022, according to The Knot, a wedding website. That’s a difference of 1.7%.
• Artwork and other collectibles are not immune to rising insurance costs, either. By one estimate, the cost to insure fine art is surging anywhere from 5% to 12%, in part because of natural disasters in places like California and Florida.
• Dogs, cats and other pets also are becoming pricier to protect. The VetHelpDirect website reports that pet insurance premiums rise every year, just as health insurance premiums for humans do. According to the PawlicyAdvisor website, the average monthly premium for dog insurance soared 15% from 2016 to 2020, while the average premium for cat insurance increased by a more modest 6.4%.

Ways To Save on Your Insurance Premiums

So, what can you do to fight inflation and other factors that are causing your insurance premiums to jump? We’ve got six recommendations:

• Compare insurance rates
• Maximize insurance discounts
• Increase insurance deductibles
• Bundle insurance policies
• Bypass the insurance middleman
• Minimize small insurance claims

Compare insurance rates

To find better insurance rates, it’s smart to do some comparison shopping.

One easy way to get started, for example, is to check your price from BriteCo Jewelry Insurance. You can get a free, no-obligation quote in 30 seconds online to see what you can save.

When looking for auto and home insurance, the Insurance Information Institute suggests obtaining quotes from at least three insurers. The same advice can be applied to shopping for policies to cover jewelry, artwork, collectibles and pets.

Fortunately, shopping for insurance has never been easier.

These Days, a Number of Online Tools for Comparison Shopping Are Available

These are some of the top options:

• BriteCo for jewelry insurance
• The Zebra for a variety of policies
• Hippo for homeowners insurance policies
• Gabi by Experian and Clearcover for auto insurance
• Chubb for artwork and collectibles insurance
• Lemonade for pet insurance

Maximize insurance discounts

Policyholders can take advantage of an array of discounts. The list includes:

• Adding anti-theft devices to your home or car
• Taking a defensive driving course
• Insuring more than one car with the same company
• Maintaining a clean driving record
• Agreeing to use tools that monitor your driving habits, such as Allstate’s Drivewise app
• Installing an alarm system or home safe to protect your jewelry and other valuables
• Fortifying the roof of your home
• Sticking with the same insurer to score a loyalty discount

Increase Insurance Deductibles

Bumping up the deductible on a policy typically can lower your premium.

The deductible is the amount of money you pay out of pocket before an insurer covers a claim. For example, raising your deductible for comprehensive and collision auto coverage from $200 to $500 could shave 15% to 30% off your premium, according to the Insurance Information Institute. Going from $200 to $1,000 might slash your comprehensive and collision premium, and you could save 40% or more.

Of course, be sure you’ve got enough money put aside to make up for a higher deductible in the event that you need to file a claim.

If you’re not comfortable enough to raise your deductible, consider trimming your coverage. For example, it might not make sense anymore to carry comprehensive and collision coverage if you’re driving an older low-value car that’s paid off.

Bundle Insurance Policies

If you’ve watched any shows on TV, you’ve probably seen insurance ads that promote bundling as a way to save money. When you bundle policies, this means you’re purchasing two or more insurance policies from the same company.

It’s common for bundling to include auto and homeowners insurance policies. This bundling combo could easily lead to saving on homeowners insurance by 5% to 25%.

However, you might be able to snag savings by doing the opposite and unbundling your policies. For instance, a specialty insurer like BriteCo might supply better coverage without deductibles for jewelry coverage at a lower cost than adding jewelry coverage to an existing homeowners policy.

Bypassing the Insurance Middleman

When you buy coverage directly from an insurer rather than working with an independent insurance agent or broker, you might be able to reap savings of, say, 10%. But this may not always be the case, as insurance rates vary depending on different insurance companies, your credit score and geographic locations.

If you decide to purchase directly from an insurer, make sure the coverage meets your needs and is reasonably priced.

On the flip side, an independent agent or broker who has access to a range of insurers might be able to find a better deal than you’d get by purchasing directly from an insurance company.

Minimize Smaller Insurance Claims

In some cases, filing a claim might cost you more than it’s worth. Insurers often will raise your rates after you’ve filed a claim. So, if you’ve submitted a relatively small claim, you may wind up coming up with more money for premiums than you’d get from the claim payout.

So, you might want to think twice about filing a claim if, for instance, a bicycle is stolen from your garage, or a wreck causes minor damage to your car. In situations like this, you could be better off paying for repairs or replacements out of your own pocket to avoid premium increases down the road.

Earn Rewards on Routine Purchases

Upside is a simple and free app that allows you to earn cash back on many of the things you already do. Basically, when you use the app, you can see returns from activities like:

• Gas
• Groceries
• Dining and more

When you earn these rewards, you can cash out with a:

• Direct deposit
• PayPal deposit
• Gift cards from Amazon, Target, Starbucks and more

You can download the app to your Apple or Android device, claim offers that appeal to you and wait for the reward to appear in your account—it usually takes 2 to 4 days. Plus, you can earn up to 3x the cash back you would normally get on particular programs, spanning more than 50,000 businesses. While this cannot defray all your insurance costs, it can help put some cash back in your pocket in these extraordinary times.

Be Prepared to Face Higher Premiums — and Take Action

No one likes to spend a lot of effort evaluating insurance coverage. But as rates continue to increase, it behooves everyone to dig a bit deeper into the options for saving money. One big benefit? Even a small amount saved can add up over time.