methods for obtaining cheap insurance

It may seem nearly impossible to find cheap insurance, whether you are seeking to insure your home, automobile, life, or health. You have
likely seen numerous advertisements on television, radio, and billboards for insurance companies claiming to specialize in low rates.
When you call a company advertising low rates or an agent representing such a company, though, you will often find that either the company's rates are not significantly lower than those offered by any other company, or the agent will try to sell you coverage not adequate to your insurance needs. It is understandable that people become frustrated when trying to obtain insurance, because finding adequate coverage for manageable premiums can seem futile.
Whether you are new to insurance or you have purchased several
policies before, there are strategies you can use to obtain cheap insurance without sacrificing the coverage necessary to protect you and your family.
COMPARISON SHOPPING
Shopping for insurance can seem a bit like car shopping - it is a task no one truly wants to undertake but is a periodic necessity of modern life. Although it is easy to take the best offer after a few calls or agent visits, perseverance can save you hundreds or thousands of dollars on your yearly insurance premiums. Here are some simple ways you can compare quotes and policy coverages available from several different insurers so that you can be sure you are getting the best deal on your insurance policy.
REFERRALS
Do not be afraid to ask for recommendations and referrals from
people who already have the types of insurance you are seeking.
Find out what companies they are insured through and ask for the
names and numbers of their insurance agents. You will know if a
friend, neighbor, or family member is happy with his or her insurance
company and agent because he or she will not hesitate to put you in
contact with the agent.
INTERNET SHOPPING
Another easy way to comparison shop for insurance quotes and
policies is to look for insurance companies online. The Internet is a
powerful resource for comparison shopping for insurance policies
more companies each year are offering online quotes to prospective
customers based on information you provide. Some will even allow
you to purchase policies online.
The insurance quotes you receive online are merely estimates based
on the limited information you enter into the quote form. The purpose
of these initial quotes is not to provide an exact representation of your
insurance premiums but rather to give you an estimate without
requiring you to enter several pages of detailed information. If you
have entered your information honestly and have not omitted any

pertinent information, your policy premiums should be within 5 to 10
percent of your initial quote.
You can also find Web sites that will allow you to enter your
information once and give you quotes from several different
companies. This can make comparison shopping even easier,
because you can spend ten minutes entering information into a Web
site form and have up to a dozen quotes and coverage plans to
compare.
CONTACTING MULTIPLE AGENCIES
Although a bit more time consuming, one of the most thorough ways
to compare insurance coverages and premiums is to contact nearby
agencies. You can limit your time on the phone by calling one agent
from each insurance company. There is virtually no advantage to
calling more than one agent from the same company (unless, of
course, you decide you do not like the first agent) because the agents
use the same rating software throughout the company and would give
the same quote.
The advantage of contacting and visiting multiple agencies is that
each agent will take the time to fully explain your quote and the
coverages you can obtain for different policy premiums. This method
requires a greater time investment than most, but it gives you the
greatest amount of information possible to make an educated and
informed decision when selecting an insurance policy.
Insurance companies are required to offer quotes for free. If you are
asked to pay to obtain a quote for insurance coverage, leave the
office or hang up the telephone and contact your state's insurance

department. The contact information for each insurance department
in the United States is located in Appendix A of this book.
CONTACTING AN INDEPENDENT AGENT
Another way to easily compare premium quotes and policy coverages
is to contact an independent agent. Rather than being bound to
provide quotes for only one company or group, independent agents
quote, write, and service insurance policies for several different
companies and, therefore, can provide a quote for each company
they have contracted with.
The advantage of using an independent agent is that you can obtain
multiple quotes quickly. Also, since many insurance companies rely
on credit scores to determine policy premiums for various insurance
programs, using an independent agent gives you the advantage of
having only one inquiry on your credit record, instead of having an
inquiry for each company.
Make sure you keep a list of companies that an independent agent
uses to provide you with premium quotes so that if you choose to visit
another independent agent, or use another means to compare
quotes, you do not obtain duplicate quotes from the same company.
EDUCATING YOURSELF
Another effective method for finding cheap insurance is to take the
time to become educated on the coverages available on the types of
policies you seek and understand what they mean. Although this will
require a significant time investment, becoming educated about
various insurance coverages will help you identify coverages not

appropriate for your personal circumstances and keep you from
declining coverages essential to keeping you and your family
protected.
WHAT TYPES OF COVERAGE DO YOU NEED?
Because agents earn their livings based on commission that is, they
are paid a percentage of the premiums they write for an insurance
company - some agents maytry to persuade you to purchase
coverages and endorsements that you may not need. Thus, it is
important to discuss the quote with your agent thoroughly, so you can
understand each coverage included in the quote and the reason each
coverage is applicable to your personal situation. Do not be afraid to
ask questions if you do not understand a coverage or policy limit or to
ask your agent to explain any optional endorsements to show you
how they can benefit you and your family.
ASK ABOUT DISCOUNTS
Also, make sure you are aware of the discounts that may apply - if
you qualify for several discounts, you could easily cut your insurance
bill in half. Agents will not always tell you about these discounts. It
pays to know the right questions to ask so you can maximize your
savings.
For example, if you are applying for an automobile insurance policy,
be sure to check with your agent or your auto insurance company to
find out if the company also offers home or renter's insurance.
Purchasing both policies from the same insurance company, or
through two affiliates of the same insurance company, can be
advantageous to you because many insurance companies offer a
special discount, often called a multiline discount.

A multiline discount can save you money on your home and
automobile insurance - sometimes as much as 15 percent of the total
policy premium for each type of insurance. The reason insurance
companies are willing to offer this discount is because you are
purchasing more than one line, or type, of insurance from them. It
also benefits you to have all your insurance in one place so you can
work with one agent and one company, instead of managing policies
with several agents.
The multiline discount is only one of the many discounts you may be
eligible for on your personal insurance. It is important to know what
discounts and savings are available so that you can benefit from the
lowest possible rate. This book will list available discounts for each of
the four major types of personal insurance in subsequent chapters,
and they are defined in the Glossary in Appendix B.
KNOW YOUR LIMIT
Before you purchase a policy or even begin the quoting process, you
should have a realistic idea of how much it would take to replace all
your personal property, pay off your family's bills if you passed away,
or take care of your medical expenses if you became ill. Knowing how
much coverage you need to put you in the same financial position as
if the negative event had never occurred is crucial to your financial
success because it keeps you from taking out more or less personal
coverage than you need. Just remember to be realistic. Cheap
insurance will not help you during a disaster if you have inadequate
coverage.
You can get an idea of how much personal property coverage you
need by getting appraisals on your more valuable items and by

seeing what similar items cost new. You need appraisals for your
more valuable items, such as jewelry and furs, because these items
need to be scheduled on your policy. Your agent will most likely keep
a record of the appraisal in his or her files in the event that something
happens to the scheduled item.
OTHER CONSIDERATIONS
Regardless of which method you choose to compare insurance
quotes, it is important to keep in mind the limits and deductibles that
each company assumes when providing you with a quote for
insurance coverage. For example, Company B may give you a higher
price than Company A, but it is possible that Company A is quoting
you at lower policy limits or higher deductibles.
It is also important to ask if your credit will be obtained as part of the
quoting or application process and if it is factored into the premium
quote. Some insurance companies partially base your rate on your
personal credit rating and consumer reports, such as motor vehicle
records, accident and claim reports obtained through the
Comprehensive Loss Underwriting Exchange (CLUE), health and
medical records obtained through the Medical Information Bureau
(MIB), and other records and reports.
Some insurance companies run your credit and other reports at the
time of the quote; others assume you have good or excellent credit
and give a quote based on these assumptions. Companies that base
your initial quote on information assumed by the agent or verbally
stated by you will then run your credit when your agent submits your
application for the policy, and you may be surprised by a higher rate.

Finally, another important thing to consider is your choice of
deductible amounts for your policy coverages. Because insurance
companies use different rating factors for different deductible
amounts, a higher deductible means a lower rate. Make sure you
know what deductible amounts your agent is basing your quote on so
you have an accurate cost comparison.
Although you can easily lower your policy premium by selecting a
high deductible, it is also important to be realistic when determining
your deductible amount for each coverage. You should ask yourself
how much you would realistically be able to pay out of pocket if you
incurred property damage, a loss, an injury, or a liability for injury or
damage to others. If you are not able to absorb a high deductible in
the event of damage or a loss, it is better to pay a slightly higher
premium for a lower deductible.