If youre afraid to open your mail or inbox for fear of the bills inside, youre not alone. The cost of living is going up, and that means more, pricier bills. As your costs climb, you might be tempted to cancel or reduce coverage on your insurance products for a little extra cash each month. Although this tactic could give you a bit of immediate relief, its a poor financial decision. Not only are your insurance expenses some of your lowest when compared with your other bills, but cutting down on insurance now could mean big bills in the near future.
How Do My Insurance Costs Stack Up?
Cutting down on insurance to reduce monthly bills isnt an effective money-saving plan because, when compared with your other expenses, insurance isnt that pricey. For example, money guru Dave Ramsey lists the average monthly car payment at $475 per month, but the average monthly car insurance premium is just $150. In 2012, U.S. renters paid an average of $937 per month for their homes and $15 to $30 per month for their renters insurance policies. Even historically expensive health insurance can be obtained for less thanks to group rates and government programs. What you pay for your insurance products depends on a variety of variables – from where you live to your driving record to your health status – but odds are that all of your insurance costs combined would fall far short of your single largest bill, such as your mortgage, rent, or car payment.
Can Cutting My Insurance Hurt Me Financially?
Unfortunately, it doesnt take much to turn financial stability into instability. A natural disaster, fire, health crises, or car accident could leave you deep in debt in seconds. Youve worked hard to provide a solid nest egg for your family, but if you died, they would be faced with your debts, funeral costs, and other final expenses. Having insurance means having security – you dont have to worry about the unexpected because your familys financial health is secure and protected, even if the unthinkable happens.
If you cancel your electric service, youll notice when you try to turn on a light or power an appliance. Cut your cable, and youll realize it when you want to watch your favorite TV show. But if you cancel or downgrade your insurance, you wont see an effect right away. Thats why eliminating this bill is so tempting. But the decision could result in financial ruin if you need your insurance and it isnt there.
How Can I Save on Insurance Premiums?
Your insurance costs are among your most important and least expensive bills, but that doesnt mean you shouldnt try to get the best possible rate for the lowest possible price. Although you shouldnt cancel or reduce your coverage to save money, you should shop around to keep your costs low. Every insurance company figures their prices differently and offers different discounts. By getting multiple quotes from many different insurers, you can ensure youre getting the best possible rate and save some money each month.
Compared to the rest of your monthly bills, your insurance costs dont seem as high. But the little you pay per month to keep your insurance in good standing can save you millions if the unexpected happens. SelectQuote wants you to have financial security and peace of mind; thats why we recommend that you keep coverage, but seek out comparative quotes regularly to ensure your current rate is the best rate.