You'll save 10% right away by raising the deductible on your car or homeowner's policy to, say, $500 or $1,000 from the typical $250. You shouldn't make small claims anyway; they may push your premiums higher. Keep an emergency fund rather than paying for a low deductible. Make sure you buy your auto and homeowner's coverage from the same insurer to get a 15% multiline discount. You can lower premiums further by adding storm shutters, reinforcing your roof or buying stronger roofing materials, or by adding smoke detectors, dead-bolt locks and a burglar alarm or a sprinkler system. You can save on medical insurance too by raising the deductible or switching to an HMO from a more costly PPO or POS plan.
"Raising deductibles to save on premiums makes the most sense for those who are healthy and have cash reserves to pay the increased cost in the event they have more claims than expected," says Kevin J. Meehan, a financial planner with Summit Wealth Advisors in Itasca, Ill. "Many pay for benefits they just don't use." This is also true of life insurance, where you may be able to save thousands of dollars a year in premiums by avoiding whole or universal coverage and opting for a term policy with a face amount large enough to retire all your family debt immediately and leave your spouse with an income stream for life.
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