This quick call can save you thousands of dollars
Last week I was giving myself high-fives after making $500 in five minutes. It wasn’t the first time this has happened, and it’s something that millions of Australians can do too.
All it takes is a telephone call after receiving your annual insurance renewal.
Whether it’s for home insurance, car insurance, health insurance, life insurance, landlords’ cover or any other premium that gets renewed each year, huge potential savings can be made.
In my case I was able to reduce my annual home and contents insurance premium by $500 simply by switching from one major insurer to another, rather than accept its automatic renewal.
It’s called a loyalty tax. People paying recurring bills will often accept prices rises for the sake of convenience, or not even notice price rises, and insurers know this. They can get away with jacking up prices on policies to inflate their profits, knowing that not everyone will question their moves. And they often give the best deals to new customers to lure them in.
Insurance is always a touchy subject, and fires and floods in recent years have stoked its controversy, but it’s also one of the simplest household bills to save money on.
Once you have your annual renewal details, phone another insurer or two and compare premiums – making sure you are comparing apples with apples when it comes to valuations, excesses and what is actually being covered.
Comparison websites can also help people check policies and their details, but when it comes to insurance I prefer the direct approach because each person’s assets and locations are different.
It’s worked several times for me in the past few years, and I reckon I’ve switched five or six car, home and landlord policies and saved hundreds of dollars each time. And it wasn’t moving to a cheap and nasty insurer – it was from one large foreign-owned company to another large foreign-owned company, through which I’ve previously had positive claims experiences.
Switching insurance companies is nothing like the headache of switching banks, where the bank account and direct debt changes can be a huge turn-off.
You can also contact your existing insurance company to see if they can do better. In my experience, they don’t have as much wiggle room as banks’ customer retention teams, and may instead offer you a lower premium only if you give up some of your existing policy’s benefits. No thank you.
If you cannot find a better deal anywhere, there are other ways to cut insurance costs, including:
• Increasing the excess you must pay when making a claim;
• Checking whether the insurer offers a discount for paying annual premiums upfront rather than monthly;
• Considering adding extra security to your home or car – a small expense now could save a lot of recurring extra costs later; • Checking that the sum insured not been over-inflated by the insurance company, and instead reflects the true value of your asset.
And if you cannot save money on your insurance, try some of the other big household bills that all seem to be climbing too fast. Home loans, transport costs, groceries, utilities, credit cards, health expenses, entertainment and lifestyle spending are all areas where big potential savings can be made.
There are more free sources of advice and money-saving tips online than ever before, and they are simple to find.
Just type “how to save money on …” and you’re away.