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Wise Spend Tip: Shop Around For Insurance

Wise Spend Tip: Shop Around For Insurance

Shopping around for insurance should be done periodically to get the best deals on premiums. According to an article from the Motley Fool, drivers must have auto insurance in most states. As a result, for most Americans, car insurance is an essential purchase. It can also be an expensive cost to add to monthly budgets.

Don't be afraid to explore other options. Our Wise Spend Wednesday discusses the importance of purchasing insurance, and why it doesn't hurt to shop around. Here are 4 key points as to why you should:

1. Other insurance companies might offer better deals.

One of the strategies insurance companies have is called a "multiline discount." This is where they will bundle several cars or car & home insurance together to get a cheaper rate in the long run.

2. Shopping around gives you a good idea of where insurance rates are.

Not sure what a good rate actually is? Shop around. Call up State Farm, Nationwide, or American Family for example and ask for quotes from all three. This will give you a good comparison of what they charge.

If you don't want the hassle of dealing with each company, reach out to an independent insurance contractor to do the work for you.

3. Comparing policies gives you bargaining leverage.

Once you receive the quotes from your different companies, barter with the company you are leaning towards. Let them know that company ABC has a lower rate on the homeowners insurance and ask what they can do for you.

4. Car insurance rates fluctuate for several surprising reasons.

These reasons can be such things as too many speeding tickets. Maybe your kids' grades in school are awful, so you might loose your "good student discount." Or, maybe your credit score is bad and affecting your rates.

Any myriad of things could cause an influx of rates.

In Summary

Spending wisely on something as important as insurance is always a good thing. Why spend $50 or $60 more a month on insurance just because you've had them your whole life (true story!). Shop around. There are far better deals to be had. And, if you still want to keep your same insurance, at least use the quotes from other companies as leverage for a cheaper rate.

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