Reducing Risk And Cutting Insurance CostsThere's one guaranteed way to lower your insurance costs: reduce your risk. The purpose of getting insurance is to mitigate risk and provide some peace of mind, so you know youll be taken care of should something go wrong. Here are three steps you can take right now to control risk without extra insurance: Eliminate risk altogether, lower the probability of something happening and assume the responsibility yourself.
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Eliminate Risk AltogetherThe most obvious and easiest thing you can do is simply avoid whatever risky activity youre thinking of. Do you really need to go skydiving, plan that snowmobile adventure or attempt to set a land speed record? This method may not work for chainsaw inspectors or X Games contestants, but for everybody else, it is easy. Practically speaking, here are a few changes to consider:
- Delay getting a drivers license for your risky teenage son
- Move to a safer neighborhood and away from a high crime area
- Dont buy a house in a location prone to hurricanes, mudslides, flooding or other severe weather
- Dont wear expensive jewelry
Lower RiskIf you cant eliminate risky behavior altogether, the next option is to lower the chances of something happening.
- If you own collectibles, such as a valuable comic book collection, consider various methods to protect it. Cover items in a plastic sleeve and store them inside a safety deposit box, instead of underneath the bed or in the attic.
- Wear your modest jewelry collection.
- Help reduce doctor visits by eating right, exercising and stop drinking and smoking. If youve eliminated most of your risk, you can switch to catastrophic insurance instead of a more comprehensive program that lets you run to the doctor after every minor scrape and scratch. This should reduce your out of pocket costs as well.
- Auto insurance costs can be lowered by parking your car inside a garage or other secure area instead of on the street.
- A fire extinguisher, car alarm or airbag will also help reduce some risk.
- Stop using your cellphone to talk or text while driving.
- Take your car in for a regular tune-up.
- If your driving record is similar to Lindsay Lohans, consider driving a Hyundai instead of a Maserati.
- Have your property inspected for damage or potential safety issues.