It can be stressful to realize you have more bills to pay than expected. Often, when looking into housing and mortgage costs, new homeowners forget to account for home and auto insurance.

Insurance policies can take a hefty portion of your earnings. But did you know there are a few ways to lower both of these bills? We’ll look at popular ways to save, like bundling car and home insurance, and we’ll also discuss specific discounts you might not have heard of.

Besides discounts, we’ll cover how comparing insurance quotes can help you save, and finally, we’ll look at some of the most surprising ways to get lower insurance rates. 

Let’s dive right in and look at discounts.

Insurance Discounts for Maximum Savings

As mentioned above, a bundling discount can help you save on both home and auto insurance. In addition, you can be eligible for this discount if you purchase your home and auto insurance from the same provider. 

There are many more discounts. Some are unique to home insurance, some to auto, and some may apply to both. First, let’s take a look at some common auto insurance discounts.

Auto Insurance Discounts

• Defensive driver – If you’ve taken a defensive driver class, you may be rewarded with a discount.

• Good driver – Insurance companies reward good drivers with lower rates and discounts. Your insurance company will likely set the standard for a good driver as someone who hasn’t gotten a traffic violation or caused a crash for at least three years.

• Green – This discount is available for customers with electric or hybrid vehicles.

• Telematics – Many insurers encourage customers to install a telematics device or use a monitoring app when they drive. By collecting driving stats and information, insurance companies can more accurately assess risk. 

Ask your insurance agent for a list of available car insurance discounts so you make sure you’re not missing out on anything you’re eligible for.

Home Insurance Discounts

Insurance companies base your rates on your risk. The higher the chance they’ll have to pay a claim, the more they will charge you in premiums. If you can lower your risk, you will often get a discount as a reward.

Here are some of the most common discounts and some unexpected discounts for homeowners.

• Fire alarms – Every house should have them, and you’ll probably get a discount for them.

• Security systems – If you can deter would-be thieves, you can prevent vandalism and theft. Make sure you know which systems your insurance company recognizes and offers discounts for. 

• Smart devices – Smart devices like water shut-off switches can significantly reduce the risk that an insurance company will have to pay a water damage claim, so they often give discounts for similar monitoring devices.

• Sprinklers – Residential sprinkler systems are becoming more common. They can turn the potential for complete devastation into a claim for localized water damage repairs, saving insurance companies a lot of money.

• Upgrades – If you repair or replace your roof or install a metal roof, add hurricane shutters, or complete other exterior home improvements, you can earn a significant discount.

Separate discounts are excellent ways to save money, but some discounts aren’t specific to the type of coverage and will likely apply to both home and auto policies.

General Insurance Discounts

These are some of the easiest ways to get discounts on your insurance policies:

• Automatic payments – If you set up your account for automatic payments, the insurance company won’t have to use assets to remind you to pay your bill, so they incentivize the option with a discount.

• Military – Most insurance companies offer a discount to members and retired members of the military.

• Paperless billing – If you sign up for paperless billing, you’ll usually get a discount.

Even if each discount saves you only a small percentage on your bill, you can experience savings up to 40% when you add them up.

Comparing Quotes for Significant Savings

Discounts aren’t the only way to save. If you compare insurance quotes, you may find a company that’s better suited to your situation.

How Comparing Insurance Companies Can Lead to Savings

Car insurance companies use most of the same factors to develop your insurance rates, but they all calculate those factors differently. So the company that was best for you a year ago may not be the best for you now. This is why it is important to take the time to shop your insurance quote and do your research around the time of every renewal.

Insurers advertise that switching to them could save you hundreds of dollars a year, and it may be true. The only way to know is to use the various search tools available online to compare car insurance quotes online, which is the quickest and easiest way to gather information these days. However, keep in mind that when you compare, you’ll need to make sure you’re comparing apples to apples. That means you have to compare the same types of coverage with the same deductibles and limits in order. 

If you find an insurer that offers you comparable coverage for a lower price, you can switch and start saving right away. 

Warning about Cheap Quotes

The price of insurance is important, but it’s not the only factor to consider. You need to make sure that the company you hire to insure your belongings is reputable and will pay claims according to your policy terms.

Check for their financial stability by looking up their rating from A.M. Best. If they have a positive outlook, you can be confident that they’ll stay solvent and will be able to pay claims.

Having to make an insurance claim is stressful in itself. But, if you have to deal with poor customer service, the experience can be even worse. See how any potential insurers do on customer satisfaction surveys by reading the most recent J.D. Power Claims Satisfaction Survey.

Unexpected Ways to Save

Comparing rates and finding discounts are pretty standard ways to get lower insurance rates, but you may not have realized you could save in other ways.

Credit Score Savings

Not every state allows insurers to consider your credit score in their calculations, but it’s common practice in most states. Many people voice concern that this is an unfair practice, but insurance companies claim that people with lower credit ratings are statistically more likely to file insurance claims. 

Whether or not you like it, your insurance company is probably partially basing your rates on your credit score. So if you can build good credit, you’ll likely get lower insurance premiums.

Increase Your Deductible

The higher your deductible, the less likely you’ll file a claim, and if you do file a claim, the less the insurance company has to pay. 

So, your rate will decrease with a higher deductible and increase with a lower deductible. Just remember that you’ll have to pay your deductible out of pocket, so only increase it if you’re able to set aside the funds to pay it.

Drop Unnecessary Coverage

If you’re driving an old car, you might not need full coverage. When you compare car insurance rates, remember to review your coverage and make sure you are paying for what you need and not for what you don’t. 

If you don’t live in an earthquake-prone area, don’t carry earthquake insurance. It just doesn’t make sense.

Following these tips is simple, but it could save you a surprising amount of money on your monthly insurance premiums. 

Melanie Musson writes and researches for the auto insurance comparison site, AutoInsurance.org. She enjoys helping others understand their insurance needs so they can save money and protect their financial stability.