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If you are like me, you may be able to deliver an A+ Master Class on The Avoidance of Annoying Things, especially when busy just doing “Life”.
In the past, thinking/paying/trying to save on Insurance for me has been classed as one of those Things to be avoided unless absolutely necessary.
But alas. It is renewal time again on my insurance policies, and the cost of my premiums are up. My attention must be diverted from summer fun and back onto the less glorious Adulting and figuring out to how to pay these more expensive premiums.
I am not alone in this struggle. Enquiries to our team on about how to save on insurance have shot up lately and it is no wonder, considering the cost-of-living palaver we find ourselves in.
So, here I am, scrutinizing bank statements to discover where my surplus magically disappeared to last year (You're welcome, Macpac).
I like the idea of cash surplus. Paying for insurance less so.
There is a familiar thought process here. Should I cut some coverage? Or should I keep my coverage and cut back on other expenses, like fun stuff? Or should I put my big girl pants on and seriously focus on saving money on insurance?
Thankfully I opt for the latter, and further decided to write this blog to not only share some insurance saving inspiration with you too, but to motivate myself to act.
Tip! (If you are considering chucking your policy, read my sandwich blog for a bit of a laugh about what I changed to keep my health cover.)
For those of us Kiwis who have traditionally embraced the "Set and Forget" strategy with our insurance (and yes, I'm raising my hand here), it's time to Unset and Remember. What was a good coverage option in 2019 may have changed. While we may be paying too much for one area, we might not have the right coverage in another.
Try not to panic about what has changed in life since the policy was put in place. Grab your policy documents and let’s get this party started.
There are two types of ways to approach this saving money business, The DIY way and the Outsource To A Pro way.
Let’s talk about both, as both have their merits.
For DIYers: You’ve made it this far, now go ahead and save yourself some coin by doing the following:
Up your excess.
Opting for a higher excess - the amount you pay if you need to claim - will significantly lower your premiums. For example, if you had yourself an emergency fund set aside, you could make your excess amount higher, knowing you can cover any less serious incidents yourself without getting into high-interest debt. This also means that you are less likely to claim on small things that you can fix yourself, and potentially reap the rewards of a no claims bonus!
Apply for no-claims bonus.
So, Lady Luck has been on your side lately and there hasn’t been anything to claim on? Hooray! Hit your insurer up for a no-claims bonus.
Choose no-excess glass as an add-on.
Here is a little tip that Ben from Caveo once shared to save you money on the thing that’s most likely to break! Genius!
Leverage your New Year Health Kick.
Some health insurers reward you with lower premiums, discounted memberships and gifts for improving your health. Read about how Brendon got lower premiums and a new Garmin watch!
Check your sum-insured.
The sum insured is the maximum amount that your insurer will pay out in the event of a claim. If you have too much coverage, you may be paying more than you need to. An example of this is of the value of a depreciating asset, like a car. Every year it may cost less to replace your car than the year before, so check your sum insured people!
Research free cover for kids.
I didn’t know this myself, but apparently some insurers will tag on some free cover options for kids. Cool, right? Check out Alex’s article here on that.
Get that multi-policy discount.
Both general and personal insurance providers love it when you take out more than one policy with them and reward policyholders with a discount.
Self-employed with a GST number?
Elementary, Dear Watson. Save money on fuel by insuring through Caveo.
Pay annually, and don’t pay late.
Paying late can, at the minimum, incur penalties and, at the worst, means you have no cover. So, plan ahead for those upcoming payments (start using a sinking fund.) If you can, try to pay annually, as you will get a discounted rate.
Go for third-party vehicle insurance.
Third party car insurance covers you for only the damage caused to the other car. It is much cheaper and a good option if you have an older car with a lower value that you could replace more easily. Of course, another way to save on car premiums is to drive a cheaper car altogether (I love my 2007 Toyota!).
Shop around for a good deal
I haven’t used it myself, but Consumer NZ has a paid house and contents policy comparison tool which may be of use.
More. There are more insider tips you can apply to your insurance to get the maximum bang for your buck, and our advisers can help.
For those time-constrained or less confident in their DIY ability (or, perhaps their ability to focus on anything that’s not their current hyper fixation - ADHD anyone?) you always have the option of using a broker. They can investigate the above for you, and so much more. The added bonus of talking to an expert? You can save yourself an average of around 20%, basically from not bumbling through a process that you are not an expert in!
For me, I have done a mixture of both bumbling DIY and using a broker, but as I cement my planning going forward I will be using a broker next renewal time (See Simon’s blog about the value that can add here), simply because I know they will do a much better job than me and also, it is because I have ZERO interest in studying insurance policy, period.
Want to talk to a broker? You can talk with our team for free here.
I hope that one person who reads this will find some way to save some money here that they hadn't been aware of, regardless of whether it’s a DIY your insurance or outsource the task to a pro job. If you have any other tips we can add to the list, please let me know!
Shona.
About Shona: Hi, I’m Shona, the communications and marketing support person for Velocity Financial. Designing effective communications in a complex industry such as Finance is a worthy challenge. Finding ways to bridge gaps between complex financial information, and the everyday needs of people trying to navigate that world through informed choices, is something that I relish. I love deciphering and disseminating the expert knowledge and ideas of our clever team, into simple messages that speak directly to our clients, who are hungry for more knowledge and better understanding. In my outside life, I am a keen photographer and, like others in the team, I have a passion for the outdoors, hiking and mountain biking. I also train in martial arts and have been known to wield a sword on occasion.
Disclaimer: I am not a financial adviser and what I have shared is general advice that has been peer-reviewed by my team. As always, make a time with our financial advisers for expert advice about your own situation.
The information shared in this post is meant to be general guide to support you on your journey. When making important decisions about your finances, we encourage you to seek independent financial advice first, tailored to your unique situation. As well as talking with a financial adviser, make sure you talk to your lawyer and accountant too – together they'll help you find the best solution for your specific situation. Our knowledgeable financial advisers are here to help. Check out our website for the details about our financial advisory services in our disclosures https://www.velocityfinancial.co.nz/disclosure-statement.