Seeing as everyone seems to be feeling the pinch of inflation, it is important that we all look for ways to budget better and save money.
The amount we pay for car insurance and other types of insurance can mount up. Therefore, the cost of insurance is certainly one area that we should look at closely.
So, let us explore how much you should budget for car insurance and other types of insurance, and look at some helpful ways in which you can lower the costs.
How much should you budget for car insurance?
According to an analysis of the average auto insurance premiums in 2022 by Bankrate, the average cost of car insurance in the U.S. is $1,771 per year for full coverage, which works out as around $148 per month, while the minimum cost for coverage is approximately $545 on average per year.
However, the exact rate for your own car insurance will depend on numerous factors, such as your age, your driving record, your location, and your credit history.
To ensure you budget the right amount for your auto insurance, make certain that you know exactly how much your policy costs each year and each month.
How much should you budget for life insurance?
The same applies to life insurance. The precise amount for life insurance is dependent on various factors and you should know how much your annual costs are, and how they break down into monthly amounts, to work out how much you need to budget.
Life insurance premiums will vary based on the specific coverage in place and your personal situation, such as your location and your age.
According to Personal Finance, on average, people in the U.S. pay between $40 and $55 per month for a universal policy, which works out to between $480 and $660 per year.
How much should you budget for health insurance?
In 2020, the average cost of health insurance in the U.S. was $456 per month for an individual and $1,152 per month for a family.
Again, your personal situation and the type of policy you have will determine the exact amount you will pay.
Make sure you know what the overall cost will be each year so that you can budget the right amount for each month.
Three Ways to Lower the Cost of Your Insurance
The good news is there are several ways in which you can lower the cost of car insurance and other types of insurance.
Here are three methods that you will want to consider.
1. Shop Around
One of the best ways of lowering the cost of insurance is to shop around.
In today’s digital world, it is easy to compare different insurers to get cheap insurance quotes online.
For car insurance, get started at Cheap Insurance. Simply enter your zip code to find the best and cheapest car insurance quotes around.
2. Show Insurance Companies That You Take Steps to Stay Safe
Insurance prices are partially based on mitigating risk. Therefore, if you can demonstrate to your insurance company that you actively take steps to reduce your risk, you could get cheaper insurance.
For instance, by always driving safely and keeping a clean driving record, you could get cheaper auto insurance.
And for home insurance, you could pay less by installing smoke detectors and burglar alarms in your house.
For life insurance, you could lower your costs by not smoking tobacco.
3. Bundle Your Policies Together
Many insurers will lower your premiums if you purchase more than one type of insurance policy from them.
Therefore, consider getting things like your car insurance, home insurance, and life insurance from the same company. By doing so, you could make significant savings.