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Examine your insurance policies

In today’s economic climate, everyone is looking for ways to cut costs.

Some people will try to cut costs on their cell phones. Many more people are cutting coupons before going grocery shopping. When going on vacation, perhaps you have a stay-home vacation and do things locally in your area.

But there is one area in which every person and small business must look to reduce their costs, and that is insurance. Insurance is considered one of the largest liabilities on a balance sheet — not just a company balance sheet, but also a family or individual’s balance sheet.

Where to start to look for these major liabilities? You look at your most prized possessions: your health, your car and your home.

Your health is the No. 1 priority. Without it, you have nothing. The key thing you can do to keep your health insurance premiums down is stay healthy. Staying healthy goes a long way toward controlling health insurance costs. If you’re buying a private-market plan, you’ll be charged based on your health, such as weight, cholesterol, blood pressure and other health conditions.

Another good way to reduce cost is raise your deductible. Whether you are enrolled in a group or individual plan, the more you pay out of pocket, the less you will have to pay in premiums. You may want to think of your insurance as a safety net for major health disasters rather than a payer of all routine medical costs. According to the National Association of Insurance Commissioners, the lower your deductible, the more likely you will make a claim with the health insurance company. Health insurance companies compensate for this by increasing the premium on low-deductible plans. To get more bang for your buck, set your deductible at $2,000 or higher.

In the matter of your home and auto insurance, there are a couple of things you can look into. Like health insurance, you can raise your deductible to lower your premium. What else can you do that might lower your premiums? One is combine policies with one carrier. Some companies that sell homeowners, auto and liability coverage will take a certain percent off your premium if you buy two or more policies from them. But make certain this combined price is lower than buying the different coverages from different companies.

Secondly, improve security. For your auto insurance, opt for safety gear. You can qualify for a discount on many policies if you have air bags, automatic seat belts, anti-lock brakes and daytime running lights. An approved alarm system or other anti-theft device can give you additional savings. With your homeowners insurance, you can usually get discounts for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by a certain percentage if you have a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren’t cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you’d save on premiums.

Who knows when this economy is going to turn around, or how long it will take. If you are trying to reduce your monthly costs for bills, you need to look at your insurance premiums. I believe if you take the time to do this you will find out it was well worth your time.

Michael Miele, benefits specialist with the MGA insurance group, can be reached at mmiele@mga-insurance.com

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