Dave Ramsey Recommends This 1 Step to Save Money on Insurance – The Motley Fool

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Is it possible to reduce premiums on insurance?

Key points

Insurance is a crucial purchase that provides essential protection.Premiums can be expensive on policies.Finance guru Dave Ramsey recommends reviewing your coverage to save money.

Insurance premiums are an essential expense that most consumers incur. In fact, almost everyone needs some type of insurance, whether it’s auto insurance, home insurance, or life insurance. And many people need multiple coverage types to protect different assets and provide for loved ones in case of an untimely death.

Unfortunately, buying insurance coverage can come at a high cost — especially for consumers who are risky to insure for various reasons (such as teen drivers) or for people who need lots of different kinds of protection.

The good news, though, is that there are techniques policyholders can use to save as much as possible without compromising the protection insurance should provide. In fact, finance expert Dave Ramsey has recommended one key step that all consumers need to take when it comes to paying the lowest price possible for their insurance. Here’s what it is:

This Ramsey advice can potentially help consumers save a fortune on insurance coverage

According to finance expert Dave Ramsey, the best thing most people can do to save money on insurance is to regularly review their coverage options.

As Ramsey explained on his blog, millions of Americans never re-evaluate their policies. As a result, “they could be missing out on new discounts that apply to where they’re currently at in life.”

Insurance costs can change for a number of reasons, including lifestyle changes such as marriage, a switch to a different vehicle, or a teen driver getting good grades. And different insurers can also change their premium prices, or could offer new discounts they didn’t provide before.

Consumers who just stick with the status quo may not be aware there is a more affordable option out there than their current policy. They could find themselves needlessly paying extra premiums for years when simply exploring different coverage options could have saved them a fortune.

How Ramsey believes consumers should shop around for insurance coverage

Ramsey suggests consumers work with an independent insurance agent in order to review the types of insurance available and the costs of coverage that apply in their situations.

Independent agents don’t work for any particular insurer, but instead have a network of different companies they work with. When a consumer goes to an independent insurance agent, the agent can shop the policy around to all the different companies they work with to find the best deal.

While this approach can sometimes save time and can make it easier for people to compare their coverage options, it’s not necessarily the right move for everyone — especially since it is now easy for the average person to get insurance quotes online.

Although independent agents may have a large network, some affordable insurers may not be part of it and consumers may miss out on opportunities. By shopping for quotes independently online, consumers can decide specifically what insurers they want to get quotes from, and can take more control of the process of finding the coverage that’s right for them — rather than trusting this process to an outside individual.

But whether a consumer uses an independent agent or shops for a policy themselves, the important thing is to follow Ramsey’s advice about the importance of periodically reviewing coverage options. Consumers who don’t do so could end up paying more for less.

Providing Peace of Mind for Life’s Moments

Insurance is not something we often think about until we need it and typically that means you aren’t spending much time researching what is best for you and your personal situation. Taking the time to educate yourself on the basics of insurance, whether it’s how to get discounts on your homeowners insurance policy or the best way to get a car insurance quote, will help you save money and ensure you have the right insurance coverage for your needs.