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Recently when grabbing the mail. I got the not so pleasant surprise, that it was time to renew our vehicle insurance policy for 2015.
I had mixed feelings about this. On one hand I knew this would take a chunk out of our savings rate and cash available to invest. On the other hand I knew this presented an opportunity to implement a revised team strategy for the Cash Accumulators.
Upon opening the envelope I was made aware that for 2015 for our vehicle insurance policy we owed $2458. On Monday I decided to take a couple of hours and investigate the possible options available with my insurance provider.
Compare Costs With Other Insurance Providers
We compared costs with other Vehicle Insurance providers. It turned out that our current vehicle insurance providers were already the cheapest. I suspect this was a result from comparing prices with competitors the last couple years and making sure they were still the cheapest insurance providers with similar coverage options.
Combine Exposures With One Insurance Company
Due to purchasing a home this fall, I thought this would be an excellent option. To combine our home insurance and our vehicle insurance under one insurance company. I figured this would surely reduce our combined insurance premiums. Well turns out it didn’t work out as planned.
This is because Miss Captain Cash got into a vehicle accident this summer while driving my vehicle. At the time she was not on my insurance policy. Which, resulted in a claim on my insurance policy. Luckily for myself being claim free and with my insurance company for a long time, it did not affect my insurance premiums. But I suspect it is on file when other insurance companies pull up my file. Which is why my current insurance provider is still the cheapest. And remains cheaper even with bundling the house and vehicle under one insurance company.
Which brings up the point. Drive carefully as traffic convictions and at-fault accidents result in increased premiums. If you do have traffic convictions, take drivers training that might be able to reduce insurance premiums.
Reduce Physical Coverage
This was actually done last year. On my 2005 vehicle with 340,000km. I removed my physical coverage which reduced my annual premiums by $500. No additional savings were available here for the Cash Accumulators.
Vehicle Insurance To High! Increase Your Deductible
Increasing the deductible from $500 to $1000 resulted in an annual savings of $139. Which I think is a worthwhile investment for a couple of reasons. Mostly because now my Miss Captain Cash walks to work everyday… Ha, that actually had nothing to do with her driving skills, but rather we have been taken steps to minimize the amount of time we spend behind the wheel. Less time behind the wheel less chance of needing to make a claim. Not to mention numerous other vehicle related savings, and health benefits.
The Savings
An annual savings of $139 might not sound like much. But lets say you invested the $139 annually. Earning a 5% return on investment after 4 years it would be worth $600. More than enough to cover the difference if required to make a claim. Thinking about the savings on a longer perspective. Such as ten years earning a 5% return on investment it would be an extra $1750. After all, it’s all the little savings that add up over the long run.
Deciding to not live in fear that something bad lurks around the next corner. I think increasing your insurance deductible is a solid investment. This is coming from a guy who had to pay $500 a couple of months ago too. Because if I ever need to make another claim again. I am confident that I will not be in a vehicle accident every four years and will eventually be running on a surplus.
Check out our results from increasing our home insurance deductible. Team Strategy Update! Save $780/Year Increasing Your Insurance Deductible!
What do you think of the latest Cash Accumulator Team Strategy? Do you know of any additional options available to lower insurance premiums.
Mr. Captain Cash
Leading the way to financial independence.
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