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The Top 5 Ways of How to Save Money on Insurance in Texas

  1. Get a cheaper insurance plan. Keep in mind that lower premium usually means a higher deductible and/or less coverage.

  2. Save money by selectively picking only needed insurance coverage. Discuss your needs with an insurance professional with a large portfolio of options and see what they recommend to fulfill them.

  3. Get more insurance for less, by bundling multiple policies or getting group insurance. Keeping more than one insurance policy with the same carrier usually results in a discount.

  4. Get multiple quotes from different agents and insurers (with different portfolios of products), to make sure that you explore your options from all perspectives.

  5. Paying a premium in full for the entire policy term may provide a discount (depending on insurance type).

Saving Money on Insurance 101

The best thing one can do to save money is to contact a Texas insurance professional, who is licensed by the state in your desired type of insurance. Ideally, you want to use an independent agent with a large portfolio of various insurers, types of policies, and coverages at their disposal. If you contract a captive Texas-licensed agent, you will be offered products only from one insurer or a group of insurers, which might not be available from the independent agents. Both are great options, as long as you are aware of the difference.

In order to understand how to get cheaper insurance plans, one must understand how the particular type of insurance functions and what ultimately affects the price.

The most common things that can influence the price of insurance in Texas are your:

  • Claims history,

  • Credit score rating,

  • Age, and

  • Location.

If you do not have claims in your past, you pay less than someone who has an extensive and/or questionable history of claims before. Insurance companies in Texas may pull the applicant's insurance score from a database service like LexisNexis, which is used by the insurers to share risk details about properties and clients.

If you have a good credit score, you tend to pay less.

Does insurance price depend on age? Age is a multi-sided issue. In some insurance policies youth is less expensive insure, while in others, being more mature may provide discounts. When the age of property comes into play, new items are usually less expensive to insure than older ones. Talk to your agent to find out how your age, or the age of your insured belongings affects the cost of your coverage.

Premium in all types of insurance depends on your location. In some types of insurance the price may be set by county (ACA Health Marketplace), while in others, the price may fluctuate based on a zip code (Auto insurance).

Insurance in Texas comes in various shapes and sizes and each insurance type has additional ways how its savings can be achieved. Below are some ideas for you to discuss with your insurance agent.

Health Insurance

Health Insurance benefits are determined according to the cost-sharing method. This means that after paying a deductible, you are responsible to cover a pre-set remaining portion of healthcare bills, until the maximum-of-of-pocket (MOOP) amount has been met. MOOP is the maximum amount you may have to pay for medical bills before the insurance starts covering 100% of expenses (up to the limit of the plan).

Group health coverage offers the best savings. When getting health insurance through group coverage, all offered plans cost the same (pre-negotiated) price for all members of the group. The main savings here comes from the sponsoring organization, which usually covers a portion of the premium.

The pricing of the individual health plans depends on each individual's set of circumstances and needs, such as: age, health conditions, tobacco-use, county of residence, income, etc. Some Texas residents may qualify for additional savings through the use of tax-credits on the health marketplace or by utilizing a wide array of alternative (non ACA-compliant) health insurance options.

Qualified Texas residents may also get low-cost health coverage through federal or state run programs like Medicaid and Medicare. Additionally, state of Texas operates several local health programs that help pay for residents' coverage:

Keep in mind that such government-sponsored health programs may have limited coverage, so combining public and private plans may be a good idea. On private health insurance policies, choose a coverage that gives you what the public health plan cannot provide. And avoid duplicating plan coverage.

Make sure to discuss all your questions with a health insurance agent who is licensed in Texas and has access to a wide range of Texas health insurance options.

While you have an active health insurance coverage, there are additional ways how you may save:

  • Use the care providers in your network: you pay more when you use care providers outside your network plan.

  • Keep hospital visits to what is necessary: if available, use the virtual consultation option. On some plans they may be offered free of charge. The same applies to preventive care visits.

Auto Insurance

Auto Insurance - mostly focuses on protection from the liabilities that may occur in connection with your vehicle. Texas is an at-fault state and drivers are required to pay for accidents for which they may be responsible, so, at the very least, all vehicle owners in Texas must carry auto liability insurance.

To decide how much your coverage will cost, auto insurance companies use the underwriting process. This means that the coverage cost is based on each applicant's particular specifics. To help determining the cost, the underwriter considers the applicant's:

  • Driving record: Convictions or points on the driving record will usually lead to higher premiums.

  • Parking location: Some areas are more exposed to risk than others. Theft and accidents are less likely to occur in the rural areas than in the city. In the city, a secured public garage is safer than parking on the street. Private home garage is even safer, and therefore may lower the premium cost even more.

  • Type of vehicle: Luxury cars cost more to repair, which results in higher premiums. The more expensive the car, the costlier the coverage.

  • Usage: The mileage of your car per day can increase premium rates. So, if you are stuck at home, working remotely during the pandemic, you should contact your auto insurer, to lower the anticipated mileage for the year, and as a result - save on the cost of coverage. Do not forget to increase it back up once you start driving more frequently again.

There is very little wiggle room for savings on an auto plan but most auto insurers in Texas offer discounts if you:

  • Install anti-theft equipment of devices that reduce the impact of a crash

  • Complete a driver education course (especially if you have existing points on your driving record)

  • Insure more than one vehicle on the same policy (multi-vehicle discount)

  • Purchase other products from the same insurance company (multi-policy discount)

  • Keep a clean claims history

  • Maintain an excellent driving record

Talk with your auto insurance provider and/or your Property and Casualty (P&C) insurance professional to discuss your additional discount options.

Home Insurance

Home Insurance protects from financial losses if your residence gets damaged by a hazard or event covered by the policy. Home insurance comes in 4 distinct types of coverages:

  • Homeowners insurance covers any (non-condo) residential property you may own.

  • Condo insurance covers condo owners.

  • Landlord insurance is for when you rent your home or condo to a tenant.

  • Renters insurance is purchased by the tenant of any leased residence.

While all these coverages serve a bit different purpose, if you are looking to make your home insurance cheaper, the key variables under your control are:

  • Age and condition of the property: Older and more susceptible to damage assets cost more to insure.

  • Location: If you live in an area with less risk exposure to such things as floods, fires, tornadoes, you pay less.

  • Proximity to local fire services: You pay less if your property is located close to a local fire service station and/or a fire hydrant on the street.

  • Cost of replacement: If it costs more to replace your property, expect to pay more for additional coverage. As an example, the cost of new individual housing construction in Texas in 2021-2022 skyrocketed due to the shortage of lumber. As a result, if a home had to be rebuilt after an insurance claim, the rebuild cost was significantly larger than the outdated coverage in place. Make sure that your insurance coverage is sufficient to accommodate such market swings. (Note: Homeowners should review the coverages at least once a year but following the instruction provided by the insurer)

You can further save money on home insurance if you do any of the following:

  • Install protective equipment in your home/property, such as burglar alarms, sprinkler systems, and impact resistance roofing.

  • If you stay claim-free for over three years, most insurers will offer an additional discount.

Life Insurance

Life Insurance has its uses both for while the insured is alive and after their death.

The 3 distinct personal uses of life insurance are:

  1. Living Benefits, as a group, is any use of life insurance while you are still alive. This can be the use of the policy as a retirement financial tool, to accumulate cash value (money) and eventually use it to supplement income during retirement. Or in case of a terminal illness, you may be able to start using the death benefit prior to passing, to cover the medical treatments and other associated costs. Upon the insured's death, the loaned up-front amount generally gets deducted from the death benefit amount that is issued to the beneficiaries.

  2. Legacy Creation is the use of a death benefit to create a significant sum of money that is passed on to the chosen beneficiaries, similarly to an inheritance (except that death benefit is tax-free).

  3. Basic Life Insurance is any life insurance that is purchased with the main purpose of paying for the cost of one's burial and the associated final expenses.

In addition to Personal uses, Texas life insurance is also frequently used as a supplement to Business insurance coverages, to be offered as an employment benefit for business owners and employees.

Age, health, and lifestyle risk factors are major considerations when life insurance companies underwrite a policy. You can save money in the long run by getting a policy when you are young, with the lowest premium possible locked in.

  • Another way to save costs on life insurance is to get coverage through a group policy, usually offered by an employer.

  • Keep the death benefit at a realistic level, according to your needs. The higher the desired death benefit - the costlier the coverage.

  • If you are a smoker looking for ways to save on life insurance, quitting the habit is going to drastically improve the cost of your coverage.

The best way to save on life insurance is discussing your needs with a qualified and licensed insurance professional prior to making any final decisions of a purchase. A professional life insurance agent can make recommendations based on the analysis of your needs and what is currently available on the market to meet them.

Commercial Insurance

Commercial insurance, as a group of coverages, applies to a variety of needs a business might have. It deals with everything, from property and liability protection to workers compensation, health, and life insurance benefits offered by employers to the employees.

Due to a wide range of options, all business-related insurance coverage usually requires the involvement of an insurance agent. This is because of the possible complexity of overlapping coverages and to make sure that the insured is afforded every opportunity to ask questions to a certified professional, prior to getting the coverage. Businesses have been ruined due to wrong insurance coverage decisions.

Generally, saving money on commercial insurance is possible through the adjustment of the amount of risk that needs to be covered and the amount of coverage desired. The more exposed the business is to risk, the higher the premium.

To get cheaper property commercial insurance in Texas:

  • Remove as many potential hazards as possible. Moving your insured farm equipment out of a flood-prone area of the property, for example, will significantly reduce the cost of insurance. Cut down overhanging tree branches that could snap and damage property below.

  • You could also mix and match coverages according to identified business insurance priorities.

  • Decide which to save on - deductibles or premiums: Higher deductibles mostly mean lower premiums and vice versa.

  • Get multiple quotes and comparison-shop.

  • Consult with a state-licensed insurance professional, who can assess your needs and recommend fitting coverages.

Can you Negotiate the Price of Insurance in Texas?

No, you cannot negotiate the price of insurance. But you can still get cheaper insurance. Here are a few tips:

  • Tweak the insurance plan coverages to give you just what you need, to get the best value for your money.

  • Take good care of your property. Claims increase insurance costs.

  • Consider paying your premiums upfront if you can afford it. Most insurers give significant discounts for lump-sum payments.

The Texas insurance market is highly competitive and offers multiple products for every need. Discuss your needs with a state-licensed insurance professional, who can provide advice and suggest solutions based on your needs.