Welcome back to Money Matters, a collaboration between the TODAY Show and CNBC Select where we focus on simple ways to manage your finances and save money. In the latest installment of the series, CNBC Select Contributor Brittany Jones-Cooper walks us through her best tips for saving money on a variety of insurance policies.
Check out the full interview featured on TODAY in the video below and read on to see some of her best strategies.
Car insurance: Regularly compare quotes on new policies and look for discounts
Car insurance is required in all states but New Hampshire and Virginia, but it’s often a big expense. According to Bankrate, full-coverage car insurance across the U.S. can run you an average of $2,014 per year. It’s possible to save on this expense, but it may take some effort.
To find more affordable coverage, become a frequent shopper of car insurance, especially if you haven’t been in an accident and can qualify for a safe driver discount.
“Most experts suggest looking for a new policy every year or even every 6 months,” Jones-Cooper explains. “Before your policy expires, go online and get some quotes. Just compare prices. You may be surprised.”
Jones-Cooper also recommends working on your credit score before jumping on a new policy. According to ValuePenguin, a higher credit score can lower your car insurance rate.
“People with an excellent credit score pay on average $400 less per year for full coverage compared to someone with an average credit score,” she says. “If your score is low, you can bump it up by making payments on time.”
You can also use a service like *Experian Boost™ to help you improve your credit score by making on-time payments for bills that don’t typically get reported to the credit bureaus — like your payments to streaming services or your phone bill.
Experian Boost™
On Experian’s secure site
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Cost
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Average credit score increase
13 points, though results vary
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Credit report affected
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Credit scoring model used
Results will vary. See website for details.
Another tip for getting more affordable car insurance is to ask about discounts you might qualify for. For example, according to Jones-Cooper students with at least a 3.0 GPA can get a cheaper policy with some insurance companies.
CNBC Select considers Farmers Insurance a strong auto insurance contender since it offers a whopping 22 discounts, including a good student discount. This discount is available to students who have a 3.0 or better GPA, are on the Dean’s List or Honor Roll, are within the top 20% of their class, or within the top 20% on standardized testing.
Farmers Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Farmers sells car insurance in every state except Alaska, Delaware, Hawaii, Maine, New Hampshire, Rhode Island, Vermont, Washington, D.C., and West Virginia and offers a whopping 22 discounts.
Homeowners and renters insurance: Know how much coverage you need
If a huge, unexpected disaster were to occur and damage your home and the possessions in it — or if someone got hurt on your property and accrued medical bills because of it — you likely wouldn’t be able to afford the out-of-pocket costs of fixing, replacing or even paying those bills. This is why it’s important to have either homeowners or renters insurance.
These policies protect your home and associated structures (like your fence or garage) or your belongings in your apartment if it’s damaged due to incidents and disasters. Renters insurance is typically fairly affordable, especially if you go with a company like Lemonade, which boasts speedy claim approvals and pricing starting at $5 per month.
Lemonade Renters Insurance
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Cost
Starts at $5/month; premium depends on the coverage amount you choose
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Maximum coverage
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App available
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Policy highlights
Policy covers personal property damage caused by fire, vandalism, theft, and more; covers damage you accidentally cause others
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Does not cover
Natural disasters, flooding, power outages, your roommate’s belongings, pest damage
Homeowners insurance tends to cost more than renters insurance (though CNBC Select has ranked the best affordable options available). But no matter what type of insurance you need, you’ll have to catalog all the things you want covered before finding the policy that’s right for your needs.
“The first step is to know what you have because you’ll be paid and reimbursed for damaged items,” Jones-Cooper says. “So go through and make a list of your items and that will tell you how much coverage you need.”
She also makes the important point that you shouldn’t assume the policy will cover you under all circumstances. For instance, flood and earthquake coverage aren’t typically covered in homeowners insurance policies but they can often be purchased as an additional cost. Be aware of everything that your property will need and everything the desired policy does and doesn’t cover.
Once you know what you need, you can actually look for savings by bundling your policies.
“If you’re looking to save money, bundle,” Jones-Cooper says. “If you put your life insurance and homeowners insurance together, sometimes you can save a little money.”
Travel insurance: Research the travel benefits on your credit card
According to Jones-Cooper, travel insurance is a topic that stirs a lot of debate. To make sure you protect your trip as affordably as possible, she recommends weighing travel insurance against the purchase of a refundable ticket.
“A lot of airlines offer a refundable ticket which costs more, but if you’re looking for flexibility it could be what you need,” she says. “Travel insurance costs 4–10% of your total travel costs so my suggestion is to weigh that against the refundable ticket and choose whichever one is cheaper.”
Also, your credit card may have built-in travel insurance and other benefits that you can take advantage of at no additional out-of-pocket cost. Some cards like the Chase Sapphire Reserve® card let you get reimbursed for lodging and meals (up to a certain dollar amount per ticket) when your trip is delayed a certain number of hours.
Chase Sapphire Reserve®
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Rewards
Earn 5X total points on flights and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining & 1 point per $1 spent on all other purchases plus, 10X points on Lyft rides through March 2025
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Welcome bonus
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $900 toward travel when you redeem through Chase Ultimate Rewards®
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Annual fee
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Intro APR
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Regular APR
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Balance transfer fee
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Foreign transaction fee
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Credit needed
Pet insurance: Get it while your pet is young and healthy
Keeping your furry (or scaly or feathered) companions healthy is a top priority for any pet owner. When your pet is young and healthy, insurance may seem unnecessary, but this is actually the best time to get insurance for them, according to Jones-Cooper.
“It does pay to insure your pet when they’re young and healthy because, like humans, insurance companies won’t cover pre-existing conditions. So when you insure your pet when they’re younger, your policy will cover more things,” she says.
Pet owners may also consider accident-only policies. Jones-Cooper says that most people struggle with paying for unexpected accidents that harm their pets, so an accident-only policy can give you the coverage you need without breaking the bank.
Bottom line
In the best-case scenario, insurance winds up being just another bill you pay for something you won’t have to use. But if disaster strikes, you’ll be glad you paid the extra cost to protect yourself, your trip, or even your pets.
Of course, there are ways to make sure you’re saving as much money as possible while paying for the coverage you need. For more information and advice, be sure to check out the full interview.
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*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.