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There are many people looking to reduce their premiums but are not sure how to do it or what they need to do. A cursory search about the best ways to save money on insurance premiums is going to produce some predictable results, but also present yourself with things you have not thought about.
Furthermore, there is no denying that those methods will lead to reductions in your premiums. However, it is really a matter of what you expect to achieve with the whole process. Right from the start, it should be stated that in case you want to make a significant impact on your premiums, you have to change your expectations. This is necessary because you can not keep doing the same old things if you want to have real results.
In this article, you will learn about the best ways to reduce your premiums. Keep reading to find out why the methods you knew about might not work and find a better approach that will actually help your case.
The Wrong Way to Reduce Premiums
Following is a compilation of some of the most common solutions you may already be using to reduce your premiums.
1. Comparing Prices
It is good to have options with most things in life. More choices are certainly a good thing, but what are you really comparing while browsing through the different prices?
You are not getting the premium of one insurer for your needs instead of that of another insurer. In actuality, what you are really getting is one the premium of one insurer for your class of buyers versus the premium of another. So, this does not take your specific case into account but the whole predetermined class. The only premium reductions you might achieve are from a different insurer’s internal risk profile and shareholder expectations.
2. Highlight Your Past Claims
You have had no claims for the last 10 years, and surely that is a good thing. Maybe it is, but maybe it does not even matter and here is why.
An insurer does not care what happened in the past unless it can help them predict the future and change something in their business. If you have not made any claims on your automobile insurance, does that mean anything for the rest of the customers and how they will drive their own cars in the upcoming period?
3. Package Your Insurance to Get Better Premiums
Many insurers resort to buying more insurance to entice insurers with a bigger total package for a better price. There is nothing wrong with this, at least not on the surface. You might get a better deal on those premiums in the end, but you should ask yourself this question:
Would it not be an even better deal if you did not insure some of those assets at all? Yes, it probably would. Claims are much more predictable than you think and by applying statistical analysis accurately, you can focus on insuring only those assets that you can not afford or that you do not want to lose.
4. A Better Way to Do It
So, what is the solution here?
For starters, shift your focus from the past to the future. Only the future claims are important and the past only matters so far as it can help predict the future and improve something.
It is not enough to strongly emphasize that you are a good risk. You have to make insurers believe that you truly understand all of your risks and make them think you are a good candidate.
In practice, this means outlining those risks in a Solvency II-friendly format. It also means making a realistic plan for mitigating those risks.
Institutional insurance buyers understand how important it is to present risks favorably. It is not uncommon for a large buyer to spend tens or even hundreds of thousands of pounds on an insurance presentation. They need it in order to attract people and present them with their case.
And of course, it is more than worth it simply because it can easily mean millions saved on the premiums.
If you save the insurer’s money by reducing their overhead costs, they will pass those savings on to you in the form of reduced premiums. So, do not be afraid to spend a little more than you hoped for if it means reducing administrative tasks. And perhaps most importantly, do bot ask to wipe out their shareholders.
Who is foolish enough to do that, you may ask? Well, as it turns out, far too many insurance buyers seem to be.
Suppose buying EL insurance for 1,000 employees with £100 million cover per occurrence. What you are asking for is to cover the potential of every one of your employees raising a claim every day that can cost up to £100 million each.In other words, this is more than enough to bankrupt the insurer entirely!
Be extremely careful about how you word your policy terms and keep in mind that any mistake could signal to the insurer that you do not really trust your own risk analysis.
5. Reduce Premiums Significantly, Safely, and Strategically
Do not settle for a fractional reduction of your premiums, especially if you know full well that you can achieve much more than you think just by changing your stance a bit and having the right approach.
If you can convince the insurers that you are aware of your own risk, and that you are willing to take on some of those risks yourself, you can expect major savings every time. No longer will you spend a fortune where you do not need to.
According to the consultants at InsuranceInspect Services the product can help you make sure that you are putting your best foot forward and negotiate your premiums successfully.
Follow this guide carefully and take the main points into account once you finally decide to do something about reducing those unfavorable premium prices that have bugged you for far too long.