It seems like prices—including insurance premiums—continue to increase. Your knee-jerk reaction may be: Reduced coverage equals decreased costs. This is never the right solution. Instead, here is how to limit insurance costs.

Increase policy deductibles. By increasing the amount of money you pay prior to your insurance kicking in, you can reduce premium costs. One thing to keep in mind: Have enough money allocated in your budget that is available should you need those funds to pay for these higher deductibles.

Maintain good credit. Insurance companies use credit information to price insurance policies. By maintaining a good credit score history, you are less of a risk to a carrier, and you may see a decrease in premiums. It is up to you to review and maintain a good credit history.

Multipolicy credit. Some companies offer a discount when customers purchase two or more types of insurance, which can decease premium costs. However, make sure you need the combined policies, and that the cost of the combined policy does not exceed the costs of maintaining each policy separately.

Ask about discounts.It never hurts to ask for customer discounts. Many auto insurance companies offer discounts if you haven’t had an accident or moving violation within a specific period, or if you take a defensive driving or driver’s education course, or you have been a long-term customer.

Consider umbrella insurance. If more security is what motivates you rather than cost, consider supplementing your insurance portfolio with umbrella insurance. It provides extra liability coverage beyond the limits of existing policies and provides extra coverage for things such as legal fees and damages. Typically, liability insurance is included in most homeowners, auto, and renters policies, but additional umbrella insurance is added protection in the event of a lawsuit against you.

It does not usually cover the costs of your own injuries or property damage, or liability stemming from your own breach of contract or the commission of a crime. You should consider it if you have a lot of assets or a high chance of being sued (e.g., if you own property, have significant savings or other assets, have an inexperienced driver in your household, or own things that can lead to lawsuits such as pools, trampolines or guns.)

If you are thinking of reducing your coverage, call us. We may be able to help you find a better solution.