Saving money on your insurances

- David Pine | Nzij Risk Management Ltd


One effective way to reduce your premiums is to choose a higher excess on each of your policies. For domestic insurance your broker or insurer will be pleased to quote the savings to be had by adjusting your excesses. The highest saving will probably be on your home contents, where an increasing number of our clients are choosing a $250 or $500 excess. But be sure to obtain a quote for your home and vehicles as well. Although the savings here may be smaller, overall you may be pleasantly surprised at the reduction in your premiums that is possible.

For life insurance products, excesses are not generally available, but for income protection you have the ability to change the stand-down or waiting period. This is the period at the beginning of disablement during which no benefit is payable. The most common stand-downs are 4 weeks and 13 weeks. If you are on a 4 week stand-down, you can save up to half of your premium by switching to 13 weeks. The downside of this is that in the event of disablement you would need to support yourself for 13 weeks instead of 4 weeks. But if you feel you could manage this then the switch is worth considering.

Health insurance is one area where excesses are very common, with the never ending increases in premiums as we get older. Our most recent sale of a health plan has been to a couple who have chosen at the outset to have a $1000 excess on all claims. They can live with this, and the savings are substantial. Much larger excesses are available, with one insurer offering $5000. Because of the freedom of choice afforded by health insurance, it makes sense to do what you can to hang on to this most important cover. Choosing a higher excess is one way of doing this.

For business insurances, ask your broker to quote the savings you can make by increasing your excesses. One area where this can make a substantial difference is in liability cover. If you ever have a liability claim the chances are that it will be a large one, so you might consider the idea of paying the first $1000 (or even more) yourself. In our own case we have a $2500 excess on our professional indemnity cover. One of our corporate clients has a $50,000 excess on theirs.

While a larger excess eliminates some claims you may wish to make, you are still insuring for the big loss – the one that would place you in major difficulty if you didn’t have any cover. So most of your cover is still intact. Now might be a good time to have a close look at the savings that are available to you.