Don’t automate your insurance

Insurance

Are you like most people who receive the yearly insurance renewal letter from your insurer and you put it aside to deal with later?

That’s the sneaky little trick they use because they are banking on you being too busy and letting the renewal automate to the next year, you know, for your convenience. There are some big savings to be made if you take the time each year to compare your current insurance with that of the market.

I did a comparison on my Honda for full comprehensive insurance and found that the cheapest insurance I could get was $322.73 per year, with a $600 excess and most expensive was $462.57 with the same excess. That’s a saving of $139.84. In the grand scale of things you might trivialise the savings compared to a whole year, which of course equates to around $5.40 per fortnight. But adding that fiver to your debt can make all the difference to your final payment. Imagine making savings in other areas.

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What about health insurance. If we just look at price only for basic Hospital and Extras the cheapest quote I could find for a single male my age was $87.73 per month and the most expensive was $110.19. That’s a difference of $22.46 per month and $269.52 per year. So let’s include the fortnightly savings to the plan.

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So just by shopping around for your insurance each year there is some big savings to be made without it even affecting your lifestyle. Pretty cool huh! And you can see just by adding this small amount to the Debt Destroyer Plan you would have paid off your first debt item six month early.

Ok, so what about house and contents insurance. I compared one of the big four banks to a lesser known brand and the big four bank came in at $92.45 per month to replace the house and contents for $250,000 and $50,000 and $138.54 for the other brand. That’s a difference of $46.09 per month and a whopping $553.08 a year. So once again, let’s add it to the plan.

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So, taking a closer look at this scenario we can see that by paying more attention to your insurance and shopping around, you can start to make some good progress toward your debt reduction if you apply the savings to the plan. You will also see that as the extra payments go up, the dates of your final payments start to reduce.

The diagrams you see here are cut from my Debt Destroyer Plan spreadsheet that uses a mathematical equation to rank each of your debt items into an order giving you a starting point to maximise the speed at which you pay off your debt. You can find out more about the DDP HERE. In this course I will guide you step by step through the minefield of debt elimination and put you in the mindset to teach your children, siblings and/or parents about finding the path to financial freedom.

8 thoughts on “Don’t automate your insurance

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