First Person: I Saved $3,750 by Paying More Insurance

In my first apartment, my appliance insurance saved me $230 in repairs. Since then I've learned that paying a little more for insurance doesn't only buy me peace of mind; it can actually save me money in the long run. In fact, in one year I spent $374 more in insurance premiums, but saved $3,750 as a direct result of paying more for insurance.

Car Insurance

When an ice storm glazed my neighborhood streets, I was unable to stop my car at a downward stop sign. I hit the Jeep in front of me going at a speed of 15 MPH. Luckily, the Jeep's sturdy bumper incurred no damage, but my heavy SUV's bumper was driven into the radiator, damaging it and other engine components. Repair on my vehicle cost $4,500.

Since I chose to pay $16 more a month for my car insurance, my deductible was set at $1,000 instead of $2,000 (as it had been the year before). This saved me $1,000 outright, in addition to the repair job. And since this was my first claim against my insurance, my premium didn't even go up.

Home Owner's Insurance

After renovating my home, I contacted my home insurance company to increase my coverage. I included the new hardwood floors and basement carpets in the valuation. This increased my money premium payment by $11.

A year later, the water filtration system in my fridge began leaking. Unfortunately, because the floor under the fridge is tilted backwards slightly, the water flowed into the crack between the tile and floor molding, then straight through the wall to the ceiling below. I only detected the leak when a portion of the basement ceiling collapsed.

The repair for the damage came to $5,300. Since I had included all the upgrades in my new home valuation, my insurance covered all my replacements and repairs with comparable materials. I estimate that this saved me $1,800 over and above what my insurance would have paid out without the policy update.

Traveler's Insurance

I like to buy non-refundable airline tickets at least one month before my travel date, as this lowers the price considerably. In case of a last-minute emergency, I also buy traveler's insurance at an average cost of $50. When I came down with stomach flu just before my trip to Spain, I was able to move my flight date by a week without losing my ticket. This saved me $950, since a non-refundable ticket without insurance must be used on the date specified or lost altogether.

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First Person: I Saved $3,750 by Paying More Insurance