How can you save more money by spending less? — Part 1

Spending…

Spending can trigger some immediate pleasure, but in the long-term, it brings more pain than pleasure.

I already wrote an article on how to create a budget. This article explained how you could use a budget to move towards your financial goal. Once you have your budget, you know the speed at which you could achieve your financial dream.

Is there a way to speed up this process?

The answer is yes!

There are actually two ways to do it. Either you earn more money or you cut your spending.

Earning more money is the best way to save more money for your dream, but it can be tricky as it does not depend only on your decision. You have to convince your boss or switch jobs.

Keep in mind that humans tend to spend the increase in salary instead of saving it. This situation can be counterproductive as you don’t speed up saving for your financial dream.

It means that you need to control your spending even though you earn more money.

The other way is to cut your spending.

Cutting your spending is a very personal task to do as it relates to how you live your life, the situation you are in, …

I propose a list of categories where you can easily spare some money by adapting your current provider, product, …

This article covers “how can you save on insurances”. It is part of a series covering various topics ranging from choosing a bank to finding the cheapest products.

Car in accident

Vehicle insurance

Every vehicle owner knows it. Before you can even register your vehicle, you need insurance.

Look at an insurer’s website. For vehicle insurance, you will need to choose between the public liability insurance, the partial casco, and the complete casco. They all stack up. That means if you have a complete casco, you also have a partial casco and public liability. If you have a partial casco, you also have public liability. And if you have public liability, well, you have public liability. That’s it.

These are not mandatory insurances (except the public liability insurance), and they don’t have a law regulating their prices and coverage.

In that case, you can only rely on your best friend: comparison tools

Comparison tools, such as comparis.ch, will allow you to enter some criteria and find the cheapest insurance coverage.

Comparison tools will give you a reasonable basis on which you can work. These tools are pretty straightforward and fast to use.

The next step would be to use this generated list and try to negotiate with insurers directly. This task is very time-consuming and does not always result in a significant improvement in the price. Even more so, sometimes paying less, blocks you at the same insurance for an extended contract duration.

One essential aspect to always check is the coverage. When you sign a contract with an insurer, they might not know what you already have (or they might try to sell you more coverage).

For example, the household insurance can cover the damage on the items you have on yourself while motorbike insurance can cover items you hold on yourself while you are riding.

In this case, the household insurance provides better coverage for the items you hold on you than the motorbike insurance.

Comparing these insurances is very hard and requires you to read the General Terms of Insurance to make sure you don’t miss anything.

A nice living room

Household insurance

The household insurance covers everything that relates to your, well, household. That was hard to guess, wasn’t it?

It would be a shortcut to say that it only covers the household. Household insurances can cover some different aspects of your life, depending on the options you choose. I have presented in the section for the vehicle insurance an example where the household insurance can cover items you hold on you on your motorbike or car.

Household insurance comes in two parts: public liability insurance and household insurance.

Only the public liability part is mandatory when you decide to rent an apartment or a house.

The household insurance can be taken with public liability insurance to protect your inventory in case of an incident.

Even if only the public liability part is mandatory, I recommend taking the household insurance and not underinsuring the inventory. In case of an emergency where you would lose all of your belongings, you would be better off with a correct inventory assessment in order to be reimbursed correctly.

How to find the cheapest and most effective household insurance? Again, this is thanks to comparis.ch (only available in french and german). They have a comparison tool that allows you to choose whether you want the public liability insurance or the household insurance on top.

Don’t take the output of comparis.ch as your best insurance. I use the output of comparis as the basis for my own research.

I usually contact several insurers to discuss the details. There is always some way to negotiate some coverages, and the price is never fully set.

We say that Switzerland is a country where we don’t negotiate, but this is not always true.

X-ray scan of a hand

Mandatory health insurance

The mandatory health insurance is a law regulated insurance. The coverage is the same regardless of the insurance you select.

Even though the coverage is the same, the premium (price) you pay is not the same. That means you need to compare again.

The premium changes depending on your gender, age, location…

You can still use comparis.ch and moneyland.ch for your search, but the confederation also proposes a tool to compare the prices (only available in French, German and Italian though).

When you select mandatory health insurance, you can choose between all the models (standard, family doctor, HMO, or Telmed). You have a reduction if you don’t take the standard model, but then, it is a matter of preference.

There is another choice you can make. You can choose the deductible (how much you pay out of your pocket before the insurance starts to cover).

You have a bunch of different choices, but in reality, only two of them matter: the 300 CHF deductible and the 2500 CHF deductible!

Everything in between will cost you more than these two deductibles.

We usually recommended choosing the 300 CHF deductible if you expect more than 2000 CHF of healthcare costs during the year and 2500 CHF deductible if you expect less. This article from moneyland.ch explains it very well.

Choosing one option or the other looks like a gamble on your health during the following year, and you may bet wrong.

Regardless of the gamble, these two choices are the only ones that matter. In the other cases, you would pay more in total (deductible + premium + proportionate share of 700 CHF) regardless of the deductible you choose.

Person with oil essences

Supplementary health insurance

Ah, the supplementary health insurance. As its name suggests, this insurance is not mandatory. When you are a kid, you can have one pretty easily. Once you grow up and you have some health problems that start to appear, supplementary insurances will either reject you or impose you a restriction on their coverage if you try to change your insurer.

When changing supplementary insurance, you have to fill up a survey with some information about some health issues you might have.

The supplementary insurance is usually composed of several parts. You can select each part as you prefer:

Even though you can take each of these parts separately, it is worth noting that some insurers propose packs that are cheaper than the combined parts.

Again, comparison websites such as comparis.ch or moneyland.ch can help to find proper supplementary insurance. Still, they are so diverse that you might want to dig deeper into the conditions of the insurances themselves to see what fits you best.

Ambulatory care

This part of the supplementary insurance covers everything that implies a treatment where a stay in a hospital is not needed.

Most of the ambulatory care supplementary insurances cover some or all of the following care:

Ambulatory insurance can provide enjoyable care that is useful even if you are not sick. Usually, each of these practices has its deductible, though. That means you can spend quite a lot already before the insurance start to reimburse anything.

For me, the supplementary insurance pays itself with the reimbursement the insurance does on the fitness membership.

Hospitalization

The hospitalization insurance covers your stay at the hospital.

It covers several things such as the ward you choose to stay in (general ward, semi-private ward, private ward), but it can also impact your doctor’s choice.

Staying at the hospital is already covered by mandatory health insurance. Some restrictions are applied, though.

Dental care

Dental care insurance is tricky to contract when you are already an adult. The premium is quite expensive, and the coverage is limited.

Usually, if you need to remove your wisdom teeth, the dental care insurance does not cover the procedure.

This insurance takes into account the accidents that can happen with your teeth and reimburses a prevention check-up (partially or entirely).

If you want to insure a child, it can make sense for orthodontics as it can be pretty expensive if you have to pay for it yourself.

Old train in a forest

Travel insurance

Yes, you paid all of the above, but the insurances still want more of that sweet money of yours. 💸

Travel insurance can cover cases such as cancellation of holidays, repatriation, rescue, or other things you don’t want to happen to you.

Keep in mind that some credit card companies provide insurance coverage when you pay your holidays using your credit card.

Moneyland.ch offers a comparator for such insurances. This kind of insurance can be handy if you travel a lot, but if you travel only sparsely abroad, you might be better off with temporary insurance.

Temporary insurances provide temporary coverage for your journey. If you select temporary insurance, you will pay a lump sum and are not contractually related to the insurance after the coverage is over. It can be useful if you do not travel too often.

Conclusion

On all the insurances that we have seen in this article, only two are mandatory. You have to assess your needs and risk levels to choose whether you contract other insurances or not. Because in the end, insurance is nothing more than paying a subscription to avoid perhaps paying a high fee one day.

Even though they are not mandatory, in some cases, it is worth spending a little money to make sure you never have to pay the BIG money.

As insurances cover risks, it is a very individual choice, and I could not make any suggestions on the course of action you could take to reduce your premium more than compare the different insurances using the tools I provided.

If you have other ways to compare insurers and insurances, I would be very glad to know about it in the comments.