Saving money is usually a good thing, and most of us try to save money at every possible turn. A big problem with this when it comes to insurance is that people try to save by reducing their coverage or dropping important coverages altogether. While this may take away from some of the current bills that you have, it actually adds a good majority of risk to your life. It also may cause you to have much bigger bills in the future if a disaster were to occur. There are common insurance mistakes that people make, but there are many things you can do instead to save some money.
Don’t insure your home for its real estate value rather than for the cost it takes to rebuild. When the real estate market isn’t on the rise, the prices of houses tend to go down. This causes some homeowners to think that they can reduce the amount of insurance on their home. The problem with this is that insurance is around to cover the costs of rebuilding your home, not the price that you paid to own it. You should be sure that you have enough coverage to completely rebuild your home and replace all of your belongings, no matter what you spent on your home.
Save better by raising your deductible. An increase from $500 to $1000 could save up to 25% on your premium payments.
Don’t select an insurance company by only focusing on the price they offer. It is important to choose a company that has good prices to offer, but that shouldn’t be the only thing that you focus on. You should be sure that the company you choose has more to offer to you like having a financially sound business that also provides good customer service.
Save better by doing your research. Find out if the company is financially stable and ask people you know what their experiences with the company are. Find a company that will respond to your personal needs while also handling your claims with your best interest in mind.
Avoid dropping flood insurance. Flood insurance isn’t generally covered under the standard homeowners and renters insurance policies. You may not think that you are at risk of flooding to happen where you live, but the truth is that floods can happen anywhere. You don’t need to live near a body of water.
Save better by trying to purchase a home that is in a low-risk flood area. If you do already live in a high-risk area it is important to make an effort to reduce the risks of a flood happening at your home.
Purchase more than just the legally required amount of liability for your car. The minimum amount of coverage is only that. It’s the least coverage you can get away with according to the law. If you only purchase the minimum, you are more than likely to pay more money later on if an accident were to occur. It could even jeopardize your financial well-being.
Save better by considering lowering your coverage on older cars that aren’t worth a lot of money.
Don’t skim by without renters insurance. A renters insurance policy isn’t required by the law, but that doesn’t mean you should avoid getting it. A renters policy covers your valuable possessions and additional living expenses if you have to stay somewhere else due to an insured disaster. It also provides liability protection in case someone is injured inside of your home and decides that they should sue you for the damages.
Save better by looking at multi-policy discounts. Sometimes you can save money by purchasing multiple policies at the same time from the same insurer.
Resources:
http://www.iii.org/article/five-insurance-mistakes-avoid%C2%85-and-still-save-money
