Avoid these common mistakes and you’re on your way to getting the best insurance for your needs and budget
Saving money feels good. Furthermore, shopping around while searching for insurance coverage is an extraordinary method to do it. Be that as it may, just diminishing your coverage or dropping vital coverage through and through is like dieting without working out— concentrated just on numbers, not on outcomes. Don’t risk ending up dangerously under-insured and on the hook for much bigger bills in the event of a disaster. (Five Insurance Mistakes to Avoid)
Following are the five most common auto, home, flood and renters insurance mistakes people make, along with suggestions to avert those pitfalls while still saving money (we call them, “better ways to save”): (Five Insurance Mistakes to Avoid)
1. Insuring a home for its real estate value rather than for the cost of rebuilding.
When real estate prices decrease, some homeowners may think they can reduce the amount of insurance on their home. But insurance is designed to cover the cost of rebuilding, not the sales price of the home. You should make sure that you have enough coverage to completely rebuild your home and replace your belongings—no matter how the real estate market is doing.
A better way to save: Raise your deductible. An increase from $500 to $1,000 could save up to 25 percent on your premium payments. (Five Insurance Mistakes to Avoid)
2. Selecting an insurance company by price alone. (Five Insurance Mistakes to Avoid)
It is imperative to choose a company with competitive prices. But be sure the insurer you choose is financially sound and provides good customer service.
A better way to save: Check the financial status of a company with independent rating agencies (some well-known ones: A.M. Best, Moody’s), and ask friends and family members about their experiences with insurers. Select an insurance company that will respond to your needs and will handle claims fairly and efficiently. (Five Insurance Mistakes to Avoid)
3. Dropping flood insurance.
Damage from flooding is not covered under standard homeowners and renters insurance policies. Coverage is available from the National Flood Insurance Program (NFIP), as well as from some private insurance companies. You may not be aware you’re at risk for flooding, but keep in mind that 25 percent of all flood losses occur in low risk areas. Furthermore, yearly weather patterns—spring runoff from melting winter snows, for example—can cause flooding.
A better way to save: Before purchasing a home, check with the NFIP to determine whether a property is situated in a flood zone; if so, you may want to consider a less risky area. In the event that you are as of now living in an assigned surge zone, take a gander at relief endeavors that can diminish your danger of surge harm and consider acquiring surge insurance. (Five Insurance Mistakes to Avoid)
4. Only purchasing the legally required amount of liability for your car.
The minimum is just that—the least you can get away with by law. So buying only the minimum amount of liability means you are likely to pay more out-of-pocket later. And if you are sued, those costs can jeopardize your financial well-being. (Five Insurance Mistakes to Avoid)
A better way to save: Consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident. (Five Insurance Mistakes to Avoid)
5. Neglecting to buy renters insurance.
A renters insurance policy covers your possessions and additional living expenses if you have to move out due to an insured disaster, such as a fire or hurricane. Equally important, it provides liability protection in the event someone is injured in your home and decides to sue. (Five Insurance Mistakes to Avoid)
A better way to save: Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto, and life will generally provide savings. (Five Insurance Mistakes to Avoid)
(Five Insurance Mistakes to Avoid)
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