Despite your best efforts -- and there are probably some insurance mistakes you might be making. (Hey, nobody's perfect!) Especially with regard to saving money on insurance premiums, there are some cost-cutting moves that could really cost you.
Read on for 5 common insurance mistakes, and how to avoid them -- and still save money!
Mistake #1:Not insuring your home for its "rebuild value"
If the market takes a turn, and your home suddenly loses value, it may be tempting to reduce your insurance coverage to reflect that change. However, experts advise insuring your home for its "rebuild value;" that is, the cost of rebuilding and completely replacing everything inside. Want to save $$? Raise your deductible: going from $500 to $1,000 could save you significant money!
Mistake #2: Picking the cheapest insurance company
We all want a good deal, but insurance is more than just a price. (That's why we are big fans of small insurance companies!) Making sure you can get individualized attention and a solid policy is more important than saving a few bucks. But we do recommend shopping around every few years - your circumstances can change over time, and another company might be able to provide better (and more cost effective) coverage.
Mistake #3: Forgoing flood insurance
You may not be aware you’re at risk for flooding, but, according to statistics, some 25 percent of all flood losses occur in "low risk" areas. Furthermore, yearly weather patterns, such as spring runoff from melting winter snows, can cause flooding. And flood insurance is likely not part of a standard homeowner's policy. Coverage is available from the National Flood Insurance Program (NFIP), as well as from some private insurance companies. Save money by making sure your home is protected as much as possible (get necessary repairs, water-proof your basement, etc.) That's a worthy investment that could really reduce costs down the road!
Mistake #4: Buying the bare minimum
It's tempting to get the bare minimum of what you need (for example, with car insurance, which is a legal requirement), but that's really risky. Buying only the minimum amount of liability means you are likely to pay more out-of-pocket later, which could be devastating financially. Instead, look at your policies and consider dropping things that are no longer necessary (for example, collision coverage for an older automobile).
Mistake #5: Skipping renter's insurance
You're not a homeowner, so you don't need homeowner's insurance. But is renter's insurance worth it? It is. 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. It also provides liability protection if someone is injured at your (rented) home. Save money by bundling policies; your car insurance carrier will likely provide renter's insurance: bundle and save!
Of course, if you're looking to save a little green on your insurance policy, we recommend calling your agent! You can look over everything and brainstorm ways to save - without compromising coverage!
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Source: Insurance Information Institute, Five Insurance Mistakes to Avoid... (And Still Save Money)