We’re all looking to save a few bucks here and there. I’ve learned that great value pop tarts taste exactly the same as normal pop tarts and I save a whole whopping 30 cents! With the Internet available and reality TV, we’ve all become the ultimate bargain shoppers. If you think there’s a better deal out there, check the Internet because there probably is. Shopping around for insurance is important, however, simply reducing your coverage or dropping important coverages altogether can leave you dangerously underinsured in the event of a disaster. Following are the 4 biggest pitfalls consumers make and suggestions to avert catastrophe while still saving money.
1. Insuring a home for its real estate value rather than for replacement cost. When real estate prices go down, homeowners may think they can reduce the amount of insurance on their home. Insurance is designed to cover the cost to rebuild, not the market value. You should make sure that you have enough coverage to completely rebuild.
Save This Way: Increase your deductible. An increase from $500 to $1,000 could save up to 25 percent on your premium payments.
2. Selecting an insurance company by price alone. It is important to choose a company with competitive prices, but also one that is financially sound and provides good customer service. There’s no point in having insurance if the company can’t pay a claim.
Save This Way: Check the financial standings of a company and ask friends and family for recommendations.
3. Purchasing the lowest legally required amount of liability for your car. In today’s sue happy society, buying only the minimum amount of liability means you are likely to pay more out-of-pocket if you are sued—and those costs may be steep.
Save This Way: Consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000. It is generally recommended not go below a minimum of $100,000 of bodily injury protection per person and $300,000 per accident. Companies are even beginning to give discounts if you have high limits of insurance.
4. 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.
Save This Way: Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto and life generally will provide big savings.
If you have questions regarding your insurance, ask ECI, we are always here. Contact us at 405-373-2977 or email us.