We all are anxious to save money and it is significant to shop throughout your area when looking for insurance coverage. Although, shortening your insurance coverage or pulling out some necessary coverages entirely can corner you to be alarmingly uninsured in an event of a disaster.
Below are the typical mistakes consumers can make regarding their insurance, also some approaches to avoid these difficulties and save money along the way.
• Insuring a home for its real estate value rather than for the cost of rebuilding (typical mistake)
Normally, when real estate prices go down, some homeowners tend to think they can lessen the amount of insurance on their home. Although, insurance is used to cover the cost of reconstructing and not the sales price of the home. You need to make sure that you have adequate amount of coverage to fully rebuild your home and change your possessions.
An effective way to save: Increase your deductible. An increment from $500 to $1,000 could save up to 25 percent on your annual premium payments.
• Selecting an insurance company by price alone (typical mistake)
It is essential to go for a company with competitive prices, but also one that is financially sound and provides good customer service to you.
An effective way to save: Research on the financial viability of a company with independent rating agencies and consult your friends and family for recommendations that they might give depending on their experience with a company. You should prefer an insurance company that will best respond to your needs and manage claims justly and efficiently.
• Dropping flood insurance (typical mistake)
Damage resulting from flooding is normally not covered under standard homeowners and renters insurance policies. A flood insurance coverage can be bought separately from independent insurance companies and is available at National Flood Insurance Program (NFIP). Flooding can occur due to various reasons without prior warning and normally affects the low risk areas since they are not prepared for it. With immense amount of snowfall this winter, spring can face flooding issues thus putting relevance to acquire flood insurance.
An effective way to save: Ahead of obtaining a home, check up with the NFIP to decide whether the property is located in a flood zone or not. If it is the case, then you might want to consider less risky areas. If you already reside in a flood risk area, seek for reduction efforts that can help you reduce your risk of flood damage and you should opt for flood insurance.
• Neglecting to buy renters insurance (typical mistake)
A renters insurance policy covers your belongings and any extra living expenses in case you have to move out due to an insured disaster, such as hurricane or fire. It also provides liability coverage in an event where someone might get injured in your home.
An effective way to save: Look into multi-policy discounts. Buying various policies with the same insurer, such as renters, auto and life will generally provide great savings.