In the current economic climate everyone is looking for ways to save money. While there is some great advice out there, it’s important to be armed with knowledge to avoid taking the wrong path.
Melissa Kupfer, personal lines agent, at McGrath Insurance Group has put together a list of five common insurance mistakes you should avoid in a struggling economy.
1) The current downturn in real estate values should not be mistaken for a reason to reduce the amount of your homeowners insurance; before reducing the amount based on current value, do some research into replacement cost. “It’s likely, in the event of a loss, it will cost more to replace your home than the current real estate value,” according to Kupfer.
2) Choosing an insurance agency on price alone is a poor strategy. Ask people you trust for recommendations. You want to be sure you’re not trading knowledge and service for a lower cost.
3) Reducing the amount of liability coverage you carry or the replacement cost of your home can be a dangerous way to conserve premium. Pennies saved today could cost dollars down the line. A terrific way to reduce your total insurance expense without compromising your protection is to increase your deductible. Choosing the highest deductible you can comfortably afford in the event of a loss will reduce the risk assumed by the insurance company, which will help to reduce your premium.
4) Purchasing only the legal limits of auto insurance coverage is very risky in the long run. “In the event of an accident your out-of-pocket expenses will most likely far out weigh the limited savings,” added Kupfer.
5) Eliminating or neglecting to purchase renters insurance will not provide you with a significant savings up front. The cost to you in the event of a loss could be devastating. “The cost of renters insurance is minimal so talk to your agent for affordable premium options,” concluded Kupfer.
