When cutting budget corners, avoid the 5 biggest insurance mistakes

In the post holiday season, we’re all looking for ways to tighten our belts to save money in the new year – particularly since the economy continues to be sluggish, with no end in sight. But when making resolutions for the year ahead, the Insurance Information Institute (III) reminds us not to be penny wise and pound foolish by cutting insurance costs in a way that could cause problems later. III advises consumers to avoid the 5 Biggest Insurance Mistakes:

  • Insuring a home for its real estate value rather than for the cost of rebuilding
  • Selecting an insurance company by price alone
  • Dropping flood insurance
  • Only purchasing the legally required amount of liability for your car
  • Neglecting to buy renters insurance

III elaborates on each of these mistakes and suggests better alternatives.
Other common mistakes that we see, which can cost you money:

  • Forgetting to keep beneficiaries updated
  • Not understanding what a policy does and doesn’t cover
  • Buying too much or too little coverage
  • Forgetting to update coverage to reflect major life changes, such as birth, marriage, new homes
  • Not verifying agent or insurer licenses
  • Not taking advantage of potential discounts

One thought on “When cutting budget corners, avoid the 5 biggest insurance mistakes

  1. Good to know what not to do, but also, what are realistic and reasonable ways to save money on insurance?
    Many opt for higher deductibles and are taking advantage of big account discounts for insuring all of their policies with one agency. More than ever, customers are opting for automatic EFT payments or paying in full to save on monthly service fees.
    There are other ways to reduce costs, but always consult someone who knows the details.

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