NEW YORK - For more than 40 years, the
Insurance Information Institute has been giving consumers advice through anaylsis of insurance products. They offer insurance mistakes to avoid in 2010 when taking care of personal insurance needs. The Insurance Information Institute says if you avoid them you can save money and remain protected.
Mistake #1: Insuring a home for its real estate value rather than the cost of rebuilding. Many people think when real estate prices decline so can their insurance but Insurance covers the cost of rebuilding, not the sales price. A better way to save: Raise your deductible, a change from $500 to $1,000, could save up to 25%.
Mistake #2: Selecting an insurance company by price alone. It’s important to choose a company with competitive prices, but also one that is financially sound with good customer service. A better way to save: Check the financial health of a company with independent rating agencies and ask friends and family for recommendations.
Mistake #3: Dropping flood insurance. Many homeowners are unaware they are at risk for flooding, but 25% of all flood losses are in low risk areas. A better way to save: Before purchasing a home, check with the National Flood Insurance Program (
NFIP) to see if it is in a flood zone; if so, consider a less risky area. FEMA recommends all homeowners consider flood insurance, available from the NFIP.
Mistake #4: Only purchasing the legally required amount of liability for your car.
In today’s litigious society, buying only the minimum amount of liability means you’ll likely pay more out-of-pocket. A better way to save: Consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000.
Mistake #5: Neglecting to purchase renters insurance. A renters policy covers your possessions and additional living expenses if you have to move out due to a disaster. It also provides liability protection. A better way to save: Look into multi-policy discounts. Buying several policies with the same insurer will generally provide savings.
