Most of us are on a pretty tight budget when it comes to bills. Saving money always makes your monthly bill paying feel much better when you have some room to breathe. There are good and bad ways to cut the budget… simply reducing coverages or dropping them while being only focused on the bottom line could end up costing you, in the long run, should an accident or natural disaster occur.
Here are our top 5 mistakes and better alternatives to save when it comes to insurance.
MISTAKE #1. Insuring a home for its real estate value rather than for the cost of rebuilding.
When real estate prices drop, often homeowners start to think it might be a good idea to reduce the amount of insurance on their home. The problem with this train of thought is that insurance is designed to cover the cost of rebuilding, not the sale price. Make sure you have enough coverage to rebuild and replace all your possessions should the worst happen.
A better option: Increase the deductible. A raise from $500 to $1,000 could save up to 25% on your premiums.
MISTAKE #2. Only carrying state minimum drivers insurance
Buying only the minimum amount of liability means you are likely to pay more out-of-pocket later. If you cause an accident and are sued, those costs can trash your financial well-being.
A better option: Is your car worth less than $1000? Consider dropping collision and/or comprehensive coverage on older cars. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident.
MISTAKE #3. Neglecting to get flood insurance
A common belief is that homeowners’ insurance will cover water damage. That simply isn’t the case. Damage from flooding is not covered under standard homeowners or renters policies. Coverage is available from the National Flood Insurance Program (NFIP), as well as from some private insurance companies. If you live in SWFL you have the possibility of flood damage.
A better option: Information on flood insurance can be found at www.FloodSmart.gov.
If you live in a flood zone, look at mitigation efforts that can reduce your risk of flood damage and consider purchasing flood insurance.
MISTAKE #4. Selecting a policy by price alone
Competitive prices are important. But also be sure the company you choose is financially sound and provides good customer service.
A better option: Check the financial history of a company with independent rating agencies and ask friends and family members about their experience putting in claims. Select an insurance company that will respond to your needs and handle claims honestly and in a timely manner.
MISTAKE #5. Not buying renter’s insurance coverage
If a fire, burglary, or other event happens your landlord is not going to file a homeowner’s policy claim on your behalf. They are not responsible for your losses. Renter’s 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. It also provides liability protection in the event someone is injured in your home.
A better option: Look at taking out multi-policy discounts. Grouping several policies with the same insurer (renters, auto, and life) will help you save.
If you are in the Southwest Florida area we would love to create a customized quote for you. Just give us a call at (239) 247-5125 or visit www.cisinsfl.com. We look forward to getting you the protection you need at a great price.