Shopping for insurance can be tedious and overwhelming, and it’s not uncommon for people to make mistakes that can cost them more when it matters just to save some money upfront. If you cut coverage to keep your premium low, you’re playing the dangerous game of being underinsured, which could result in financial disaster should you ever need to file a claim. Let’s review the five most common insurance mistakes everyone makes and how to avoid them.
What Mistakes People Are Making
Dropping Flood Insurance
Home and renters insurance policies will cover an array of perils, but flood damage is not one of them. To get coverage against floods, homeowners or renters must purchase a flood insurance policy. After a flooding event, there’s usually a spike in flood policy purchases, but most will drop their coverage after a few years to help save some money. While we understand wanting to save, consider that over 25% of flood claims occur in low-risk areas, and flooding can happen anytime- not just in the spring and summer months.
We highly recommend that any renter or homeowner living in an area prone to flooding carry a flood insurance policy and know how to protect their property during a flood to help mitigate any damage. At TGS Insurance, we can help you shop for your flood insurance policy through the NFIP or private insurers to find the best rate and coverage for your needs and budget.
Insuring Your Home For its Value, Not The cost to Rebuild
According to current construction and materials costs, your dwelling coverage is calculated based on how much it would cost to completely rebuild your home from top to bottom. A common mistake homeowners make is that homeowners will reduce their dwelling coverage to save on their premiums when the real estate market goes down. This is a huge mistake! Regardless of the market, you should always carry enough coverage to rebuild your home and replace your belongings.
Instead of lowering your coverage, you can increase your deductible for a lower premium. This means you’ll have to pay more upfront if you need to file a claim, but as long as you can afford the extra deductible amount, then raising it can help you save.
Not Looking at Your Carrier’s Financial Ratings
Sure, everyone wants to pay the lowest premium on their home, renters, or auto policy, but that doesn’t mean you’ll always get back what you pay into it. Don’t pick a carrier based on price alone. Research their financial ratings and read reviews on customer service experiences. You want an insurance carrier that provides a fair premium and can back you up when needed.
At TGS Insurance, we only work with the best. Our partnerships with over 55+ carriers boast an A financial rating or higher, so our clients can always have peace of mind knowing their carrier is financially sound. Click to shop for our carriers and get a quote using your address in 15 seconds or less!
Failing to Buy Renters Insurance
Renters insurance covers your personal possessions and living expenses if a claim due to an insured disaster occurs. It also provides liability coverage for someone injured in your home, such as falls and sues. Usually, renters are required by their landlords to carry a renters insurance policy. Though, it’s not uncommon for renters to cancel their policies after a few months to help save a few bucks. We don’t recommend this at all. By canceling your renters policy, you’re taking on a huge financial risk that may devastate you.
Try bundling your renters policy with an auto or motorcycle policy for savings.
Only Buying Liability Auto Insurance
Purchasing the minimum amount of auto insurance, you’re required to is the most cost-friendly way to save on…it would seem. But by doing this, you’re opening yourself up to the risk of paying more out-of-pocket costs later. If you’re sued and found liable, you’re responsible for paying the money.
Instead of carrying a liability-only auto policy, raise your deductible or drop your collision and/or comprehensive coverage on your vehicle if it’s worth less than $1,000.
Save on Insurance with TGS Insurance
Our agency was founded on the ethos that no one should ever have to overpay for the necessary insurance. This is why we shop every client’s policy through our market of over 55+ A-rated (or better) carriers to find a competitive policy that’s perfectly balanced in coverage and price. Click now for your hassle-free quote and see why over 15,000 people trust TGS Insurance for all their needs! We save on it from home, auto, renters, and more.
Source: Insurance Information Institute