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, then you’re playing a 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.
Mistake #1: 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 can understand wanting to save, consider that over 25% of flood claims occur in low-risk areas, and flooding can happen at any time- 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 your 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 you the best rate and coverage for your needs and budget.
Mistake #2: 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 rebuild your home from top to bottom completely. A common mistake homeowners make is that when the real estate market goes down, homeowners will reduce their dwelling coverage to save on their premiums. This is a huge mistake! You should always carry enough coverage to rebuild your home and replace your belongings regardless of what the market looks like.
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.
Mistake #3: 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 not only provides a fair premium but can also back you up when you need it.
At TGS Insurance, we only work with the best. Our partnerships with over 35+ carriers all 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 our carriers and get a quote using just your address in 15 seconds or less!
Mistake #4: Failing to buy renters insurance
Renters insurance covers your personal possessions and any living expenses in the event of a claim due to an insured disaster such as a hurricane. It also provides liability coverage should someone get injured in your home, such as a fall and sues. Usually, renters are required by their landlord to carry a renters insurance policy, but it is 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.
Mistake #5: Only buying liability auto insurance
Purchasing the minimum amount of auto insurance you’re required to by law is the most cost-friendly way to save on auto insurance…it would seem. But by doing this, you’re opening yourself up to the risk of paying more out-of-pocket costs later, and 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 insurance they need. This is why we shop every client’s policy through our market over 35+ A-rated (or better) carriers to find a competitive policy that’s perfectly balanced in coverage and price. Click now to get your hassle-free quote and see why over 15,000 people trust TGS Insurance for all of their insurance needs! We save on it all from home, auto, renters, and more.
Source: Insurance Information Institute