Insurance Mistakes That Will Cost You Money

Fear is an important motivator when it comes to buying insurance. We worry about assets like cars or homes if they are involved in a disaster, so we buy insurance to maintain financial integrity if something should happen.

While this is the purpose of insurance, sometimes it can't give us the outcome we expect. That's not because something's wrong with the policy, but rather the result of human failure. When buying a policy, many consumers fail to consider the true level of coverage needed and, thus, cannot restore assets to pre-disaster condition. Here are five common insurance mistakes that could end up costing you.

1. Thinking "the price gun" or "saving 15 percent in 15 minutes" is the best way to "cheap" insurance. Remember: You get what you pay for. This is never truer than with insurance protection. Insurance pricing is heavily regulated. A company "promising" a huge savings is probably offering less coverage.

2. Going it alone. Insurance is a complicated business, and a professional can help untangle the complexity. Last year, 87 percent of the people who changed their auto insurance started by shopping online, but only 13 percent actually purchased online. Use the Internet to gather information, education and even get a quote, but when it comes to acquiring the proper insurance protection, seek professional advice. Independent agents can give you multiple options.

3. Skipping protection reviews. How much has your life changed in the last 36 months? How many of those changes could have impacted your protection plan? Was a car or driver added or deleted? Did the value of your home go up or down? Did you acquire or sell any valuable personal property? Did a child start or finish a higher education program? Life's changes can cause either a gap or overlap of insurance protection.

4. Cutting it too thin. Since the financial collapse of 2008, many have cut their living expenses to the bone, sometimes by reducing coverage, often described as "penny wise and dollar foolish." Maybe you lowered the rental car reimbursement coverage to the minimum limit, say $30 a day. If you're currently driving a SUV, luxury vehicle or minivan, $30 a day won't cover it.

5. Limiting options. There are a number of companies that have a "one size fits all approach." Over the past few years, a number of these companies have reduced the type of risks they want. Those decisions show they truly aren't on your side, or have you in good hands. Why limit yourself to one choice, when you can have options?

We have professional insurance agents that can help you review your current protection plan and give you options on how to meet your risk management goals. Click here for more info.

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