4 Insurance Mistakes That Could Cost You Big!

Insurance is meant to be your safety net should life throw you a curve ball. Not many of us have the disposable income to purchase a new home, a new car or replace all of our belonging if they got damaged. This is why it’s so important to have insurance to cover you in the event of a loss. However, having too little insurance or not the right insurance could cost you big. Take a look at these four insurance mistakes and be sure to avoid making them!

#1. Buying only the minimum

Most states set a legal limit to the minimum amount of insurance you must have, particularly for cars. Don’t make the mistake of buying only the minimum! Sure, it might save you a few bucks now, but it will certainly cost you big in the event of an accident. Most often, this minimum insurance will cover the other driver and their car, but will not fully recover the damage to your vehicle. You will be forced to pay out of pocket or fulfill a high deductible to fix or replace your vehicle. If you rely on transportation to get to your job, run errands and anything else, think about how this could impact your finances – and your life!

#2. Not seeking out discounts

Always be sure to ask your insurance agent about possible discounts or money saving tips. Some companies will reward safe drivers or offer a diminishing deductible after a certain length of time. If you consider yourself to be safe and responsible, there is likely a discount program that will reward you for that! Ask and do your research to be sure you aren’t leaving money on the table.

#3. Selecting a deductible that is too high or too low

Let’s talk about deductibles. It’s important to pick a deductible level that fits your finances. How much money could you reasonably pay out of pocket at any time to fix damage to your home, car or personal belongings? Setting a high deductible will often reduce your monthly premium, but if you cannot fulfil it in the event of an accident, it really won’t do you any good. On the flip side, don’t set your deductible too low, either. You will likely see your monthly premium increase as a result and you may go years without ever needing to take advantage of it.

#4. Shopping by price alone

Finally and most importantly, be sure to consider more than just the price of your insurance policy. Look for online reviews of an insurance company or ask someone you know who has worked with them before to gauge their professionalism and customer service. The cheapest coverage may save you some money right now, but if their customer service is substandard, this will most certainly cause you headaches and frustration in the long-run.

Have you personally experienced any of this mistakes or maybe another one we didn’t mention? Share your thoughts by leaving a comment!