With nearly one in 10 Americans out of work, and others forced to make ends meet with less money, many people are looking for ways to cut costs.
There are many ways to save on home and auto insurance. Be careful, though, not to make mistakes that could result in your being dangerously underinsured.
“When money is tight, it’s extremely important to be financially protected against a catastrophe with the right amount and type of insurance,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the Insurance Information Institute (I.I.I.). “By taking a few simple steps, it is possible to cut costs and still be protected should disaster strike.”
According to the I.I.I., these are the four biggest insurance mistakes that people often make:
1. Insuring a home for its market value rather than for the cost of rebuilding. When real estate prices go down, some homeowners may think they can reduce the amount of insurance on their home. Insurance is designed to cover the cost of rebuilding, not the sales price of the home. You should make sure that you have enough coverage to completely rebuild your home and replace your belongings.
A better way to save: Raise your deductible. An increase from $500 to $1,000 could save you up to 25 percent on your premium payments.
2. Selecting an insurance company by price alone. It is important to choose a company with competitive prices, but also one that is financially sound and provides good customer service.
A better way to save: Check the financial health of a company with independent rating agencies. You should select an insurance company that will respond to your needs and handle claims fairly and efficiently.
We're lucky to have a wide variety of financially strong insurers in our agency. For example, ERIE has an A.M. Best rating of A+ (superior) with a stable financial outlook. Additionally, ERIE ranks among the 50 top performing insurance companies, according to the Ward Group, which analyzes the financial performance of 3,000 property-casualty companies. ERIE has also won awards for customer satisfaction and claim service by independent organizations.
3. Only purchasing the legally required amount of liability coverage for your car. In today’s litigious society, buying only the minimum amount of liability coverage means you are more likely to have to make out-of-pocket payments — and those costs may be steep.
A better way to save: The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury liability protection per person and $300,000 per accident. Also, consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000.
4. Neglecting to buy renters insurance. A renters policy covers your possessions and additional living expenses if you have to move out due to a disaster. Equally important, it provides liability protection in the event someone is injured in your home and decides to sue.
A better way to save: Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto and life will generally provide savings.
We can help. For more information about how you could save money on your insurance policies, call us at (937) 592-4871 or visit our website to start the discussion. You can contact us from the site, as well as submit a quote request.