Insurance policies are there to help your get back on your feet in case you experience any financial trauma. You cannot deny the key role they play in your financial life. Nowadays, even the federal and state governments have made some policies mandatory keeping in mind the protection they carry. Whether you are new to this arena or having coverage now for years, you should be aware of some common mistakes that most insured folks do. You can keep your insurance costs under control just by knowing these common mistakes. Today, in the first part of this series, we are trying to showcase 5 common mistakes.
1) Lower deductibles are good: If you have set your auto and home insurance deductibles at low, the premiums will be high. On the contrary, a higher deductible would help you reduce the premium rates significantly. Lifting your HO deductible form $500 to $1,000 could cut your premiums by 25%. Similarly, boosting your auto insurance deductible from $200 to #1,000 could save you around 40%.
2) Discounts will be credited automatically: You are not going to get the benefits of the discounts unless you let the insurer know that you are eligible. Though criteria vary from carrier to carrier, the basic things are same like installing a home alarm system, storm-resistant shutters and carpooling.
3) Submitting to Inertia: Chances are pretty less that the carrier that offered you the lowest rate 5 years back will still go on doing so. Get price quotes from several places if any major financial change takes place. For example, if you get married, move to a new house, purchase a new car or include your child in the policy. Talk to agents/broker and shop around for the best deals. You can find an independent insurance agent at www.iiaba.org.
4) Overlooking a bad complaint record: It’s wise to shop around for better deals every few years but switching carrier just to save a few hundred dollar may not be a good idea. Check in details about any company before falling prey to the lucrative offers. Check the carrier’s service rating through the National Association of Insurance Commissioners’ Consumer Information Source. Always try to avoid a provider that has a higher-than-average complaint ratio.
5) Remaining under the notion that group life is cheaper: Free group life insurance from your employer is no doubt of great benefit. But if your boss offers another policy and now with a charge, think twice before saying yes. However, if your company charges you for the group policy and the average age of the group is higher than yours, then it’s wise to search for a deal on your own.
Click here to read the second part…