Avoid Five Big Insurance Mistakes

Avoid Five Big Insurance Mistakes

January 9th, 2012 // 10:20 pm @

Educators trying to save money on insurance may find themselves underinsured and exposed to large financial losses if they’re not careful. According to the Insurance Information Institute, customers should beware of the following pitfalls:

Do not:

  • Insure a home for real estate value. Instead, buy enough coverage to completely rebuild your home and replace your belongings.
  • Select an insurance policy based on price alone. Check a company’s financial health and claims-paying ability through independent rating agencies. Ask family, friends and co-workers about their customer service and claim experiences.
  • Purchase only the required amount of auto liability. You could pay steep out-of-pocket costs if you’re found at fault for property damage or injuries. Insurers and consumer groups generally recommend at least $100,000 bodily injury protection per person and $300,000 per accident.
  • Forget about renter’s insurance. If you rent, you still need to insure your belongings. Renter’s insurance also protects you if you have to move out due to a disaster or in case someone is injured in your residence.
  • Overlook flood insurance. Standard home and renter’s policies do not cover flood damage. Since 25% of all flood losses occur in low-risk areas, you may still want to consider coverage through the National Flood Insurance Program.
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