Don’t fall victim to these insurance coverage mistakes

Looking to cut your insurance premiums down to size? Proceed with caution, as the effort to save a little money may turn into a very expensive proposition. Think twice before you decide to pinch pennies in these four coverage areas:

  1. Liability coverage. Today’s society is litigious. Even if you drive a relic on wheels, and justified dropping your collision or comprehensive coverage to reduce your premium costs, think carefully before you scale back on liability coverage. Depending on your assets, you may want to increase your coverage, or purchase additional liability coverage in the form of an umbrella policy. Your agent can help you determine how much liability coverage would best protect both you and your family.
  2. Flood coverage. Many homeowners are at higher risk for flooding after last summer’s fires scorched many parts of the U.S., burning millions of acres. Yet, even if you don’t live on a flood plain, flood insurance is something you should still consider, since one-quarter of all flood losses occur in low risk areas. Flood damage may not be covered under standard homeowner’s insurance policies, and there’s a dearth of government programs to help homeowners deal with costly flood damage. Without flood insurance, you’re often on your own.
  3. Renter’s insurance. Many renters don’t carry renter’s insurance, which leaves them vulnerable in the event their belongings are damaged or stolen. These folks often don’t consider that renter’s insurance also provides liability coverage in the event someone suffers an injury while in your residence, or your pet causes an injury to another person. This coverage doesn’t cost a lot, but can save you a bundle, if Fido decides to lunge for your neighbor.
  4. Long-term care insurance. Think carefully before canceling your long-term care coverage. It’s hard to get a handle on just how expensive a long-term disability can be. So, talk to your insurance agent about potential steps you can take to preserve coverage, if you’re feeling the need to pinch pennies. For example, one way to make premiums more affordable is to reduce the benefit period of your policy. Don’t cancel your policy without first checking into the cost of replacement coverage. You are likely to find that the premiums on a new policy will cost far more than they did on your old one.


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