When buying insurance, there are some things you may not know and wish you did. Purchasing insurance can be an overwhelming task with all the options and providers to choose from. Here are a few tips to help you make an informed decision when buying insurance.
We all want to save money when shopping for insurance; however, the cheaper policies are not always your best choice. Insurance policies can vary greatly depending on the premium you pay. For example, if you purchase a state minimum requirement car insurance policy, you likely are not going to have very great coverage. You would be surprised how a few extra dollars towards your premium can dramatically change the quality of your coverage. You may want to save more now by paying a lower premium but end up paying more in the long run if it turns out you aren’t sufficiently covered.
If you’re concerned about paying high insurance premiums, you may want to consider choosing a higher deductible. A higher deductible will lower your premium payment while still allowing you a quality coverage policy. You would pay higher out of pocket costs if you do need to file a claim but still have the coverage you want. You can take the money you save from lower premium costs and put it towards a savings account. That way you have money set aside to pay your deductible if a loss occurs.
Another thing to consider when buying insurance is to take out disaster coverage. For example, you may have hurricane coverage but still not be covered if a flood occurs as a result of the hurricane. Check with the National Flood Insurance Program (NFIP) for flood policy pricing. Make sure you don’t under insure either. Even if your mortgage company only requires you to have coverage at or above your unpaid principle balance, you are better off with a policy that includes guaranteed replacement cost. Stay informed, weigh your options, and be realistic about the coverage you need and you can’t go wrong.