Buying different types of insurance is an important part of ensuring the comfort of your family if an unfortunate incident or tragedy occurs. It can protect you in the event of an auto accident, illnesses and unexpected “acts of God” like storms and floods. Even if you’re on a tight budget, having insurance is very important – maybe even more important.
There are some insurance buying mistakes you will want to avoid, though. Here are the most important ones:
- Only Considering Price – One of many considerations, price is an important factor but it is not the only factor that you should think about when you are buying insurance. You want to ensure that you’re getting your money’s worth, but you don’t want it to be so cheap that you just buy the lowest priced insurance you can find. Check the company ratings too. Some cheaper companies never make payouts.
Making Erroneous Assumptions – Many people automatically assume that they cannot afford insurance without even checking it out for themselves. This is especially true right now when it comes to the Affordable Care Act. Before making a choice, compare prices in the exchange with prices off the exchange, as well as the benefits involved.
- Setting Unrealistic Deductibles – With property insurance you can usually choose between a few different deductibles (sometimes with medical insurance, too). Be sure to make a realistic choice. If you never have any savings and absolutely cannot come up with 1000 dollars, don’t choose that deductible. You will pay a lower monthly premium for a higher deductible, but if you can’t pay that deductible, you’re not any better off.
Failing to Check Out Multiple Companies – It’s hard to resist high pressured sales techniques but it is important to compare different prices, coverage offerings and rankings among various companies before choosing.
- Not Reading Everything before Signing – Even down to the last moment before you sign, you have a chance to back out of a contract. That’s why, even though it’s a lot to read, you need to read every last word of the contract as well as make sure you understand it.
Not Asking Questions – Many people are so overwhelmed with the insurance industry, the terminology and the fear associated with the things one must talk about when dealing with insurance, that they don’t ask questions. However, it’s very important to ask as many questions as you want. There are no bad ways to ask.
- Buying Too Little Insurance – While you don’t need to buy so much insurance that you leave your family rich if you die, or overpay for insurance you don’t need for your home or automobiles, you must guard against under buying too. Add up what you really need, then tack on something for contingencies you didn’t think about to be safe.
- Not Keeping Your Policies Updated – Each year, review your insurance policies to ensure that you have enough insurance or aren’t over buying. Some people choose to check their policies during the month of their birth so that they can keep track of when they did it each year.
Avoiding these buying mistakes is important if you want to ensure that when you do make a purchase, it is the right one for your family today and in the future.