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7 Most Common Mistakes People Make When Buying Insurance

Jeff Pic 2It might not surprise you to hear that I love talking to people about their insurance. Everyone has a different set of needs, and there are so many options available.

One thing I don’t love is hearing that someone experienced a financial loss because they had the wrong insurance. Over the years, I’ve discovered that there are 7 most common mistakes people make when acquiring insurance for themselves, their home or auto, or their business.

Not Marketing to Multiple Companies – Insurance premiums are based off statistical data that insurance companies collect to try and predict the likeliness of a claim for you. This information which each insurance company uses to determine their rates can vary significantly. Your age, your driving record, your credit, where you live, etc. is all used to calculate the premium. Taking the time to market to multiple companies can ultimately save you a significant amount of money. Independent Insurance Agents typically represent many companies, so one call can usually give you many quotes.

Not Comparing Agents – The front line person who works to find the best policy for you is the agent. Making sure that the agent is properly licensed to give you sound advice and also has a good reputation is imperative for having a good experience. Speak to a couple of agents to make sure that you feel comfortable with their level of expertise.

Not Understanding the Policy – Full Tort or Limited Tort? Uninsured and Underinsured Motorist? First Party Benefits? The coverage and options can seem confusing and overwhelming. Asking for examples and making sure that you understand the coverage and options available to you is important. Finding out what coverage means after a claim is not always a good experience

Not Buying Enough Insurance – Let’s face it, nobody likes to buy insurance. Spending money to cover something that you hope doesn’t happen isn’t that exciting. It can be peace of mind for some, but most buy insurance because they have to. Many people only buy what is required; however, you should always buy the proper amount. Insurance is a financial safety net! You can’t predict the future, but you can protect yourself from an unfortunate incident.

Not Updating Your Coverage – As you go through life, things change. Whether you get married, become divorced, buy new property, are having a child turn 16, or are having a child go to college; you need to let your insurance agent know. You should never assume that your policy is fine without making changes.

Not Taking Advantage of Discounts Available – Insurance Companies are always looking for ways to get a larger piece of the pie and write more business. Most carriers offer discounts for having multiple vehicles on the same policy or by having your home and auto insurance with the same company. Companies also often offer good student discounts, driver’s training discounts, and paid in full discounts. Many carriers give you a discount for quoting 10 days or more before the effective date. You may also discover that belonging to a certain association, working in a specific profession, or even driving a hybrid vehicle can land you a discount.

Not Choosing a Reputable Carrier – Service is everything in buying an insurance policy. Make sure you research the experience that others have had. It seem that many insurance companies spend a ton of money on advertising to get you to buy, but seem to skimp on having friendly customer service and local claim service. Using internet search engines and reviewing with the Better Business Bureau, you can find a lot about others’ experiences with a specific carrier. It is also important to review the financial stability of the company to make sure they can pay your claim in the event of a loss.

Do you recognize any of these mistakes? Have you made one yourself?