We have gathered to together some tips to help in the insurance buying process. It is easy to fall into common traps when buying insurance and you end up buying in piecemeal and spending too much or not being properly covered. With just a little education you can avoid this.
Homeowners Insurance :
Homeowner insurance does not cover flooding. That is a hard lesson learned by a lot of people recently with the so-called 'super-storm'. If your location is prone to flooding, talk to your insurance company about an individual flood insurance policy.
Have you heard of 'incidental occupancy endorsement'? You can add this to your homeowners insurance and it will also cover personal liability - including liabilities for injury of guests on your property. This is a must-have if you are working from home. It costs less than $30 a year for this endorsement and is well worth it. Even if you don't have people working at your house, if you get deliveries it will cover the driver if he slips and falls on your property.
Car Insurance :
Make sure you are properly insured for lawsuits. If you are covered for $100,000 per person that won't even cover medical bills in serious accident. $500,000 to $1,000,000 is the minimum coverage you should carry. It is not that expensive to raise liability coverage and well worth it.
Don't stop with your auto insurance when raising your liability insurance. Do it as well with your homeowners, boat, motorcycles..etc. The peace-of-mind alone is worth the additional cost.
Make certain you have uninsured driver's insurance and raise it to the same levels as you have your liability insurance set at. It is essential that 10-20% of all drivers are uninsured. It is best to be prepared.
You can save money by dropping comprehensive and collision coverage on older vehicles if you feel like you can comfortably afford to replace it without car insurance. Save some money and it will decrease the risk involved.
Self insure on small losses by increasing your deductibles. It will save your money and reduce the number of small claims you file, keeping your rates low.
Life Insurance :
Nothing can replace a family member. The emotional loss is staggering. When purchasing life insurance it is wise to consider a policy that is ten times the lost income. Think about it this way. Why stress the remaining parent by making them work that much harder to compensate instead of spending precious time with their family.
Term life insurance is a great way to start for a young family just getting started financially. It is very cost effective. Try and lock in the price for 20-30 years and make certain that it is convertible to permanent policy for when the time comes.