Adam and Associates Insurance Agency Blog

Tempted to trim coverage in tough times?

Don’t cut too deeply

With increasing job instability and the value of paychecks and investments going down, you may be tempted to cut corners on your insurance. While there are many smart ways to save money on insurance, the Insurance Information Institute alerts consumers that there are also mistakes that could result in being dangerously underinsured.

Selecting an Insurance Company by Price Alone

When shopping for insurance, it is important to select a company that is financially sound and has a reputation for outstanding customer service.

Check the financial health of an insurance company by using ratings from independent rating agencies. Contact your state insurance department to find out whether they make available consumer complaint ratios by company.

A Better Way to Save Money: Ask friends, relatives and business acquaintances for recommendations. It is important to select an insurance company that answers questions and handles claims fairly and efficiently. Remember, you will be dealing with this company if you have an accident or other emergency, so you want to find a company that will be responsive to your needs whether you're in Tennessee, Georgia, Alabama, or South Carolina.

Insuring a Home for its Real Estate Value Rather than the Cost of Rebuilding

With the value of real estate going down, some home buyers may think that they can reduce the amount of insurance on their home. Insurance, however, is designed to cover the cost of rebuilding a home. It is not linked to the sale price of the home. Homeowners should be careful to purchase enough insurance coverage to completely rebuild their home and replace their belongings.

A Better Way to Save Money: Take a higher deductible. Consider a deductible of at least $500. If you can raise the deductible to as much as $1,000, you may save up to 25 percent on many home insurance policies. The average person only files a claim every eight to 10 years, so most homeowners will save money over time.

Neglecting to Purchase Renters Insurance

Buying a renters insurance policy can provide a very important financial safety net. Renters insurance covers personal possessions in the event there is a fire or other insured disaster. It will not only pay to replace your belongings, but also provides coverage for additional living expenses and liability protection in the event someone is injured on your property. With the average policy costing only about $200 per year, it is also affordable. Unfortunately, a 2006 Insurance Research Council poll found that only 43 percent of renters had insurance compared with 96 percent of homeowners.

A Better Way to Save Money: Look into multipolicy discounts. Purchasing several policies with the same insurer will generally provide some savings in the form of a discount. Check the cost of getting your renters insurance policy with the same company that provides your auto, life or excess liability policy. Our agency is located in Hixson, TN, please drop by to visit us.