Action Line: How to safely trim your insurance costs
BY PHIL MULKINS World Action Line Editor
Tuesday, February 12, 2013
2/12/13 at 6:51 AM
Dear Action Line: We receive letters from insurance companies wanting our business. How do we cut insurance costs and still have good coverage? - N.O., Drumright.
The Insurance Information Institute website says simple steps can cut the cost of home and auto insurance. Here are some mistakes to avoid.
Confusing real estate and rebuilding values: Insuring a home for its real estate value instead of for the cost of rebuilding is false logic. With home prices still down in many parts of the country, it might makes sense to reduce the amount of insurance on your home, too. But insurance is designed to cover the cost of rebuilding your home. Make sure you have enough coverage to completely rebuild your home and replace all your belongings in the event of a disaster. Raise your deductible. An increase from $500 to $1,000 could save up to 25 percent on your annual premium.
Judge policy just on price: Competitive pricing is important, but should not be your only criterion for choosing an insurance company. It is a good idea to also make sure the company is financially sound, provides good customer service, and offers policies right for you. Check the company's financial health with independent rating agencies and ask friends and family for recommendations. You should select an insurance company with a reputation for excellent customer service and response to customer needs. Ask questions, as insurers offer different services or coverage.
Not buying flood insurance: Flood damage is not covered by standard homeowners or renters insurance policies. Coverage is available from the National Flood Insurance Program tulsaworld.com/NFIP as well as certain private insurance companies. Many homeowners are unaware of the flooding risk but 25 percent of flood losses occur in low risk areas. Check your flood risk and the cost of an NFIP flood insurance policy on its website. When buying a home, factor flood insurance cost into your housing budget. If you can't afford the insurance, you can't afford the home.
Just the minimum: Buying just the legally required amount of liability insurance for your vehicle means you are likely to pay more out-of-pocket when you are sued and those costs are steep in today's litigious society. The insurance industry and consumer groups recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident. Consider shopping around for the best policy, taking a higher deductible and dropping collision and/or comprehensive coverage on older, less expensive cars. Consider the cost of insurance when buying new or used vehicles.
Counting on landlord: Too many people neglect to buy renters insurance thinking their landlord is responsible for their belongings. The landlord is only responsible for the structure of the building - not your personal possessions. Renters' insurance policies cover your possessions and additional living expenses when you have to move out due to an insured fire or disaster. It provides liability protection when someone is injured in your home. Your injured guest can submit medical bills directly to your insurance company. If someone decides to sue you, renters insurance also covers legal defense and court judgments up to policy limits. Look into available discounts. Buying several policies with the same insurer, such as renters, auto and life, provide savings. You also receive a discount for installing dead-bolt locks, fire extinguishers and alarm systems.
Original Print Headline: How to safely trim your insurance costs
Submit Action Line questions by calling 918-699-8888, emailing phil.mulkins@TulsaWorld.com or by mailing them to Tulsa World Action Line, PO Box 1770, Tulsa OK 74102-1770.
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