Insurance plays an integral role in providing economic security, yet many don’t give their policies the consideration they deserve. Neglecting to determine your coverage needs or learn ways to save on premiums can cost you a lot of money, either through unnecessarily high costs or inadequate protection. Here are a few of the most common mistakes people make when purchasing insurance.

5 Costly Insurance Errors

1. Purchasing a Policy Based on Price

Although staying within budget is important, an insurance policy does no good if it doesn’t provide sufficient coverage. Secure the most comprehensive policy your budget will permit. You should also take into account the reputation of the insurer and their ability to pay claims in a timely manner.

2. Insuring Your Home for Its Market Value Only

Home values constantly fluctuate. However, people frequently make the mistake of believing their homeowners insurance doesn’t need to cover as much when market prices drop. However, home policies should always cover the full amount it would cost you to rebuild and replace everything inside your house. This generally amounts to quite a bit more than market value.

3. Only Buying Liability Coverage for Your Car

Most states require drivers to carry a minimum amount of liability coverage on their vehicles. If you were to cause an accident, this would help cover any bodily injuries and property damage other people suffer as a result. However, you would still be responsible for paying any costs beyond your policy limits, and the policy would pay nothing for your own losses. Set higher limits and add comprehensive and collision coverage to your policy to avoid significant expenses later.

4. Failing to Review Your Policies

Life events change your insurance needs all the time. Review policies annually to make sure you’re still suitably covered. Having your insurance agent shop around for you will also help to keep your costs low.

5. Not Asking for Discounts

Insurance companies offer a range of discounts, which vary among providers, so you won’t know everything you qualify for unless you ask your agent. They will identify all the rebates and discounts you’re eligible for to secure the greatest savings.

Steering clear of these errors will help you avoid paying too much for insurance or purchasing a policy that doesn’t suit your circumstances. The first step to getting the right policy for your needs is to work with an experienced insurance agent that works with multiple carriers. Residents of Lexington, NC, trust High Rock Insurance Agency for their home, auto, and motorcycle insurance needs. They offer 24/7 support and in-agency discounts to secure the best quality coverage at affordable prices. Call (336) 236-9022 to request a quote, or visit them online to learn more.