Insurance: Get the right coverage, save money

One of the most expensive mistakes that many people make is not having the right insurance coverage. Too little coverage can you can be left with a huge bill from an accident or illness, to much coverage and you could be paying hundreds or even thousands of dollars a year that you do not need to pay. Getting the right insurance coverage can be a step in the right direction toward freeing up money that can then go into your cash reserve.

• Know what you have to insure. Each state has various requirements for both car insurance and homeowners insurance. Checking with your state insurance department will let you know what you have to insure to be legal and what you can pass on. Consider this one phone call to your state insurance company can save you hundreds if not thousands of dollars per year. In addition you should check with both your mortgage lender and your bank or credit union if you have a loan on your car. Mortgage lenders and banks will have certain insurance requirements for the items they are lending you money to purchase. Failure to correctly insure your house or car can result in severe penalties from your lender and even precipitate your loan being called in.

• Carefully review your policies with a certified insurance agent. Taking a few minutes to go step by step over your policy can often save you big money. Do not hesitate to question each provision, remember you are paying for the policy. If you find extra insurance that you do not need drop it and realize that you are being able to pocket the extra cash.
• Insure only what you need to. Too often in an attempt to be extra safe people are lured into buying extra insurance. It is important to ask yourself-Does your 15 year old car really need full coverage when it is only worth a few thousand dollars? Keep in mind that certain items (like older cars) may only be replaced for low market or even scrap value despite having extensive insurance. Insurers can save up to $1000 dollars or more per year depending on where they live by lowering the insurance provisions on their older cars. Do you really need rental insurance? (This provides a rental car if your car is damaged.) If you have another car at your disposal or can make other arrangements you can save yourself about $120 in insurance costs per year. The same goes with homeowners there are several provisions that you may not need to add onto your policy. If you do not live in a flood zone why add on a flood provision that can cost you thousands of dollars a year. While you may flood the basement from leaving the sprinklers on you can most often clean this up without insurance help leaving you to pocket the extra cash.
• Don't forget to review your medical insurance. While many people are diligent about reviewing car and homeowners insurance they often pass up the opportunity to save themselves some cash by going over their medical insurance. While many employers offer a one size fits all policy for their employees some employers offer a cafeteria plan that has employees being able to pick and choose their options. For example: many health insurances offer an expensive prescription rider. If you take 2 or more prescriptions it may be in your best interest to have this insurance. But if you are not taking any prescriptions you can save yourself about $500 dollars a year by not picking up this rider. Keep in mind that if you do need a prescription the full cost will come out of your pocket but until then you can pocket the money you are saving.