We realize that most consumers do not truly understand the insurance product they are purchasing. Despite efforts to educate and inform policyholders the simple truth of the matter is that insurance can be difficult, and that is unfortunate.
If you are in the market for insurance coverage, we recommend that you take your time before making a decision to purchase. Due diligence could make all the difference in the event of a claim or your expectations regarding service or customer experience. Ask questions of the insurer, do they have a company mission statement or company charter that may indicate how or why they do business? Most important, always try to determine the full value you should expect when you purchase your insurance coverage.
Here are four mistakes we see often when people purchase personal coverage for home, auto, and tenants insurance.
1. Purchasing from an insurance company based on price alone.
We consider this to be the biggest mistake to avoid! You will typically find that most insurance prices are fairly competitive in the market, but occasionally you could find one price that seems like the best deal ever! Before securing coverage, find out more about the insurance company behind the product. Are they financially stable with a reputation for providing great customer service to their policyholders? Erie Mutual has built strong relationships with our members since 1871, you would be hard-pressed to find many insurers who have been operating for as long as most of the mutual companies. Testimonials by policyholders and a high retention rate are good indicators of the loyalty members have with their insurance company, and why. Check out their website to see what they offer in value above and beyond the insurance product and ask if their financial statements are available for viewing. If you know others who insure with the company, that may be your best source of information, their honesty about service and claims handling should help in making your decision.
2. Purchasing the minimum automobile insurance required by law
Everyone looks to save money on their auto insurance rates. We realize this is the mindset of most drivers today when it comes to their vehicle. We will never recommend you carry the bare minimum coverage on your auto insurance, you are leaving yourself open to a shortfall in the event of a claim. Our team will discuss your insurance needs based on liability limits, physical damage coverage for the automobile and equally important, accident benefit limits. Your auto insurance is not somewhere you want to cut corners just to reduce costs, you need to have the proper coverage and adequate limits to protect yourself and your family.
3. Not purchasing tenant insurance as a renter
Huge mistake, if you rent you need to carry tenants insurance for two reasons. First, is to protect against loss for your personal property or contents. The landlord is not responsible, nor is their insurer when it comes to a loss or damage to your belongings. Secondly, a tenant policy provides you legal liability protection in the event of negligence which causes damage to your rental unit, or other units within the same building. The price for a tenant insurance policy is very feasible and well worth the expense to ensure make sure you are covered!
4. Not insuring your home to value
We are not referring to the current real estate value of your home, that is not the proper way to determine your insured limit under your homeowner insurance policy. The real estate market fluctuates, the cost to rebuild your home is not the same. Ultimately, the cost to rebuild your house will only change based on the cost of labour and building materials as they tend to increase over time (additions or high-end changes to the home may also influence the need to amend your current insured limit). We always recommend our members insure their home to value! That is, the cost to rebuild your home today if there was a total loss. Limits under your policy should always be adequate to rebuild your house and replace your contents within the home.
Article Written by Darcy Johnson
Erie Mutual Insurance Manager – Sales, Marketing & Business Development
Please contact us with any questions you may have about this or any other topic related to your insurance.