Price versus Coverage — A Balancing Act

A Balance NeededWhen it comes to purchasing auto or home insurance, you want enough coverage so that your out-of-pocket expenses will be very low or, even non-existent, but you don’t want to sacrifice on the coverage and quality of your insurance. Finding a balance between reasonable insurance premiums and sufficient coverage can be hard, but it isn’t impossible.

Here are a few tips for keeping your insurance issues in balance:

1. Compare, compare, compare.

Even if you’ve had insurance with the same company for years, it still doesn’t hurt to compare rates every once in a while. If you find a lower rate that offers the same coverage you currently have or want to have, let your present insurance company know. The agent may be able to get you that price, or at least closer to it, so that you won’t be tempted to change companies.

2. Find out exactly how much insurance you need.

This can be especially beneficial when it comes to auto insurance. If you have a car that has been paid off, is a fairly old model, and has high mileage, you may be able to get by with just liability insurance. If you can do this, you can save quite a bit of money by switching your policy from full coverage to liability only. Remember, though, that liability only insurance does not pay for repairs or replacement to your car, nor does it pay for medical expenses should you be injured.

The same may hold true for homeowners insurance, if your home is paid for. However, keep in mind that homeowners insurance coverage is usually enough to replace your home should it be completely destroyed, and usually provides coverage for medical expenses should someone be injured while they are in your home.