When was the last time you compared the prices of your home and auto insurance policies? Unfortunately, policies held for a long time accompanying a stellar security record do not always translate into lower insurance rates. Even if you think you have a good price, shopping regularly is smart.
After receiving my April newsletter and trying to follow my advice to maintain an umbrella insurance policy, one of my readers contacted his insurer to add coverage. This reader was shocked when his insurer informed him that he was not eligible for an umbrella policy because he had not purchased sufficient liability insurance on his automobile insurance policy. (A minimum automobile liability insurance - often $ 500,000 - is required to purchase liability insurance.) Although this person has owned his policy for eight years, he was unaware that the policy offered only liability coverage for $ 50,000. This amount was clearly insufficient for someone approaching and preparing for retirement.
In addition to realizing that he was severely underinsured, this individual discovered that he was also paying excessive premiums. For only $ 50,000 in automobile liability coverage, this person paid $ 914 per year. In addition, the individual realized that he was paying $ 351 per year for the $ 350,000 of civil liability coverage he had on his condo.
Therefore, in total, this person paid $ 1,265 per year for $ 50,000 in automobile liability insurance and $ 350,000 in home liability insurance.
This person then spoke with an independent insurance agent to increase automobile liability coverage to an amount that enabled him to obtain an umbrella policy. This was essential, as it significantly reduced the exposure to the individual's liabilities, a risk that an individual with accumulated assets should clearly not have. Even better, the individual was able to obtain considerably improved rates on his policies. For a total of $ 1,207 (less than what he paid before!), The individual was able to obtain 1,000,000 automobile liability insurance coverage, $ 350,000 home liability insurance and a supplementary insurance policy of 1,000,000. $.
Obviously, it may be beneficial to occasionally review and compare the rates of your insurance policies. People tend to believe that policies that have been held for long periods have an effective price, but it may be the opposite. If you have not verified that you are well insured and have performed a cost comparison recently, speak to an independent insurance agent and minimize your exposure with profitable policies.