Reducing coverage on auto insurance or other forms of financial protection may be one way consumers can save money.
Given that unemployment is high, many Americans are trying to reduce their monthly bills. And while there are ways to obtain auto insurance coverage for lower rates, the Insurance Information Institute says consumers should be careful about lowering coverage.
For example, some motorists may opt to have the minimum amount of auto insurance required by their state. While this could lead to savings in the short term, an accident could lead to unforeseen expenses or a lawsuit, both of which would dampen any perceived savings.
“When money is tight, it extremely important to be financially protected against a catastrophe with the right amount and type of insurance,” says III spokeswoman Jeanne Salvatore.
Another option may be to purchase home insurance coverage based on a property’s real estate value. However, the III says the actual costs to rebuild and replace possessions are what should be considered.
Increasing deductibles for both home and auto insurance coverage is one way to save on monthly bills. Still, policy owners should note doing so may cost them more in the future when making a claim.
