Money Saving Tips

Rick Hackett at Farmer’s Insurance

When shopping for insurance, you may be tempted to reduce your coverage or drop important coverages altogether with the goal of saving money. But be careful, you could end up being dangerously underinsured and have to pay a substantial amount in the event of a disaster. In the end, you didn’t save money, you lost money. Here are some common mistakes people make when it comes to insurance.

THE MISTAKE:
Insuring a home for its real estate value rather than for the cost of rebuilding.

WHY YOU SHOULDN’T:
When real estate prices go down, some homeowners may think they can reduce the amount of insurance on their homes. But insurance is designed to cover the cost of rebuilding, not the sales price of the home. You should make sure that you have enough coverage to completely rebuild your home and replace your belongings— no matter what the real estate market is doing.

A BETTER WAY TO SAVE:
Raise your deductible. An increase from $500 to $2,500 could save up to 10% on your premium payments.

THE MISTAKE:
Only purchasing the legally required amount of liability for your car.

WHY YOU SHOULDN’T:
The minimum is just that—the least you can get away with by law. So buying only the minimum amount of liability means you are likely to pay more out-of-pocket later. And if you are sued, those costs can jeopardize your financial well-being.

A BETTER WAY TO SAVE:
Consider dropping collision and/or comprehensive coverage on older cars worth less than $5,000. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident.

THE MISTAKE:
Neglecting to buy renters insurance.

WHY YOU SHOULD BUY IT:
A renters insurance policy covers your possessions and additional living expenses if you have to move out due to an insured disaster, such as a fire or hurricane. Equally important, it provides liability protection in the event someone is injured in your home and decides to sue.

A BETTER WAY TO SAVE:
Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto, and life will generally provide savings.

RICK HACKETT
Your Local Agent
CA License # 0832675
949.943.3610
rhackett@farmersagent.com
agents.farmers.com/rhackett

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Farmer’s Insurance
33161 Camino Capistrano, Suite K2
San Juan Capistrano