1. Consumers that purchase their auto and home insurance based solely on price. Just like any other service or product, price definitely needs to be considered when purchasing insurance. But, if you are buying insurance based just off cost alone, you are making a huge mistake.
If you are shopping for a car, would you buy it on price alone? No, you would compare the options on cars, the mileage if it is a used car, is it a one owner, is there maintenance records and so on. Buying an auto or home insurance policy just because one company is cheaper than another without comparing coverages is mistake # 1.
2. Consumers who never shop their rates. Price is not the sole reason to decide which company you should insure with. (See reason # 1.) However, never checking to see if your insurance rates are still competitve could cost you thousands of dollars over your lifetime. Rates can fluctuate wildly between companies over time. Your rates could also vary over time due to changes in your life – you get married, add a teen age driver, you have an accident, or an accident or violation drops off your driving record, and your credit rating improving are just a few factors that could dramatically impact your rates. Never shopping your insurance rates is mistake # 2.
3. Consumers who never review their coverages with their agent to see if their coverages are still adequate (or needed). Paying for coverage that does not meet your needs could easily cost you more than mistake # 2. At the time you suffer a loss is not when you want to find out that you’re not covered. It’s impossible (policies don’t cover everything) and maybe cost prohibitive for you to cover yourself for any misfortune that comes your way. By reviewing your coverage on a regular basis with your agent will help to minimize that possibility. Never reviewing your insurance coverages is mistake # 3.
4. Consumers that purchase their auto and home insurance online without the advice of a licensed agent. You take on a home improvement project yourself without the help of a licensed contractor. Will it turn out fine? You decide to bake some cookies from scratch for the first time without a recipe. How do you think they will turn out? You get sued or you’re falsely arrested! Would you show up in court without an attorney? Purchasing an auto or home insurance without the advice of a licensed agent is a recipe for disaster and mistake # 4.
5. Consumers who believe that the smartest way to purchase and to save money on insurance is to cut out the “middle man”. Some TV commercials portrays the “middle man” as an unnecessary expense who brings no value to the purchase of insurance. This might be true if your present agent is not providing you the service you need. In reality, the “middle man” is an independent insurance agent who has the ability to shop your insurance through various companies, provide advice on coverage to help you determine protection that is appropriate for you, and to help guide you through the claims process. However, not all independent insurance agents are created equally. If you’re not getting this service from your present agent, you may need to shop for another local agent. Consumers who look to cut out the “middle man” (independent insurance agent) when they purchase their insurance is mistake # 5.