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The 5 Biggest Insurance Mistakes People Make

There are several ways you can save on insurance costs. But be careful not to make one of the biggest insurance mistakes by cutting coverage that could create an insurance coverage gap.

An insurance agent is often your best resource when it comes to figuring out what coverage you really need. Erie Insurance Agent

Justin Sonon with the Lowa Group in Pottstown, Pa., shares five of the biggest insurance mistakes that customers may make when they do not work with a licensed insurance agent.

Biggest insurance mistakes

Only purchasing the legally required amount of liability insurance coverage for your car.

Chances are you’ll need more liability insurance than the state requires. That’s because you could be on the line for much more than the limits on your policy. That could expose personal assets like your home or savings.

“Keep in mind that when you only buy the minimum amount of liability, you’re also likely to pay more out-of-pocket for losses incurred after an auto accident,” Justin says.

A better solution: Insurance industry experts generally recommend a minimum of $100,000 of bodily injury liability protection per person and $300,000 per accident.

Not buying a life insurance policy because you have coverage with your employer.

Even though your employer may have a top-notch life insurance program, it’s worth asking yourself the following questions:

      • How long do you have to pay for the life insurance policy?
      • If you retire or lose your job due to a layoff, what happens to your protection?
      • Do the costs go up?
      • If you leave the company, does the life insurance coverage go with you?
      • Do I have enough coverage?

A better solution: Talk with an insurance agent about buying a separate life insurance policy. It’s often a more effective way to cover costs and protect loved ones left behind.

Having an “it-can’t-happen-to-me” mentality.

Unfortunately, bad things happen from time to time. And sometimes really bad things happen—a horrific car crash or a tragic accident in your backyard. These types of catastrophic losses could wipe you out financially.

A better solution: “Don’t wait until the crisis hits to try to figure out what to do,” Justin says. Get an extra layer of liability protection over and above your auto and homeowners policies in case you (or a covered family member) are sued because of an accident. Ask your agent about a personal catastrophe liability policy. The coverage is affordable and offers additional protection starting at $1 million with higher limits available.

Not purchasing accidental death and disability benefits because it’s optional auto insurance coverage.

A crumpled fender is one thing. But when a car accident results in the death or disability of an insured, it’s a whole different level of loss.

A better solution: Death and disability coverage provides benefits should an insured die or become disabled as a result of an auto accident. The amount of coverage varies depending on the nature of the accident and the injuries.

Selecting an insurance company by price alone.

It is important to choose a company with competitive prices. But you also want one that is financially sound to back your claims and provide good customer service.

A better solution: Check the financial health of a company with independent rating agencies like the A.M. Best Company or the Ward Group. You should select an insurance company that will respond to your needs and handle claims fairly and efficiently. A licensed insurance agent can also advise you about the coverage options and what protection you may need. Think of your agent as your insurance advocate.

“Don’t wait for an insurance claim to uncover an insurance mistake, leaving you without the coverage that you may need,” Justin says. “Be informed about your insurance decisions and turn to licensed insurance experts for help.”

Avoid the biggest insurance mistakes by talking with an Erie Insurance Agent in your community. He or she can help ensure you have the right coverage.

There are several ways you can save on insurance costs. But be careful not to make one of the biggest insurance mistakes by cutting coverage that could create an insurance coverage gap. /blog/biggest-insurance-mistakes Erie Insurance

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.

The insurance products and rates, if applicable, described in this blog are in effect as of June 2014 and may be changed at any time. 

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.