5 Mistakes anyone can avoid while purchasing insurance

Whether you are insuring your car, your house or yourself, never shop without knowing the coverage itself or the add-ons since when the unexpected will happen - a fender bender, a speeding ticket, a head injury or a house fire, you’ll be left stranded & clueless. It’s always a relief to know that at least some of your damages will be covered in case there is an accident. But do you know how much coverage do you need? And what question should you ask before purchasing a policy? Many consumers who purchase insurance for the first time do tons of mistakes. Here are 5 mistakes that you could easily avoid. 1) Staying prejudiced that insurance is not for you: According to the US Census Bureau, 40 million citizens in 2012 had no access to health insurance. And according to LIMRA, about 30% of US households have no life insurance. The reason being that most consumers think that insurance is beyond their reach. However, in most cases, it’s not true. According to Marvin Feldman, president and CEO of the LIFE foundation, a non profit organization, average consumers remain under the false notion that insurance is three times more costly that what it actually is and that’s why they are not reaching to determine what the actual cost is. While purchasing property, health or casualty insurance, a consumer can ask for any reasonable discounts. "Two-thirds of consumers don't realize they can get financial help if they buy their own health insurance, and they can get financial help if they go and buy in these health insurance marketplaces," says Lynn Quincy, senior policy analyst with Consumers Union, a division of Consumer Reports. 2) Putting assumptions in high-faith: As time goes on, economy rises, so do inflation. To deal with such changing economic conditions, you need more coverage than what you had in past. For instance, with life insurance the sum that you expected your beneficiaries would receive in case something wrong befall you might appear unreasonably less at the time of the event. According to Feldman, disability and long term care insurance are even more complicated stuffs than traditions life insurance policies. Do you have any disability or health insurance policies? Do they fulfil your requirements? If you really want to know, you should immediately consult an insurance expert. Did you recently renovate your home? In that case your home could be uninsured. Again, the same might be the case if the cost to build a home has increased due to higher material costs or other related factors. 3) Shopping on price alone: Comparing insurance policies can be hectic and confusing, but never pick the one with the lowest monthly premium. Make sure you consider the reputation of the company, it’s past performance, client satisfaction rate, the add-ons, and most importantly the coverage you’d get before purchasing a policy. Private insurance companies must provide examples so that you can understand what the policy would cover and what your estimated out-of-pocket costs would be. "Make sure you're shopping apples to apples and getting quotes based on the same coverage that you have," says Lori Conarton, a spokeswoman for the Insurance Institute of Michigan. If you are having a property & casualty insurance, it may not cover things like food spoilage worth more than $1000 in the event of a flood or power outage . So here you need to purchase extra add-ons. 4) Choosing a too low deductible: If you settle on a lower deductible, the premiums will be high and if there comes a property and casualty insurance and a greater likelihood of small claims, which are ultimately going to raise your premiums. Insurance is basically designed to cover your losses that you cannot do yourself. So if you can afford to pay the first $500-$1000 on your own, you may not need a lower premium. 5) Glossing over the details: Make sure you understand in detail what your insurance policy covers and what not. If it is health insurance, choose a policy where your doctor is in-network and prescribed drugs from the formulary. You can always check with your insurance agent if anything is unclear.