Everyone loves to save money! Shopping around is a great way to accomplish saving money, but you should never reduce or drop important coverages to do so.

You should never risk being critically underinsured and being stuck paying more out of pocket in the event of a loss.

We have listed five critical mistakes people make, with suggestions on how to avoid those critical mistakes, while still being able to save money. (In other words “Smarter Ways to Save”)

1.Best to insure a home for its current rebuild value rather than what you paid for it.
You want to make sure that you have enough coverage to completely rebuild your home from the ground up and to replace your belongings, regardless of how good or bad the real estate market is doing at the time of the loss.

Smarter Way to Save: Increase your deductible from $500 to $1,000; this could possibly save you up to 25%.

2.Don’t select an insurance company on price alone.
Seriously consider one that is financially sound and provides great customer service.

Smarter Way to Save: Ask friends and family members about their experiences with insurance carriers. Also, check the financial stability of a carrier and above all select a company that will be there for you during times of need to handle claims fairly and efficiently.

3.Just purchasing your states legally required liability limits for your car.
Purchasing only the state minimum could cause you to pay more out of pocket if you are sued for more than the state minimum and can result in a serious financial setback.

Smarter Way to Save: If you have an older automobile consider removing collision and/or comprehensive coverage. Also, to better protect yourself instead of the minimum state limits, the insurance industry and consumer groups recommend a minimum liability limit of $100,000 of bodily injury protection per person and $300,000 per accident.

4.Removing Flood Insurance.
Loss due to flooding is not covered under your standard homeowners and renters insurance policies. Coverage for flood loss is available from the National Flood Insurance Program (NFIP) and some private insurance carriers. Most people do not live in flood plain areas but statistics say that 25% of all flood losses happen in low risk areas. Did you know that even annual weather changes, such as melting winter snow can cause a flood?

Smarter Way to Save:  Always before buying a home, check with the NFIP to see if the property is situated in a flood zone. If you find out it is you might want to consider a less risky property area. However, if you are currently living in a designated flood area, look into mitigation efforts that can possibly reduce your risk of flood damage and above all consider purchasing flood insurance. More information on flood insurance can be found at www.floodsmart.gov.

5.Never put off buying renters insurance.
Renters insurance will cover your possessions and additional living expenses if you cannot remain in your home due to disaster or loss. Examples would be a fire or storm. Also, very important it provides protection if someone is injured in your home and they decide that they want to sue you for that injury.

Smarter Way to Save: Think about buying several polices at the same time such as auto and renters to get multi-policy discounts; this can provide savings of 10% or more.