Fifteen Minutes or Less? How “Saving” Money Can Cost You in the End


By Laurie Haas, CAPI, Vice President, Private Risk Services

Spend 15 minutes or less and you could save 15% or more on your insurance – sounds great, right? Perhaps you can take only seven minutes and save 20%!

Making sense of the barrage of ads touting insurance savings with just a small investment of your time can make your head spin. Yet if you pay close enough attention, you may notice that nowhere in these ads are the type and amount of coverage addressed. Sure, you can save money when you simply reduce coverage, but is that really the right move for you and your family? When it comes to buying your personal insurance – an important decision impacting your short- and long-term financial wellbeing – it would be prudent to spend more than 15 minutes reviewing your options.

The true value of your insurance policy rests not in the premium paid, but in the features, benefits and loss settlement provisions. Discovering you’re underinsured at the time of a loss can be devastating. The amount of premium you pay is correlated with the amount of coverage you receive. Low premiums may also mean very little payment from the insurance company in the event of a claim.

There is a lot to consider when you buy personal insurance. Total losses can and do happen and typically occur without warning. Does your homeowner’s insurance policy provide guaranteed replacement cost with no cap on the limit? If not, you may be paying out of pocket to cover the difference. What if you couldn’t reside in your home after a covered loss? Does your policy provide loss of use without a time or dollar limit to cover additional expenses incurred while you live in a temporary residence during the repair of your home?  While many people have a contingency plan in place to cover emergencies, in most cases that does not include the unexpected expense of covering a shortfall in your insurance program.

What if you decide not to rebuild in the same location or simply choose not to rebuild at all? A few select insurance companies such as Cincinnati, Chubb, Nationwide Private Client Group and PURE allow you to cash out without depreciation in the event of a total loss of your house and your contents. If you own a home with exposure to catastrophic losses such as a wildfire, or you are ready to downsize, this might be an appealing benefit.

Preserving your financial future and peace of mind are of equal importance. If you have assets to protect, including future income, it is imperative you have the proper amount of coverage to defend a lawsuit or judgment resulting from an auto accident or an injury sustained on your property. In addition to your underlying limit of liability, consider buying a personal umbrella policy, particularly one that allows you to purchase excess uninsured/underinsured coverage that protects yourself and family members if you are injured by a party without insurance or insufficient limits of coverage. Further, in the age of social media, an umbrella policy that includes personal injury could be your first and best line of defense from a party who feels they were damaged by something posted online.

Navigating the landscape of personal insurance can be tricky and you shouldn’t go it alone. A qualified insurance agent won’t simply sell you a policy; they will help you make an informed buying decision. While cost certainly becomes part of the conversation, it should not be the sole basis on which a purchasing choice is made. Completing a thorough risk analysis with your agent can identify gaps and deficiencies to be sure your insurance program not only meets your current needs but also keeps pace with whatever life throws your way. So, the next time you find yourself with an extra 15 minutes to spare, grab another cup of coffee and then call your insurance agent to schedule an appointment for a complete review of your policies. Yes, it will take longer than 15 minutes, but an investment of time upfront may preserve your peace of mind and financial well-being in the future.