TIPS: Five insurance traps to avoid

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Buying car and home insurance is easier than ever. Make one call or go online and you’re sorted… Or are you?

Here are some pitfalls to avoid when it comes to insurance:

1.Cheaper isn’t always better

When shopping around for car insurance for the first time, it’s tempting to pick the cheapest cover on the block. But paying less for the time being, can actually lead to having to fork over thousands later.
You’ll enjoy a lower premium every month, but if you end up in an accident, you’ll have to cover your own damages yourself. The cost of fixing accident damage or replacing your car can easily be way more than what you would have saved by not taking comprehensive cover.

 2. Aiming too high

If you find yourself in a situation where you have to claim for damage to your car, you have to pay your insurer an excess amount. If you don’t pay this amount, your claim won’t be paid out.
That’s why you need to pick a reasonable excess amount.

3. It’s in the details

Once you’ve signed on the dotted line and bought insurance, you get a little thing called a policy document. Basically, it’s a breakdown of what you’re paying for. And if you don’t read it, not only do you risk being under-insured, you also end up paying a monthly premium with no idea why.

4. Keep your insurer posted

Your insurer needs to know about high-value items that affect the overall sum you’re insured for. Don’t let the excitement of new toys distract you from the important stuff like updating your insurance.  Update your home insurance at least once a year to make sure everything’s covered for its current replacement value.

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5. The second mouse gets the cheese

The early bird gets the worm, right? But the second mouse gets the cheese. Especially when it comes to getting the right insurance for your needs.
Simply put, you’re not very likely to find the best deal the first time around. You need to take some time, compare prices and do your research.

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