When Buying More Coverage Is A Lot Cheaper

By Chimezirim Chinecherem Odimba

I write a lot about ways to cut down your rates. However, it's also important that I stress that buying any policy that leaves you compromised all in the name of paying less is plain foolishness. Apart from this, there are also times when buying more coverage will actually save you a lot more provided you know what you're doing. Let's look at two cases...

1. Insurance coverage is sold in ranges. That is, an insurer might sell you a policy at $0.97 per $1,000 coverage if you buy between $250,000 and $499,000 while they'll sell $1.12 per $1,000 coverage if it's less than $250,000.

In the example above, you'll pay $271.60 for a coverage amount of $280K because it falls within the $250K and $499K range. However, if you buy $240K worth of coverage you'll pay $274.40. That's about $3 more in premium dollars for $40K less in coverage.

Therefore, don't forget to ask your agent how much they charge per $1,000 of coverage for different ranges. You can then do the math to know what amount will be the best coverage amount.

2. Your home and auto insurance policies both have liability coverage. It's a wise move to drop (where possible) or reduce to the barest minimum for these policies and get an umbrella policy. The extra advantage here is that notwithstanding that you will pay much less, you will also receive superior coverage.

Remember what the liability part of your home and auto insurance policies cater for: To protect you from losses you could incur because of injuries to people on/by/in your property. It should as well cater for lawsuits that might be occasioned by this. But like all things in insurance, there's a limit to the amount that is covered and your auto or homeowners' liability coverage might even be totally inadequate.

Nevertheless, an umbrella insurance policy will typically cater fully for even the most cost-intensive of lawsuits and all you'd have to pay are very affordable premiums.

For less than $300 you can get $1 million coverage with an umbrella policy. Add just about $75 (that's a total of $375) to make it $2 million coverage or even buy more for just a paltry $50 per $1 million coverage after the $2 million mark.

Could you compare this to the fact that the same profile would have to pay $300 more just to raise his auto liability (bodily injury) to $100K/$300K from $25K/$50K?

You can see with these two examples that sometimes you can actually pay a lot less by buying more coverage. And whatever you do, do NOT forget to do thorough comparison shopping. You'll find even sweeter deals this way.

Here are great pages for insurance quotes... InsureMe Insurance Quotes Insurance Quotes Chimezirim Odimba writes on insurance.