Many people look at their insurance premium and think, “how can I get a lower rate?” The thing is, this rationale is fundamentally incorrect, as the lowest premium could put you at risk.
If you’re too aggressive in reducing your insurance coverage by having the lowest legal limits you could be putting yourself in serious financial harm.
Price is an inevitable factor that clients inquire about most frequently, especially when they experience an increased insurance rate. At the end of the day, as an Insurance Brokerage, we aim to ensure our valued clients are informed on their insurance coverage.
Why having proper insurance coverage is essential
There are many factors that impact the cost of insurance from claims history, climate change, a hard market, and even the types of coverage you choose.
This year, we began a campaign to inform our clients on the importance of having their personal insurance liability limit be $2 million or greater. By increasing your personal insurance liability limits you’re effectively reducing your financial exposure, especially if you consider the potentially extreme costs associated with a claim.
Ultimately, having a higher liability limit could potentially increase the cost of your insurance, but it provides peace of mind, knowing you are protected.
How a lower premium could equal more risks
Remember, a lower insurance premium could be the most expensive insurance you’ve ever had - especially if you experience a loss. In another post we published titled, Why Price Matters When it Comes to Insurance, we shared this simple equation: premium + uninsured losses = cost of insurance.
Essentially, this means that the lowest insurance premium doesn’t necessarily equal the best insurance coverage.
We've outlined the dangers of not being adequately insured and why you shouldn't base your insurance decisions on the lowest premium. As always, we are your resource for everything insurance-related, don't hesitate to contact us to discuss your coverage today!
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