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Avoid these Insurance mistakes ... Save Money

Posted on 2016-06-08

Learn to avoid these common Insurance mistakes and you’re on your way to getting the best Insurance for your needs and budget.

Saving money feels good. And shopping around when you’re looking for insurance coverage is a great way to do it. However, simply reducing your coverage or dropping important coverages altogether is like diet without exercise—focused only on numbers, not on results.
Don’t risk ending up dangerously underinsured and on the hook for much bigger bills in the event of a disaster.

Following are the five most common auto, home and liability insurance mistakes people make, along with suggestions to avert those pitfalls while still saving money - we call them, better ways to save;

Insuring a home for its real estate value rather than for the cost of rebuilding.

When real estate prices go down, some homeowners may think they can reduce the amount of insurance on their home. But home insurance is designed to cover the cost of rebuilding, not the sales price of the home. You should make sure that you have enough coverage to completely rebuild your home and replace your belongings—no matter what the real estate market is doing.

A better way to save:

Raise your deductible. An increase from Ksh.5,000 to Ksh.10,000 could save up to 25 percent on your premium payments.

Selecting an insurance company by price alone.

It is important to choose a company with competitive prices. But be sure the insurer you choose is financially sound and provides good customer service.

A better way to save:

Check the financial health of a company with independent online platforms like and ask friends and family members about their experiences with insurers. Select an insurance company that will respond to your needs and handle claims fairly and efficiently.

Dropping Excess protection.

Unfortunately, a lot of people don't find out what coverage they should have had until they have a loss. Some dont know that Political Violence and Terrorism are not covered in the main motor comprehensive policy. However, you can usually buy a separate policy on excess protection or an optional PVT cover on top of the main policy. Many people get to understand this when a claim is declined.

A better way to save:

Always ask the insurer if your excess protection is inclusive in the main premium paid.

Only purchasing the legally required amount of liability for your car

The minimum is just that—the least you can get away with by law. So buying only the minimum amount of liability means you are likely to pay more out-of-pocket later. And if you are sued, those costs can jeopardize your financial well-being. For example going for third party only instead of comprehensive.

A better way to save

Consider dropping comprehensive coverage on older cars worth less than Ksh.300,000. The insurance industry and consumer groups generally recommend a minimum liability amounts.

Neglecting to buy renters insurance.

A renters insurance policy covers your possessions and additional living expenses if you have to move out due to an insured disaster, such as a fire or floods. Equally important, it provides liability protection in the event someone is injured in your home and decides to sue.

A better way to save

Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto, and life will generally provide savings.

Insurance has become part of our daily activities that we are not going to avoid it. Students in our colleges need personal accident covers before they can be placed on interniships. WIBA has now become a compulsory venture for any employer. Education policies are soon becoming daily bread for many families. Let’s productively embrace insurance

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