DENVER, Jan. 12 - When money is tight the first thing that many people cut is their insurance. However, this is not always the best choice when facing a financial crisis. According to a recent survey by the Center for American Progress, middle class Americans are less prepared than ever to handle an unexpected expense. This scenario is the worst possible case for being underinsured. AAA Colorado has designated January as Insurance Review Month to remind everyone that an annual review of all insurance coverage is critical for safety, security and peace of mind. Following are tips on shopping for insurance from AAA Colorado, one of the largest agencies in the state specializing in personal lines insurance. 1. When receiving a new insurance quote, compare the coverage as much as the price Just like you would not compare a sports car to a mini van, it's important to not compare a less expensive insurance policy with less coverage to a policy that costs more but also provides better coverage. Compare apples to apples to make the most educated decision in any insurance purchase. 2. Consider the worst case scenario Many motorists buying auto insurance purchase the least amount required by law. ($25,000 per person and $50,000 per accident for medical payments and $25,000 property damage). That amount of coverage would likely not cover all of the expenses if you were at fault in a serious injury accident. It also would not cover all expenses in a collision with a vehicle valued over $25,000. If you are on a tight budget, your financial future could be devastated. When purchasing life insurance many people do not consider all of the expenses should your policy need to be exercised: These can include funeral costs, providing for the care and education of your children, and assisting your spouse after the loss of your income. In many cases, upping your coverage is not overly costly and can protect your family from suffering financial ruin in addition to bereavement. 3. Review all exclusions in insurance coverage Many home insurance policies do not automatically have coverage for common misfortunes such as floods, identity theft, or liability for injury on your property. It's also important to read your policy carefully to determine coverage limitations with respect to theft and fire losses. Analyze your insurance policy limitations each year-don't find out the hard way. 4. Analyze your insurance for excessive coverage Just as it's important to review your auto, home and life insurance in case you're underinsured, it's also important to review if you are carrying more insurance than you need. For example, carrying collision coverage on an older vehicle that has a low replacement cost may be dollars better spent elsewhere. With living expenses on the rise, this is just as important as reviewing if you are not covered in the worst case scenario. 5. Evaluate your current insurer's customer service Is your current insurer always available to answer questions? How fast do they respond to a claim? In an emergency, this can be as important as the coverage. Expect your insurance company to provide outstanding personal service as well as a suitable product. For more insurance information visit www.rmiia.org, website for the Rocky Mountain Insurance Information Association, a non-profit insurance communications organization; or www.aaa.com and click on "Insurance/Financial." Note to Media: This is the second of four informative pieces to highlight January as Insurance Review Month — AAA's reminder to everyone that an annual review of all insurance coverage is critical for safety, security and peace of mind. Each week in January you will receive another in the series. For more information please contact Eric Escudero, Public Relations Manager, 303-210-2904; eescudero@colorado.aaa.com. AAA Colorado reaches one in four households in the state and is an advocate for safety and security for all travelers. As North America’s largest motoring and leisure travel organization, AAA provides its nearly 50 million members with travel, insurance, financial and automotive-related services, as well as member-exclusive savings. ###
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