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Bad insurance advice.

When you have an insurance claim, the last thing you want to discover is that you don't have the coverage you need! Your agent should help you determine what coverages you need, but if since you have the final say, if you deny or pass on coverage, that is your decision to make.

It is human nature to trust others, at least for most of us, so we are always listening when someone offers us advice (especially if it is money saving advice) are a few bad bits of advice you might have heard:

Bad Tip No. 1: Lock up all insurance policies and other important documents in a safe deposit box
Do not keep your life insurance policy in a safe deposit box. If yours is the only name on the safe deposit box, no one but the executor of your will can get into it without Power of Attorney. If your life insurance policy is locked in there, your beneficiaries will have to wait until the estate is opened by a government entity and an executor is appointed.

If you want the assurance of having important documents locked up, buy a fire-safe box. Just make sure you protect these documents from fire and/or flood - with today's technology scan everything and create electronic copies!!!

Bad Tip No. 2: You don't need flood, earthquake or other disaster insurance
If an earthquake destroys your home, you won't recover a penny unless you have an earthquake insurance policy. The same rule applies to floods.

Decisions about flood insurance should be based on your proximity to a body of water that could overflow, not whether the area flooded before. On the plus side, if you're in a low-risk area, your policy will cost less while still providing the maximum protection.

Keep in mind that floods occur in all 50 states.

Bad Tip No. 3: Renter's insurance is a waste of money
Many renters mistakenly assume that their belongings are covered under their landlord's policy. Not the case! If something like a fire happens, your landlord's insurance won't cover the contents in your rental property, nor will it pay for you to live in a temporary space while your place is uninhabitable - but if you have renter's insurance, you will be good.

Also, if someone is injured while visiting you and sues you, your landlord's insurance won't cover that!

Bad Tip No. 4: Get the best rate even if you have to lie a little
It might be tempting to stretch (or minimize) the truth on an insurance application. Don't do it!! Not only is it insurance fraud, and a felony in most states, but it will most likely prevent any insurance coverage/benefit.

Bad Tip No. 5: Base your home insurance policy on the real estate value of your home
Experts recommend setting the structural limit of a home insurance policy on what it would cost to rebuild the home if it were destroyed, not what it would sell for in today's real estate market.

Bad Tip No. 6: Set your dwelling limit low
Don't underestimate the value of your home. Most policies have four separate categories of coverage: 1) Dwelling 2) Contents 3) Other structures 4) Additional living expenses. Three of the four pay a percentage of the dwelling, so if you lowball the dwelling value because you have 100 percent extended coverage endorsement, you'll be underinsured for your contents, other structures and additional living expenses.

People seem to always be looking for the "best deal" at the "best price," but if you don't have the coverage you need or can't get help when you need it, it isn't a good deal!!