What is the most important factor when purchasing insurance? Most people would say the premium. The premium is an obvious factor, but it should not be the only contributing factor to the decision. It is important to make sure the coverage is correct, look for bonus coverages, and work with reputable agents. When purchasing the cheapest policy it is very possible that it will cost more in the long run.
The most important step when purchasing insurance is making sure correct coverage is provided. Without the correct coverage there is no point in even purchasing insurance, because if a loss occurs on property that is not properly protected the claim will be rejected or only partially paid and the insured will have to pay the remaining expense themselves. For example, if a dwelling's replacement cost is $400,000 but it is only insured for $300,000 the insured will have to pay around $70,000 out-of-pocket due to the 90% co-insurance clause that is found in most insurance policies. Looking back saving that $50 a year by not insuring the dwelling to value could easily cost the insured more money in the end.
Many policies have free bonus coverages built into them that some bare bone policies will not have. One example of this is Nationwide's "Vanishing Deducible"; this is provided in all of their auto policies and provides savings during the policy. Another example is in some policies windshield replacement is provided with no deductible. This again can save money during the policy, but may not be the cheapest premium upfront. When purchasing a policy look for these types of bonuses and decide if they could benefit your specific needs.
Dealing with a reputable insurance agent can save time and money. Insurance agents are supposed to service accounts and take care of any needs or questions the insured may have, although many agents will not contact the insured after they sell the policy. The agent also needs to work with the insured at policy renewal to make sure the coverages stay up to date and that the insured is receiving the discounts they qualify for. An agent that keeps their clients best interests in mind will be worth much more than the few hundred dollars they may cost upfront. When shopping for insurance ask for testimonials from insurance agents to make sure they take care of their clients passed the date they sell them the policy.