Many Americans are overpaying for home and car insurance and don’t even know it.  It is important to review your policies at least once a year.  Here are a few things that anyone can do to help save money on their insurance.

Compare prices

Property and auto insurance rates have been on the decline recently, so it might be good time to shop around and see if you can’t get a better deal somewhere else.

Purchase the proper amount of coverage

For homeowner’s insurance especially it is important to get an accurate value to what you are insuring and the amount of coverage you actually need.  Instead of using property value as the basis for coverage amounts you should use the estimated replacement or reconstruction costs.  With housing prices in a sharp decline, some people may actually be under insured.

Increase your deductible

It can increase what you pay for an incident but it can significantly lower the cost of your premiums.

Use a single insurer

In some cases it may be cheaper to get both types of coverage from a single insurer.  Check to see which companies offer package deals.

Look for discounts

Many companies offer discounts for a variety of different reasons.  For instance, a company may offer government employees a special discount. Make sure you receive any that you might be entitled to.

On Friday, a Florida appeals court ruled that Florida’s Office of Insurance Regulation had the right to suspend Allstate Insurance from writing new polices in the state.  Allstate had been appealing a suspension that was imposed on Jan. 16 by the state’s insurance commissioner.

At the heart of the matter are the company’s internal documents that pertain to the company’s claims paying practices.  Florida regulators have asserted that Allstate had failed to comply with their subpoena to release these documents back in October.

Allstate has maintained that these documents contain trade secrets it will not release.  It is alleged that these documents detail a business strategy created by the consulting firm McKinsey & Co. back in the 1990’s that is believed to have been widely used in the insurance industry.

Supposedly the “McKinsey” strategy outlines practices to pay as little as possible for claims and how to keep costs down.  It is believed to revolve around making low initial claim offers and using delaying tactics, with customers who refuse the initial offer, up to and including legal action if necessary.

Whether these documents show any illegality or not, they would certainly damage Allstate’s reputation if they were to come to light.  They could also have a measurable impact on any ongoing or future lawsuits that the insurance industry has over claims.

The facts are that flood damage can happen no matter what state you live in.  Even in the highest risk areas, only a small percentage of homeowners purchase flood coverage.  Many Americans have left themselves wide open to heavy losses with little to no recourse.

It’s estimated that about 30% of Americans still mistakenly believe that flooding is covered under their regular homeowner’s policy.  Heavy rains in the Midwest have brought flood insurance back into the spotlight.

Since insurance companies don’t typically offer this kind of coverage the government has had to step in and become the “insurer of last resort”.  In 1968, Congress established the National Flood Insurance Program(NFIP) which is under the direction of the Federal Emergency Management Agency(FEMA).

The program offers flood coverage to residents in communities that follow FEMA guidelines for floodplain management and damage mitigation.  Annual premiums are normally in the $400-$500 range for a median priced home.  While regular insurance carriers don’t offer the coverage itself many of them have entered into agreements with the program to accept payments for the flood coverage and maybe able to offer you some advice.

The program is often criticized because it encourages people to build and reside in flood prone areas.  Nonetheless if you live in these areas currently, you should take advantage of it.

Since it’s a federal run program, premiums are artificially low.  If private companies were to offer flood insurance, rates would be much higher.