Skimp on Clothes, Not Insurance

With millions of Americans out of work these days, reciting the dangers of foregoing insurance coverage may seem presumptuous.

But with sue-happy litigants, inflated prices and financial hardship running rampant, it just makes sense to cut discretionary spending wherever possible—while gearing up on insurance protection that could help avoid huge, unnecessary expense down the road.

For instance, consider the amount of money each of us spends on clothing every year. Could we cut that number in half by shopping at thrift stores, monitoring clothing exchange boards in our communities or online, or shopping at garage sales? Sure we could.

During tough times like these, many people are coping with tighter budgets in the midst of unemployment, a depressed housing market, and soaring medical and prescription costs by getting creative when it comes to saving money. They're using methods like clipping coupons, bartering for goods and services—even standing on street corners asking others for help.

Many are also lowering their insurance levels—or dropping coverage completely.

While doing so can save money in the short term, it can leave us helpless, vulnerable and broke over the long term, facing huge monetary losses and struggling to repay debts. In the end, making the wrong decisions when it comes to tough choices can cost us far more than we save, leaving individuals and families vulnerable and possibly even unable to survive.

Whether or not we ever use our insurance to file claims, insurance coverage represents a protection none of us can afford to live without.

"It's...basically like playing the lottery," says one insurance customer, cited recently in an Insurance Journal article. "It's a gamble, but you have to have it."

So what kind of insurance should consumers never live without?

Other types of insurance coverage, like health and life, help policyholders enjoy life, remain or get healthy, and provide for their families once they're gone. Though completely voluntary, those types of policies can represent a person's actual viability, helping determine quality and length of life for policyholders as well as for families.

According to an Insurance Resource Council (IRC) survey conducted last December, 28 percent of consumers with two vehicles who were asked had shopped for lower auto insurance rates.

Nine percent said they had canceled or decided not to renew their auto coverage, and five percent had cancelled or not renewed their homeowners insurance.

Even 14 percent of renters had dropped their contents coverage,??leaving their possessions and belongings??suspect to??theft or ruin.

Why are consumers going to such drastic lengths to save money at a time when coverage has never been more important?

"People are willing to take on more risk in tough economic times to save money, but when they do that, the outcome can be catastrophic," says David Corum, vice president of the IRC.

For those struggling to stay afloat during tough times, don't surrender vital insurance coverage that protects you from the unexpected. Instead, consider ways to keep the coverage you have, like boosting your deductibles, shopping your rates online at InsureMe.com and temporarily cutting back on discretionary spending, like clothing or entertainment.

By skimping on things that aren't as important, hanging on to the necessities—like home, life, health or auto insurance—becomes that much more manageable.