Avoiding these mistakes can save money on insurance and keep you financially protected.

(PRNewswire) –  The Insurance Information Institute says you can save money on insurance if you avoid five big insurance mistakes:

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Mistake #1: Insuring a home for its real estate value rather than the cost of rebuilding.

When real estate prices go down, homeowners may think they can reduce the amount of coverage on their home. But insurance covers the cost of rebuilding, not the sales price.

A better way to save: Raise your deductible. An increase from $500 to $1,000, could save up to 25%.

Mistake #2: Selecting an insurance company by price alone.

It’s important to choose a company with competitive prices, but also one that is financially sound with good customer service.

A better way to save: Check the financial health of a company with independent rating agencies and ask friends and family for recommendations.

Mistake #3: Dropping flood insurance.

Many homeowners are unaware they are at risk for flooding, but 25% of all flood losses are in low risk areas.

A better way to save: Before purchasing a home, check with the National Flood Insurance Program (NFIP) to see if it is in a flood zone; if so, consider a less risky area. FEMA recommends all homeowners consider flood insurance, available from the NFIP.

Mistake #4: Only purchasing the legally required amount of liability for your car.

In today’s litigious society, buying only the minimum amount of liability means you’ll likely pay more out-of-pocket.

A better way to save: Consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000.

Mistake #5: Neglecting to purchase renters insurance.

A renters policy covers your possessions and additional living expenses if you have to move out due to a disaster. Equally important, it also provides liability protection.

A better way to save: Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto and life will generally provide savings.

About the Insurance Information Institute

The Insurance Information Institute (I.I.I.) is an educational, research and communications organization funded by the insurance industry to explain what insurance is and how it works.

Each year, the I.I.I. works on more than 3,700 news stories, handles more than 6,000 requests for information and answers nearly 50,000 questions from consumers.