Insurance is just about the most boring thing out there, and certainly shopping for coverage isn’t a favorite pastime for any of us. But paying attention to the insurance you’re buying—or not buying—can avert big trouble later. Insurance is the product you buy in case the unthinkable happens. Unfortunately, by the time you need it, it’s too late to make sure you have the right type and amount of coverage. Make sure you don’t make any of the following seven mistakes while buying financial protection against disaster.  

1. Not shopping around
The most common mistake is that people don’t shop around for insurance. Most people end up going to one agent and letting that person handle all of their insurance needs. To get help in this area, read the insurance buyers’ guides offered by the state insurance department and then call around to a few companies; it could make a huge difference in the price you pay for insurance.  

2. Focusing too much on rates
When you’re shopping around, it’s best to look not only at prices but at companies’ reputations for paying claims. You can check out insurance companies by looking at how they rank with third-party insurance rating companies, such as A.M. Best, Fitch Ratings and Standard & Poor’s. Also examine a company’s complaint ratio. State insurance departments sometimes publish this information, and the Web site of the National Association of Insurance Commissioners (www.naic.org) publishes these numbers.  

3. Not comparing agents
Not all agents are created equal. First, make sure an agent is properly licensed. Check with your state department of insurance. Then make sure to get referrals and ask each agent some questions. Your agent should be able to explain the policy and provide other helpful services.  

4. Not knowing your policy
Not knowing what’s in the fine print of a policy can be a consumer’s biggest mistake. Many people don’t know what their deductibles are and don’t realize what’s not covered until disaster strikes. Consumers need to talk to their agents to find out what’s not covered and do an evaluation each year.  

5. Not buying enough of certain important insurance products
Don’t skimp on health insurance no matter how healthy you feel today. Finding a way to at least have catastrophic health insurance is really important so you don’t go into such medical debt that you never can dig your way out.   
    Also, consider getting life insurance if you have dependents. It can help pay the bills after a working parent dies unexpectedly. It’s much better to buy it when you’re young and healthy; it’s much cheaper and easier to obtain when you don’t have a chronic disease.
    Unless you have major assets to tap, think about getting long-term-disability insurance. For anyone who works, it is probably the single most important coverage an employee can obtain. Disability income protection is more important than life insurance, even though life insurance gets more press. People are much more likely to become disabled than to die early. If you become disabled and can’t work, long-term-disability insurance can help keep you and your family financially solvent.
    Regarding short-term disability coverage, some suggest maintaining an emergency fund of three to six months’ worth of living expenses. Then you can save your money to buy the long-term policy with your employer, if available.
    Another option is long-term care insurance. It can help pay for the expenses associated with chronic illnesses, as well as nursing-home care and in-home caregivers. Again, the younger you are, the easier it is to qualify. Many people think they don’t have to deal with long-term care until they are 50 or older, but they don’t realize they can develop something like multiple sclerosis at 30 or 40 and no longer be insurable at that point.  

6. Buying unnecessary insurance policies
 You wouldn’t take out a homeowner’s insurance policy if you didn’t have a house, nor would you buy auto insurance if you didn’t own a vehicle. But many people make some of the following insurance blunders: Buying unnecessary life insurance coverage—Most people don’t need life insurance on their kids. While the death of a child is tragic, financially it’s not as detrimental as a breadwinner passing away.  
    Buying specialized insurance—Be wary of purchasing too-specific variants of broader types of insurance. You may need life insurance, but you shouldn’t buy it at the car dealership. Don’t buy insurance from somebody you went to buy something else from.   
    The same goes for dread-disease policies. Carefully read the fine print before buying specific illness insurance like cancer coverage. If you’re insured through a major medical policy, you may not receive additional benefits from these types of extra coverage.   
    If you’re worried about identity theft, don’t rush out to buy identity-theft insurance. Check your homeowner’s policy as it might already include some identity-theft protection. Credit cards also offer some protection against unauthorized charges.  

7. Not updating your coverage
Evaluate your coverage whenever you go through a life change, such as birth, adoption, marriage or divorce, but at least once annually. If your home has gone up in value, make sure you increase your policy limits. If you have a replacement cost, it should be about 80 percent of the value of your home. So, if you’ve made a room addition, make sure you increase accordingly.     
    It’s also a good idea to review your health insurance each year. If you’re a dual-income family and your spouse has coverage, look at both policies and decide if it’s more cost-effective for you to be covered under one or if it still works best to be covered under each individual policy.