Americans everywhere are clipping coupons, searching for freebies, and finding all sorts of creative ways to save money. Saving money is chic; another way to impress the neighbors. But others are making far tougher choices that threaten to cost them far more than they save.

 

Reducing insurance coverage, whether it's a consumer or a small business making the cuts, does mean instant cost savings. But it's proving to be problematic for some people, leaving homes and businesses underinsured, and their owners facing huge monetary losses should disaster or illness strike. It's also making families vulnerable to financial hardship because some are giving up their life insurance.

 

There are certain policies that consumers and businesses absolutely must have — auto insurance, for example, or homeowners insurance for people with mortgages. But many consumers are sliding by without discretionary coverage such as life insurance or even health insurance. Small companies may not be buying enough insurance to cover their losses, or to guarantee they'll stay in business should disaster strike.