Since I’ve started reviewing my insurance coverage, I’ve discovered that when you don’t have the proper support, it’s pretty darn easy to make a mistake. Luckily, I have now developed a positive relationship with my provider that leaves me feeling very comfortable in my current coverage. But to help my readers avoid the same pitfalls I fell into, I thought I’d dedicate some time to common mistakes people make when it comes to their insurance coverage.
Insurance Coverage Mistake #1: Not Carrying Any
This one mostly affects younger people, but still, even experienced car and property owners sometimes try to save a few bucks by skimping on their coverage. This can be a very costly mistake, even if you don’t think your property is worth very much. Replacing clothes, computers, smartphones and personal belongings can quickly total into the thousands of dollars.
Also, snowbirds should remember that their home insurance coverage may lapse if they leave their home unoccupied and unattended for an extended period of time. Always check with your insurance provider in advance of a long trip to make sure your policy will remain valid for the duration of your absence.
Insurance Coverage Mistake #2: Coverage Gaps
I’m a proud soccer mom, and I discovered that bare-minimum car insurance packages don’t provide enough protection if you often find yourself carting around carloads of people. I had to review my liability coverage to make sure I wouldn’t find myself on the financial hook in a worst-case scenario involving an accident with multiple serious injuries.
*Umbrella insurance is a very good idea for multiple policy holders. An umbrella policy kicks in if you end up facing a coverage shortfall from any of your other policies. It’s a great and inexpensive catch-all to make sure you’re on totally solid footing.
Insurance Coverage Mistake #3: Undervaluing Your Property
Insurance is there to protect you if the unthinkable happens. Just imagine your house is levelled in a freak accident or a natural disaster wipes out everything you own. Would you be fully covered?
To make sure you are, it’s very important to conduct a thorough assessment of the value of your property. Not only should you make sure your home’s physical structure is adequately protected, but also that you’ve got enough coverage to replace everything of value in your home. It’s a good idea to review coverage limits after performing major renovations or acquiring items of significant value.
Insurance Coverage Mistake #4: The Wrong Insurance
We own a motorhome, and we assumed that our regular homeowners’ insurance policy would cover the valuables we took with us on our first road trip of the season. As it turns out, the situation isn’t always that simple. Special coverage limits apply on both policies when it comes to personal belongings, and the excess needed to be accounted for on our motorhome insurance policy, not our home insurance policy.
These kinds of honest mistakes can result in major shocks if something goes wrong. My insurance broker took the time to make sure I had the right coverage, and I think it’s something everyone should do.
Insurance Coverage Mistake #5: Not Shopping Around
As with any major purchase, shopping around for insurance is a good idea. I was able to find a great price on a unique and progressive policy that met my needs without forcing me to pay for protecting something.
Two last important pieces of advice: always review a policy in detail before agreeing to it, and stick with the same insurance provider to the greatest possible degree. Many insurance companies offer significant discounts to multiple policy holders, so it’s usually worth sticking with the same company if you find one you like.