Nine Common Insurance Mistakes to Avoid

Melissa Matzenbacher-Galan | Sep 14, 2022 | minute read

A Personal Insurance Update

Nine Common Insurance Mistakes to AvoidEverybody needs to have a personal insurance strategy to cover their home, auto, and family. It’s important to decide what personal insurance plans you need, and which are the most suitable for you and your family. The worst insurance errors might not surface right away or even at all, but if they do, the repercussions could be very difficult to handle.

In the event of a claim, accident, or emergency, insurance can help protect your home, family, and finances. Whether you’re purchasing your first policy or have had coverage for years, avoiding these common mistakes can help you keep insurance costs under control while giving you the coverage you need.

Insurance Mistakes to Avoid

Buying Insurance Online or from a Captive Agent

To obtain the right coverage at the most affordable price, independent agents work with several different insurance companies. An independent insurance agent can offer you the products you require because they have access to numerous markets.

Having more options may result in more affordable prices, flexible policies, and improved coverage. Independent insurance agents can often provide ways to cover potential gaps in coverage with the use of policies that work alongside the insurance you already have.

Not Having Enough Personal Insurance

Insurance premiums can be reduced by choosing basic insurance plans or coverage that is less comprehensive. The issue is that, when it comes to your deductibles and out-of-pocket costs, you’re probably going to have to pay up the difference, nevertheless.

If you don’t purchase enough insurance coverage up front, you’re gambling on whether you’ll ever need it. You can suddenly spend more than you would have if you had paid the higher rates up front due to one house fire or car accident.

Selecting the Wrong Deductibles

When selecting your deductible, give careful thought to how much you’re willing to spend. Many other factors have a role in this choice.

There is an advantage to choosing the higher amount, as a higher deductible will often result in a reduced premium rate. You should perform the necessary calculations to determine whether you can afford to pay the higher deductible.

Your agent can help you with this

Your agent can help you with this. Think about any additional policy limitations when it comes to home insurance. Understanding your deductibles and the types of emergencies or disasters that could result in additional costs is crucial. When you file a claim, you can consider how much money you can afford to pay out of pocket.

Not Understanding Your Policy Terms and Conditions

Personal insurance policies can be very complex and confusing. A conversation with an insurance professional who is aware of your needs and can respond to your inquiries is beneficial. You should be aware that lowering your deductible will lower your monthly payment.

Cutting coverage, however, occasionally results in higher costs than anticipated should you ever need to make a claim.

Free Guide: Why Low Price Insurance May Not Be The Best

Insuring Your Home for Market Value rather than Replacement Cost

A home’s replacement cost is totally based on the cost of the materials, labor, and other items required to reconstruct it with like kind and quality materials. Since the market value of your property includes the value of the land, you might be overpaying if you insure it for its market value rather than its replacement value.

Contrarily, although house market values are high now, this hasn’t always been the case, and you don’t want to be underinsured.

Thinking You Don’t Need Special Insurance Coverage

A standard insurance policy does not always cover flood or earthquake damage and foregoing additional coverage could cost you a lot of money. Think you don’t need earthquake or flood insurance? According to the Federal Emergency Management Agency (FEMA), one inch of water can cause $25,000 of damage to your home, and more than 25% of insurance claims originate from areas outside of high-risk flood zones.

Failing to Adjust Your Coverage as Your Needs Change

You might need more insurance if your life changes. You will need to include your kids in your insurance when they start driving as teenagers. Has your financial situation changed? Did you get married or start a new job? Have you bought any expensive art or guns?

These are all instances of common life changes that will modify the type of insurance you need. If you have any questions, speak to your insurance agent, or get in touch with an experienced agent.

Not Asking for Discounts

Some savings are only applicable if you notify your insurer that you qualify for them. The list varies from insurer to insurer but frequently includes things like adding a new roof, installing a home alarm system, choosing a job with a shorter commute (or quitting your commute altogether), carpooling, and even working in specific professions.

Buying too much Insurance

The cost of over-insuring yourself or your belongings could be just as high as the cost of under-insuring. Auto insurance is one area where this may occur. If you drive an older vehicle, you may have more collision and comprehensive coverage than you need.

The Bottom Line

Everyone makes mistakes. However, mistakes on your insurance could result in you losing a lot of money that you don’t need to. Review this list carefully and take care of any issues right now for your long-term benefit. Then contact your agent.

Free ebook: Why Low Price Insurance May Not Be The Best

Free eBook | Think Beyond the Price: What good is a low priced policy if it covers what you don't need and doesn't cover what you do? Learn how to find real value - and protection - by reading Why Low Priced Insurance May Not Be the Best. Download.

Leap | Carpenter | Kemps Insurance Agency Can Help

Contact the experts at Leap Carpenter Kemps Insurance Agency. They have been in business for over seven decades and have licensed experts on hand to guide you on the best coverage for your organization. Call for a free quote today!

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About The Author

Melissa specializes in auto insurance, flood insurance, homeowners insurance, special event insurance, renters insurance, and watercraft insurance. She prides herself on knowing our markets inside and out.

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