1. Choosing an insurance company solely based on pricing.
The old adage, “you get what you pay for”, is true in the insurance world as well. Making sure the insurance company you choose is financially sound as well as responsive to your needs, is very important. Also choosing an insurance agent who will give you the service you need during any insurance issue, billing, claims, etc. And one who calls you back, can make a world of difference. Having competitive pricing is important. Choosing a company that is financially sound and will provide good customer service is important as well.
2. Getting an auto policy with only the legally required amount of liability coverage.
It is tempting to buy an auto policy with only the minimum requirements to save yourself some money. But that could come back to haunt you later. Medical costs can add up quickly. Consider that you might be sued for injuries you cause in a car accident. If you don’t have enough coverage, you could be paying out of pocket for a long time. Each client has specific needs so talk to us first to get a recommendation on adequate coverage limits.
3. Having home insurance coverage based on real estate value instead of rebuilding cost.
There is a difference between market value and replacement cost. Market value is the current value your home is worth to a buyer on the open market. Replacement cost is the amount it would cost to rebuild your home. Your home insurance policy should be based on replacement cost (labor and materials). That value can fluctuate, so call your agent to make sure you are properly insured.
4. Forgetting about renters insurance.
If you are renting your home, it is important to make sure you have renters insurance. If there is a disaster, like a fire, smoke damage or water damage, renters insurance will cover your expenses if you need to move out and find another place to live. Plus, it will cover the damage to your personal belongings. Your landlord’s insurance will not cover you for these losses.
5. Think twice about letting someone borrow your car.
Remember, your auto insurance follows your car. If someone else is driving your car, and they get into an accident, it is your insurance that pays for the damages. And if there are injuries involved, it falls back on you. Make sure you feel comfortable with the person who is driving your vehicle.
These are just some of the insurance errors to avoid. Please call us if you have any questions or want to ask for advice.