Insurance Mistakes to Avoid

When shopping for insurance, it is important to be careful. Many people make mistakes when shopping for a policy or after they have purchased an insurance policy. Be careful to avoid these mistakes when shopping for insurance.

Be sure to maintain policies on every piece of property and vehicle that you own.  A natural disaster or accident can easily destroy any buildings or vehicles, making coverage necessary. Do not fall into the false belief that because nothing bad has ever happened to someone that nothing ever will.

Make sure all of your insurance policies are up to date. More specifically, make sure that each insurance policy has correct and detailed information about the structure and composition of the property. One of the most common insurance mistakes is forgetting to add any improvements that have been made to the property to its insurance policy. Of course, it is also important to alert the insurance company in the event that any structures are demolished. 

Skimping on flood insurance is another common mistake. Any property located in a FEMA designated flood zone should be fully insured. Many people forget or skimp on covering properties that are not in flood zones. In actuality, flood coverage doesn’t cost that much, and it can save you thousands of dollars. Every year, many people lose their property to a flood. Remember that a flood does not necessarily have to be caused by a natural disaster. A burst water pipe or a clogged street grate can also cause a serious flood. 

Don’t keep your policies separate. Buying all of your policies for your real estate and automobiles from the same company can give you the opportunity to get a multiple policy discount. Keeping all of your policies together also allows you to establish a good relationship with a single company. This will make it easier to make a claim if needed.

Finally, carefully consider buying full replacement coverage. When shopping for homeowner’s or automobile insurance, there are two choices. One choice makes it possible to cover the overall cost of replacement or repairs. The second choice will only cover the current market value of what has been damaged or destroyed.  Carefully consider what assets you have available to cover any repairs before deciding between these options. If you do not have a lot of money available to make repairs to a property, it would be a mistake to not have full replacement coverage.