Be savvy about insurance: Avoid these 8 mistakes

Insurance can be hard to navigate, but if you want the best coverage without breaking the bank, you gotta play it smart and avoid some of the most common mistakes people make. Let’s look at the eight most common blunders and throw in some extra tips to watch out for. 

Eight mistakes to avoid when thinking about insurance!

Mistake #1: Striking the Wrong Deductible Balance 

Setting your deductible too high or too low can have financial consequences. To strike the right balance, consider your financial capacity to pay for damages in the event of a claim. And think about how much you can afford to pay if something happens and how filing small claims might affect your future premiums. 

If you’ve got some savings, you could go for a higher deductible to save on premiums. 

But if the deductible is too much for you to handle when there’s a claim, it’s better to go lower. Just balance the cost savings with the potential financial burden to make an informed decision. Want to learn more? Read our article on how car insurance deductibles work.

Mistake #2: Having Insufficient Home or Auto Insurance Coverage 

Nothing is worse than finding out — after the fact — that you underinsured your home or vehicle and now can’t make ends meet to get them replaced or repaired. Check if your coverage limits adequately protect your assets, including personal belongings and valuable items. 

Crunch the numbers to figure out how much it would cost to replace your car and rebuild or fix your place, and factor in rising prices. If needed, explore ways to increase your coverage, such as endorsements or riders, to ensure adequate protection.

Mistake #3: Not Giving Comprehensive and Gap Coverage A Second Look

It’s always smart to understand your collision and comprehensive insurance coverage. Comprehensive coverage protects against non-accident damages and theft, while gap insurance covers the difference between your car’s value and what you owe. When your car reaches a certain age or is no longer financed, take another look at how much collision and comprehensive coverage you really need. 

Assess the current value of your vehicle and compare it to the cost of insurance. If the potential repair or replacement expenses outweigh the benefits of keeping comprehensive coverage, you may want to remove it. Similarly, if you owe less on your car loan than your car’s value, you can think about dropping gap insurance. Speak with your insurance agent to determine if these coverages are still necessary and cost-effective.

Mistake #4: Not Understanding Your Healthcare Network Policies

To avoid unexpected expenses, you’ll want to thoroughly understand your health insurance plan and the intricacies of associated healthcare networks. Determine if referrals from your primary doctor are required for specialist visits and if pre-approvals are necessary for certain treatments. 

And for non-emergency situations, utilize in-network doctors to maximize your benefits and minimize out-of-pocket costs. Failing to comply with these procedures may result in denied claims or increased expenses.

Mistake #5: Keeping Your Life Insurance a Secret 

It’s not enough to have a life insurance policy; failing to inform your family about it can create unnecessary complications during an already challenging time. Make sure to communicate the details of your policy to your loved ones, and take proactive steps by providing them with the company name, policy number and all the necessary documents. 

By being transparent, you can empower your loved ones to navigate the claims process smoothly when the time comes, eliminating potential delays or difficulties in accessing the benefits they need to carry on.

Mistake #6: Underestimating Disability Insurance 

Not having enough disability coverage can seriously impact your finances and even lead to bankruptcy if you become disabled and can’t work. Without it, you may find it tough to handle things like bills, rent or mortgage payments, and all your other living expenses. 

To figure out how much disability insurance you need, look at your income and consider the important stuff you have to pay for, like housing, utilities, transportation, groceries, and any debts you owe. Calculate how much you’d need each month to cover these expenses. 

Once you have a clear picture of your income and obligations, you can choose disability insurance to replace a significant portion of your lost income and cover those essential expenses. This way, you can maintain a decent standard of living for yourself and your family when you can’t work. 

When comparing different policies, pay attention to the waiting period, benefit period, and how they define “disability.” Some policies only cover total disability, while others also include coverage for partial disability.

Mistake #7: Disregarding Umbrella Liability Insurance 

Adding umbrella insurance to your coverage is like adding an extra shield for your finances. It goes beyond your traditional home or auto insurance and provides an extra layer of protection. Skipping out on this coverage could leave you vulnerable to serious financial risks if you ever face a lawsuit or a major accident. 

Take a good look at your assets, lifestyle, and potential liability situations to determine if umbrella insurance is something you need to keep your financial well-being safe and sound. It’s a smart move that gives you peace of mind, ensuring you’re prepared for whatever unexpected twists life throws your way.

Mistake #8: Overlooking Cyber Insurance 

With the increasing prevalence of cyber threats and data breaches, failing to consider cyber insurance can leave you and your business vulnerable to financial and reputational damage. It’s like having an extra layer of protection for your wallet and reputation.

Cyber insurance covers all the expenses that come with data breaches, cyberattacks, and even identity theft. So, take a good look at your digital footprint, think about how sensitive your data is, and imagine dealing with a breach. Trust me, figuring out if cyber insurance is a smart move will save you a lot of headaches and money in the long run. It’s like having a superpower to bounce back from those digital disasters.

Contact us to learn more and receive expert assistance for all your insurance needs.

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