10 Common Insurance Mistakes to Avoid
10 Common Insurance Mistakes to Avoid
10 typical insurance errors to avoid, whether you’re looking for auto, home, health, life or any other type of coverage.globalcu.org
1 Underinsuring Your Property or Assets
Why it matters: You might save on premiums in the near term, but risk getting far less than you should if a loss happens.
Common example: Failing to update home insurance after renovations or upgrades.
2 Not Shopping Around
Why it matters: Insurance can differ significantly between providers, from premiums and coverage to treatment.
Tip: Re-shop quotes yearly, or at each policy anniversary.
3 Ignoring the Fine Print
Why it matters: Exclusions, limits and deductibles can sneak up on you.
Pro tip: Read your policy carefully or talk to an insurance agent or broker.
4 Choosing the Cheapest Policy
Why it matters: Cheap policies may cover little or have high deductibles.
A better approach: Strike some balance between cost and value.
5 Failing to Update Your Policy
Why it matters: Life changes (getting married, getting divorced, having a baby, landing a new job, moving to a new home) frequently necessitate policy updates.
Tip: Lawyers recommend reviewing your coverage once a year or whenever there is a significant life change, like the birth of a child.
6 Overlapping Coverage
Why it matters: This money is wasted on covering two things that you don’t need.
Example: Travel insurance can overlap with benefits you already receive under your health or credit card insurance.
7 Filing or Failing to File Claims in a Timely Manner
What it means: Some insurers have tight time requirements and require specific documentation.
Tip: Get reports in as soon as you can and keep records (photos, receipts, police reports).
8 Not Understanding Deductibles
Why it matters: A high deductible can help you minimize premiums but end up being costly when you have a claim.
Tip: Make sure your deductible covers an amount of risk and loss you can afford.
9 Forgetting About Beneficiaries
Why it matters: Old beneficiaries like ex-spouses, can lead to legal battles or undesirable results.
Tip: Periodically check and revise the beneficiary designations on life insurance, retirement policies.
10 Not Asking Questions
Why it matters: Insurance-speak can be confusing. Malentendus can cause a rejection of claims.
Tip: Never hesitate to request that your agent or insurance company explain anything you’re not clear on.
5 Key Factors That Affect Your Insurance Rates
About the Author
1 thought on “10 Common Insurance Mistakes to Avoid”