Common Pitfalls to Avoid When Buying an Insurance Coverage

If you are shopping for auto, homeowners, or business coverage, try your best to avoid common insurance mistakes. Some coverage pitfalls may leave you unprotected, while others may cost you more than necessary. To ensure that you’re fully protected and can recover the insured asset or property if a covered peril occurs, here are some key pitfalls to avoid.

Homeowners Insurance Mistakes

  • Insuring your property for its real estate value- Insure your home for its replacement cost to make sure that you can rebuild it if it’s destroyed in a covered peril. The market value may not be enough to rebuild your property and recover all lost belongings.
  • Assuming a standard policy is enough-Your home insurance policy has a limit, meaning that it doesn’t cover everything. To cover additional perils, you’ll want to buy endorsements or coverage options, like earthquake and flood policies.
  • Lacking a home inventory-You should have a list of all personal possessions in your house that you want to be included in your homeowners’ insurance policy. If you buy anything, such as a new couch or TV set, be sure to update the list on your policy.
  • Not having a renters policy-If you live in a rented apartment, get this cover to protect yourself against personal property loss and liability claims.

Mistakes Common in Auto Insurance

  • Buying low liability insurance limit-Liability protection isn’t just about obeying state law. Increasing your liability limit beyond the minimum legal requirement can protect you when you’re liable for auto accidents involving multiple cars or injured victims.
  • Ignoring policy add-ons-A standard auto insurance policy provides basic protections, but you can extend the coverage by buying add-ons. For example, consider including roadside assistance or car rental endorsements for additional protection and convenience.
  • Ignoring your deductible-Evaluate your needs and decide whether you want to pay a higher deductible and reduce your premiums or vice versa. If you pay a lower deductible, your insurance costs will increase, since your carrier assumes a higher risk.

Commercial Insurance Mistakes

  • Insufficient coverage-Not having comprehensive protection is one of the most common insurance mistakes made by businesses. To be on the safe side and avoid unnecessary financial loss, determine and cover both general and unique risks that your company faces.
  • Not buying liability protection-Businesses may face liability lawsuits or claims from customers, employees, guests, and other parties. You want to be protected when you’re sued for personal injury or damages. To extend your coverage against such liability, consider taking out umbrella insurance.
  • Spending on the wrong insurance policies-Every business is unique and some of its commercial insurance needs are unique to its operations, location, industry, and other factors. You’ll want to thoroughly assess your insurance requirements to avoid paying for unnecessary costs.

These are some of the common insurance mistakes to avoid and ensure you can financially recover after losing a covered asset or property. For assistance with all your insurance needs, contact the experts at Pierce Insurance Group today. We are ready to help you with all your coverage needs and questions.