Many common mistakes are made when purchasing auto insurance, home insurance, or commercial insurance. By not first figuring out what your insurance needs actually are, you could be spending too much on coverage, or not getting enough coverage to cover your costs in the case of an unexpected event. Educating yourself on your needs before-hand is the smart approach when shopping insurance for auto, your home, or your business.
Having the Right Auto Insurance Coverage
Auto insurance issues include not buying enough insurance to cover potential accident costs. Another common mistake is purchasing too much insurance for an older car. State insurance laws have caused companies to offer limited insurance options that merely pass those regulations.
However, if you are involved in an accident, and the personal injury limit on your policy is too low to cover injuries from the accident, you could be in some serious financial trouble. Making sure you have sufficient personal injury coverage on your policy is vital.
Educating yourself on what insurance you really need can also reveal that you may be purchasing too much coverage. Collision and comprehensive coverage is essential if your vehicle is valuable or if you have a bigger loan on the vehicle. However, if you have an older car that is already paid off, this type of auto insurance is not very economical.
Other reasons an auto insurance policy may be higher than expected is the add-on perks such as vehicle rental reimbursement, tow services, emergency roadside assistance, or vacation interruption. These are services that may be added to your policy automatically unless you read the fine print and let your insurance company know you’re not interested.
The deductible that you choose will also have a significant effect on your premium. A lower auto insurance deductible equals a higher premium, and a higher deductible equals a lower premium. It’s important to plan for the worst-case scenario. If you are involved in an auto accident, what kind of deductible will you be able to afford? What monthly premium can you afford?
Reading Your Policy
One of the biggest mistakes many people make is not reading their insurance policy. Much like your auto insurance policy, it is crucial to make sure your homeowners insurance covers your property properly. For example, if your home floods but flooding isn’t covered by your policy, it could mean losing your home due to repairs you cannot afford.
Coverages such as flood, earthquake, sewage or mold coverage are common things homeowners may accidentally leave out of their policies. You don’t necessarily have to be in California to experience an earthquake, and floods have hit many unexpecting communities across the country. Be prepared.
Some commercial insurance policies may save you money in the short-term, but you may find that you’ve made a serious mistake by underinsuring your company. This can mean lost revenue or losing your business altogether due to inadequate coverage when disaster strikes.
Different businesses will require different kinds of commercial insurance. For example, if you have employees working on-site you will likely need workers-compensation insurance to protect your business in the case of a work-related accident. It’s important to know the potential liabilities your company will face and make sure that you are properly covered.
The same goes for home and auto coverage – thoroughly researching your insurance needs will protect you and your business in a time of crisis. Consulting an insurance agent is a very good option to determine your needs and deciding the potential liabilities you need to cover.
At Absolute Choice Insurance, we are committed to providing Floridians with quality home, commercial, and auto insurance. For more information, contact us today.