It’s not uncommon to purchase a policy, just to insure one item like your home or car. Maybe you even purchased them from different agents. Whatever the combination, it is highly likely that you ended up with the typical result, which is fragmented, and more difficult and expensive to manage. This approach could also leave you with even bigger gaps in coverage that you don’t know about until it is too late.
Not working with an agent who has been trained to actually read the polices, not just sell them.
There is a vast difference between quality and service between insurance agents. There are Exclusive Agents (Only sell for One company, ex Allstate, American Family, Farmers, State Farm), these agents work for the company they sell for. Then there are Independent Agents (have access to many companies), these agents work for YOU, and if they pursued extra training such as the CIC (Certified Insurance Counselor) certification, they are trained at a much higher level so they know how to find gaps in your coverage and create a custom insurance solution that fits your lifestyle.
If you added up the value of all your stuff and it is less than the amount of liability coverage you purchased, you are risking all of your valuable possessions in the event of a lawsuit. Not to mention your future income, 401k, your kids college fund. All of the above items can disappear in the blink of an eye in today’s litigious environment. Seriously consider higher limits along with an umbrella or excess policy, it’s not that much more.
If you had to rebuild your home in today’s market, would your homeowners’ insurance sufficiently cover all of the expenses? In our experience, 85% of the homes we review are under-insured because they have either not reviewed their policy with their agent in the past 3 years or it was insured for the loan amount at the time of purchase, which could lead to even bigger heartbreak at the time of a loss. Most people don’t realize how much more expensive it is to Rebuild than build new. After a claim, you most likely won’t have the option to build new, so you are stuck replacing what you had.
You have not insured your valuable collections properly.
Special insurance coverage is available for fine art, jewelry, wine, antiques, and other collectibles. Most people believe their homeowners covers these items, while that part is true, they don’t realize that there are special limits that cap the amount an insured can collect at the time of a loss. Not to mention the value that may be lost due to depreciation. With special coverage, you can obtain, better coverage to provide more flexible protection for your special items.
You don’t know what is excluded from your policies.
All insurance policies have excluded items to help the insurance companies to know what they are protecting and to help control the cost for us the insureds. Can you imagine how expensive insurance would be if it covered everything under the sun? Don’t wait till claim time to find out what is and is not covered, ask your agent to go through your policies with you and explain how they work. You might find out how un-educated your agent is about the product they are selling. And keep in mind not all insurance policies are created equal, there are differences in the actual contracts.
You haven’t addressed your vulnerabilities.
There are many more exposures you face on a daily basis that are not covered under your auto and home. Finding the right adviser to proactively identify areas your not protected properly against can help reduce those exposures. Believe it or not, insurance is not always the answer, and a good adviser will tell you that.
Additional areas you might need to be concerned with:
Storms & other natural disasters such as earthquake
Threats to personal safety and security
Independent business pursuits
You don’t demand a choice.
The benefits you receive retaining and independent insurance agent is that they are working for YOU. If you’re not frequently presented with options on how to address your needs, it may be time to find a new advisor.
Your paying too much.
There are two costs of insurance: the upfront cost of the insurance policy itself, and then the hidden costs of a claim – your out of pocket costs, lost time, frustration, whether it’s covered or not, just to name a few. With proper management, insurance becomes a tool that if properly balanced in all areas of your life, can create a more effective solution when addressing the risks you face on a daily basis.
You don’t regularly evaluate your insurer’s financial strength.
In the event you do face a catastrophic event, will your provider be able to pay your claim? Look for financial stability when choosing your insurer. You can use information from companies like A.M.Best to review the current financial strength of your companies.