Have you ever bought personal insurance and when you finally make a claim only to find out your mistake, or find out you’re paying too much or too little?
Here are 5 common mistakes when buying personal insurance:
1. Not reviewing your policy once a year.
Once a year you should review your policy for any changes that happened over the past year. Changes such as family changes (marriage, divorce, children), job changes, changes in debts owed, or any other changes. This also helps with any upgrades you may need or even price changes due to any improvements.
2. Not buying renter’s insurance
You may think that just because you don’t own the place that you won’t need insurance. But renter’s insurance covers the cost of your possessions in case of disaster and living expenses due to these disasters. It also can give you liability protection for anyone injured in your rental space.
3. Buying the wrong amount of life insurance.
The general rule of thumb on buying life insurance is 5 to 10 times your salary. But people commonly forget to take in what’s needed after you die. If you’re a sole earner with a spouse and children, this amount might not be enough to cover their needs as opposed to other couples earning their own income and have no dependents.
4. Insuring your home for it’s market value
Some people insure their home for the amount they bought it, market value, and forget to add the cost of rebuilding the home in case it’s destroyed, the replacement value. The difference in these two policies also affect what kind of damage and replacement coverage you receive inside the home as well.
5. Paying for Extras
Read your policy closely and eliminate any extras you don’t need. Extras such as: gas leak coverage when your home is all-electric; dog bite coverage when you don’t even own pets; and hurricane coverage when you live in a landlocked area.
For further information about personal insurance and getting help reviewing your policy, we’ll be happy to help.
