Don’t Let Gaps in Your Insurance Coverage Put You at Financial Risk
Buying insurance is about avoiding risk. We all know we need health insurance to cover some of the cost of healthcare. Homeowners insurance or renters insurance assume the risk of loss in case your home is damaged or destroyed. But, have you really taken all aspects of your family and life into account.
Here are some common coverage gaps to consider when reviewing your insurance needs.
Life insurance
You make sure that between life insurance, savings and income, you have enough insurance so your family will continue to live the lifestyle to which they’re accustomed. But, changing circumstances may leave a gap in your life insurance coverage.
For example, if you have life insurance through your employer, changing jobs could affect your insurance coverage. Maybe your coverage decreases or the type of insurance changes.
Review your income, savings, and expenses annually and compare them to your insurance coverage. Changing circumstances may require more insurance.
Let us help you determine if you have enough coverage to meet your family’s future income needs.
Homeowners insurance
Homeowners insurance can be tricky. It’s important to know what your homeowner’s policy covers, but believe it or not it’s more important to know what it doesn’t cover.
Don’t assume your insurance will pay the full cost to replace your home if it’s destroyed by a covered occurrence. Many policies place a cap on replacement cost up to the face amount stated on the policy. Check with a building contractor to get an idea of the replacement cost for your home, then compare it to your policy to be sure you have enough coverage. This is especially important if you recently renovated a room or two in your home.
Keep in mind that damage caused by floods, earthquakes, and hurricanes may be covered only by special addendums to your policy, or in some cases, separate insurance altogether. Also, your policy may not cover the extra cost of rebuilding your home to meet newer stringent building codes. Or, your policy may limit how much and for how long it will pay for temporary housing while repairs are made.
To avoid these gaps, review your policy annually. Don’t rely on your interpretation of the policy, let us help you understand what is and isn’t covered to determine if you need to make adjustments to your policy.
If you own a condo, your association’s property insurance may leave gaps in coverage. For example, most association insurance doesn’t cover your furniture, wall coverings, electronics (e.g., televisions, radios), interior walls, and structural improvements made to the interior of your unit. Review your condo documents to understand what the association insurance covers and what you may need to insure.
Auto insurance
Do you know which drivers and what vehicles are covered by your auto insurance? Most policies provide coverage for you and family members residing with you. If your child is living in a college dorm he or she is probably covered. But, if he or she is living off-campus, they might no longer be covered.
What if you and your spouse divorce, which policy insures your children who are living with each parent at different times during the year? Notify your insurer about any change in living arrangements to avoid a gap in coverage.
Remember, policy terms and conditions aren’t always well defined, and you may not understand what’s covered until it’s time to file a claim.
Don’t hesitate to give us a call so that we can help you make sure your coverage is complete!