Harris, Reed & Seiferth
Buying insurance can be a tricky purchase - but it doesn’t have to be. Simply put, some areas of your insurance policy will just require extra attention to avoid weaknesses in your coverage. Here are some of the major coverage mistakes we’ve seen here at our agency.
Not Insuring Your Home For Replacement Cost
Do you think you only need enough coverage to insure your home for the amount you paid for it? If you said yes, well, that’s just not true! You need to be insured for the amount of money it would cost to REPLACE your home, not the amount of its actual cash value which will include a deduction for depreciation. Think of it this way: the total cost of replacing a home could be tens of thousands more than the house would have sold for on the market, cash value. So, what if a fire or tornado destroyed your home and you’re currently only insured for the cash value? You could be at risk!
Buying The Cheapest Policy
When you shop for insurance, do you settle for choosing whatever is the cheapest? Cheaper isn’t always better. And if you’re looking to save money, you have to be sure you’re doing it smartly. Start with a reputable company; you want to buy from a solid insurance carrier that you can trust to pay your claims. You’ll also want to be sure that you’re comparing apples to apples. If you’re buying for your home, ask yourself if the cheaper policy only insures your home for cash value instead of replacement cost (like above)? Does one company exclude leakage of water but not cover it? These are the details that can often be missed or worse, misunderstood.
Buying Only The Required State Minimum Liability Insurance
While each and every state does have a required minimum amount of liability insurance to drive, it’s often not sufficient or helpful when you’ll need it. Selecting only the minimum could leave you open to a suit, wage garnishment, or even worse, the potential loss of an asset, like your home. You’ll want to be sure you’re discussing different liability amounts with your agent to see what is necessary based on your income, net worth, and liabilities. A bonus? It won’t be near as much as you might think!
Buying Life Insurance Through Work
Many clients initially were telling me that they have life insurance through work and weren’t interested in purchasing their own coverage. Huge mistake. Why? Well for one, gone are the days where people are staying at jobs for 30+ years. On top of that, if you develop health problems and leave your current employer, you’re at risk for possibly not being able to solidify coverage again! Purchasing your own life insurance, which is extremely affordable, ensures that you are covered no matter where you are employed or what health concerns you might develop in the future. It’s the smarter choice, right?
Not Using An Agent
The ultimate solution to avoid all of these coverage mistakes? Work with an insurance agent! As agents, we have vast knowledge on the details and can always find coverage that’s right for your specific situation. It’s our job to discuss different liability amounts and ensure that the one you choose is high enough, to explain the difference between actual cash value and replacement cost and make sure that your home will be covered at the cost to replace it after a loss, to help you put your own life insurance policy in place so that you won’t be at risk to lose it when you change jobs, and to make sure that you aren’t buying an inadequate policy that doesn’t protect you.
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Harris Reed & Seiferth Insurance Group
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