Saving some coins on your insurance always feels good, and one of the best ways is to shop around before settling on an insurance package.
However, dropping some important coverage or just reducing your coverage is like having a diet with no exercise - it's focused on numbers rather than results. Most insurance mistakes lead you to be dangerously uninsured and leave you in a precarious situation where you are likely to foot much bigger bills if a disaster occurs.
The following are the top five most common insurance mistakes to avoid in Dallas and what you should do to prevent them.
Do not Drop Your Flood insurance
Standard renters and homeowners insurance policies will not cover flood damage. Flood insurance is federally insured through the National Flood Insurance Program (NFIP) and private insurance companies. Skipping or dropping flood insurance is among the most common insurance mistakes -you may be unaware of your risk of flooding but have in mind that 24% of flood losses occur in low-risk areas.
Since you may still want to save money, before purchasing a home, always inquire through NFIP and determine if the property is located in a flood zone. If you are already situated in a designated flood zone, begin by implementing mitigation efforts to reduce flood damage, then purchase your flood insurance policy.
Don't Assume Your Homeowner's and Renter's Insurance Coverage Will Cover Everything
One of the common insurance mistakes made by homeowners occurs way before the loss takes place. Many lack enough coverage and count on the wrong insurance policies for coverage. In Dallas, a typical homeowner's insurance offers coverage for damage resulting from lightning strikes, fires, hail, and wind storms. Lacking the right or complete insurance policy can leave you in a big financial hole.
Other losses, for instance, damage from floods, as earlier pointed out, and earthquakes are not covered. Standard homeowner policies typically don't include any coverage for artwork, valuable jewelry, and other collectibles.
Many homeowners have assumed that their renter's insurance covers damage from hurricanes and floods. However, the assumption is a costly mistake in insurance, especially when you live in a hurricane-prone region in Dallas or a flood zone. The other common error is skipping renters insurance. People forget renters insurance due to misinformation on what it covers, while others underestimate the market value of their possessions.
The bottom line is that your homeowner's and renters' insurance will have a lot of exclusions that you should research and adjust different policies accordingly. The two also cant be used interchangeably.
Check with your Agent Before Canceling or Reducing your Car Insurance
If your agent is not affiliated with any given insurance company and works independently, they will help you with the cancellation of your current auto insurance policy. They'll also navigate the competitive insurance marketplace and help you switch insurers to one that better suits your needs.
Your agent and insurance provider will also clarify any process and charges involved in cancellation. For instance, while some carriers will cancel your policy at renewals without payment, many offer their clients a grace period for their liability insurance coverage. The grace period extends liability coverage beyond the expiration of your policy to allow you some extra time to pay your bills.
However, If this period passes without you making any payments, then your insurer may charge you with non-payment penalties and charges for the coverage extension
Don't Neglect Health Coverage - It can be Difficult and Expensive to Obtain once you need it
Whether you are trying to save a few dollars or assume you are young enough to go by without it, forgoing an insurance cover as basic as health insurance can be costly.
Waiting to buy health insurance when you need it may not be as feasible as it sounds in theory. What if you trip on the stairs and your ankle needs surgery? What if you need stitches after slicing your hand when washing a broken wine glass? Medical bills for stitches in an emergency could be quite expensive. Your coverage will not take effect immediately, and it's doubtful that you would manage to wait for medical attention when already unwell.
Fortunately, there are multiple options with health insurance. Suppose your current employer does not provide you with medical insurance. In that case, you can obtain a policy from the insurance market start by looking for a good group of health insurance policies.
You'll find multiple levels of insurance, from catastrophic to gold insurance packages. When cost is the issue, devastating insurance, typically the cheapest, is better than having no health insurance.
Choosing an Insurance Company Based on Price Alone
It's essential to pick an insurance company offering competitive packages. However, choosing the least expensive policy to save money could also mean highly reduced coverage that may land you in a financial mess. Insurance companies are regulated by the National Association of Insurance Commissioners, which protects consumers by standardizing the market value of policies. Life insurance rules, liability limits, and other regulations are all under federal law to ensure you are not taken advantage of.
Basing your choice on insurance purely on price neglects and ignores multiple essential factors that constitute insurance policies. On the other hand, choosing the most expensive policies does not guarantee all the coverage you need. It's also not assured that you will receive the best insurance value for your money. Remember that being on an insurer's complaint record may also be why you have a higher deductible.
Therefore, ensure that your choice of insurer is financially stable and has great customer service. Ensure that you have chosen insurance commissioners that offer you the most comprehensive coverage.
It would be best to equally inquire from your friends and family members about their experiences with insurers. Pick an insurance company that will effectively respond to your needs and handles your claims.
Speak to a Trusted Insurance Agent in Dallas, TX
The best way to avoid any insurance mistake is to consult an insurance expert before making any big decision.
Contact the Thumann Agency to speak to any of our agents who live right here in Dallas. We help you understand any of your existing insurance coverage and find you a more suitable alternative or addition to your current policies.
Thunman Insurance Agency understands how important it is for you to be able to shop around. We are confident in the packages we offer, and we allow every client a free insurance quote with no obligation to commit to a package.