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5 Mistakes You Could be Making With Your Insurance

Insurance premiums are too high for you to afford to not maximize every cent you put into them. Even though the government says rates will be going down in the next few years,you should still do everything in your power to get everything out of your insurance policy you can. To help you start, here is a list of common mistakes that people make with their insurance policies.

1:  Not Talking About Discounts.

Discounts are wonderful things. You add them to your policy, and you pay less. What’s there not to like?

And insurance companies have realized that people like getting discounts, so they have collectively decided to implement as many as possible. This means that there are many opportunities to save money on your insurance policy, but also means many requirements, constraints and qualifications. Because all of these discounts are conditional on something (like age, whether or not you have a mortgage, if your child is away at university), it becomes very hard to keep track of which ones you qualify for and which ones you don’t. Add in the fact that all companies carry different discounts, and that the rules and requirements for discounts are in constant flux, and you have the potential to miss discounts you should be eligible for. A broker is a great defense against missing discounts, as they review your policy for things like that, but you can also take the initiative to find what discounts your insurance company offers, and which ones you qualify for.

2: Vacant Property

Vacant property has a loose and contested definition in the insurance world, but it basically means property that no person lives in. Vacant property is extremely important in the world of insurance, as it is excluded from typical home policies. How does this affect you? Think about what your home is like when you go on vacation – it is vacant.

The same applies for homes which are given to you in a will (the occupier has deceased), or a second home that you currently own and are trying to sell. These situations result in special circumstances which could make your insurance policy voidable – a circumstance where the insurance company isn’t required to pay your claim. There’s nothing worse than having something terrible happen to your home, then discovering that you aren’t covered, so always talk to your insurance broker if your home will be unoccupied for a sustained period of time. Some vacancy issues can be solved as easily as arranging for someone to visit the house regularly, but others will require an entirely new policy or an endorsement on your current one. Either way, it’s better than not making any changes and taking your chances. Murphy’s law doesn’t go on vacation.

3: Moving

Moving can be an exciting time for anyone’s life, but it is also a time where a lot of mistakes are made with regards to insurance policies. Changes in where you live will need to be reflected in your home, tenants or condo policy as the location will drastically effect the insurance needed. But there are other aspects to consider as well, like where the furniture and other contents will be stored while you undergo the move. You also need to change your auto policy to reflect the new territory you are driving in, as if you don’t the insurance company can refuse to honor your insurance policy in the event of a claim. Always let your insurance company/broker know a few weeks before the move, as that will give them the time to make any changes, additions or subtractions required, before the move is completed.

4: Inadequate/Incorrect Coverage

You buy your insurance for the coverage, but how do you know how much coverage you need? Do you know how much courts are awarding in settlements?  Do you know what costs of a claim typically are?

Probably not. Which is why inadequate/incorrect coverage can be a big problem, especially if you aren’t being given advice by a licensed representative. Going by what is legally required by law is generally not a good guideline for insurance either. At McDougall Insurance we feel it’s necessary to carry at least $2,000,000 in legal liability coverage, on both your home and auto policies, but you are only required by law to carry $200,000 on your auto, and nothing on your home! That’s a big difference which can cost you a lot if you experience a legal liability claim.

But it isn’t just limits that can be inadequate, but endorsements and add-ons to your policy as well. Loss of Use is an add-on to most auto policies, which pays for a rental vehicle in the event of a claim. Because vehicle repair can take a while, the cost of renting a substitute vehicle can exceed the cost of the original claim in some cases. Plus it’s a huge pain in the neck to have to deal with renting a vehicle, on top of the entire claim, and the last thing you want to worry about.

5: Out of date personal information

Seriously. Out of date personal information has caused more problems for policyholders then I think anything else I’ve dealt with as an Insurance Broker. Whether you have a home, life, auto or even commercial insurance policy, effective communication between you and your insurance company is essential for you to get the best rates, have no problems, and ensure a pleasant insurance experience.  And effective communication will not work if the company/broker is trying to contact you using a cancelled phone line, an old work number and an incorrect address.

Having a correct mailing address is particularly important, as it is the primary way insurance companies communicate.  If your insurance company cancels your policy, experiences a problem, or requires information, that generally notify you through the mail. If the address is wrong, you will be missing out on your renewals (and proof of insurance), potential discounts, and could even be exposing yourself to the risk of driving without insurance, as your policy could be cancelled without you knowing it.

Personal information also includes up to date bank accounts, as switching accounts or banks without telling your broker/company will result in Not-Sufficient-Funds (NSF) violations being registered on your insurance record, NSF fees, and even cancellations.

So call your company/broker, verify that their contact information is correct (especially if you’ve recently moved), and safe yourself a lot of headache.

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