Common Mistakes People Make When Getting Insurance
It is essential that every individual has basic insurance coverage. Not getting one is the most common financial mistake that people make. Even when getting the insurance, one should ensure they have adequate coverage for their needs. It is also important to understand that basic insurance will shield your assets and finances from a potential accident or another damaging situation.
However, often people make mistakes when getting insurance. It is important to understand when it comes to insurance coverage, a small mistake can really affect you financially.
To help you avoid a tricky situation, Chaparral Registry and Insurance has compiled a list of common mistakes people make when getting insurance:
1. A lot of first-time homebuyers don’t shop around for home insurance
They typically talk with the bank that is offering them a mortgage and know they need to have insurance, so they buy the bank’s insurance coverage. This can be the easiest course for the client but they are missing out on potentially huge savings in shopping around. Not only are they missing out on savings on their home, but their vehicle insurance is also most likely somewhere else, so they’re missing out on bundling discounts which could lower their auto insurance premium. We always tell our clients to not wait till the last minute and ensure that they have received at least three quotes.
2. Buying a car before getting insurance quotes
There are so many new drivers out there that get excited over the ability to purchase a new car. The salespeople are great at making you feel like you can afford the car payments and show off all of the fancy bells and whistles of the new car. The individual buys the car, then realizes that they need insurance. When they come, see us, sometimes, the insurance payments are out of their current budget, and now they feel stuck because they’ve already purchased the vehicle. It is advisable that all new drivers get some insurance quote before purchasing that new vehicle.
3. Getting speeding tickets
In the short-term, most people think that they’ll pay the $150-$250 ticket and then be on their way. These tickets are chargeable on your auto insurance and can be charged for up to 3 years. If you get a few speeding tickets a year, over 3 years that could add up to a significant surcharge on your auto insurance premium. This also applies to other tickets as well. Some companies are treating tickets issued for cellphone use when driving as major convictions which can be a huge surcharge on your policy.
4. Not telling your broker about water mitigation systems installed in your home
If you have a sump pump or a backflow valve in your home these can help prevent major water losses. When getting quotes a surprising number of people don’t know if they have one or not. By having one you can be eligible for some discounts on your home policy. So if you’re not sure if you have a sump pump or a backflow valve, double-check before going in to get some house insurance quotes.
5. Not having tenant’s insurance
There are so many renters that rent without having tenant insurance. Is it required - no; but it is highly recommended. The landlord is going to have insurance for the building and any of his belongings but his insurance will not cover your belongings. Even if you live frugally, a fire to all of your belongings could be hard to replace. Plus, if the landlord’s insurance company investigates and finds out that the fire was caused by you forgetting to turn off the stove while you ran to get groceries, they could sue you personally for damages.
6. Not having the proper insurance on your home in place
When insurance companies/brokers are quoting your home, a lot of the value is based on the square footage. So if you’re getting quotes and telling everyone your home is 1,000 square feet while in reality, it’s 1,500, yes your quote is going to be cheaper. But what happens when there is a fire and the insurance company is only going to pay to build a 1,000 sq ft home? You’re going to be quite upset with a home that's $150,000 less while only saving a couple of thousand dollars over the years you had insurance.
To avoid these and other common mistakes when getting insurance, reach out to Chaparral Registry and Insurance - Insurance Services, Insurance Brokers In West Lethbridge, AB. We provide Home, Farm, Automobile, Commercial & Life Insurance Services.
Serving across West Lethbridge, Cardston, Raymond, Fort Macleod, Mountain View, Enchant, Picture Butte, Pincher Creek, Wrentham, Warner, Milk River, and the surrounding areas.