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9 Key Factors To Insuring Yourself Without Coverage Gaps
Very often when we are sold “comprehensive” insurance policies, we get the idea that we get covered for almost anything we can think off barring extraordinary circumstances like terrorists attacks and meteor showers.
But ever so often people make their claims like just another day in the office and only realize then that their polices did not come into play.
It is too easy to blame aggressive salesmen for these shortcomings.
But the ultimate responsibility lie with yourself for not understanding what you signed up for. The disturbing part which you might not want to admit, is that you have suspected these gaps existed but did nothing to mend them.
If you are a pragmatic person who wants to get adequate insurance not only to protect yourself, but your family as well, you need to take action and determine what you need.
Don’t leave it to a chance meeting with an agent to ask about your requirements.
Here are 9 areas to digest so that you can make the most of avoiding any coverage gaps which can exist when buying insurance.
1) Competent agent
When there is a legal battle, you hire a capable lawyer at your corner. When you need to repair the foundation problem at your home, you hire the best builder you can find. And when you want to get insured with the least possibility of falling into a non-claim gap, you hire a great insurance agent.
The logic behind this is very simple to understand. Yet many people do not put enough emphasis on it. Instead choosing to give their business to rookies just because they are acquainted in some way.
Unlike an attorney where you will likely pay a premium for experience and expertise, insurance agents are compensated the same way no matter how experienced or incapable they are.
That is a bargain in itself to hire experts with track records.
Surely you don’t want to have your policies being reassigned from one agent to another due to job hopping.
The ability to deeply understand what you need and recommend policies accordingly is indeed an important skill.
But one of the most important aspects of a great agent is actually something you may not have even thought of. It is the ability to help you organize you claims so that everything goes through without encountering hiccups and disappointments.
2) Reputable insurer
If given a free choice, most people would prefer to go for big reputable brands instead of unknowns.
But what if the insurer you prefer is not able to give you something that meets you specific needs?
Beware of companies offering you the moon for very little. You don’t want to have disputes every time you make a claim.
If you find an insurer that you have never heard of before, do some diligence checks on them.
Key things that can help judge their credibility include how long they have been in operations and their available track record. Also make a search on news outlets to see if they have been in the news recently for the wrong reasons.
3) Home replacement guarantee
If you home gets destroyed, not only will it hurt your pocket, you could be psychologically scared as well.
The one thing that will go a long way to healing yourself is to get a replacement for your home.
You need to have enough structural coverage to have it rebuilt at the insurer’s cost. But to establish a value could be challenging. You want to get adequate coverage while not paying way more than you have to.
To solve this issue, look for an extended replacement cost guarantee. This will ensure that you are sufficiently protected.
4) Don’t settle for huge variations in limits for different policies
The average person could have 3 different types of policies.
If you are one of those or have even more, it would be wise to have them in the same liability limit.
This is because whenever you need to make any of your plans do it’s job, you want to have the same amount to cover all the costs.
If what you have is an umbrella plan, review your other liability insurance limits does not conflict with the umbrella. You will have to pay the variance from your own pocket if they don’t.
5) Liability gaps
There are a lot of gaps that typical insurance policies don’t cover. That includes your homeowner’s plan, auto insurance, health policy, etc.
You need a good agent to be able to identify them and advice you on the options available to plug them accordingly.
There is no hard and fast rule that applies to everyone. This is why an expert is needed to uncover your needs and propose solutions accordingly.
There are hundreds of weird incidents that can make you liable without having the backing of your insurer. Those are the biggest ironies you want to avoid.
6) Umbrella policy
If you are getting an umbrella policy, make sure that you are getting what you want out of it. There are many types of plans available in the market and they are different in many ways.
Actually some of them have so many holes that you wonder how they can be described as an umbrella in the first place.
You need to first identify what you want and need.
The biggest tip is to shop around and do not settle with your current insurer out of convenience.
Brands sell at a premium price. Very often you will find that for the same price an insurer is charging, you can get way more in coverage from a lesser known competitor.
Again, your unique requirements could also play a huge role in determining which plans to go for.
Your personal agent would probably only try to sell you’re their own policies. So you could be looking at some work to research what is available in the market.
The good part is that agents are often easily found and they are always enthusiastic serving a new prospect.
7) Get more life coverage than you need
If the purpose of life insurance is to ensure your family will not face a financial calamity on your death, then make sure your policy addresses this issue directly.
To avoid situations where you underestimated the amount needed, it is better to go above your calculated estimates.
For example, if you worked out $500,000, go at least 25% more to $625,000. Also take note that if you have a young family, you could be looking at significantly more than you first thought.
8) Long term disability
We hate to think about ending up disabled in future. The certainty of life lies in it’s unpredictability. We could suffer a heart attack or stroke tomorrow without warning.
The easy part is if we died and our families get the claims.
The financial disaster is if we survived and require long term care from professionals. The living expenses can really take a toll on family finances.
This is a gap that is commonly overlooked. Think about whether you need long term disability insurance and decide accordingly.
10) Natural disasters
If you are relocating to an area you are not familiar with, get up to date on the weather hazards that could be a feature of the area.
It is a fact that some places are more prone to types of natural disasters compared to others.
Floods, tornados, hurricanes, and earthquakes are just some of them to research about. They can destroy you home and are often exclusions found in your general policies.
Find out how you can protect yourself against these risks accordingly.