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An alarming number of respondents, about 38 percent, say they have never conducted research before purchasing their insurance policy, in a new, national survey by Trusted Choice and the Independent Insurance Agents & Brokers.

The survey also found that more than one of every three surveyed policyholders has not even talked to their insurance agent in the past year. Even more staggering, about 40 percent of respondents said they were not confident or only somewhat confident that they have adequate and appropriate insurance coverage for their needs.

With the complex nature of insurance policies and the multiplicity of options for coverage, it is essential to meet with trusted professionals like our staff at Advocate Brokerage to tailor your policy to meet your exact needs. Even after a customer has purchased a policy, it is crucial to keep your agent up to date on changes in your family or to your property (including a new baby, marriage, divorce, home renovation or major purchase) to make sure that your policy is providing you the most appropriate protection for you and your assts.

“It’s critical that consumers understand the basics of protecting their family, home and property,” says Robert Rusbuldt, IIABA president and CEO. “This survey shows that many Americans may not even realize they are vulnerable to serious losses. A lot can happen in a year. The start of a new year is a perfect time to dust off your insurance policies and review them thoroughly.”

The following are the top 5 common mistakes consumers make related to insurance:

Mistake 1: Not Knowing Your Limits.

Many customers don’t know the limits of their insurance coverage and don’t understand how inexpensive it can be to increase their overall protection. This is especially true regarding liability coverage. For example, you can increase the coverage of a typical homeowners policy from $100,000 to $300,000 a year for a fraction of your current annual premium. In addition to inadequate homeowners policies, not enough consumers have separate umbrella liability policies which can provide $1,000,000 of protection a year for a very small investment in your security.

In the survey, only about 29 percent of respondents considered coverage limits, or the amount of coverage, the most important criteria when selecting an insurance policy. Now is a perfect time to review your policy with your agent and better understand your coverage, assessing any aspect of your policy that may require increased coverage.

Mistake 2: Disregarding Discounts.

Too often, consumers leave money on the table by failing to ask about discounts for which they may qualify, including some unique, regional, very specific and, at times, quirky discounts. These include savings on homeowners insurance for installing a security system, living in a gated community, updating the roof and/or wiring in a house, and remaining claim-free. Some of the more unusual discounts on auto insurance include discounts for teen drivers with good grades, or carpooling. Check with your agent to see if any apply to you because these discounts can make a significant difference in your premium costs.

 Mistake 3: You Can’t Take It With You: Consider Insurance in Estate Planning.

With the beginning of a new year, it is a perfect time to discuss your estate and final wishes. During the estate-planning process, many put their homes in trusts, but fail to tell the insurance agent that the trust owns the home. In those cases, the home is no longer insured since the owner is not on the policy, which might cause an issue when filing a claim.

Also, to evade higher estate tax, some people don’t claim valuables or collectibles as part of their estate. But these items require special coverage beyond a standard homeowners policy, or they won’t be insured. If there is a loss on these items, you or your heirs won’t be compensated. It is not worth the minor cost savings to leave yourself unprotected.

Mistake 4: Not Assessing Your Biggest Asset – Your Home.

Many people are unclear or do not report changes in occupancy that may affect their insurance coverage. Selling, renting or leaving your home for an extended period of time directly changes the terms and conditions of your coverage. Your insurance company can refuse your claim is there is a loss because you are no longer in control of the happenings at or in your home. Every homeowner should know the time limit on vacancy or change of occupancy lest the company alter or cancel the terms of the policy.

In addition, a lack of certain specialty coverage can also cost homeowners dearly. Failure to have a policy with sewer and drain back-up insurance, flood insurance, earthquake insurance, ordinance or law coverage, or to adjust coverage as property improvements occur, can have detrimental consequences in the event of a disaster. Keep your agent advised of any and all changes regarding your home, no matter how minor they seem, and ask questions if you are unsure about what is and is not covered by your current policy.

Mistake 5: Taking the Cheapest Route.

Though price is a factor in choosing a policy, it should not be the biggest and only factor in your decision-making process, which could ultimately be a costly mistake. Insurance policies carry different deductibles, coverage, limits and exclusions. Your insurance agent can help customize a policy that will provide you, your family and your property the protection if the worst was to happen. Of those surveyed, one quarter of respondents thought price was the most important criteria when shopping for insurance, and 61 percent said they were only somewhat familiar or not familiar with the details of their insurance policy. To see an example of a common misunderstanding regarding coverage, click here our recent post about flood insurance.

If you are shopping for insurance or have questions about your coverage, Advocate Brokerage has a staff of experienced and trusted professionals who will work with you to tailor a policy to your unique needs.

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