The common pitfalls when searching for insurance

Buying insurance can seem like a complete hassle and an overwhelming process, and searching for insurance can take a long time to find the perfect policy and coverage.

There are so many companies to choose from and so many different types of insurance and levels of coverage. When so much of the actual information you need to make an informed insurance buying decision is confusing or full of complex jargon, it can seem like the best way to choose an insurance company is to let their – often very creative – advertising sway your decision. However, with a little bit of research and patience, it is possible to find the perfect insurance. The insurance that works best for you will depend on your personal circumstances but there are steps you can take and things to be aware of that will help in avoiding the most common pitfalls that plague insurance customers when searching for insurance.

Basing your choice on rate alone

While an incredibly inexpensive insurance payment each month may seem like a little victory every time the statement comes in, all those apparent savings will be swallowed up by any issue that your policy doesn’t cover. Inexpensive policies are often inexpensive because they do not offer adequate coverage.

Similarly, you might find an insurance company that offers the coverage you need at a great price, but if they have ineffective or apathetic insurance agents, it could be a serious struggle to ever actually receive the payments that you are entitled to. Cost is important but it isn’t everything.

Not knowing your policy

Just like you wouldn’t set up a business outside of your area of expertise without reading up on the industry and being well informed, why would you buy insurance without knowing what your plan covers? Many people make that mistake, though, and don’t bother to understand exactly what their policy covers. Not knowing what is in your policy is a bit like playing Russian roulette – any new issue that arises with your house, car or business could be the one that isn’t covered by your policy, and without knowing the details of your coverage, it will be an unpleasant surprise when that happens.

Not having enough coverage

There are some types of insurance coverage that most people know are essential – fire and flood for their home, collision insurance for their car, etc. Oftentimes, people only have the bare minimum of coverage, as this is usually cheaper. This can easily lead to having to pay more out of pocket once something happens that they didn’t have covered. Having enough coverage for any eventuality is very important.

For example, if you have motorhome coverage, there are some types of coverage that you might not even consider when selecting a policy but that are basically essentials if you intend to travel extensively. These include options such as EU travel insurance and third-party damage while towing, as an inexperienced or careless tow truck driver can do considerable damage to a motorhome.

Having too much coverage

While not having enough coverage can leave you in the lurch, having too much coverage can also be a problem. You won’t end up having to pay for something that wasn’t covered but you will consistently overpay on your higher premiums. Be sensible about what kind of protection you may need. Yes, the Great Storm of 1987 was technically a hurricane but that in no way means that hurricane protection is an essential element that you must have in your homeowner’s insurance policy. (Storm coverage, however, is another matter entirely, depending on where you live, so be sensible!)

Not updating your policy

Once you’ve settled on a policy, it’s easy to think of it as a task checked off the list that you don’t have to think about ever again. Keeping your insurance up to date is an incredibly important step that many people overlook. Insurance valuations should always be current and reflect any new purchases in order to prevent any serious losses. With the current fluctuations in the real estate market, it is also important to keep your home’s value with your insurance provider current.

Finding the right insurance can be a tricky process but it’s worth the effort to find the perfect level of coverage for your circumstances. Whether you’re looking to insure your home and possessions, your car, your motorhome or your business, be aware of the most common pitfalls when searching for insurance and do your research. Having the right insurance will save you money in the end and the peace of mind it brings is worth every penny.