Even the most careful people sometimes have coverage gaps in their insurance that could put themselves, their family, and their belongings in danger. Here are some common coverage gaps to be aware of.
No Umbrella Coverage
Whether you are at fault for an automobile accident or not, you could still have a personal injury or liability lawsuit filed against you. That is bad news considering lawyers’ fees, hospital bills, pain and suffering payments, and more could potentially exhaust your auto and homeowners policies (and possibly even your net worth) a lot faster than you can imagine. For example, have you priced out the cost of life flight recently? An umbrella policy adds an extra $1 to $5 million to your liability limits with premiums that start at $150 per year. That should give you enough coverage—and peace of mind.
No Flood Insurance
Insurance companies cannot cover floods at reasonable rates since they tend to be so devastating. But the Federal government offers this coverage through the National Flood Insurance Program (NFIP). It is definitely worth considering since people who live outside of high-risk flood areas file more than 20 percent of NFIP claims. Just one inch of water can be catastrophic to your home.
No Coverage for Your Valuables
Do you have any expensive jewelry, electronics, artwork, or furs? Since most homeowners policies have a $1,500 limit for theft of personal items, you might want to consider adding an HO5 form to your insurance policy to increase your coverage. Also, it is a good idea to schedule specific items or add an inland marine policy to the package. It is common for individuals to miss the limitations in their homeowners policy and to just assume personal property is 100 percent covered. This is not the case, so make sure you understand your policy and discuss this important coverage with your agent.
Not Enough Auto Liability
Many car owners just want “state minimum” liability to keep their registrations active and to satisfy the DMV requirements. They assume since they feel like a safe driver they don’t need to carry much coverage and “the other person’s policy” will pay for any damages. What happens when you rear end that Cadillac Escalade valued at $90,000 and you are only carrying $10,000 limit for property damage? The $80,000 difference is coming straight out of your pocket. It is important to understand how much coverage you really need for all situations. If you own a home and have assets you could lose, you definitely need liability insurance to cover the value of the assets someone may try to take from you.
Don’t let these common coverage gaps leave you financially exposed.
Contact your Leavitt Group insurance advisor for a review today.