Your Auto and Homeowners Insurance May Not Fully Protect You -- Here’s the Fix
Insurance is viewed as a necessary evil in our budget. But, what if what we’re paying for isn’t even protecting us?
Experts gave some insight into what you need to look for when you purchase insurance to make sure your money isn’t being wasted.
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Auto Insurance
Almost every state requires you to have car insurance, and while it might be tempting to opt for the cheapest plan, that choice might leave you sorely lacking in protection. Jeffrey Nadrich, the founder and managing attorney at Nadrich Accident Injury Lawyers, said that it’s important to understand that many policies don’t cover manufacturer parts without an upgrade.
“It's worth the upgrade, especially if you have a newer car with tech integrations," Nadrich shared. "Newer cars have features that won't function with many after-market parts.”
Rami Sneineh, licensed insurance producer and co-president of Insurance Navy Brokers, added that many consumers have a common misconception when it comes to auto policies.
“There are three extras people think are included as standard yet aren't: Rental reimbursement, roadside assistance and uninsured motorist coverage," he said. Sneineh suggested drivers always go over their policy and ask the company any questions before you start paying.
Here’s another auto insurance term that gets thrown around a lot: Full coverage. The truth is “full coverage” is not a legal term. So, any insurance company can tell you you’re getting full coverage because there’s no standard definition.
“Many people do not realize that their auto insurance policy did not contain bodily injury liability coverage or underinsured motorist coverage, and this realization usually happens when it is too late and after an accident occurs,” Justin Weinstein, the founding partner of the Weinstein Legal Team, said. “You must take the time to sit down with someone who is going to go through the whole policy in detail so that you know what you are signing.”
2. Homeowners Insurance
On top of your mortgage and property taxes, you’ve added homeowners insurance to your monthly bills. Though it can save you a lot of money in the face of a disaster, not every situation will be covered with a standard policy.
“Consumers may need additional coverage or endorsements for things like flood damage, sewer backups, earthquakes, certain high-value possessions, and business equipment used at home," explained Lauren Mitchell, a point-of sale and consumer lending advisor at Coach Financing Solutions. “There are also limits on what insurers will pay, even for covered items.”
Mitchell suggested reviewing coverage limits, deductibles and exclusions before approving a policy. Additionally, if you have a concern about a risk that’s common in your area, ask about it specifically.
“Replacement-cost versus actual-cash-value provisions and special limits for valuables are also important to consider," she shared.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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