The Worst Insurance Mistakes Everyone Makes
Call it human nature. Call it a hatred for insurance. Whatever the reason, almost all insurance clients make the same mistakes. They’re predictable and largely avoidable. Here are the 5 worst insurance mistakes everyone makes.
1. Not Reading Your Policy
This comes straight from the Ombudsman’s office, folks. More claims get rejected for not being covered by the insurance policy than by the insurance company trying to save a buck. And there’s nothing the Ombudsman can do about it. Read your policy to know exactly what you’re covered for. Or even better, list all your risks and then prioritise them according to most expensive and most likely. Make sure those are covered in your policy.
2. Insuring for the Estimated Value
Don’t let the insurance company determine how much your home or car is worth. Check for yourself and make sure that you’re covered for this amount. You will have to update this number every 6 months to a year. For a home, this means having it valued and then covering it for the cost to rebuild. This includes buildings materials and rubble removal. Your home insurance company won’t do this for you.
3. Lying to Your Insurance Company
Don’t do this. Ever. Not even a little bit. You’ll be surprised how smart your insurance company is when it comes to determining whether or not you’re lying. In fact, people are employed to check the validity of claims. This means insuring your car for business use if you use it for business, telling them who drives your vehicle, and installing the alarm system you told them you had. Your insurance company will reject any claim if they find out you lied to them. It’s an expensive risk.
4. Missing Payments
Chances are, on the one day you will actually need to claim from your insurance, whether it’s a car or home insurance company, it’s when you have missed a payment. Failing to make a payment cancels your insurance policy and increases your risk. In fact, your insurer may choose not to renew your cover if you fail to make payments.
5. Getting Car Insurance for a Caravan
Make sure you get a special insurance policy for every specialised item you need insured. A home insurance policy and a car insurance policy will not cover certain items. Bikes, caravans, trailers, boats, and jet-skis all have their own policies. Even 4x4s have their own cover.
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