The New Year is often a time to clear out the clutter, set intentions, and get things in order. Yet, one thing many people forget to review during this fresh start is their insurance coverage.Homeowners insurance and auto insurance are meant to safeguard what matters most – your home, your car, and your peace of mind. But mistakes in managing these policies can leave you vulnerable when you need protection the most.
Here are five common insurance missteps you'll want to avoid this year, along with actionable tips to ensure you're adequately covered.
When was the last time you reviewed your homeowners insurance policy? Many people make the mistake of setting and forgetting their coverage, assuming it will cover everything that might happen. However, your coverage might not reflect your current needs or the cost of rebuilding your home.
For example, if you've renovated your kitchen or added a home office, your current policy might not take these upgrades into account. Worse yet, some homeowners only insure their property up to its market value – not the replacement cost, which can leave them underinsured in a disaster like a fire or hurricane.
What to do instead:
Many people assume that basic liability insurance is enough, especially if they have an older car. While it's true that liability insurance is the minimum required by law, it won't cover things like theft, a hailstorm, or hitting a deer on your early-morning commute. Skipping comprehensive or collision coverage to save a couple of bucks could cost you thousands in the event of an accident.
Imagine driving home in icy conditions and sliding into a guardrail. Without collision coverage, you're on the hook for the repair costs, no matter how slick the road is. Now, add inflation and rising repair costs, and the gamble of going minimal could hit your wallet harder than you'd like.
What to do instead:
Life doesn't stand still, and your insurance needs shouldn't either. But people often forget to update their homeowners and auto insurance policies after big changes, leaving gaps in their coverage.
For example, if you've recently gotten married, moved to a new city, or added a new driver (like a teenager) to the family, your insurance policies should reflect those changes. Similarly, if you've acquired valuable items, like new jewelry, artwork, or expensive electronics, you'll want to make sure those are covered.
What to do instead:
Saving money is great, but choosing the cheapest insurance policy can often backfire. Low premiums typically come with stripped-down coverage, higher deductibles, or exclusions that could leave you uncovered when disaster strikes. While it's tempting to focus solely on cost, it's far more important to evaluate what you're actually getting for your money.
Take homeowners insurance, for example. A bare-bones policy might not include coverage for water damage, earthquakes, or even certain weather event, depending on where you live. Similarly, opting for the cheapest auto insurance could mean footing the bill for costly repairs after an accident.
What to do instead:
Surprising as it sounds, many people leave money on the table by not taking advantage of discounts or bundling options. You might already be eligible for savings based on your home security features, driving habits, or even your occupation.
Similarly, bundling your homeowners insurance with your auto insurance is one of the simplest ways to cut costs. Still, this is where working with a knowledgeable insurance professional can make all the difference – they'll know what discounts are available and help you find the best deal.
What to do instead:
The New Year is an ideal time to reflect, regroup, and prioritize your financial well-being. By avoiding these common insurance mistakes, you'll protect your home and car and ensure peace of mind for whatever comes your way.
Take the time to review your policies, make updates as needed, and work with trusted experts who put your needs first. Don't wait until it's too late—reach out to SimplyIOA today to start the year off right with the proper protection for you and your family. Start by speaking to a SimplyIOA agent at 833.872.4467 or getting a quote online now.