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Five Mistakes to Avoid when Buying Home & Auto Insurance

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August 15, 2021

Five Mistakes to Avoid when Buying Home & Auto Insurance

Insurance is a tricky business. What kind do you need? What about coverage? What if you aren't covered? There are five costly mistakes that you can avoid when buying home & auto insurance.

Underinsuring Your Home

It's not always enough just to have coverage to pay off your mortgage. You should think about all the costs incurred with a total loss. This can include grading on your property to get ready for a rebuild, or labor and material costs that are added on to the cost of a total rebuild. Also be sure your coverage is sufficient for your personal property inside the home.

Umbrella Insurance

This is one of the costliest mistakes you can make. Umbrella insurance is added as extra liability coverage on top of the liability coverage you already have. It's important for many reasons, but ultimately can protect your family from financial ruin if you are at fault for any event that occurs inside your home or from an accident. This includes pet injuries like a dog bite or medical payments from a car accident where the policy holder is at fault. The cost to add is relatively low for the extra pay off if needed.

Thinking You Have A Flat Deductible

Not every deductible is created equal. Auto insurance carriers can list separate deductibles for glass only claims (cracking your windshield) than they would for an accident. For home, many carriers will list separate deductibles for wind & hail damage.

Having A Deductible That Is Too Low

Having a lower deductible is better in a time of loss but will cost you more money throughout the years in your premium. Get two quotes: one with a higher deductible and one with a lower deductible. Compare the amount you would pay out of pocket in the event of a loss with the amount you are paying in premiums very year. If you can afford a larger deductible it would a smarter money move to pay less over the years.

Not Shopping Your Coverage Every Year

Shop your insurance coverage every year right before your renewals to take advantage of the best rates and make sure your coverage levels are sufficient to cover you in a total loss.

Reach out to us at oXYGen Financial today to shop your current rates, make sure you are covered, and to breathe easier® about life!

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About the author

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Allison Baines

Wealth Plan Design Specialist

Allison Baines, CFP®
Wealth Plan Design Specialist at oXYGen Financial

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

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