No one wants to pay high insurance premiums so many people choose the least expensive premium or don’t buy insurance at all. They hope they won’t need to submit a claim and they often think that “it will never happen to them.”
Unfortunately, when you leave your future in the hands of Lady Luck, you leave yourself wide open to many problems. These problems also manifest at a time when you need help the most. Let’s take a look at a few problems that can be caused by having inadequate insurance coverage.
Proper insurance protects you from the crushing expenses associated with loss, liability, and injuries. If you do not insure your home or car properly, you’re risking the value of the asset and costs associated with injuries to others. These quickly amount to thousands of dollars and jeopardize other assets too. A personal injury accident could include a lawsuit, legal, medical, and rehabilitation bills and a catastrophic loss of your home could mean you lose everything.
Left Short Due to Minimal Coverage
Buying the least expensive policy isn’t in your best interests unless it provides proper coverage.
For instance, if you buy the minimum amount of car insurance legally allowed by the state, it likely won’t protect you if you total someone else’s new car. It only covers up to $25,000 for damage to another person’s property. Since most new cars cost well above that, the other driver or their insurance company could sue you for the remaining amount.
Many people underestimate their home insurance needs, too. There’s no point in having a policy unless it provides you with the security you need.
Face Unforeseen Risks
If you do not discuss your insurance needs with a professional, you may not be protecting yourself from all risks. Insurance policies use complex language and include many clauses to address various situations. You may think you’re covered for a particular risk, but when you need to file you might find otherwise.
Discovering you lack coverage after the fact can cost you dearly.
Poor or No Professional Advice
It’s simple to buy an insurance policy online, but does that business truly have your best interests at heart? Making a sale is the easy part, but choosing the correct coverage and providing service when you need it takes expertise that only a local independent agent can provide.
Every person who needs insurance is unique. You may be a self-employed person, run a business, have teenagers ready to start driving, or be on an extremely tight budget. Your local independent insurance agent will take the time to get to know you to discover what you need. They can bundle policies and discover applicable discounts.
Impacts Your Future
Having inadequate insurance coverage doesn’t just cause problems now – it can also impact your future. If you’re sued because you’re not covered properly you could lose your savings, investments, and a sizable chunk of your wages until you satisfy your debt. You could jeopardize your financial security for years to come.