7 Insurance Moves That Won’t Leave You High and Dry, According to Brokers
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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Insurance is often one of those bills people think about only when premiums rise or a loss makes it necessary to review. Not updating a policy can cost you vastly more money than just paying a slightly higher premium, be that car insurance, home insurance or life insurance, to name a few.
Rather than waiting to find out what coverage you have, brokers and other insurance experts offered some moves you should make as soon as possible.
1. Revisit Coverage Limits Before a Loss Forces the Issue
A common mistake is not updating insurance coverage when life changes — things like adding drivers to a car, remote work, marriage or having more children — or even when your asset values change (such as a home renovation), according to Katie Scheuer, a principal and Great Plains division leader at World Insurance Associates. “This can lead to inadequate dwelling limits, outdated personal property values or insufficient liability coverage when a claim occurs,” she said.
Unfortunately, “It is frequently only in the wake of a traumatic accident or loss that this comes to seem apparent,” said Joe Zdrilich, the lead attorney at Zdrilich Injury Law.
2. Add Endorsements That Actually Protect You
While everyone wants to find the most affordable insurance possibly, thus skipping add-ons, this can backfire when you really need specific coverage. Zdrilich pointed out that “some of the add-ons just are always worth paying for.”
Some of these, according to Scheuer, include:
- Replacement cost coverage for personal property (instead of actual cash value)
- Extended or guaranteed replacement cost on homeowners’ policies
- Water backup/sump pump coverage
- Scheduled personal property for jewelry, collectibles or high-value items
- Umbrella liability coverage for households with assets or teenage drivers
- Rental car coverage and gap coverage for newer auto loans or leases
What you should not accept, according to Michael Silverman, president and CEO of Silver Lining Insurance Agency, is “actual cash value or depreciated value.” Always opt for that replacement cost coverage.
3. Don’t Assume You’re Covered, Verify
One of the most expensive insurance mistakes is assuming coverage exists without confirming it. Brokers say many gaps only become obvious after a claim is denied. Zdrilich pointed out that many people “falsely believe” they’re covered for a gamut of things from water damage to home business activities. “Most of those assumptions end up being wrong absent explicit endorsements,” he said.
Another area of coverage people wrongly assume is covered is flood insurance. While standard policies might cover burst pipes or other leaks originating in the home, Silverman said that most policies exclude flood insurance unless it has an endorsement to add it.
According to Matt Brannon, data analyst at Insurify, up to 56% of homeowners “were not aware that policies tend to exclude these perils.”
4. Review Policies Regularly
Waiting until premiums spike or a claim happens is often too late. Silverman suggested that a policy review should be done at minimum, annually. Beyond that, changes in exposures, purchases, updates or other life changes are often times that trigger a general review.
5. Use Deductibles Strategically
Raising deductibles can lower premiums, however, Zdilich warned that they can harm consumers who cannot easily afford to pay them when a claim arises. “I see many good claims delayed or lost because the deductible was miscalculated,” he said.
Silverman echoed his concern, adding, “As long as a consumer is aware of the higher deductible (come claim time), the benefits often outweigh any negatives.”
At the end of the day, what a high deductible does is shift more financial responsibility to the policyholder, Scheuer noted.
6. Control Costs Without Cutting Protection
If your first instinct to save money on insurance is to reduce coverage, these experts warned to stop and think first. Instead, they recommended doing the following:
- Zdrilich advised “securing the proper limits and then adding endorsements instead of reducing coverage.”
- Silverman said, “Raise deductibles to maintain the same level of coverage and keep costs under control.”
- Scheuer suggested, “Increase liability protection while adjusting deductibles thoughtfully. Raising deductibles modestly and adding an umbrella policy often reduces overall risk exposure while keeping premiums manageable — without cutting essential coverage.”
7. If You Haven’t Looked in Years, Assume It’s Outdated
All the experts say one of the most important insurance moves is reviewing your policy with the understanding that it’s likely outdated and being willing to make some changes. If not, Zdrilich pointed out, it’s likely that loss will force the issue.
It’s simple to make an appointment with a professional insurance representative, Silverman urged. Don’t wait until it’s too late. Don’t miss a chance to save money not only in your monthly payments but through thorough coverage.
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