Insurance Potholes – Where Are the Gaps In Your Coverage?

by Ron Haynes

An Insurance Pothole?

An Insurance Pothole?

Potholes. The nemesis of drivers everywhere. They appear when you least expect them and they can do some real damage to your tires, your wheels, and even the frame of your vehicle. Potholes need to be filled quickly, before they get larger and damage more vehicles.

Insurance potholes act in the same way. They pop up when you least expect them and certainly when you don’t need them. When they rear their ugly heads they can do some real damage to your assets – especially your cash assets. Insurance potholes need to be filled too. And just like potholes in the road, it’s easy to put off fixing them. But procrastination with insurance potholes is a REALLY bad idea.

One of the biggest insurance potholes is a “gap” in coverage.

What is a “gap” in coverage? Other than a time gap, where you allow a non-payment of insurance premiums to cause your policy to lapse or go dormant, a gap in coverage occurs when what you want to insure is valued at more than the insurance you’ve purchased.

Car Insurance.

State law minimum requirements for car insurance vary from state to state but usually they’re very, very low. Many states only require you to purchase as little as $10,000 in property damage coverage per accident. So, if you have a car accident and it is deemed to be your fault, make sure the other vehicle isn’t worth more than $10,000. That means don’t hit an car less than one or two years old, no upscale European or Japanese models, no Cadillacs, Lincolns, or Corvettes. Think you can pull that off? If you have any doubts, you have a gap in coverage.

Life Insurance.

Far too many people believe that the younger crowd doesn’t need any life insurance but I disagree. Even if you don’t have dependents, the chances are very good you’ll have some final expenses associated with your untimely death .. should it occur. Do you really want your mother or father or other family members to have to face telling the hospital or your creditors that there isn’t enough money to pay them off? Do you really want your parents or family to have to shoulder the entire bill associated with your funeral? I know I didn’t. That’s why I bought a minimal policy, even before I had children, just so my wife wouldn’t face that ordeal.

Homeowner’s Insurance.

Wait a minute! Isn’t your home insured for it’s replacement value? Where could there be a gap in that insurance? My answer: how much is your jewelry insured for? How ‘bout your electronics? What about any antiques, guns, furs, or other of those items typically capped at a ridiculously low amount on homeowners insurance policies? If you have those items included in your homeowners insurance policy as an additional rider, you don’t have that gap in coverage.

Has your home increased in value since you bought your policy? If it has, you may be underinsured. If your home has actually decreased in value, you may be over insured and need to decrease it.

Click HERE to get started evaluating the gaps in your insurance coverage with InsureMe.com

Renter’s Insurance.

You rent your apartment or house? You need renter’s insurance. Without it, if anything happens to the dwelling and you lose your personal belongings, you’re out of luck. Renter’s insurance is cheap.

Medical Insurance.

I know the Federal government is supposed to swoop down sometime in the near future and save us from the evil health care industry, but personally, I’m not holding my breath. Your gap in coverage with your health insurance may come in the form of a higher than standard deductible ($2,000 per person and up). If it is, a supplemental health insurance plan can close that gap and provide you with the necessary coverage so you’re not left holding a bill that’s much larger than you realized.

What do you do if you find a gap in coverage?

I’d recommend checking out InsureMe. When you fill out their simple form, you can get quotes from insurance agents without the hassle. InsureMe’s research shows that consumers save 20-40% by receiving multiple quotes and over 60% of consumers would recommend InsureMe to a friend!

Even if you don’t want to try InsureMe, give your regular insurance agent a call and schedule a time you can both examine your gaps in coverage and make sure they’re filled as soon as possible.

Photo by Heneghan

About the author

Ron Haynes has written 1000 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


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{ 3 comments }

Health Insurance Providers

Another important gap in medical insurance coverage to be aware of is many people roll the dice when they leave their job or when their COBRA coverage expires by going without coverage at all. Many think that just a few months of being uninsured will not harm them at all as long as they manage to not develop a major illness (risky in and of itself though anyway) but what most do not realize is that any gap in continuous health insurance coverage can affect ones eligibility for having all pre existing conditions covered when the next health plan is applied for. The best advice is to always do the responsible thing and get and keep continuous health insurance coverage.

Cmr

What about supplemental disability coverage? Most think they are all covered through work but don’t realize their employer paid benefit is taxable, won’t typically cover bonuses or commissions, and is written on a contact that leaves much to be desired. before our housing crisis, this was the number one cause of home foreclosure and you are 3-4 tines more likely to miss work sure an extended period of time than you are to die prematurely.

Ron

Excellent addition. Yes, there is definitely a big gap there if you don’t have supplementary disability coverage.

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