Many small businesses rush to buy insurance policies because they think that doing so is an obligation or that they need the money to pay it. Unfortunately, many of these business owners fall into the traps that some insurance policies create. We have listed three common pitfalls that you will encounter when buying business insurance.
First and foremost, it is normal to think about insurance in order to have protection for many elements of our lives. You need auto insurance to avoid an accident on your way to work, homeowners insurance to shield your property from damage and theft, and life insurance to enable you to support your family financially. Yet, behind these normal needs hide some dark secrets that could mislead non-experienced insurance takers.
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Expensive premiums on your car insurance
Why do insurance companies always ask you to pay a very expensive premium for what they offer? Not every insurer provides the same service, and each insurance company has a very distinct target audience.
It will not be long before your premium amounts start to climb for no reason. It might just be that your insurer does not care about your specific needs. Being loyal to your insurance provider is only effective when you are exactly the type of customer that they want to serve. In the meantime, it is a good idea to shop around for an insurer whose policy matches your needs and your budget.
Other important factors that can affect the price of your auto insurance premiums:
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A sudden change of address, as some locations may be deemed less secure for car owners, and therefore, your insurance will increase premiums.
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Adding your teenager to your insurance policy.
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Cross-state travel or an increase in mileage.
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History of insurance claims or accidents.
Ineffective home insurance cover
When you’re trying to find the right insurance for your home, it’s very important that you know what risks are possible to cause damage to your property. Failure to understand those risks means that you could pay a lot for insurance cover that doesn’t actually protect you when you need it.
These are the most common problems that people report when trying to find the best home insurance policy:
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They don’t understand which DIY work is authorized by the policy and accidentally cause damage that is outside the scope of the policy.
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High-value belongings are not covered by the home insurance.
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They have been forced to delay home improvement works to keep the cost of the home insurance policy low.
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They lack the knowledge that some events, for example natural disasters, require additional purchases to the policy to be properly protected.
Inadequate life insurance
In the event that you die, having a life insurance policy that covers all of the assets you own protects you. For business owners, life insurance coverage is especially important as it will help replace your income and continue to support your family. But you may find it difficult to make the right decision when it comes to buying a policy:
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Not knowing the difference between a whole life policy and a term life policy and how they affect your family.
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Choosing an unnecessarily high amount of coverage on accident, meaning you pay higher premiums for an amount your family may never need.
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If you have standing debts, not altering the policy coverage to reflect that financial situation.
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Postponing purchasing life insurance because it is “only for old people”.
Finding the right insurance coverage is tricky, especially as business owners are likely to need additional coverage to match the value of their home and income and the use of their vehicles. Insurance advisers like those at Engarde Financial Group in Pittsburg can offer you the right advice and help you choose the right policy for your home or business needs.