Nashville insurance insight: the most common insurance mistakes
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I do a lot of different things, as an independent Nashville insurance agent. I give advice. I research coverage options. And often enough, I fix insurance mistakes.
There are some I can’t fix — like not having the coverage you need and trying to address it after you need to make a claim. On the front end, though, if we sit down and go over your total picture, I can point out the places where you’re paying too much for insurance, or you’re under-covered, or putting yourself at unnecessary risk to save a few bucks.
I breathe insurance day in and day out, so whipping your insurance situation into shape is both a job and a joy for me. I legitimately love helping clients find better coverage at better prices.
If you’d like to sit down and chat about your insurance needs, reach out and let me know. In the meantime, if you’re curious about whether your insurance coverage has some hidden mishaps, here are a few of the most common insurance mistakes I see people make. They might give you perspective on where your car insurance, home insurance, renters insurance, life insurance, etc. needs attention.
common insurance mistakes
Getting only the legal minimum auto coverage
I just wrote a whole post on why Tennessee’s legal car insurance minimum is almost never enough, so this is fresh on my mind. Reading that post will give you a more detailed picture, but the basic gist here: The legal minimums are low, and you’re making a gamble with your financial well-being by stopping there. For perspective: Tennessee requires a minimum of $25,000 injury liability per person, $50,000 per accident. Industry recommendations are more like $100,000/$300,000. That’s a pretty good gap. If you have assets that you’d categorize above “minimal,” let’s talk about a more fitting car insurance policy.
Over-insuring your home
I know, seems like whiplash from the first one. But with a home, there’s market value, and there’s replacement value. Market value includes the land, which in a place like Nashville is a noteworthy portion of the whole. For home insurance purposes, you want to be covered for replacement value — what it’d cost to rebuild your home if the worst happened. Market value just isn’t necessary; the land value is still there, even if something catastrophic happens to the home.
Knee-jerking toward low deductibles
I have a lot of feelings about when to/when not to make an insurance claim, to land at the best dollar figures, long-term. Happy to chat about that with you over coffee any time. Low deductibles fit in those feelings.
For a lot of us, the knee-jerk deductible thing is to aim for the lowest, figuring it’ll save us out-of-pocket cash if something happens. That’s true and not true. You’re paying more (sometimes a lot more) for that low deductible, which adds up. And that low deductible often encourages us to make claims for small incidents. Doing that repeatedly can lead to higher premiums down the line.
Quick figures from the Insurance Information Institute: Going from a $500 deductible to $1,000 could drop your monthly home insurance payments as much as 25 percent. Pushing your car insurance deductible from $200 to $1,000 could knock the premiums down as much as 40 percent. If you save that money monthly, and save your claims for major incidents when it really makes sense, you tend to make out better in the long run.
Not knowing about discounts you qualify for, or not asking for them
Insurance companies have all kinds of discounts available for different policies and different circumstances. Add a home security system? Discount. Start carpooling to work? Discount. The trick is: knowing about all of the little (or not so little) benefits that apply to you, and asking to have them applied.
This feeds into why I recommend working with an independent insurance agent (even if it’s not me), and assessing your insurance picture regularly. I ask a lot of questions when I’m hunting for a policy for clients, and this is part of the reason — I want to make sure you’re getting the best policy for you, at the best price possible. Knowing all the available discounts helps. And when things change in your life/home, we want to make sure your insurance keeps pace, whether that means adjusting your coverage or grabbing some new discounts.
Not getting renters insurance
I wrote a whole post on the importance of renters insurance too. And I really mean it, not just as insurance-agent me, but Nashville-neighbor me. Renters insurance offers valuable protection and tends to be really affordable. It’ll cover your stuff if there’s a fire in your apartment; it’ll protect you if someone is hurt on your property and files a lawsuit. It’s smart, and worth it. You might be surprised by how little it costs. Call me, and I can run some numbers by you, or grab an online insurance quote here.
Not seeking life insurance that’s fine-tuned specifically for you
Another reason why I recommend working with an independent insurance agent. Going the DIY route, a lot of folks research what the average life insurance recommendation is — usually 10-12 times your annual income — and throw that in the cart. But your life isn’t a simple average.
A bunch of different factors feed into what’s a sensible life insurance picture. Do you have kids? A spouse? Is he or she working? The key here is less what the average recommendation looks like, but more what your family would need to remain stable. An agent like me will go through your whole picture, and recommend a logical life insurance policy from there.
Putting off getting life insurance
It’s natural to hold off on looking into life insurance until it feels irresponsible not to. It’s why I often meet with clients after they’ve gotten married, or had kids, or bought a home.
Thing is, though, when you’re in your 20s, life insurance can be remarkably cheap. Fast-forward 15 years: sometimes significantly less so.
If you’re just moving into adulthood, I can’t recommend this enough: Look into life insurance. I can probably find a great policy for the equivalent of three Americanos a month. And in a few years when life’s more complicated and life insurance is more expensive, you’ll be glad you took that advice.
Not telling people about your life insurance policy
You’d be surprised how many people need to be reminded of this. But if you don’t make your beneficiary (or the professionals who might be handling your estate) aware of your policy, they won’t know or have the information needed to make a claim. Which kinda defeats the purpose of having it.
Getting insurance, then ignoring it forever
You can be leaving money on the table if you don’t shift your insurance picture as things in your life shift. You can also be leaving yourself vulnerable.
Life and home changes feed into insurance changes. Take on a big renovation project? Your home insurance should reflect that. Kids move out of state? That can change your car insurance picture. Sometimes other carriers simply start offering a better deal that might fit you, and you wouldn’t know about it if you didn’t look.
Some folks in the insurance industry recommend an annual let’s-assess-my-coverage checkup. That works. I’m also happy to chat anytime something noteworthy changes, from wedding bells to a new job, to see if we should adjust your plan or if there’s a chance to adjust your premiums.
Hope these points gave you a few things to think about. If I can help with more information about anything insurance-related, reach out. I’d be happy to chat, and/or go over some policy possibilities.
If you’d like to get a quick and easy look at some Nashville insurance options, get an online quote here.
And if there are other insurance topics you’d like to see tackled on our blog, let me know too. I’m always eager for feedback.