You might think that you have enough insurance protection. After all, you have car insurance, home insurance, life insurance, health insurance and disability insurance. What else could you possibly need?
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Here is a troubling truth: Even if you have subscribed all the necessary insurance policies to protect yourself and your family, you still run the risk of facing gaps in coverage. Review your policies regularly. And when you do, watch for these potential gaps in your coverage.
1. Life insurance
Many employers offer their workers group life insurance as a significant financial benefit. The US Council of Life Underwriters said that at the end of 2015, group life insurance accounted for 44% of all life insurance contracts issued in the United States.
Employees like this insurance because it is generally inexpensive. However, there are some drawbacks: most group life insurance policies end if you leave your employer and the next company you work for may not offer this protection. Second, payments for group life insurance policies tend to be less important than those for an individual life insurance policy that you would buy yourself. Usually, the death benefit of a group life insurance policy is one or two times your annual salary. It is a nice sum of money, but it is certainly not enough to support your family in the long run if you die unexpectedly.
<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "That's why you need to use a strategy of group as a supplement, not a replacement, for an individual life insurance policy Yes, an individual policy will cost more, but you will also receive a much larger death benefit (see also on WiseBread.com: Why your group life insurance is not enough) "data-reactid =" 28 "> That's why you should use a group font as a supplement and not to replace an individual life insurance policy Yes, an individual policy will cost more, but you will also receive a larger death benefit (see also on WiseBread.com: Why your group life insurance is not enough)
2. dog bites
According to the Insurance Information Institute, dog bites and other dog-related injuries accounted for more than one-third of all homeowners' insurance liability funds paid in 2016. This equated to 18,123 requests for insurance. compensation, the average cost of each claim rising to $ 33,230.
The problem with dog bites is that many insurance providers do not want to insure owners with certain breeds considered "dangerous". Insurance companies vary, but many do not insure pit bulls, rottweilers, German shepherds or Doberman pinschers. If you have a dog, ask your insurance company to make sure it is covered. Paying a dog bite without the help of your insurer can prove to be expensive.
3. Shipping costs
Your automobile insurance policy will cover the damage to your vehicle as a result of an accident as part of its collision coverage. But what if you have to rent a car to get around when your vehicle is in the store? It can be expensive.
Unfortunately, most auto insurance policies do not provide for what so-called transportation cost coverage. And when the policies allow, the amount they will give you to rent a car – often as little as $ 20 a day – may not be enough to cover the entire cost.
Check your policy to determine if it will cover a rental car. If that's the case, make sure you know exactly how much you will receive. If you are not satisfied, it may be time to pay to improve this coverage.
4. Additional liability
What if a neighbor drowns while swimming in your pool? Will your home insurance provide sufficient coverage if your neighbor's family files a costly lawsuit against you?
Probably not – and this is where an umbrella insurance policy comes in. An umbrella insurance policy offers additional liability coverage beyond the limits of the coverage provided by your car insurance or home insurance. Maybe your home insurance policy offers liability coverage of up to $ 500,000. If someone sues you for a million dollars, then you may have to pay $ 500,000 more.
An umbrella policy can protect you from this. It comes into action when a lawsuit against you cancels the amount of liability coverage you have. In the example above, your umbrella insurance policy would cover the extra $ 500,000 that the policy for homeowners would not cover. An umbrella insurance policy can offer you the same kind of extra protection if you cause a serious car accident.
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The umbrella insurance is not too expensive. According to the Insurance Information Institute, consumers typically pay between $ 150 and $ 300 a year for protection of $ 1 million. This investment could help you avoid a financial disaster.
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5. Not enough disability coverage
You may think that you have taken the necessary steps to protect yourself and your family by taking out a disability policy. If you are injured or get sick and can not work, this policy will come into effect to allow you and your family to receive regular payments.
Here is the challenge: most group disability insurance plans pay only 60% of the insured person's base salary. And employees who rely on bonuses and overtime will not receive any compensation for these extras.
Receiving 60% of your salary even if you do not work can seem like a good deal. But it can be difficult to live with only a portion of your regular income. Could you afford to cover all your monthly expenses if 40% of your income suddenly disappears, especially if you have medical deductibles and other expenses to cover?
Otherwise, consider investing in additional disability insurance. Of course, you will have to pay for it, but this extra coverage could protect you if you have a medical problem that prevents you from working.
6. Damage caused by wind or hurricanes
A report published in 2016 by Travelers Insurance revealed that the strong wind storms were responsible for the largest number of home insurance claims from 2009 to 2015.
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In this case, you'd better make sure that your home insurance policy provides adequate coverage against wind damage.
According to the Insurance Information Institute, many insurers, particularly those grouped along the Atlantic coast and the Gulf of Mexico, provide separate deductibles for hurricane and wind damage, except for incidents such as fires or lightning. These can be expensive. Your standard deductible for most home damage can be $ 500, which means you'll need to cover the first $ 500 worth of repairs before your home insurance takes effect. However, an additional deductible for damage caused by wind or hurricanes can percentage of the insured value of your home.
Assume that the insured value of your home is $ 300,000 and that your insurer's deductible against the wind or hurricane is 5%. This means that you would have to cover yourself $ 15,000 in damages before your insurance cover comes into play.
If you live in an area exposed to storms, check your coverage. If the deductible for damage caused by wind or hurricanes is too high, it's time to shop for a new policy.
If a heavy rainstorm causes your basement to flood, a standard home insurance policy does not cover the damage caused by the water.
If you want to protect yourself from flooding, you will have to take out a separate form of protection called flood insurance. You can usually subscribe to one of two fonts: one that covers your home up to $ 250,000 and the other that covers your personal property up to $ 100,000.
The flood insurance only covers water damage resulting from a flood. It will not provide coverage if your water heater bursts and floods your basement or if water runs out of your toilet.
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What if a fire destroyed your home? Yes, your home insurance policy will help you rebuild. But do not expect him to pay the full cost.
Most insurance policies limit the amount of coverage to be paid. They also take depreciation into account when determining the value of the property destroyed during the fire. You could receive a payment much smaller than what you expect when you rebuild your home.
Call your insurer to make sure you get enough coverage if a fire destroys your house. If this coverage is not enough, you may have to pay extra protection.
According to the Bureau of Insurance Services, the average loss in a home burglary is $ 3,786. Your landlord's policy can help you recover some of the costs of your stolen personal property, but do not assume it will pay you back. Often the payment is very short.
In order to reduce premiums, homeowners' policies limit certain valuables, such as jewelry, electronic devices or works of art. Even cash often has a lousy limit of $ 200. Suppose your property policy sets a threshold of $ 1,000 for jewelery and that your $ 3,000 diamond ring is stolen, along with several other expensive necklaces. You would be out thousands of dollars. The payment would not be close to the value of what was stolen.
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If you have valuables in your home, you may want to consider subscribing to an additional (or "floating") policy that will cover the objects beyond what the homeowners will offer. Some suppliers offer special riders for unique items, such as jewelery or photographic equipment.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This article comes from Dan Rafter of Good bread, an award-winning personal finance and credit card comparison website. "data-reactid =" 72 "> This article is an excerpt from Dan Rafter of Good bread, an award-winning personal finance and credit card comparison website.
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