The 5 Insurance Mistakes That Could Cost You Thousands

Insurance is meant to protect you from financial disaster, but common mistakes can leave you vulnerable. Here are five costly missteps you should avoid:

1. Underinsuring Your Home or Business
Many people assume their current coverage is enough. But with inflation and rising repair costs, you may be underinsured. Review your policy annually to ensure it reflects current market values.

2. Choosing the Cheapest Policy
Saving money upfront can cost you later. Low-cost policies often come with high deductibles, exclusions, or limited coverage. Always compare the details, not just the price.

3. Skipping Umbrella Insurance
A lawsuit could wipe out your savings. Umbrella insurance provides extra liability protection beyond home and auto policies—an essential safeguard against unexpected legal claims.

4. Forgetting to Update Your Policy
Life changes—marriage, home renovations, or a new business—affect your insurance needs. Inform your provider to ensure you’re properly covered.

5. Assuming You’re Covered for Everything
Standard policies don’t always include flood, earthquake, or cyber liability coverage. Understand your policy’s exclusions and consider additional coverage if needed.

Sources: Insurance Information Institute , National Association of Insurance Commissioners