☰ ˟
Lone Star Insurance Agency
Get More Information Cleburne (817) 641-3676 | Burleson (817) 426-2886
  • Home
  • Business & Commercial
    • Business & CommercialImage of right arrow
      • Bond Quote Online
      • Business Owners Policy (BOP) Quote Online
      • Commercial Auto Quote Online
    • Workers Compensation InsuranceImage of right arrow
      • Workers Compensation Quote Online
    • Contractors Insurance
  • Personal
    • Auto InsuranceImage of right arrow
      • Auto Quote Online
      • Auto Insurance - RESHOP Quote Online
    • Classic Car InsuranceImage of right arrow
      • Classic Car Quote Online
    • Homeowners InsuranceImage of right arrow
      • Homeowners Quote Online
      • Homeowners Insurance - RESHOP Quote Online
      • Homeowner Flood Quote Online
    • Dwelling Fire Quote Online
    • FloodImage of right arrow
      • Flood Quote Online
    • Landlord Insurance
    • LifeImage of right arrow
      • Term Life Quote Online
    • Manufactured Home Quote Online
    • Mobile Home Quote Online
    • MotorcycleImage of right arrow
      • Motorcycle Insurance Quote
    • Recreational VehicleImage of right arrow
      • Recreational Vehicle Insurance Quote
    • RentersImage of right arrow
      • Renters Insurance Quote
    • UmbrellaImage of right arrow
      • Umbrella Policy Quote
    • Watercraft & BoatImage of right arrow
      • Watercraft Insurance Quote
  • Customer Service
    • Client CenterImage of right arrow
      • Client Update Form
      • When To Contact Us
    • Payment Center
    • Claim InformationImage of right arrow
      • File A Claim
    • Companies We Insure With
  • Blog & General Info
    • Blog
    • Helpful Texas Dept Insurance Links
    • Myths About Buying Insurance
    • Industry Pro Tips & Reports
    • Insurance Glossary
    • Privacy Policy
    • Web Site Disclaimer
  • Our Agency
    • About UsImage of right arrow
      • Our Locations
      • Employee Directory
      • Dave Ramsey ELP
      • Nine Reasons To Do Business With Us
      • Love Your Agent Guarantee
      • Captive vs. Independent
      • Agency Comparison
    • Referral Reward ProgramImage of right arrow
      • Refer a Friend
    • TestimonialsImage of right arrow
      • Submit a Testimonial
  • Contact Us
    • Contact Us
    • Our Locations
    • Follow Us on LinkedIn
    • Follow Us on Facebook
    • Follow Us on Instagram
    • Follow Us on Twitter
  • Areas We Serve
    • Insurance - Cleburne, Texas
    • Insurance - Burleson, Texas
    • Insurance - Granbury, Texas
    • Insurance - Glen Rose, Texas
Logo
Insuring your Future today
Cleburne (817) 641-3676 | Burleson (817) 426-2886
Business Auto Classic Car Homeowners Life
Home > Blog > Execellent article...12 terrible pieces of insurance advice
MONDAY, AUGUST 26, 2013

Execellent article...12 terrible pieces of insurance advice

It's rare that I read an article in our industry that offers some decent advise and that's not the same old information that's been given over and over.  So kudos to the recent article that was on MSN's website.  We've copied and pasted it here but we always give credit.  Enjoy-


12 terrible pieces of insurance advice

When you have an insurance claim, the last thing you want to discover is that you didn't buy the right coverage. While it's easy to point the finger at agents, coverage gaps could be a two-way street.

Sometimes friends and family members offer bad advice, including tenuous, illogical and even illegal strategies, hoping to save you a few bucks. But the eventual losses can be huge.

"When people shop for insurance, a lot of times they're looking for the best deal," says Ron Reitz, an independent insurance adjuster and president of Quality Claims Management in San Diego.

We asked some insurance veterans about the bad advice they've heard over the years. Here's what makes them cringe.

   

No. 1: Lock up all insurance policies and other important documents in a safe deposit box

Do not keep your life insurance policy in a safe deposit box. If yours is the only name on the safe deposit box, no one but the executor of your will can get into it without Power of Attorney. If your life insurance policy is locked in there, your beneficiaries will have to wait until the estate is opened by a government entity and an executor is appointed.

If you want the assurance of having important documents locked up, buy a fire-safe box.

"Just make sure documents aren't stored in a place where they can be lost in a flood or fire," says Reitz. With today's technology, there's no excuse not to scan everything and create electronic copies of important papers that can be put on disks or in other storage devices.

No. 2: You don't need flood, earthquake or other disaster insurance

If an earthquake destroys your home, you won't recover a penny unless you have an earthquake insurance policy. The same rule applies to floods.

Decisions about flood insurance should be based on your proximity to a body of water that could overflow, not whether the area flooded before. On the plus side, if you're in a low-risk area, your policy will cost less while still providing the maximum protection.

"Floods occur in all 50 states, and in many cases flood damage happens in areas that aren't high-risk flood zones," explains Peter Moraga, spokesperson for the Insurance Information Network of California.

No. 3: Renter's insurance is a waste of money

Many renters mistakenly assume that their belongings are covered under the landlord's policy. Not the case! If some calamity were to occur, such as a fire, your landlord's insurance won't cover the contents in your apartment, nor will it pay for you to live in a temporary space while your place is uninhabitable, says Amy Bach, executive director of United Policyholders.If someone is injured while visiting you and sues you, your landlord's insurance won't cover that either.

No. 4: Get the best rate even if you have to lie a little

It might be tempting to fudge the truth on a life insurance application, especially if you have a serious health condition. "Don't do it," advises Steven Modell, president of Modell Brokerage Group in Wayne, Pa. "Not only is it insurance fraud and a felony in most states, but it could prevent your beneficiaries from receiving the death benefit."

No. 5: Base your home insurance policy on the real estate value of your home

Experts recommend setting the structural limit of a home insurance policy on what it would cost to rebuild the home if it were destroyed, not the real estate value. Trouble is, the rebuilding cost is a subjective number.

"Many agents use online tools to estimate the rebuild value, but those tools can be misleading," says Moraga. "It's more important to talk to a contractor and find out what the local costs are for your home's particular type of construction, whether it's in a tract home or custom construction."

No. 6: Set your dwelling limit low

Some insurance agents try to give customers the lowest premium possible in order to close the sale.

"One of the ways they're doing it is by underestimating the value of the dwelling and slapping a 100 percent extended coverage endorsement on the policy," explains Bach. "Most policies have four separate categories of coverage: 1) Dwelling. 2) Contents. 3) Other structures. 4) Additional living expenses. Three of the four pay a percentage of the dwelling, so if you lowball the dwelling value because you have 100 percent extended coverage endorsement, you'll be underinsured for your contents, other structures and additional living expenses."

No. 7: Purchase the state minimum coverage for auto insurance

Many drivers buy the minimum coverage their state law requires for auto insurance.

"In California that minimum was set in 1967," says Moraga. "A lot has changed since then. So when you look at your auto policy, understand that if you're only getting what's mandated by law, you may be woefully unable to pay any kind of a claim."

The limit on liability for property damage in California is $5,000. That can be exhausted quickly, even with just a fender bender.

 For medical expenses, the limit per accident is $30,000. "If your policy has a $30,000 limit and the medical expenses of the person you hit is $100,000, you're on the hook for that $70,000," says Moraga.

No. 8: Ignore uninsured motorists coverage

Protection against underinsured and uninsured motorists is an important add-on policy for anyone who spends a lot of time on congested roads.

"If you drive frequently in a city where there's a lot of traffic, your odds of having an accident with someone who isn't covered rise," observes Moraga. The added protection can be invaluable.

No. 9: List your vacation home as your primary address on your auto insurance

The ZIP code of your vacation home might qualify you for better car insurance rates than your primary address. But don't lie about the principal place where your car is garaged.

"If you have a loss and your insurer finds out, they may delay your claim settlement or take other adverse action," says Bach. "Most people don't grasp the concept that insurers want to know about the risks they're undertaking, and if you mislead them there can be serious consequences."

No. 10: Drain your retirement accounts to fund a life insurance policy

You should never stop contributing to your 401k because an agent tells you to put that money into a life insurance policy.

"Funding a tax savings retirement account should come before you buy anything except term life insurance, which is quite competitive (in pricing)," says James H. Hunt of evaluatelifeinsurance.org. "Buy enough life insurance to protect your family, but fund all retirement accounts that save on taxes first."

No. 11: It's no problem to take cash out of a permanent life insurance policy

"Agents often mislead people about cash value policies, saying you can borrow on it later to fund a college tuition or retirement," says Modell, "But if you take the cash out, you won't have the insurance."  Withdrawals from cash value reduce the coverage amount.

Also, unless you're young and you're putting a lot of money in an insurance policy, it's not going to develop enough cash for you to take money out and still have adequate coverage.

"You have to be 100% sure you're happy with the policy indefinitely," Hunt warns.

No. 12: Term life insurance policies are always the best choice

"Most people die without insurance," notes Modell. "If you're in your 50s or 60s and you want a burial policy, don't buy term insurance. That's not the purpose of term insurance." If, on the other hand, you have young kids and a mortgage on your house, buying term insurance makes sense.

If you've purchased term insurance and now wish you had a permanent policy, you can usually convert some or all of it to a permanent policy.

Posted 11:59 AM

Tags: burleson texas insurance,
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
  • 2010

  • lone star insurance agency(38)
  • burleson insurance(21)
  • cleburne insurance(17)
  • insurance burleson(16)
  • texas insurance(13)
  • insurance agency burleson(12)
  • insurance fort worth(12)
  • joshua insurance(12)
  • joshua homeowners(12)
  • homeowners burleson(12)
  • top rated insurance dfw(12)
  • burleson tx insurance(11)
  • insurance(11)
  • lone star insurance(11)
  • best insurance agency(11)
  • best insurance fort worth(10)
  • johnson county insurance(10)
  • auto burleson(10)
  • joshua auto(10)
  • godley insurance(10)
  • auto insurance(10)
  • cleburne homeowners(10)
  • burleson texas insurance(9)
  • health benefits(8)
  • james brown insurance(8)
  • blood donor(8)
  • godley auto(8)
  • godley homeowners(8)
  • blood drive burleson(8)
  • home insurance(8)
  • cleburne auto(8)
  • johnson county homeowners(8)
  • burleson auto insurance(7)
  • coverage(7)
  • auto insurance burleson(7)
  • home insurance burleson(6)
  • insurance burleson texas(5)
  • james brown insurance agent(5)
  • independent insurance agent burleson texas(5)
  • glen rose homeowners(4)
  • auto insurance burleson texas(4)
  • texas auto insurance(4)
  • lone star insurance agency burleson tx(4)
  • james brown insurance texas(4)
  • johnson county(4)
  • claims(4)
  • granbury insurance(4)
  • burleson(3)
  • insurance burleson tx(3)
  • liability(3)

View Mobile Version

Connect with us

Social Social Social Social Social
google review

Burleson Location

240 NW Newton Drive
Burleson, TX 76028

Phone: (817) 426-2886
Fax: (817) 426-2887
google review

Cleburne Location

1200 W. Henderson Street Suite A
Cleburne, TX 76033

Phone: (817) 641-3676
Fax: (817) 426-2887

Fill out the form below to get started with an insurance quote

© Copyright. All rights reserved.
Powered by Insurance Website Builder