What do I need to look for in Auto and Homeowner Insurance?

Some critical factors are often overlooked. First, liability limits. Everyone wants their insurance cheaper and as a result, it’s easy to get focused on price rather than coverage. You should always have liability coverage that exceeds your assets. If you are young, you need to factor in future earnings as an asset. Many times I have talked to people who had a net worth of $500,000 or a million dollars only to find liability limits of $100,000 or $300,000. They are risking loosing everything they have accumulated over a few dollars in premium. Most people should own an “umbrella policy”. An umbrella policy takes your liability limits to a much higher point for a reasonable price. I have had one for years.

Second, be cautious when an insurance company bypasses an agent to deal directly with you. I have seen body shops having to wait weeks for a response. In the meantime, you are paying for a rental car as well as storage fees for your wrecked car.

Third, Make sure your Homeowners insurance has a guaranteed replacement endorsement for both contents and dwelling.

Fourth, if you do any remodeling, make sure you update your Homeowners policy. There is a fine print rule that can cause you to have to pay 20% of the repairs if you are not up to date in your coverage’s. This is not theory, I have seen it happen.

Lastly, most insurance companies hate houses that have wiring and plumbing that are more than 30 years old. They also hate post and pier foundations. In most cases, you will pay more for your insurance if you have one of these homes.

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