If you’re a homeowner or have a vehicle, chances are you carry at least a few types of insurance. Most Americans carry auto, property, and health insurance, but while many carry them, few people take the time to actually read through their policies. And without reading them, it’s tough to know what is (and isn’t) covered, what limitations are in place, and what a policy holder is required to do to maintain coverage. Locating those coverage gaps in insurance is crucial to making sure you’re adequately covered in the event of an accident or loss.
What Is A Coverage Gap?
Simply put, a coverage gap is the amount of coverage a person has and the actual cost to repair or replace the damage in the event of a loss. For instance, let’s say you have your home insured for $150,000. But something catastrophic happens, and the home is a total loss. It winds up costing $180,000 to rebuild the home. Insurance will only cover the limits of the policy which would leave the owner with a $30,000 bill.
Another common insurance coverage gap often arises with car insurance. Most auto insurance policies are written for an Actual Cash Value (ACV) basis, and vehicle value drops dramatically as time goes on. If a vehicle is purchased new, and you used financing to buy your vehicle, you most likely purchased full coverage insurance. Now, let’s say you still owe $15,000 on your vehicle at the time of an accident, but the ACV determined by your insurance company is only $8,000. That leaves you a $7,000 gap that your financing institution will require you to pay before closing out the loan. This can be a costly financial burden, especially if it’s coupled with hospital bills, a rental vehicle, and/or insurance deductibles. That’s why it’s so important to work together with your insurance agency to make sure you’ve got the right policies in place.
How Can I Prevent Or Reduce Insurance Coverage Gaps?
The BEST way to prevent insurance gaps is to work with an insurance agent you trust. While it may be tempting to go directly to an insurance company for coverage, the company most likely won’t be prompting you to update coverage as things change within your home or vehicle.
What Will An Insurance Agent Do For Me?
A trusted insurance agent will be there to discuss the right policies with you and will keep you informed about changes to your policies – especially if those changes or exclusions put you in danger of having gaps in your insurance.
Additionally, an insurance agent will be there to explain the technical terms of your policies. Having an experienced agent to work with will help you through the often complex process of making sure you would be covered in the event of an accident or loss.
How Will La Porte Insurance Agency Help Me?
At La Porte Insurance Agency, we have more than 50 years of experience and 1,300+ satisfied customers. Our five professional agents are here to help you identify and cover your assets for all your insurance needs. We want to make sure you have the best coverage to keep you and your family protected. Reach out to us at (219) 324-2600 today to discuss what options are available for you!