River Valley Insurance Agency Inc Blog
I've been thinking about the truth lately. For some reason people lie to me a lot. They may not do so intentially or becuase they dont like me....I am an insurance agent.
"I don't need to tell my agent that I have a 16 year old driver, my rates will go up" This is probably the most common lie, or ommission, that I encounter. Yes, your rates will go up but let me tell you why you must disclosure this driver (or any driver of your auto). Our auto product is the state of Michigan is based on a multitude of factors. The most basic being the type of car you drive, your age and your driving record. Each of these factors are plugged into a formula to give you a rate. But when those factors are missing, that rate is not accurate. That rate cannot support the claims we encounter. That rate is just numbers. So what happens with a claim? If that driver is not disclosed your claim can be denied. No, this isn't a scare tactic, I've seen it happen. Claims are denied for "ommissions" every day. Do you want to pay that rate to NOT get coverage?
What about on your home? The same ommissions can happen here too. The most common I see is that the home is not insured for the actual use. In other words; you have a homeowners policy when in actuallity you rent it out. That needs to have a different policy. You are literally throwing your money away.
So I urge you; talk to a professional about your exposures. Even if that may cost you more money. We pay for insurance to have coverage, right? So why jeopardize that with an "ommission".
In this crazy, upside-down real estate market most home buyers are confused in regards to the amount of insurance coverage they need on their homes. Most people are in disbelief when they learn that they need $225,000 of insurance on a home that they just purchased for $150,000. This is a discussion I have with clients several times a week. The fact of the matter is, the way the current housing market sits today, it costs more to build a new home then it does to buy an existing one.
I’d like to start by clearing up some common misconceptions: First, even though home prices have fallen, the price of building materials have either stayed the same or increased. Second, many contractors have left the construction field altogether so a surplus of contractors ready to work at discounted prices is simply not the case. In addition, reconstruction becomes more expensive due the following:
Even though you may be frustrated that you need more insurance then the market value of your home, please make sure that your home is insured properly. An insurance professional should be able to guide you into finding a product that has the proper protection and you might be pleasantly surprised with an affordable rate.