Insurance is a valuable product to have and, in some cases, you might not be able to get enough for the actual potential expenses and risks you face. For instance, personal property and bodily injury liability limits in auto insurance policies might not be high enough to make you feel comfortable that your risk is adequately covered, and that may prompt you to look at an umbrella policy. But there are instances in which you can be over-insured if you aren’t careful to watch your policies.
Home insurance limits: Your
home insurance policy pays for contents that are damaged or stolen as long as the events surrounding that are insurable incidents. But if the limits of your policy exceed the actual or replacement value of your property, then you are paying of insurance that you don’t need. Find out whether your home insurance policy pays for actual or replacement value, and then re-evaluate the number to ensure that it works with the corresponding value of your property.
As for the structure of your home, the insurance benefits you pay for are to defray the cost of rebuilding your home. They do not reimburse your for the value of your property, which is comprised of the structure along with land that you still own and that still has value after an insurable incident. If the limit on the dwelling coverage of your home insurance policy exceeds rebuilding costs, you need to re-evaluate your policy.
Auto insurance: Many portions of
auto insurance policies are immune to over insurance, but there is one place that you might be putting too much value. Your comprehensive limits should never exceed the actual (or replacement, depending on your policy) value of your vehicle. If they do, then you aren’t going to get a check for the extra amount if your car is totaled, so you should adjust that.
Business insurance: Your business owns property and that property has a value. If your
business insurance policy limits are set higher than the actual or replacement values of your business property then you are likely over-insured.
The purpose of insurance is to make you whole after an insurable incident, not to make you profit. Any time the limits of your insurance policies exceed the dollar values actually at risk of loss, you should talk to your insurance agent about possible readjustments.
Contact us at ECI Agency today to find out your best options for
Oklahoma City Insurance policies!