Millions of Families Don’t Realize They Own Wrong Coverage;
New Year Is Excellent Opportunity for Update
At least 32 million U.S.households own insurance policies that aren’t right for them, says Peter Merritt of the Kirkwood Insurance in Pleasantville, New York a Trusted Choice® agency.
A new national survey conducted for Trusted Choice® reveals that many families do have not enough protection, or too much insurance or redundant coverage that is needlessly costing them money.
Trusted Choice® agencies are insurance and financial services firms that offer consumers a broad selection of insurance policies and financial services products, customized insurance coverages as well as advocacy support. These firms are committed to providing excellent customer service.
In exploring a variety of home- or work-related events that may have occurred in families during the past three years, the survey provides insight into the haphazard shopping behavior of insurance consumers, who sometimes over-insure for specific events and often ignore or overlook major gaps in coverage. The findings illustrate the importance of an annual policy checkup—and the New Year is an excellent opportunity for a review, says Merritt.
Among those homeowners who said they “significantly remodeled their homes” since 2003—including a structural change such as adding a room, porch or deck—nearly 40 percent had not updated their homeowners insurance, or weren’t sure if they had done so, to reflect the new value of their homes, Merritt said. This equates to almost 8 million American households that may be improperly insured.
And of those owning a valuable collection, such as wine, fine art, jewelry or antiques, nearly half (47 percent) said they didn’t own special insurance coverage for the collectibles.
More than 4 of 10 families who said they had a young driver move away from the home hadn’t updated their family’s auto insurance coverage to reflect that change. Of those who are frequent carpool drivers to a job, school or activities with children, an alarming 85 percent hadn’t changed their liability insurance coverage to reflect the increased risk of additional passengers in the automobile.
And a third of those families with a new baby, or 5 million households, hadn’t updated their life insurance protection.
Insurance isn’t top of mind for most consumers as they go through these changes in work and in life, but an annual review typically would uncover some coverage deficiencies, according to Merritt The survey found that fewer than 60 percent had performed “a comprehensive review” of all of their insurance coverage in the last two years. That means a total of 32 percent of respondents have outdated policies, Merritt said, with half of those saying they haven’t done a review since 2002, and an equal percentage saying they’ve never done a review. (Another 10 percent couldn’t recall.)
“Reviewing insurance is an important activity for families—and it doesn’t always mean buying more coverage,” said Merritt. “But the review does help you be a smart consumer and truly understand what coverages you have, what you don’t have, and the reasons why. It sometimes means combining coverages to get the best deal. It means examining deductibles to understand what you can afford, saving money on premiums in the long run.
“Families should make a New Year’s resolution to get their arms around these issues,” Merritt added, “especially as they’re acquiring new valuables over the holidays or starting new jobs in January, for instance.”
The Trusted Choice® survey also demonstrates a lack of understanding about property and liability risks faced by renters. Of families who rent, nearly 7 in 10 said they don’t have renters insurance, and another five percent weren’t sure. Landlords typically insure building structures, but not the contents or liability of individual tenants, Merritt noted.
The survey also reveals the extent to which consumers will purchase individual policies for specific risks, even though those specific risks typically are covered by a more affordable homeowners or health insurance policy, Merritt said. Nearly 14 percent said they bought coverage for eyeglasses, and another 6 percent specifically are covering cancer. Flight insurance was purchased by more than 7 percent of respondents, and baggage insurance, 4 percent.
Kirkwood Insurance is a local Trusted Choice® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs. You can visit Kirkwood Insurance online at www.kirkwoodinsurance.net or call it at 914-769-9070.