Colette Gowlland

Many small businesses rush to buy insurance policies because they think that doing so is an obligation or that they need the money to pay it. Unfortunately, many of these business owners fall into the traps that some insurance policies create. We have listed three common pitfalls that you will encounter when buying business insurance.

It is not unusual for us to think about insurance in order to make sure we are protected for many different aspects of our lives. You need auto insurance to avoid an accident on your way to work, homeowners insurance to shield your property from damage and theft, and life insurance to enable you to support your family financially. But, hidden behind the needs that we all have are some dark secrets that insurance companies are not willing to reveal.

Expensive premiums on your car insurance

Why do car insurance companies always request so much insurance cover? Not all insurers provide the same service, and more often than not, each insurance company has a clearly unique target audience.

So, when your premiums seem to go through the roof for no reason, it could simply mean that you are not your insurer’s target audience. Being loyal to your insurance provider is only effective when you are exactly the type of customer that they want to serve. Otherwise, it can be a good idea to shop around for an insurer whose cover matches your needs and your budget.

  • Other important factors that can affect the price of your auto insurance premiums:
  • A sudden change of address, as some locations may be deemed less secure for car owners, and therefore, your insurance will increase premiums.
  • Adding your teen to the insurance policy.
  • Increased mileage or cross-state travel.
  • History of insurance claims or accidents.

Ineffective home insurance cover

When it comes to choosing the right insurance for your home, it is very important that you know what risks exist that could cause damage to your property. When it comes to insurance, you could end up paying a lot of money for cover that doesn’t protect you when you need it.

  • These problems are some of the most common things people report when they are attempting to find the best home insurance.
  • They don’t understand which DIY work is authorized by the policy and accidentally cause damage that is outside the scope of the policy.
  • Belongings of high-value are not covered by home insurance.
  • They have been forced to delay home improvement works to keep the cost of the home insurance policy low.
  • They lack the knowledge that some events, for example natural disasters, require additional purchases to the policy to be properly protected.

Inadequate life insurance

In the event that you die, having a life insurance policy that covers all of the assets you own protects you. For business owners, life insurance coverage is especially important as it will help replace your income and continue to support your family. But you may find it difficult to make the right decision when it comes to buying a policy:

  • The unknown difference between term life and whole life policy, as well as how they will affect your family.
  • Choosing an unnecessarily high amount of coverage on accident, meaning you pay higher premiums for an amount your family may never need.
  • If you have standing debts, not altering the policy coverage to reflect that financial situation.
  • Postponing purchasing life insurance because it is “only for old people”.

Finding insurance that suits your business needs can be difficult, particularly because many small businesses require more cover to protect their buildings, income and vehicles. Experts such as the Engarde Financial Group in Pittsburg can provide dedicated insurance advice to help you find the right cover for all your needs.