Insurance can be confusing and if you attempt to purchase a policy on your own, mistakes can happen if you’re not sure what you need and who to ask. When it comes to protecting yourself, your family and your assets, insurance is one area that you shouldn’t tackle alone. A licensed insurance advisor can tailor an insurance policy based on your unique needs – at no additional cost!
It’s important to ensure you have the right insurance coverage in place so that in the event of a disaster, you are not on the hook for costly bills. Keep scrolling to learn more about potential mistakes to avoid when buying insurance, and the benefits of seeking expert advice.
Mistake #1: Purchasing the cheapest policy
Shopping for an affordable insurance policy is important, however, it’s equally important to consider the coverage included in that policy, as paying for additional coverage can be worth it. For example, optional water damage coverage can save you thousands of dollars in the event of sewer back up or overland flooding (if it’s available in your region), so if you live in zones that are susceptible to some kind of water damage, this coverage should be considered – and it’s usually only a few additional dollars per month.
Another example is to consider increasing the liability limits on your vehicle insurance, to offer additional protection in the event of a severe accident – again, it’s usually only a few additional dollars per month to increase and an insurance expert can provide these options to you and explain why they could benefit you as well.
While a basic plan may seem sufficient, additional coverage tailors your policy to suit your specific needs and helps ensure you’re covered in case of an unexpected claim, which can save you money in the long run. A licensed insurance advisor will help you figure out what to add on based on your what’s important to you.
Mistake #2: Not reading the fine print
You know you should read the fine print before signing when buying any product – an insurance policy is no different. Reading carefully helps ensure you are aware of what you’re getting and that you understand all the terms and conditions.
For example, if you have a sewer back up and your basement is flooded but you don’t have the right coverage in place to cover the claim to clean and restore it, you may have to pay a lot of money out of pocket.
Don’t get caught off guard when an emergency strikes, read the fine print carefully and contact your insurance broker if you have any questions or concerns.
Mistake #3: Withholding important information
To receive an insurance quote, you have to answer a ton of questions so that your broker and insurance company can thoroughly understand your unique situation and needs. It’s best to avoid lying about anything your insurance company may require because withholding relevant information may mean that a future claim will be rejected. Be truthful when you’re purchasing a plan. Some questions like “do you have any animals in the home?” may seem silly, but they are asked for a reason.
Additionally, tell the truth about any car accidents or tickets received because these may be revealed in a simple search. If you’re curious as to why your insurance company needs to know things, ask your broker - they’ll fill you in.
Mistake #4: Not consulting an insurance expert
Another mistake people make is not consulting a licensed insurance advisor before purchasing. Here are some issues that people may experience by not speaking with a professional:
- Not having your exact situation and circumstances fully assessed.
- Not finding the best coverage for your particular needs (sometimes this means insuring items with multiple companies which may end up costing you more).
- Not being aware of discounts or promotions available (, e.g. Bundle + Save, Referral Program).
Even if you buy online, you can still consult with a the company before you make the final purchase.
Mistake #5: Picking a deductible you can’t afford
In the event of a claim, the deductible is the amount you agree to pay before your insurance company pays the rest (up to your policy limits). When you’re shopping for insurance, you may be advised that a higher deductible lowers your premium, however, it’s important to actually choose a deductible that you’ll be able to afford.
Before you choose a deductible, ask yourself: Will I be able to pay this up front if I need to make a claim? If the answer is no, consider paying the additional few dollars per month, to bring your deductible down.
Mistake #6: Not buying insurance right away
You don’t need an insurance policy for everything, however, it gives you peace of mind and can save you a lot of money in the event of a claim.
For example, Home insurance is not legally required in Canada if your house is fully paid for, but you must purchase home insurance in order to get a mortgage. As a home is often your largest investment, insuring it properly is in your best interests.
In the case of life insurance, buying a policy earlier in your life works to your advantage as rates are lower for younger customers and tend to go up as people age, based on national and general health expectations. While your policy rates will increase over time, the rate of increase is usually more gradual if you purchased your initial policy at a young age.
Avoid mistakes, call a licensed insurance advisor!
If you have any questions, be sure to give BrokerLink a call. We live and work in the same parts of Canada that you do, so we know your insurance needs are just like ours. With local representation, we’re able to help you navigate the complicated world of insurance by sharing our professional insights into a plan that fits your exact needs. Helping you stay safe by offering you peace of mind is what we do best.
FAQs about mistakes in buying insurance
What is a floater policy?
A floater is optional coverage that becomes part of an insurance policy. It typically covers special items that aren’t included in a basic plan, such as collectibles, special jewellery, art and more.
Is it possible to cancel my insurance policy?
Yes, however, before you cancel, speak with your insurance broker as there are a variety to factors to consider and it may end up costing you money. Your broker may be able to find a solution that meets your needs and saves money.
How can I get discounts for my insurance?
This varies as every insurance company may have different discounts and offerings, but discounts are available for:
- Insuring multiple items with one company, including your home, car, motorcycle cottage and more.
- Loyalty –staying with an insurance company for several years can earn you a discount.
- Safe driving discounts – many insurance companies offer programs such as Intact Insurance’s my Drive where you can earn a discount based on your safe driving habits.
- Claims free discount – earned over time, this can save you money.
- Age discounts – there are benefits to getting older – if you have been claims free and a loyal customer, you may be eligible for even more discounts!
There are many things you may qualify for without knowing and these can change over time to be sure to ask your broker what you may be eligible for!