A recent survey found that a significant number of U.S. consumers are concerned about the impact of inflation and rising costs on homeowners and auto insurance coverage.
According to a survey, 60% of home and/or car policyholders say they are worried about not having adequate insurance. VIU by HUB, a digital insurance intermediation platform. Not having adequate insurance often means owning a policy that covers only a portion of the loss in your claim due to exclusions or coverage limitations.
40% of survey respondents who filed a claim in the last five years said they had an incident where their claim was not covered as expected.
“With the economy changing rapidly and many people unknowingly not having adequate insurance, it is natural for consumers to be concerned about potential coverage gaps,” said EVP and VIU. Bryan Davis, head of the company, said in a company report. “Education and insight can help mitigate these concerns, and expert advice can ensure ideal coverage and protection.”
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Consumers may be at risk of large out-of-pocket costs
inflation rate is near record high It affects prices throughout the US economy. As for insurance, research suggests that replacement and repair costs will increase. Policyholders may face higher out-of-pocket costs if coverage is not expanded to reflect higher reinsurance values, the study said.
Most consumers (91%) said they would be concerned if they found they didn’t have enough homeowner and/or car insurance to cover the event. Additionally, 29% said they were worried about going into debt to replace or repair their car or home if their insurance wasn’t enough to cover their claims.
These costs can be substantial, according to Kin Insurance chief insurance officer Angel Conlin.
“Even if you insure your home for $300,000, you know it will cost you $400,000 to rebuild after a total loss,” says Conlin. “Homeowners who don’t have adequate insurance can end up paying tens of thousands, even hundreds of thousands of dollars out of their own pocket.”
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Here’s how policyholders can avoid underinsurance, experts say
Survey respondents indicated a lack of understanding of how to: choosing the right insurance One reason was that we were concerned about insufficient coverage.
Research shows that more than four in five policyholders (81%) say they would like to know more or better understand the features of their homeowner or auto insurance policy.
Policyholders need to understand the nature of the risks they are insured to gauge the risk of coverage gaps, said Evan Walker, a personal injury and property claims attorney. .
“For example, if danger is a liability, your personal property is at risk if you are sued and a judgment is made against you,” Walker said. , wind, or fire, you risk not having enough money to repair the damage done to your property.
The best course of action against underinsured risk is to overinsure, Walker advised.
“We also want to look at umbrella policies,” Walker continued. “For me, it’s better to have too much insurance than too little. From what I’ve seen the money saved by getting a lower limit is a silly approach of Pennywise and Pounds. Regarding insurance A better approach might be to set a higher deductible limit.”
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