Life insurance

Beware: Your Insurance May Not Cover These 8 Losses

You might think that you have enough insurance protection. After all, you have car, homeowners, life, health, and disability insurance coverage. What else could you possibly need?

Here’s an unsettling truth: Even if you’ve taken out all the insurance policies necessary to protect yourself and your family, you might still face coverage gaps. Review your policies regularly. And when you do, watch for these potential gaps in your coverage.

1. Life insurance

Many employers offer group life insurance to their workers as an important financial benefit. The American Council of Life Insurers said that at the end of 2015, group life insurance represented 44 percent of all life insurance policies issued in the United States.

Employees like this insurance because it is usually inexpensive. But there are some negatives: Most group life insurance policies end if you leave your employer, and the next company at which you work might not offer this coverage. Secondly, the payouts for group life policies tend to be smaller than for an individual life policy that you’d buy for yourself. Usually, the death benefit with a group life policy is one to two times your annual salary. That’s a nice bit of cash, but it’s certainly not enough to provide for your family long-term should you unexpectedly pass away.

That’s why you should use a group policy as a supplement, not a replacement, for an individual life insurance policy. Yes, an individual policy will cost more, but you’ll also receive a far larger death benefit. (See also: Why Your Group Life Insurance Is Not Enough)

2. Dog bites

According to the Insurance Information Institute, dog bites and other dog-related injuries accounted for more than one-third of all homeowners insurance liability funds paid out in 2016. That equaled 18,123 claims, with the average cost for each claim coming out to $33,230.

The challenge with dog bites is that many insurance providers won’t insure homeowners who own certain breeds considered “dangerous.” Insurance companies vary on this, but many won’t insure pit bulls, Rottweilers, German shepherds, or Doberman pinschers. If you have a dog, check with your insurance company to make sure that it is covered. Paying for a dog bite without the help of your insurer can prove costly.

3. Transportation expenses

Your car insurance policy will cover the damages to your vehicle following an accident as part of its collision coverage. But what if you need to rent a car to get around while your vehicle is in the shop? That can be expensive.

Unfortunately, most auto policies don’t provide what is known as transportation expenses coverage. And when policies do provide it, the amount they’ll give you to rent a car — often as little as $20 a day — might not be enough to cover the whole cost.

Check your policy to determine if it will cover a rental car. If it does, make sure you know exactly how much you’ll be getting. If you’re not satisfied, it might be time to pay to boost this coverage.

4. Extra liabilities

What if a neighbor drowns while swimming in your pool? Will your homeowners insurance provide enough coverage if your neighbor’s family files a costly lawsuit against you?

Probably not — and that’s where an umbrella insurance policy comes in. An umbrella policy provides extra liability coverage above the limits of the coverage provided by your auto or homeowners insurance. Maybe your homeowners insurance policy provides liability coverage of up to $500,000. If someone sues you for $1 million, you then might be on the hook for the extra $500,000.

How to Save Money on Life Insurance

Life insurance is an incredibly important financial product. Unfortunately, it’s also relatively costly. With that in mind, I thought I’d put together some tips for saving money when you’re in the market for a life insurance policy.

save life

Get healthy

Any insurer worth their salt will require a physical as part of the underwriting process. The good news is that it’s easy — they’ll send someone out to your home or office. Smoking, obesity, high blood pressure, etc. will all result in significantly higher premiums. So, leading a generally healthy lifestyle will save you a lot of money on your life insurance premiums.

Buy it only if you need it

Life insurance makes the most sense for people with significant financial responsibilities. If others depend on you for financial support, then you most likely need it. However, if you’re young, unmarried, and childless, you may be better off skipping it and banking the savings.

Buy term and invest the difference

The simplest and cheapest form of life insurance is a…