Why It's Important To Know Your Coverages
If you’re like most Americans, you’re starting off the new year with a few resolutions in mind. While most resolutions have to do with eating less and exercising more, we here at Roland, Abbott, & DeZoort have a challenge for you. Find out these three numbers to make sure you are properly protected. Let’s dive in.
The data tells us that the plurality of Americans carry what’s called state minimum insurance. In Georgia, state minimum insurance is $25,000 per person and $50,000 per incident for bodily injury coverages. The state minimum for property damage liability is $25,000 per incident. While these numbers sound “big” they are anything but that. A growing number of vehicles on the road exceed $60K. If you hit one of these vehicles and total it, your state minimum insurance will not cover the replacement cost and you will be left covering the difference.
If you think this is bad, consider state minimum auto coverages in the event of an at-fault accident that requires an extended hospital stay. A hospital visit resulting from a minor accident that exceeds $100K is all too common. Again, if you have state minimum coverages, you could be on the hook for hundreds of thousands of dollars. This is not enough coverage and is not recommended or written in our agency.
If you’re like most Americans, your home has appreciated significantly over the past few years thanks to a favorable housing market. Plus with increasing costs on building materials and supply shortages, if your homeowners policy only matches what you paid for it, you could be woefully ill-prepared in the event of a total loss. It is extremely important to know the replacement cost associated with your policy to ensure your home is protected in the event of a total loss. The value of replacing your home is much different than the value of your home…..make sure you have the correct coverage amount.
Life insurance coverages
Most life insurance coverages sound really, really big and make people feel like they are protected when in fact they may not be. For example, a $1 million policy sounds like a sizable lump sum that could protect your family in the event of a worst-case scenario. However, this is not as much as you may think. If a family of four has two kids and one working spouse that makes $100K per year, this $1 million policy only covers 10 years of the spouses income. If the family owes $200K on their house and $25K on two vehicles, the money that is left will only cover 7 to 8 years of living expenses.
While these stats sounds dire and pessimistic, the first step to evaluating if you are properly protected is knowing the current policies you have in place. When you work with a an independent agency like Roland, Abbott, & DeZoort Insurance, we can sit down with you and objectively evaluate if you and your family are properly covered. Every situation is unique and person is different, this is why our team values relationships that allow us to make recommendations to protect you as your family grows and your needs change.
Moral of the story: know your coverages!