6 Most Common Insurance Rip-Offs in the U.S

NEWPORT BEACH, Calif. - April 2, 2024 - PRLog -- Key Takeaways

• If the price on a homeowners insurance is much cheaper than other quotes you've received, look into what it covers.
• You're never insured for your land with a home insurance policy, only for what it will cost to build the home itself and all attached structures.
• If your kid isn't allowed to drive your car, don't pay for it by listing them on a car insurance policy.
• If you have an old clunker and have full coverage car insurance, you were ripped off or you didn't think to remove the coverage as the car aged.

1. Homeowners Policy Priced at Home Value

Never buy home insurance coverage at the market value of your home. You're paying for far too much coverage if you do. You only need enough coverage to rebuild your home to its current condition if it's ever fully destroyed. Coverage is usually sold at 100K increments. Consider the type of materials used to construct your home and the rise in labor costs too.

When buying a homeowners insurance policy, it doesn't matter if you have a quarter acre of land or 2,000 acres, because you're only covering what it would take to reconstruct your house. Included in a homeowners insurance is personal property coverage, which should cover everything you own, including clothing, appliances, furniture and more.

Expensive items, like engagement rings and luxury watches, should have a separate rider, as should other expensive things kept in the home.

2. An HO-1 Homeowners Policy

Most of the time, you'll get agents who will try to upsell you, but there are the instances in which a broker or agent is so hungry for the sale that they will sell you a very barebones policy, like an HO-1 policy, which most insurers do not push, simply to make a sale. How it works is this: If you're shopping around and they know you're comparing prices, they will sell you a fire policy, which only covers fire and is not sufficient for rebuilding a home due to any other type of peril. If the price seems too good to be true, it probably is.

Most Americans buy an HO-3 policy, to have comprehensive coverage that will cover fire, storm, burglary and more.

Floods are never covered by homeowners insurance, so consider buying a separate policy, especially if you live in a flood zone.

For the next 4 rip-offs visit https://smartfinancial.com/most-common-insurance-rip-offs