The start of a new year (and preparing for tax season) is a perfect time to review your personal insurance policies. As you consider what changes need to be made on your home and auto policies in 2015 make sure you are not guilty of making some of these common insurance mistakes that often result in paying higher premiums or even having your policy cancelled by your carrier – content courtesy of our friends at insure.com (read the original article here).
1. Don’t pay your premiums on time.
When you don’t pay your premiums you’ll face cancellation or policy lapse, depending on the insurance type. If your car insurance lapses you’ll face higher rates when you go to buy another policy even if it is with a different carrier or agent.
2. Neglect to make a home inventory.
If you have a large homeowners insurance claim – from a fire or tornado, for example – and have no home inventory, you’ll probably have a hard time reconstructing from memory a list of everything you owned. This means you won’t be able to receive reimbursement for everything to which you’re entitled. You won’t make a claim for items you forgot you ever had in the first place.
3. Blow off open enrollment for health insurance.
Don’t forget to add or remove “dependents” from your health plan at open enrollment time. Open enrollment is your chance during the year to make changes like this. For example, say your daughter graduated from college and got a job with benefits – you’d want to drop her from your plan. Or maybe your daughter lost her job and needs insurance – you can add her until she’s age 26. It’s also the time to change deductibles and other coverage options.
Some life events will make you eligible to make changes any time of year; for example, if you get married, you can add your wife to your health plan even if it’s not open enrollment time.
4. Have a baby but don’t add the little one to your health insurance plan within 30 days of birth.
Babies are expensive. Don’t add to the expense by paying all their health care out of your pocket! That’s what you’ll be doing if you don’t add your new child to your health plan within 30 days – or the deadline outlined by your plan. If you miss that window you’ll have to wait until your plan’s next open enrollment period to add the child as a “dependent.”
5. Drive for Uber.
A personal automobile policy is designed to cover only the traditional uses of private passenger vehicles. It is not designed to cover the commercial use of a vehicle – including making money via a ride-sharing service.
This exclusion extends beyond ride-sharing to any business use of a vehicle, such as delivering newspapers or using a pickup to plow snow.
6. Loan your car.
Simply letting a friend borrow your car could affect your rates. You’re responsible for what happens to and with your car! If your pal hits someone or something and is at-fault for the accident, the liability claim goes on your record and could cause a rate increase at renewal time.
7. Make claims for every little scratch and dent.
You pay good money for your insurance, so might as well use it, right?
Better think again: Actually using your insurance could increase your rates. Your car insurance policy is not a car-maintenance policy. It’s intended to protect you from unforeseen accidents. Definitely avoid making a claim for damage that’s less than your deductible. And don’t pile up small claims, which could provoke a rate increase down the line.