The Dangers Of Being Underinsured

by Administrator 23. July 2018 11:14

Being underinsured means that one is not fully protected by the life insurance he/she has purchased. There are high chances that the amount claimed by one’s family will not be sufficient to meet its financial requirements. As far as business insurance is concerned, underinsurance means that the value of the assets you have insured is more than the insurance.

Here are some risks involved with being underinsured:

  • Uncertain Future: Underinsurance puts individuals and businesses at a huge risk of not being competent to deal with an unforeseen event to their full capacity. People usually indulge in wishful thinking that all will always be well in their lives but fail to understand that life is all about change and uncertainty. Being insured gives the confidence to face any event head-on because you know your insurance company has your back. The same holds true for businesses. Underinsured businesses are always at a risk of tremendous losses. Even one unforeseen loss can threaten the whole existence of a business.
  • Delayed Settlements: The whole idea behind getting insured is to bounce back quickly after a disaster. However, being underinsured delays the whole process and can even lag for sometime. This can be a costly affair in terms of the delay caused. Underinsurance leads to different claims of the insured and the insurer. Your insurer will have issues with the lack of concrete insurance values of your property whereas you will expect more than what’s being offered to you. To avoid such situations, the right assessment of property and getting a full insurance coverage is the best option.
  • Refusal To Pay The Claim: An insurer can decline all claims made by you on being suspicious of a deliberate effort on your part to be underinsured.
  • Penalty: Underinsurance not only puts you at a risk of funding the whole amount of your loss, but you are also at a risk of getting penalized for a partial loss. An improper valuation of the loss can lead the loss adjuster to find out that you are underinsured and you will be required to fund the losses that have no protection.

Conclusion: Underinsurance defeats the very purpose of being insured. However, it is never too late to undo this mistake. There is always an option to increase the insurance cover at a nominal amount of premium after getting an accurate evaluation of the property done. Insurance policies should be updated on a regular basis in case of any renovations, home improvements and changes in the economic scenario.

To get affordable home insurance in Killeen, TX, contact Shawn Camp Insurance Agency, Inc. We are located at 2705 E. Stan Schlueter Loop, Suite 101, Killeen, Texas 76542. You can also call us at (254) 526 – 0535.

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