Insurance policies have limits on how much they will pay out in the event of a claim. If your coverage limits are too low, you could end up paying out-of-pocket for damages or losses that exceed those limits.
- Tip:
Ensure your coverage limits are adequate—Review your policy to ensure the limits are high enough to cover potential expenses in case of a disaster. For example, in homeowners insurance, make sure the replacement cost of your property and belongings is covered, not just their market value.- For Auto Insurance: If you’re carrying only the state minimum liability coverage, consider raising your limits. A serious accident could exceed those limits, leaving you financially liable.
- For Life Insurance: Make sure the face value of the policy reflects your family’s needs, including debts, living expenses, and educational costs for dependents.
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