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If you are like most people, you may purchase a wide range of insurance policies to protect you against financial loss, and you may rest peacefully at night with the belief that you have all of the coverage you need. However, there are many instances where individuals have been financially devastated by a worst-case scenario, and they have been shocked to learn that their coverage was woefully inadequate. Finding out that you do not have the right coverage in place after you file a claim can be a nightmarish situation, and this type of event can be avoided altogether if you explore your policies in greater detail. These are some of the most devastating events that commonly are not covered by standard insurance policies.


In some cases, mortgage lenders require property owners to purchase flood insurance. This is particularly common in coastal areas, along riverbanks and in other low-lying areas. However, if you do not have a mortgage loan in place or if your lender is not requiring it, you may consider opting out of this coverage to save money. Flood coverage can cost several hundred dollars each year, but keep in mind that a single flood can entirely wipe out your home. Generally, if there is any risk of flood on your property, you are better off purchasing flood insurance.

Being Upside Down on Your Car Loan

Being upside down on your car loan means that you owe more money on the car than it is worth. If you have a car accident or your car is stolen, you may be faced with a total loss situation, and you may expect your insurer to pay off the car loan entirely and even to provide you with extra money to use as a down payment on your new car. This is not how car insurance works, however. The insurer offers benefits up to the current market value of the car. This means that you will be required to pay off the remainder of the car loan even though you can no longer drive it. More than that, you also need to pay the insurance deductible and make a down payment on a new car. This can be financially challenging or even impossible for many people. Buying gap insurance and new car replacement coverage can help you to avoid this type of event.

Sewage Backup Issues

Sewer lines can backup for a several common reasons in older and newer houses alike. Tree roots growing into the pipe as well as the settling of ground around the pipe can cause ruptures, and any type of debris can accumulate in the pipe to cause a clog. The result of a sewage backup issue is substantial plumbing, cleanup and home renovation costs. You likely also need to relocate your family to a hotel for a period of time until the work is completed. This type of even is not covered under a standard property insurance policy, but you can purchase a rider upon request.

Financial Loss If You Become Disabled

Both short-term and long-term or permanent disabilities can be hard on you financially as well. With many disabilities, there may be a period of time where you incur significant medical bills. During this time, you may also be unable to work. Some people find that they must switch professions entirely or that they are unable to earn a living at all after an accident. Disability insurance can be purchased to provide you with some compensation for medical expenses, loss of income and more.


When you think about earthquakes, you may think about California. However, earthquake fault lines run throughout the country, and earthquakes can occur along any of these fault lines and may be felt many miles away. Approximately 90 percent of homeowners in California do not have earthquake coverage, and the rates are even higher elsewhere. Earthquake coverage is affordable, and it can protect from significant or total loss in the event a serious quake hits.

Now is a great time to reach out to your insurance agent and to review your current coverage. Determine if you need any optional coverage in these specific areas, and inquire about other coverage that your insurance agent recommends.