Are there gaps in your insurance coverage?
Translation: You are responsible for the gap between the loan amount for a home or a vehicle and the insurance amount of that home or vehicle according to the insurance policy, which can be significant.1
Suzan took out a home loan for her condo at the beach for $700,000, lived there for 2 years and experienced a total loss due to a huge storm. As she combed the rubble for any salvageable keepsakes or valuable items, she realized the cost of the damage was far more than the house and its contents. The replacement value of her insurance policy is $575,000. With the interest and payments paying down the loan almost $70k in the few years she lived there, she still has a substantial gap of about $55,000 that she now owes the bank after her insurance payout.
Michael buys a truck for his son’s high school graduation present with a price tag of $35,500. He financed $30,000 of the purchase. On New Year’s Eve, the truck was hit by a drunk driver who crossed the median on the highway. Miraculously, Mike’s son sustained minor injuries and had only a one-night stay in the hospital. Unfortunately, the truck was totaled. After talking to the insurance adjuster and learning the claim amount, Michael finds himself owing the bank several thousand dollars.
These scenarios play out every day as people shop for “cheap insurance” and don’t recognize the burden they are putting on themselves down the road. Our insurance agency is dedicated to preventing these terrible situations. Let us help you find coverage that secures your future taking into account your individual needs.
1How Much Coverage Do You Need? Loan Amount VS Insured Amount (thesilverlining.com)