There’s a common assumption that if you have insurance, you’re covered. And technically, that’s true. But there’s a significant difference between simply having a policy and having the right coverage — and most people don’t find out which one they have until something goes wrong.
Underinsurance happens when your coverage limits are lower than the actual cost of a claim. You’re still insured. You just won’t be made whole.
Here’s what that can look like in practice:
Your home suffers major damage, and your policy covers $300,000 to rebuild — but the actual cost in today’s market is $420,000. The gap comes out of your pocket. No negotiation, no appeal. Just an unexpected six-figure expense at the worst possible moment.
Your car is totaled, but your liability limits aren’t high enough to cover the other driver’s damages. You’re personally responsible for the difference.
A windstorm destroys a structure on your property — a detached garage, a fence, a shed — only to find out your policy’s other structures coverage hadn’t been updated to reflect when you built it.
None of these scenarios are rare. For homeowners, industry data shows that around 60% are underinsured. No matter the type of coverage, these scenarios are the predictable result of coverage that hasn’t been revisited as life, property values, and costs have changed.
Closing a coverage gap is usually far less expensive (and less time consuming) than people expect. A small increase in your premium can mean the difference between a manageable claim and a financial setback that takes years to recover from.
The team at Mark Weedin Insurance can walk you through your current limits and help you understand exactly where you stand — before you ever need to find out the hard way.
