• Kent Shepard

What Are Common Insurance Mistake’s?


There are several common mistakes some people make when it comes to purchasing commercial insurance. Insurance is the product you buy in case the unexpected happens. Unfortunately, by the time you need it, it's too late to make sure you have the right type and amount of insurance coverage. Make sure you don't make the following mistakes while buying insurance.


Mistake One

Having two agents is better because they keep each other competitive

Having two agents duplicates effort and can create coverage gaps. For example, there is certain coverage that can be included under a liability policy and auto policy. One agent is better able to manage your entire Shepard insurance program.


Mistake Two

The lower the premium, the better

Premiums are determined by a combination of exposures and coverage. If you get a lower premium, you may be missing the needed coverage. For example, does the lower premium include replacement cost coverage on buildings and equipment?


Mistake Three

Buying from a national company is always better.

Don't listen to the entertaining advertising on TV. Most national agents only represent one insurance company. They can't shop your account to determine the best combination of price and coverage.


Mistake Four

The internet is a great place to get good insurance deals

Low-cost internet insurance usually allows you to select the coverage and limits you want. But in most cases, you end up with a limited and inadequate program. You find this out after you have an uninsured claim.


Mistake Five

Umbrella insurance is only high net worth companies or individuals

A small electrical contractor was at fault for the total loss of a historic property, a loss that exceeded his general liability policy. The contractor's umbrella paid the loss in excess of $7,000,000. Umbrella or excess coverage is some of the least costly insurance you can buy. Don't risk a lost for a little expense.


Mistake Six

I don't need employment liability insurance, I only have five employees, and they are like family.

This is the fastest-growing area of litigation for small businesses. The average claim cost in 2020 was $75,000.


Mistake Seven

Not knowing your policy

Consumers' biggest mistake is not knowing what's in the fine print of their policies. Take time to read the policy. Ask your agent to meet with you at least annually to review your coverage.


Mistake Eight

Flood insurance is only for business in high-risk areas

Big mistake; we recommend you ask for a flood quote to at least review the cost-benefit of the coverage.


Mistake Nine

I don't need disability insurance because I can get Social Security

Don't count on Social Security to take care of all your needs if you become disabled. The cost is not as much as you may think.


Mistake Ten

There isn't anything I can do to manage my insurance costs except shop price.

There are many things you can do to reduce your premiums; here are a few:

  • Consider increasing your deductibles

  • Consider the vehicle model when making a purchase. Some are more expensive to insure

  • Add smoke and security alarms to your office


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