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5 things agents want you to know about insurance

Insurance is notoriously complicated, and few people have the time or desire to pore over their policies. But some basic knowledge can go a long way — and that’s where an insurance agent can help, by clearing up some of the most common misconceptions they encounter.

Here are five things agents say are helpful for customers to know.

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1. Insurance doesn’t cover everything — When it comes to insurance, “Most people don’t understand the details,” says Andrew McGill, agent at The Insurance Shoppe in Collierville and Nashville, Tennessee.

For instance, they often don’t realize that most homeowners policies won’t cover flood or earthquake damage. If your home is at risk for these disasters, you need separate coverage.

Auto policies generally cover only personal use of your car, so if you’ve picked up a side gig delivering groceries or meals during the pandemic, you likely need additional coverage, says Keya Pratt, agent and CEO of Pratt Insurance LLC in Richmond, Virginia.

Insurance policies of all types also generally exclude wear and tear, says Katherine Navarro Wong, a State Farm agent in Santa Rosa, California.

Insurance is designed to cover sudden, accidental damage, not regular maintenance.

“We’re not going to replace (an) old pipe,” Wong says, “but if the pipe accidentally burst and ruined the wall and the flooring,” that would be covered.

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2. A gap in coverage can be costly — There are various reasons you might let your car insurance policy lapse, whether you’re having trouble paying your bills or you no longer own a vehicle. But this could cost you, Pratt says. “People tend to shop insurance after they’ve already canceled their insurance, (but) unfortunately that’s a huge negative” when calculating your price.

After a gap in coverage, insurers view customers as riskier and charge higher rates.

You can avoid this by shopping for quotes before your policy expires.

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3. You can’t get coverage for something that’s already happened — If you get into an accident and your car needs repairs, you might want a rental vehicle to help you get around. But by that point it would be too late to add that coverage, Wong says. Your auto policy would pay for this only if you had rental car coverage in place when the accident happened — not if you added it the day after.

The same goes for other insurance.

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4. You shouldn’t skimp on liability insurance — Many people focus on buying enough coverage for their belongings, but the liability insurance on your policy may be even more important. It pays for injuries or property damage that you’re at fault for.

A lawsuit “is going to be more devastating than losing your laptop (or) ring,” Wong says.

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5. Your agent is there to help – Confused by your policy’s fine print? Don’t struggle through it on your own, says Jana Schellin Foster, agent at Nevada Insurance Agency Co. in Reno, Nevada.

“We’re here to take care of you and walk you through this process.”

Once you’ve found an agent you’re comfortable with, Wong recommends touching base once a year or whenever there are changes in your life.

This article was provided to The Associated Press by the personal finance website NerdWallet. Sarah Schlichter is a writer at NerdWallet.

Email: sschlichter@ nerdwallet. com.

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