Underinsurance

Underinsurance occurs when your insurance coverage is insufficient to fully cover the costs of a loss or claim. This means that if an unfortunate event happens—like a fire, car accident, or theft—the payout you receive may be less than the actual expenses or value of what’s lost. As a result, you could end up paying out of pocket to cover the remaining costs. To avoid underinsurance, it’s important to regularly review and adjust your policy limits to ensure they reflect the true value of your assets and potential risks.