The penalty of being underinsured

Augusta

VIP Contributor
It is always good to have a full coverage for whatever you are insuring to gain the full benefits. But the truth remains that some people do underinsure theirs which might be because of high cost of insurance, lack of knowing what to insure or not knowing what to insure.

This action comes with its own penalty. So when you underinsure you face the below penalties

There will be a law suit against you by your clients especially for business owners

You will impacted negatively financially. You might encounter losses as your insurance is not giving you full coverage for risks encountered

You might get your reputation damaged as you can't give your business they comprehensive coverage it needed.As you might not have the right coverage to help your clients that needed a protection

Add your thought?
 

Mandy96

VIP Contributor
Well with the way you made it sound in your analysis does not make me agree to it. The word “penalty” makes it sound like it is a compulsory thing to do for every individual. The last time I checked I think it’s a matter of choice so word like “consequences” would have been better
 
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Augusta

Augusta

VIP Contributor
Well with the way you made it sound in your analysis does not make me agree to it. The word “penalty” makes it sound like it is a compulsory thing to do for every individual. The last time I checked I think it’s a matter of choice so word like “consequences” would have been better
Well I don't know but I think we are on the same page isn't penalty for a thing the same as having the consequences. But that is why I was trying to pass across that if you do not insured as you should then you would have consequences or penalties for them
 

sincerem

VIP Contributor
Business owners need insurance and insurance needs them, both parties are simply in-demand. Why by the business owner neglect insurance, thinking that all is well, he or she shouldn't forget we aren't living in a perfect world, unexpected collapse do hit any venture, losses come forth without any deformity. That's why we need insurance to protect our business.
 
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Augusta

Augusta

VIP Contributor
Business owners need insurance and insurance needs them, both parties are simply in-demand. Why by the business owner neglect insurance, thinking that all is well, he or she shouldn't forget we aren't living in a perfect world, unexpected collapse do hit any venture, losses come forth without any deformity. That's why we need insurance to protect our business.
ThIS is more like a symbosis kind of relationship where each of them needs one another. Yeah the insurance company needs the premium while the client needs a coverage but the client should pay the right amount and get the real coverage for everything. Don't surcharge your self by paying less for what you need
 

sincerem

VIP Contributor
ThIS is more like a symbosis kind of relationship where each of them needs one another. Yeah the insurance company needs the premium while the client needs a coverage but the client should pay the right amount and get the real coverage for everything. Don't surcharge your self by paying less for what you need
Yes, it's simply like symbiosis buddy. Both parties needs each other. Whereby the insurance companies doesn't get enough premiums from insured the company wouldn't move far, and when the insured failed to pick up a premium, then his or her business, property etc is at stake of risk.
 
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Augusta

Augusta

VIP Contributor
Yes, it's simply like symbiosis buddy. Both parties needs each other. Whereby the insurance companies doesn't get enough premiums from insured the company wouldn't move far, and when the insured failed to pick up a premium, then his or her business, property etc is at stake of risk.
Yeah bro that's the whole idea that is why no client should start a policy that the will be difficult to pay because you would lose money if you default in payment. Again, not paying the right premium will make you getting less coverage than what it should be. In my opinion it wouldn't worth it either
 

Mataracy

VIP Contributor
I think insurance company should be able to cover everything that their client insured under them.
But in case where where the property is under cover by the insurance company then the insurer will not be able to enjoy necessary benefit ought to enjoy.

So it is very good to take up complete insurance cover because there are s lot of benefit attach.
 
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Augusta

Augusta

VIP Contributor
I think insurance company should be able to cover everything that their client insured under them.
But in case where where the property is under cover by the insurance company then the insurer will not be able to enjoy necessary benefit ought to enjoy.

So it is very good to take up complete insurance cover because there are s lot of benefit attach.
That's just the gospel that is been louded here, first investigate the insurance company to be sure they are genuine, then buy your insurance policy that will cover all that you need and deem fit, avoid to have any underinsurance. It is you thst will suffer it at the end of the day
 

sincerem

VIP Contributor
Yeah bro that's the whole idea that is why no client should start a policy that the will be difficult to pay because you would lose money if you default in payment. Again, not paying the right premium will make you getting less coverage than what it should be. In my opinion it wouldn't worth it either
That's why it's better to go into insurance as a working class, and choose a premium that you can cover up either monthly or any given duration of time. Instead of rushing into insurance without steady inflows of cash. An insured that stops paying for his or her premium package risk losing the benefits in the future.
 
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Augusta

Augusta

VIP Contributor
That's why it's better to go into insurance as a working class, and choose a premium that you can cover up either monthly or any given duration of time. Instead of rushing into insurance without steady inflows of cash. An insured that stops paying for his or her premium package risk losing the benefits in the future.
Definitely, it isn't only for insurance company for every other thing you need to have a source of income to strive in it. I don't think it will make sense to just pay for premium and stop after a while, you would be throwing away your money . No insurance company will compensate you.
 

sincerem

VIP Contributor
Definitely, it isn't only for insurance company for every other thing you need to have a source of income to strive in it. I don't think it will make sense to just pay for premium and stop after a while, you would be throwing away your money . No insurance company will compensate you.
That's useless, if one simply registered via insurance company and later on stopped paying for their premium he subscribed too. It is better not to subscribe than to do simply that. That's wasting of money that could've been used to divert elsewhere and at least have hope that you have money somewhere instead if squashing it. We should examine ourselves and make sure we have free - flow of finance before we embark with insurance future investment.
 
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Augusta

Augusta

VIP Contributor
That's useless, if one simply registered via insurance company and later on stopped paying for their premium he subscribed too. It is better not to subscribe than to do simply that. That's wasting of money that could've been used to divert elsewhere and at least have hope that you have money somewhere instead if squashing it. We should examine ourselves and make sure we have free - flow of finance before we embark with insurance future investment.
I think people should consider this before starting any insurance policy. Insurance company are out to make profit so there's no way they will pay for anything that is outside their rules. If you need to get compensated at the end of the day do not skip your premium to get full compensation when the time comes.
 

Good luck

Valued Contributor
The penalty of being under insured will be lack of getting the full benefits from the company and the company may not see to some things about such insurer. The person may not have access to some benefit the company that is why it is advisable to have a full insurance policy for one to get the required benefits.
 

sincerem

VIP Contributor
I think people should consider this before starting any insurance policy. Insurance company are out to make profit so there's no way they will pay for anything that is outside their rules. If you need to get compensated at the end of the day do not skip your premium to get full compensation when the time comes.
Yes, anyone hoping to get compensated accordingly, should stick around with his or her premium, and continuously pay the premium policy plan in order for the insurance company to serve him or her right in the future. No one takes full advantage of an investment halfway, he or she must meet the demands to earn the full rewards in the future.
 
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