The Most Common Insurance Mistakes We See (And How to Avoid Them)
Insurance is one of those things many people set up once and hope they never need. But over time, we often see the same mistakes repeated - not because people don’t care, but because life changes and insurance doesn’t always keep up.
Here are some of the most common insurance mistakes we see, and how a simple review can help you avoid them.
1. Underinsuring: When Cover No Longer Matches Real Life
Underinsuring is one of the most common - and costly - mistakes. It happens when your level of cover no longer reflects your financial responsibilities.
This often occurs after:
Buying or upgrading a home
Taking on a larger mortgage
Having children
Lifestyle and income increases
When cover is too low, a claim may not be enough to:
Pay off debt
Cover living costs
Support your family long-term
How to avoid it:
Regularly review your insurance, especially after major life changes. Your cover should reflect what your family actually needs today - not what made sense years ago.
2. Relying on Work Cover Alone
Many people assume their employer-provided insurance will be enough. While workplace cover can be a helpful starting point, it often has limitations.
Common issues with work cover include:
Cover stopping if you change jobs - unless you request for it to continue
Lower cover amounts than expected
Limited flexibility or customisation
No control over policy terms
Relying solely on work cover can leave gaps - especially if your financial commitments increase or your employment situation changes.
How to avoid it:
Understand exactly what your work cover includes and where it falls short. Personal insurance allows you to tailor cover to your needs and keeps protection in place regardless of where you work.
3. Not Updating Policies After Life Changes
Life doesn’t stand still - but many insurance policies do.
Key life events that should trigger a review include:
Marriage or separation
Having children (includes natural or adoption)
Buying property (includes new home and investment)
Career changes or business ownership (including increase in income)
Failing to update policies can mean:
Outdated beneficiaries
Inadequate cover
Missed opportunities to improve protection
How to avoid it:
Think of insurance as a living part of your financial plan. A quick review after major changes can ensure your cover continues to work for you and your family.
A Simple Review Can Make a Big Difference
Most insurance mistakes aren’t made intentionally — they happen quietly over time. The good news is that they’re often easy to fix with the right advice.
At New Vision Financial Services, we help clients review their insurance, identify gaps, and make sure their protection aligns with their current life and future goals.
Because the right insurance isn’t just about having cover - it’s about having the right cover.
Amy Callon
Financial Adviser
New Vision Financial Services
Plan your future and let us help you have peace of mind along the way.