Thanks For Nothing!

Insurance coverage in the event of a catastrophe is one blessing insurance customers can be thankful for -- unless you've skipped some vital steps in making sure your policies reflect your life.

Your goose could be cooked if you have gaps in coverage, leaving you with far less insurance money than you expected from a claim.

Here are five common errors to avoid.

1. Forgetting to add your teen driver to your auto insurance policy

Typically a car insurance policy covers you and the licensed members of your household as well as anyone else to whom you give occasional permission to drive the car.

To set a premium that accurately reflects risk, the insurance company needs to know about the licensed drivers who live with you, and you're supposed to provide that information.

Conveniently "forgetting" to tell the insurer about a new teen driver, or any other driver in the household for that matter, is a bad idea. What happens if the unlisted driver causes an accident?

Technically, if a company can prove you purposely misrepresented information, it could deny the claim based on fraud. In addition, nonstandard insurance companies that cater to risky drivers are more likely to take a hard line than insurers who market to moderate- and low-risk customers, says Robert U'Ren, senior vice president of Quality Planning, a company that helps insurers identify money-losing policies.

Standard insurance companies typically will cover the claim from the teen crash but charge you back premiums, he says. Don't assume you get off scot-free. Misleading the company could prompt it to not renew your policy, and the record of a claim for an unlisted driver could put a black mark on your record, which will make it harder to find affordable car insurance.

"A lot of information is shared among insurance companies," notes U'Ren.