Insurance can be a minefield of questions and information. From understanding your needs as an individual to deciphering the myriad of insurance policies available, it can all be a bit overwhelming. To help you get started on the right track, we’ve compiled some information that will hopefully answer some of your insurance-related questions, and steer you in the right direction.
What do you need to know when purchasing insurance?
Before you even start looking at insurance options, there are some things you should be aware of. The following information will help you be more informed when purchasing insurance. One of the most important things to keep in mind is what you need insurance for. Your needs will dictate what kind of insurance you should buy. If you’re not sure what you need, consider consulting a professional.
A common question people will have is how much coverage they need. The amount of coverage a person needs tends to vary, and something like on-demand insurance gives people the opportunity to decide how much coverage they want. When you buy insurance, you are typically looking at two terms: deductible and/or coverage. A deductible is an amount you pay out of your pocket when you make a claim. For example, if you have home insurance and you have to make a claim, the insurance company will cover the cost of the repair, minus your deductible. The coverage portion is how much the insurance company will cover. Higher coverage means you will pay more in claims, but it will also give you more peace of mind.
What are the different types of insurance?
- Home insurance: This is the most common type of insurance. You are buying protection for your home. If someone breaks in or damages your home, the insurance company will cover the cost of repairs.
- Auto insurance: This type of insurance protects you and the people around you in the event of an accident. Depending on the details of your policy, it may also cover other risks, like theft or vandalism.
- Health insurance: This is an important one to understand, especially if you have a family. This is one of the few areas where it makes sense to get comprehensive coverage.
- Life insurance: This is one of the most misunderstood types of insurance. While it is true that many people only buy life insurance because they think they need it, in most cases, you don’t.
What happens if you don’t have insurance?
The most obvious and immediate risk is that you might have an accident that damages your vehicle. If that happens, you will have to pay the full bill, plus your deductible. You’ll owe that bill whether you have insurance or not. A far less obvious risk, but more likely, is that you won’t be covered in the event of an illness or an accident that causes you serious injury. Without insurance, you could wind up with a huge medical bill that you will have to pay out-of-pocket, or with a huge insurance bill that you will have to pay out-of-pocket.
The Bottom Line
The best advice we can offer when it comes to insurance is to be informed. Get a good understanding of what you need and who needs it. Then, make sure you are protected. By doing so, you can better protect your assets and your loved ones, and ensure that you have the peace of mind that comes with knowing that you are covered.