Insurance Coverage - What You Need and What You Don't

Insurance coverage is one of those topics no one really wants to think about until it’s too late. Buying insurance can be depressing for two reasons. One, it forces you plan for some catastrophe or hardship and no one likes to think about these things happening to them or their family. And two, it’s expensive.

Some insurance coverage is required, like homeowner insurance if you have a mortgage, renters insurance if you rent or auto insurance. Other types are optional like health insurance, dental insurance or even life insurance.

Insurance Coverage

Some employers provide health, life, dental, eye care and disability. If you’re employer provides this, consider yourself lucky. If not, you need to decide if the costs are worth it.

Health Insurance

Concerning health insurance, if you can afford it, buy it. Countless people have been bankrupted by unexpected medical bills. One accident or illness is all it would take for the majority of Americans to loose it all.

However, just having health insurance is not good enough. You need to make sure you are adequately covered because being under-insured is almost as bad as having no insurance. Partnering with a good insurance agent can go a long way in helping to ensure you have the right coverage for your circumstances.

It can be overwhelming if you’re not used to the insurance lingo. You can go online or check your local yellow pages to find an agent who help you sort out the details and explain the fine print.

Dental and Eye Care Insurance

When it comes to dental and eye care insurance coverage, you can be a little less cautious. Dentists and eye doctors are expensive but so are the premiums on these policies. Look at your history and figure how much you’ve spent on dental and eye care visits over the past couple of years.

Then go online or speak with your insurance agent about the cost of a policy. If the policy costs more per year than the totals of your average yearly visits, don’t buy the insurance.

The exception would be if you know you will need expensive dental work or eye procedures in the future. Most dental and eye care policies have a waiting period from the time the policy takes effect before it will cover major services so keep this in mind.

Disability Insurance

Disability insurance coverage is one most people gamble on. If it’s not provided by their employer, they usually won’t seek it unless their occupation is unusually hazardous. If you wondering if you need it, ask yourself how long you would make it without your current source of income.

If you’re the sole breadwinner in your family or live alone you need to seriously look at disability insurance. It will typically pay 45% - 60% of your gross income tax-free should sickness or injury prevent you from earning income in your current occupation.

All disability insurance is not created equal however. So it’s important do thorough research to make sure you get what you pay for. Again a good agent can help you with this.

Life Insurance

Life insurance coverage is sometimes the hardest to deal with since you’re planning for your own death. If you have a family, this one should be a no-brainer. The last thing you want to do is leave them a pile of unpaid bills to deal with in addition to everything else.

Life insurance choices are abundant and you can really tailor a policy to suit your needs. You can choose from whole life or term life policies depending on your situation. One thing to remember is, the younger you are the cheaper your premiums will be.

Before you begin shopping for a larger policy it would be to your advantage to get in shape and make healthy lifestyle changes since insurance companies will raise your premiums for things like being overweight or being a smoker.

Even if you’re single, life insurance coverage may still be good idea. The cost of burial alone is outrageous and any unpaid bills will be the responsibility of your estate. All of your possessions will be sold to pay these if no other way is provided.

Homeowner Insurance

Homeowner insurance is required if you have a mortgage or equity line of credit. Even if you own your home outright it’s a good idea to have coverage. Policy coverage varies greatly so it’s important to work with your agent to make sure you have the right amount of coverage without overkill.

Homeowner insurance will also protect you in the event someone is injured while on your property or in your home. No one likes to think that friends or even family members would sue over something like this but it wouldn’t be the first time it happened.

You can and should shop around to find the best value. There are lots of ways to lower your premiums like raising your deductible and bundling with your auto insurance.

Renters Insurance

Renters insurance is usually required whenever you rent a home or apartment. This protects the landlord’s property as well as your personal property. If there were fire or theft, the landlord’s insurance would not cover the loss of your personal property but your renters insurance likely would.

Like homeowner insurance, you should research several different companies and find the one the offers the best bang for your buck. Some will also allow you to bundle with your auto insurance and save even more.

Auto Insurance

Auto insurance is required by law if you drive the vehicle. So there’s really no getting around this one. If your car is paid for, you are only required to carry liability insurance. This protects you in the event of an accident and another driver or their vehicle is damaged. It will pay for their repairs or medical bills up to the extent of the policy.

However, if you purchase a vehicle and a bank or other financial institution has a lien on it, you are also required to carry collision and comprehensive insurance as well. This protects the lender in the event you have an accident. This insurance will pay for repairs or pay off the loan to the extent of the worth of the vehicle should it be considered a total loss.

Some people choose to drop this coverage after the vehicle is paid in full. Since vehicles depreciate with age and mileage it sometimes makes sense to do this especially if the replacement value is low.

Pet Insurance

If you have a pet or two this section may be of interest. Pet insurance is one of the newest forms of insurance available and it’s gaining in popularity. Pets are like family members and responsible pet owners try to do everything they can to make sure their pets stay healthy.

Pet insurance covers things like routine check-ups, surgeries, dental cleanings, lab fees, prescriptions and more. This insurance coverage is not only limited to dogs and cats but you can insure exotic pets as well.

The premiums can be expensive but so can vet visits. It’s best to insure your pet when they’re young so that all the necessary vaccinations and visits are covered. Talk with your veterinarian and find out which company and type of coverage they recommend for your pet.

Insurance coverage costs vary greatly depending on the options you choose and what you’re insuring. You can save by raising deductibles, bundling several policies with the same insurance company and raising your credit score. And always shop around. Just because you’ve been with a company for many years doesn’t mean they’re still best for you.

You could potentially save hundreds of dollars each year by doing a little research and restructuring your policies.

The topic of insurance coverage wouldn’t be complete without a discussion of categorizing your personal belongings. All the insurance in the world will do you no good if you can’t prove what was lost. This mainly pertains to homeowner and renters insurance.

Disaster Recovery Box

The best way to do this is to have a disaster recovery box. This box should contain a list and preferable photos of the personal items in your home or apartment.

The more specific you are in the description, the better. Brand names, model numbers, serial numbers, the year purchased, the purchase price and any other relevant information should be listed.

This could be on a CD, DVD, or paper but it needs to be stored in a fireproof box in your home or better yet in a safe deposit box in a financial institution.

You should also include insurance policy numbers, deductibles and contact information for the insurance companies, as well as copies of birth certificates, credit card and bank account numbers and contact information and any other information that would be difficult to obtain in the event of a fire or flood.

This is something that would be time consuming to do but once it’s done the upkeep of the lists would be minimal. And in the event you needed it, it would be invaluable.

Insurance coverage can be overwhelming. The main thing is to take some time and go through each type individually and determine your needs and your budget. Finding and working with an experience agent will make the process much easier.

Cut costs where you can and get the best insurance coverage you can afford. You’ll have peace of mind knowing you are protecting yourself and your family in the event of an emergency.

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