Are you a gambler? Is your vehicle or home insurance up to par? You take a risk of paying for insurance that you may never need, but are you covered in the event that a disaster or accident occurs?
In simplest terms, insurance is taking a chance against the risk of a loss. Are you willing to take that chance? The premium is money placed into a "pool" that is available if and when it is needed during an emergency. When one person has a loss, it is major to them, but minimal in the grand scheme of things. During a major disaster like Hurricane Sandy, the destruction is seen and the total amount of the loss in the billions!
Everyday commercials are on television for insurance. It is one of America's largest industries, one that is confusing to many. We all hope and pray that we never have a claim to file for a loss. In a sense, it is a necessary evil - something that we need but do not want to pay for. Many states require a minimum by law for vehicular coverage. If you rent an apartment or own a condominium, your landlord or homeowners association may require a certain amount of coverage.
Insurance is protection. Here are a few basic points to consider when shopping:
1. Discounts are given for bundling. By using one company to purchase both property and vehicle polices, money can be saved. Spend time soliciting competitive quotes. Look at the companies track record. Their rate may be great, but if their claims process is slow is it worth it? Check out insurance company ratings at www.moodys.com. Register for this free service.
2. Decide how much insurance is needed. What is the value of your residence along with your possessions? When working with an agent, have them visit your property to take measurements of your property to gather a concise picture of what you own.
3. Riders can add coverage to specialty collections such as antiques, jewelry, or collectibles. Due to their value, they may not be covered under a normal property policy.
4. Replacement cost vs. actual cash value makes a difference. Actual cash value is the value of an item today based upon the depreciation of the item. Replacement cost will allow you to replace personal items at their cost to purchase it new today.
5. In automobile insurance if you are in an accident, your ability to sue may be limited if you chose limited tort over full tort. Also consider how much coverage you want with the levels of insurance such as uninsured and underinsured motorist. Special options like towing are also available.
6. Make an inventory of your possessions. Document it with photos or a video. Store them in a location off site that can be accessed in the event of a fire or flood if your paper documents, photographs, or the computer are damaged.
7. Consider a higher deductible can lower your premium. Payment options for monthly and quarterly are good for budgeting, but can add a few extra dollars to the bill. An annual payment offers the lowest premium option.
8. Owning certain breeds of dogs, a pool, or trampoline are extra liabilities. Include these items when obtaining quotes. Paying for an injury lawsuit may cost thousands vs. a few dollars in the premium. Rightfully so, if these items are no longer in your possession, contact your agent to have your policy reevaluated.
A yearly review is good idea to make sure you have the correct amount of insurance as life situations change. Make a list of questions to ask your agent. Do not feel forced to take options you do not want. Make sure you understand what will be lost if you opt out on certain coverage.
