Thursday, September 24, 2015

Is Insurance Really Worth It


September is Life Insurance Awareness Month which reminds consumers of the benefits of having life insurance. The recent earthquakes and hurricanes that the east coast experienced last month are another reminder why consumers need insurance.  Many homeowners and auto owners suffered loss or damages due to the earthquake and hurricanes.  For those who did not have insurance, repairs will be costly.

Insurance is a form of protection against loss, damage or theft.  Insurance should not be used as a form of investment or to get extra money.  Insurance should provide enough to reimburse for loss or damages. Three benefits to having insurance are: 

1.      Can be used to reimburse for a loss that occurs
2.      Protects against harm to something or someone
3.      Saves you money in the future

There are several types of insurance available: life, health, auto, fire, home, dental, flood, disability (short-term and long-term), and many more. The three most important types of insurance everyone should have are: disability, life and health. 

Get a free analysis of your existing coverage to see if you have enough or too little coverage.   Many consumers have more coverage than needed.  Many consumers get the coverage suggested by their insurance agent and don’t bother to answer questions or comparison shop. 

When you purchase a new car, it is wise to get collision and comprehensive coverage but as your car gets older you may only need to have collision coverage.  This step could save you anywhere from $50 to $200 a month.  Collision coverage should be adjusted annually or every two years and should be based on the value of your car. Also, verify your liability coverage and adjust as needed. Here are 10 ways to save money on insurance.

  1. Increase deductibles.  Increase deductibles to lower your monthly premium.  This will save you money and prevent you from filing minor claims which can increase your premium.
  2. Assess. Assess the assess the replacement value of your insured items – car, home, health, etc.  If you house is worth $200,000 or the cost to rebuild you home is $200,000 but you only have coverage for $100,000, you need to adjust.
  3. Reputation.  Research the insurance company on the Better Business Bureau website or the internet to gather information on any complaints or the quality of customer service.
  4. Home.  Consider waving payment of your homeowner’s insurance by your mortgage company and pay it on your own.  This can save you anywhere from $50 to $300 a year.
  5. Health.  Many consumers file bankruptcy or have bad credit due to medical bills.  The increasing high cost of health care services and prescriptions is the main reason why everyone should have health insurance including dental and vision insurance if you wear glasses.
  6. Life. Adjust your life insurance policy as home environment changes.  Update every 5 years and when your children become adults, your spouse retires, etc.
  7. If you have multiple insurance products with different companies contact each company and get a quote for bundling your products to help you save money.
  8. Companies always provide discounts or specials but do not always advertise them.  Every 3-6 months call each service provider and ask if they are offering any specials and what discounts they have available for the services you currently have. 
  9. What If.  List different scenarios that could happen and make sure you have enough insurance coverage for each scenario, i.e. job loss, sickness, death, new baby, loss of health insurance or other benefits, car repair, etc.
  10. Research. Comparison shop for insurance with sites such as Bankrate, Progressive, AARP or to find the best insurance coverage.
Getting the right coverage will save you money in the future and help you get over any financial crisis you may experience.  

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