When it comes to personal insurance, there are three main areas of coverage nearly everyone needs to have. Auto, home, and life insurance are the three cornerstones of individual insurance, and there are a few basic things you should know about each of these major insurance policies so that you can make the right buying decision for your car, home, and family’s protection.
Car Insurance: Five Basic Facts
You probably hear more about auto insurance than the other two types combined. That’s likely because it’s one of the most expensive types of insurance, and because it is the one coverage that is mandated by law. Auto insurance is easy to understand if you start with the basics.
1. Every insurance company charges differently.
You can save a lot of money just by shopping around for car insurance quotes, and it’s the best way to ensure a good rate
2. You are only required to carry liability coverage by law, but optional coverage may be a must anyway.
If you financed or leased your car, odds are good your lender requires you to carry comprehensive and collision. The rest of the options are up to you.
3. Failure to carry insurance is a serious offence.
If you can’t provide proof of insurance to law enforcement when asked, you could face serious charges.
4. The best drivers get the best rates.
The longer you go without traffic tickets or accident, the more you can save. Driving carefully is the number one way to keep your rates down.
5. You have rights as a policyholder.
Many people don’t know this, but you have a number of rights as a policyholder that includes a say in how a claim is handled. You pay for those rights, so use them if you need them.
Home Insurance: Five Basic Facts
Your home is your biggest investment; even if you rent, you likely pay more each month on that than you do on any other bill. Home insurance is not required by law, but it it’s one of the most important things to carry.
1. Renters need coverage too.
If you rent, there is no coverage at all for your personal property unless you take out a policy. That could mean losing everything with no compensation.
2. You’re covered away from home.
Your home policy covers your personal property everywhere you go, so if you get robbed on vacation, you are still covered.
3. Home insurance includes liability coverage.
This is one of the most important things to have in today’s litigious society. It will protect you if you find yourself facing a negligence lawsuit.
4. Your lender requires it.
It’s not legally required like auto insurance, but your lender will require you to protect the home they have invested in with a home insurance policy. If you don’t, they’ll get one for you – an expensive one that doesn’t really cover your interests.
5. Home insurance is based on reconstruction cost, not market value.
You don’t pay insurance on the market value of your home, because that value includes the land that your home is on which will not need to be included in the cost to rebuild your home. home.
Life Insurance: Five Basic Facts
Life insurance is the one policy of the big three that many people don’t bother to get. That’s mainly because they don’t think they need it, they think it’s too expensive, or they think they’re covered at work. These facts could change that thinking.
1. The sooner you buy, the better the rate.
The older you get, the more life insurance will cost you. There is no benefit to waiting until you think you need it; locking in a low premium as soon as possible is the best way to keep it affordable.
2. There are many types of life insurance, and they are not all expensive.
Life insurance comes in many term lengths and policy amounts, and you can shop around anytime online for life insurance quotes to get the best price.
3. You don’t have to pass a medical exam.
Some insurance policies do require this, but there are many options today that don’t.
4. Your coverage at work may not be enough.
Very few company life insurance policies are really enough to cover all the expenses left behind, especially if you have a family. And if you leave that job, the coverage is gone.
5. Life insurance can pay off even while you’re living.
Accumulation accounts on some policies actually allow you to save money – and access it if you need it.