What You Should Know When Buying Insurance In 2018
The New Year is upon us and what will we do?
We will return to work, commute in traffic, research real estate online in hopes that the perfect home will come along.
You might have dreams and expectations for this coming year and what it will bring.
We may even have made plans for the year. Filled out our calendars and set goals for our families.
You see it all of the time, people with lists of new hopes and desires for the best year yet.
The new year does something to our brains. It is a way to re-group and re-discover ourselves.
But what about the practical side of things?
What literal tasks can we do to accomplish more this year than last year?
For starters, we can take a look at our budgets and the ways we can save money.
Maybe you want to work harder to get that promotion at work.
Take the time to research your insurance plans and policies.
See who is working for you and if you are happy paying for what you get.
Read this blog and find out everything you need to know about purchasing insurance in 2018.
You might be surprised at the effortlessness it can take when dealing with a broker.
There may be some discounts in your corner as well.
The time it takes to gain knowledge about insurance, could save you hundreds of dollars every year.
Let’s dive right in and see what we can make sense of.
The Law Of The Land
The first thing to know about insurance is that it should be working for you, not against you.
Let me clarify. You should only be paying for what you get and you should be getting more than you deserve.
Well, there might be a catch. This is why having a broker can be so valuable.
The broker works for the consumer: that’s you! They don’t make money until you are satisfied.
The best way to describe how important insurance is, is to compare it to a game of football.
- In football, the quarterback is your team leader, and usually the highest paid member of the team. Let’s say that this is the largest and most important bill you pay every month. In most cases that is your house payment. Whether it be a mortgage payment or rent payment, the roof over your head is very valuable to you and your family. The second highest paid member of any football team is usually the guy who protects the quarterback. This person is called the lineman. He protects the quarterback from getting injured. He is in fact the insurance of the football game. This is the second largest check you write and the second most important. Your insurance plan protects your car, home, health and the life of your whole family. Insurance is so important, that most states have written it into law. It is the law that you carry car insurance while driving. It is the law that you carry health insurance. Most banks make you pay for your homeowners insurance as well. Mortgage insurance is a collateral for when you purchase a home.
What Types Of Insurance Plans Are There?
But as time unfolds, so do the massive amounts of responsibility.
From buying a home, to purchasing a Recreational Vehicle. Having a baby and attaining that life insurance you have always wanted.
These elements to life sneak up on us. So what choices are there and how do you make them in regards to insurance?
Finding out the facts is the first step in this process.
There are many different insurance options available but here are the main insurances that people choose to have.
Car insurance is the most purchased insurance in the United States. Hundreds of millions of people drive their cars.
Maybe it’s to work, or maybe to drop the kids off at school. Either way, cars are a large part of our daily lives.
Depending on what state you live in, the amount of car insurance you need varies.
Most of the time you will need the minimum amount of cheap insurance which we call liability insurance.
There is a minimum amount of insurance that you must have in California for example:
- Bodily Injury Liability Limits: $30,000 per occurrence/ $15,000 per person
- Property Damage Liability Limits: $5,000 per occurrence
- These car insurance options will only protect the other party involved in a crash.
- There are other options which will protect your and your own vehicle.
- Basically you will be protecting the person you hit, but not yourself or the car you drive.
- Many banks and loan centers have a problem with this.
- They want to know that the car or truck you have a loan out for is covered in full.
- This makes sense because you do not actually own a car when there is a payment being made on it.
For those of us who have a loan out on a vehicle or who lease, this is what is expected of you:
- Collision coverage which will cover the cost of damages to your car incurred by an accident. This means that even if you are at fault, you will still be covered.
- Comprehensive coverage is a type of coverage that will replace your vehicle if it is stolen. It also covers minor damages not caused by an auto accident.
- It’s true that the price of insurance goes up when you add these to your premium. But, you also will not be out of pocket when your car needs thousands of dollars worth of work.
- Deductibles are the only thing you will need to pay on. A deductible is a lump sum of money you pay when you want to make a claim on your insurance. This lump sum is agreed upon before hand and usually links up with your premium. When your premium is lower, your deductible is higher. When your deductible is lower, usually your premium is high.
You have other options to add to your policy as well:
- Medical coverage for you and your passengers- Medical coverage can make a huge difference for your security and safety.
- Towing and roadside assistance- You may not only need this for a crash, but if you break down. Roadside assistance can save you time and money.
- Rental reimbursement- You could be covered or reimbursed for a rental car when you are involved in a crash.
- Uninsured Motorist coverage- this will make sure that you are still covered even if someone without insurance hits you.
- Full glass coverage- this is additional coverage for your car to cover glass windows and doors
Car insurance is one of the largest purchases you will make.
These basics will get you started.
Here is what happens when you are a little older and a little more established: you want even more security.
Some people choose to get it buy buying a home.
They look at it as an investment in their town, their happiness, their family.
Whatever your reason is for wanting to own your own home, you will need insurance.
The first type of insurance you may need is mortgage insurance. This is bought through a mortgage company.
If you put less than 20% down on a home, you will need mortgage insurance.
Is usually comes out to be about 1% of your homes value. If you purchase a 300 thousand dollar home, figure that you might end up paying around $300 a month in mortgage insurance.
This may be a little higher than some policies, but it is a rough estimate.
Unfortunately in this economy, most people cannot afford to put 20% down on a home, and so mortgage insurance is very prevalent.
The other type if insurance you will want to have is homeowners insurance.
What is homeowners insurance?
- When you purchase a home, home lenders require you to have a minimum amount of coverage in order to protect what they are financing.
- Homeowners insurance is in place in case a disaster such as a fire occurs and your home is destroyed. You will need it insured to pay off the loan on the home and recover damages.
- There are many factors that go into homeowners insurance and how much you might owe.
First you need to look at what sort of things you want covered. The most important aspect is liability coverage. This covers accidents happening in your home. This will covered if you are sued or if someone is injured in your house. We all hope this never happens, but statistics show that liability insurance is always the way to go.
Other things homeowners insurance could cover are:
- Damage to your home, including permanent structures on your property—unless your policy specifically excludes the cause of the damage
- Damage to personal property, meaning the items in your home that are not attached to the dwelling, due to causes outlined in your policy
- Loss of use, which allows you to maintain your lifestyle at another residence while your home is being repaired without incurring additional costs
- Limited coverage for items such as stolen jewelry—the amount of coverage varies depending upon state of residence, and you always have the option to increase this coverage.
- Additional coverage available for more valuable items (jewelry, fur, silverware, etc.).
- Fire and water damage are extra coverages you may need. If you live in a flood plain, get flood insurance. If you live where there are tornadoes or hurricanes, be covered for that as well.
- With all of the natural disasters happening lately, it is always better to be over insured than under insured.
- Remember that your home is not just the structure you live under, but it is also all of the valuables inside of the home. This is worth more than money because a lot of them are irreplaceable.
Your Life Is Valuable And So Are The Ones You Leave Behind
When people say things such as: “life is precious”, there is a meaning behind it.
The hidden riddle to life usually lies somewhere between bliss and death. You might not know what you have until it is gone.
This is far too true for many of us. But when it comes to insurance, you have the right to plan for even the worst case scenarios.
I’m talking about life insurance and what it can do for your own life and the life of your dearest friends and family.
Life insurance is something that only about half of the nation actually has.
Although we all know we are going to die, only half of us are prepared for it.
What does that say about us as a culture?
Are we a little bit in denial about death? Perhaps.
But insurance companies know that for those of us who are planners, there is money to be made.
Life insurance can be really straight forward or very complicated.
You can buy a 20 year term life policy for $50 a month. Or, you can choose to make your life insurance policy more of an investment fund.
You will probably need a financial advisor for the latter suggestion.
The least you can do is be prepared for your loved ones paying off your debts and obligations. Don’t leave a spouse struggling to get by.
Don’t leave your family in mourning with no funds for your funeral. These can be taken care of quite easily.
Here is a simple breakdown of life insurance:
If you are the primary provider for others, it can also replace your income for them, or give them money for college or other expenses.
It can even be used to earn a cash value that you can withdraw or borrow against later.
A policy is a contract between a life insurance company and someone who has a financial interest in life value of someone else.
Sometimes it doesn’t have to be a person but a trust. Putting money aside for another individual in case of death can greatly benefit family and friends.
You can choose where your money goes if you also have a will.
Most of the time people choose to take out a policy which exceeds ten times the amount of their annual salary.
This means that if you are looking for an insurance policy, have a number in mind for how much debt you have.
This means your mortgage, cars, loans and everything else.
- The insurance company wants to make money off of you. But if you are smart and do some research, they simply will not. With these three simple insurance policies, you could be secured for life and beyond. The basics are all here, but your more complicated questions should be for an expert. Get in touch with a broker and see how much security you could add to your life in 2018!