Step-By-Step Insurance Guide

Monday, July 15, 2019

Your Checklist To A Great Insurance Buy

It seems that today there are so many things we can insure. A prized animal, a classic car, your jewelry and pretty much everything in between. But when it comes to the core insurance products that every person needs, we seldom understand just how much to buy or where to buy this insurance from. We tend to underestimate our insurance products and why we need them. Getting the best cheap insurance we want means doing a little homework, reading a blog or two and talking with a professional. When first entering the insurance world, one might think it a bit superfluous to need as much insurance as suggested. Why do I need uninsured motorist insurance or insurance on my car?

Quite frankly, you can’t afford not to have insurance. Things are more expensive today than ever before. If your car was totaled, you could not afford to pay for that out of pocket. If your dog needed surgery, you probably don’t have a fund sitting around for Fidos medical bills. And when you purchase a home, most banks will want you to carry some kind of homeowners insurance to cover at least liability and damages. A lot can go wrong and that is why insurance is so important. Here are some insurance statistics to help you understand.

Insurance Statistics

  • Health insurance and life insurance account for over half of the insurance industry. With the Affordable Care Act in place, everyone everywhere needs to carry insurance. If you are a tax paying citizen, then join in on getting very affordable insurance. 52% of all insurance premiums were written for health insurance in 2017. This leaves 48% divided up between all of the other types if insurances.
  • The worldwide gross for insurance premiums is about 5 trillion dollars. Thats a lot of money! It seems that there are more than a few people who find insurance helpful.
  • In the United States, there are around 6 thousand insurance companies and businesses. These businesses give out premiums for car, home, renters, pet, RV, boat, medical and life insurance. These businesses also include insurance brokers. 
  • 75 percent of all businesses are underinsured. This means that their values are higher than their insurance premiums. Most people in the United States are also under insured especially for things such as life insurance. This also means they are not sufficiently covered with a safety net in case something were to happen.
  • About 20 percent of all drivers in the United States are either under insured or not insured at all. Not being insured while driving a car is illegal.
  • Burglary and theft account for the majority of insurance claims. This could be with a home or a car. Home theft is highest in low income, inner city areas. For the most part, the safer the neighborhood you live in, the less your insurance premium will be.

More Statistics

  • There are around 1500 insurance carriers to choose from in the United States. There are about 1200 insurance brokerage companies in the United States.
  • State Farm writes the most amount of Property/Casualty claims in the U.S. They are also one of the largest and oldest insurance companies around. This does not mean they carry the cheapest insurance. Getting the best cheap insurance means finding a company who is willing to work with your budget.
  • About 85% of all homeowners in the United States carry homeowners insurance. They pay a yearly average of around $1,000 towards this insurance. But over half of all homeowners don’t properly understand their policy and how it can work for them.
  • About 48% of all homeowners actually document their valuables. Making an inventory of your valuables is a great idea when getting insurance for your home. The value of your things might be more than you think.
  • Renters account for almost 40% of all home dwellers. But less than 40% of those renters actually carry renters insurance. Renters insurance is one of the most affordable types of insurance and is easy to attain. Getting renters insurance might mean just filling out an online request with a broker. You can have a great renters insurance policy for about 20-30 dollars a month.

Fast Steps

Here are the steps you should take to purchase insurance:

  1. Get a free online quote from multiple insurance carriers and compare.
  2. Understand your budget and talk with an insurance broker about how to stay on budget.
  3. Know what things in your life need to be insured.
  4. Bundle your policies together with a company that allows this.
  5. Always pay your premiums on time. To save money pay once a year instead of monthly.
  6. Make inventory of the valuables you have in your home and your car.
  7. Ask about discounts to improve your payout to the insurance companies.

Insurance Breakdown

Here are the top five types of insurances you can buy and what they offer. Each type of insurance can be bought separately or bundled together. This of course depends on the insurance company you choose to work with. Most of the time, insurance brokers can match you with an insurance company that fits your needs. Some people prefer great customer service, while others just want a cheap insurance rate. When it comes to buying insurance, saving money is important because depending on how many types of policies you attain, you could be spending a pretty penny just protecting your stuff. And that’s OK! But remember to ask about discounts because you never want to pay more than you should.

Homeowners Insurance

Homeowners insurance is important for anyone who is investing a large sum of money in a house. Banks often require mortgage insurance but homeowners insurance is not a law. It only really benefits you to have it.

Here is what it can cover:

  • 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
  • Liability coverage for legal matters or accidents that occur on your property
  • 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.). If coverage above the limited coverage amount is required, a “rider” should be purchased. This coverage offers a broader range of perils.

Car Insurance

Car insurance is very important because it is the law. Every state is a little different about what kind and how much you need. Make sure you understand the laws in your state. Most of the time you will need the minimum amount of coverage which is this:

  • Bodily Injury Liability Limits: $30,000 per occurrence/ $15,000 per person
  • Property Damage Liability Limits: $5,000 per occurrence

The best cheap 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.

Some states require more and others require less. Florida is a “no fault” state for example. Bottom line is that if you have a loan out for your vehicle, banks will require you to carry full coverage. That can look like this:

  • Collision coverage which will cover your own car in an accident.
  • Comprehensive coverage which will cover theft and damages not incurred in an accident.
  • 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.
  • Loan/lease coverage- when you have a loan or a lease out on a vehicle, your coverage needs to be different. Most of the time a full policy is required.

Renters Insurance

Renting a home is a big responsibility. Even though you aren’t getting out a large loan, or having the responsibility of maintenance, you still have a house to look after. That means anyone who steps foot in that home is under your responsibility. This also means that the things inside the home that belong to you should be protected. You might only be leasing this home for a short amount of time, but insurance is never a bad idea.

Here is what renters insurance can cover:

  • Theft- if someone comes into your home and steals any personal property
  • Fire or lightning damage- mother nature has a way of damaging property
  • Smoke damage- a small kitchen fire can cause a lot of damage, be covered.
  • Water damage- if there is any water damage to the house you are renting it could costs thousands to repair
  • Hail or windstorm damage- Live in a place with high winds? Be prepared.
  • Damage from falling objects- If a tree falls, it can cause some serious damage.
  • Personal property- Jewelry, furs, fine art, and the excess things in your house not covered by theft.
  • Dwelling- major property coverage that protects house and attached structures.
  • Explosion damage
  • Ice and sleet damage
  • Liability coverage-If someone is injured in your house, they could sue. Liability is a good idea.
  • Medical payments to others- if someone is injured and needs to have medical care.
  • Loss of use- which means that you will still be covered if the house you live in needs repairs from fire or other damages. This coverage helps with additional living expenses for you and your family.

Health Insurance

Health insurance is an important type of insurance and usually falls in a separate category. This means that many people buy health insurance apart from their other types of policies. It can be complicated and every changing in cost. The cost of insurance in most states is dependent upon your yearly income. With the Affordable CareAct, those who make less, pay less. Those who make more, pay more. Health insurance has a premium and a deductible just like all other types of plans. But for health insurance, the payout without insurance could reach up into the hundreds of thousands of dollars. You can also get health insurance through your work unlike many other insurance policies.

The type of coverage you can choose from is a wide variety. HMO, PPO, EPO, Point-of service plans, high-deductible health plans HDHP, and health savings accounts, are all possibilities that may work for you. Other items to review include policy limits, co-pays, deductibles, in network and out of  network coverage, and pre-existing conditions. In a traditional healthcare plan, the doctor is reimbursed for all or some of the patients visits by the healthcare insurance company. This gives the patient the freedom to choose their own doctor and plan. For this type of plan, there is a premium paid and usually a yearly deductible. The portion of the U.S. economy spent on healthcare is almost 20%. People in our day and age cannot afford to pay for healthcare costs out of pocket. This is why we have insurance. We also have government subsidies for people who qualify.

Life Insurance

Life insurance seems to be hit or miss for most people. If you are not in the phase of your life where you are thinking about death or what comes next, you might not give life insurance a try. But those who are financially smart understand the benefits of life insurance. Life insurance can also be a financial tool. If you have people who depend on you, you should think about obtaining a good life insurance policy. You will want to know which kind to purchase because there are a few options and they can be confusing. This is where a broker can come in handy.

There are a couple different options to think about when preparing for the future. Term life insurance is a product that is called temporary because it’s meant to protect you for a certain amount of time. It comes in forms of 5 year term, 10 year term and all the way up to 30 and sometimes 40 year terms. Permanent life insurance is a life insurance product that can provide life insurance protection for your entire life. Depending on the type of product or company, it can range from  coverage to age 90, 100, 121 or lifetime. The cheaper permanent option is a “Permanent Term” option. This is the most affordable permanent insurance, although it is more effective as life insurance protection rather than an investment.

Getting the most bang for your buck when it comes to buying insurance means talking to someone who knows the industry. Think in steps and never over pay for insurance. There are enough insurance companies around to find the one that fits your needs.



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