Critical Insurance Coverage Types You Must Have

It is wise to own certain frequently owned and some not so familiar insurance types. A well thought out insurance protection plan can prevent the derailment of a lifetime of planning. Years of savings can be wiped out in seconds if you haven’t attended to this crucial aspect of prudent planning.

Few of us have enough disability insurance coverage or life insurance. An accident, a heart attack or a stroke can not only destroy our physical bodies but also devastate our finances.

From a dollars and cents perspective, a permanent disability hurts our families even more than death. You will still need to be fed clothed and housed. This can cause a big strain on a family’s finances. Income replacement insurance protection can replace lost income and keep you on track to reach your family’s goals.

Hospital and doctors insurance coverage is also important. Uninsured healthcare bills can cause financial ruin. This is a bigger factor than the job loss even during a recession.

Car insurance protection is fortunately very frequently owned. If your automobile is financed or leased your contract mandates that you have it. Even if you paid cash for your automobile, the law in your area probably mandates automobile insurance coverage.

A slick highway and a little speed speed could not only ruin a healthy body, but it may also destroy a otherwise well put together financial plan. Chances are you already have truck insurance but you may not have checked your liability limits recently. Make sure that your liability and medical payments limits are adequate to protect you.

Homeowners insurance coverage is also a very common type if insurance. If you have a mortgage, you probably have homeowners insurance coverage. Even if you don’t have a mortgage, you probably have insurance coverage for your home because you want an asset as big as your house to be protected.

Homeowners insurance coverage offers more protection than most people realize. You probably know that it could pay to repair or replace your house if it burns and that it offers protection if your things are stolen by a burglar. You probably also know that your home insurance protection may pay the healthcare bills of someone who gets hurt on your property.

What most people don’t know is that it may pay if your things are stolen when they are outside your home. It could also pay if your negligent actions injure someone far from your home. This money comes from the liability section of your policy. Make sure that your house owners liability limits are high enough to protect you.

If you rent, you can purchase apartment renters insurance coverage. Liability insurance is part of the standard renters insurance protection contract. This is crucial coverage to have.

If you are not able to raise your truck or house insurance’s liability limits high enough to adequately protect you, consider purchasing a personal excess liability policy. This is also known as a PELP or an umbrella policy. A personal excess liability policy enhances the coverage for the liability portion of both your car insurance and your house insurance.

Having insurance that covers more doesn’t have to be more expensive. With most types of insurance protection there are ways to reduce your premiums by letting the insurance company handle only the risks for the bigger things that you can’t handle. For example, With auto insurance coverage you can request higher deductible limits on your collision and comprehensive coverage.

Having adequate insurance coverage will not assure that you will reach your financial goals. However like an football player who is injury prone because of risks taken on the court or field, you may not reach your full potential if you fail to protect yourself. A lifetime of savings may become like dust in a second if you haven’t protected your family with the right type and amount of insurance protection.

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What Is an Appropriate Amount of Home Insurance Coverage?

Determining what is an appropriate amount of home insurance coverage completely depends on the individual and what your unique circumstances are. For instance if you own a 500,000 home you will need higher limits on coverage’s than someone who owns a home valued at 250,000. The appropriate amount of your insurance coverage’s should cover to rebuild or repair your home to pre loss condition and cover your personal belongings for replacement or repair as well.

You will also need to determine where you want your coverage’s applied. For instance, your dwelling coverage is separate from your personal belongings coverage which is separate from your outside buildings coverage and so on. When you are talking about limits you will need to look at each different types of coverage that you have on any one given insurance policy.

As a general rule your personal belongings coverage is usually 30 percent of your dwelling coverage. So if your dwelling coverage is 100,000 dollars then your personal belongings coverage should be at least 30,000 dollars. This method only works though if you have very average items. I feel it is better to do a complete inventory of your home and garage to estimate what it would cost you to replace all of it if it were destroyed in a loss of some kind. And don’t forget to consider cost of items that should be covered on your home insurance policy like an RV, Boat, or ATV.

In order to determine how much is appropriate for your home insurance coverage It is very important to sit down with your insurance agent and go over all of these items in detail. The worst time to find out that you are underinsured is right after you have experienced a loss of some kind.

When you are trying to figure out how much coverage you should have on your policies you need to remember to consider not only what it will cost to replace your belongings but how much it will cost to demo, remove and possibly discard of your damaged items. This can cost several thousands of dollars depending on the extent of damages.

You also need to consider your Additional Living Expenses or ALE coverage. If your home is unlivable for any period of time your insurance policy has an ALE provision that can cover you for several months of rent and other expenses incurred for a rental or hotel room so that you have a place to live while your home is being repaired.

Another thing to consider is whether you will need any riders or scheduled items put on your insurance policy. A rider is necessary if you have a high valued item that you have an appraisal on and need additional coverage for. If you have a high value item you may not have proper limits on your standard home owners insurance coverage if you do not have an additional rider on that item. It is very important to talk with your insurance company or agent about these kinds of items. When you have a rider or scheduled item you can be sure that you have the right amount of coverage for high value belongings.

Each household will have different coverage needs based upon their belongings and home value. So the appropriate amount of home insurance coverage is not a standard equation.

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