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Insurance is one of the rare purchases you hope you never have to use. It's important to be covered when problems arise. But are you, really? If you don't know some of the essentials, you may find yourself having to come up with a payment out of pocket.
The following are a few key points to keep in mind when purchasing insurance.
Homeowners/Renters
Speak with your insurance agent for more information on appropriate coverages for your situation.
The following are a few key points to keep in mind when purchasing insurance.
Homeowners/Renters
- Make sure you have the appropriate home coverage for common perils like theft, vandalism, fire, lightning and water damage. Also, keep in mind water damage comes in many forms and may require a different policy. For instance, while homeowners insurance usually provides for repairs stemming from a burst pipe, it won't cover overland flooding. For that, you need flood insurance. With flooding being the no. 1 natural disaster in the U.S., it's well worth the investment.
- Renting a home? Consult your agent to determine what amount of renters insurance coverage is necessary. Many landlords require a minimum level of protection, and their policies don't cover your personal belongings.
- If you're a college student staying in a dorm, you may be covered by your parents' homeowners insurance policy. Keep in mind the coverage may be only partial, so you may want separate renters insurance protection.
- Check your auto insurance policy to make sure you have loss of use coverage, which pays for a rental car while your vehicle is in the shop for repairs. Otherwise, you may have to pay out of pocket.
- Every state has an insurance liability minimum that you have to buy. Err on the side of caution and go with a larger amount than what's required. Not only do accidents usually cost more than you might expect, but you can be also sued. Having a higher liability limit will protect your assets.
- Factor in depreciation when determining the amount of coverage needed in the event of total loss. Depending on the policy, you may receive a highly depreciated amount for a total loss claim or even parts to fix a damaged car.
- Several factors affect what you spend in premiums. The biggest influences are your age and your driving history. Always drive carefully, follow all traffic laws and observe the speed limit.
Speak with your insurance agent for more information on appropriate coverages for your situation.
