Insurance: The Common Insurance Points
Insurance is a tricky issue. There are lots of benefits to it, but then there are also some serious risks that can come with it. Many people put off purchasing insurance for a variety of reasons, but if you're already part of the insurance company's policy group your decisions will have different impacts depending on the type of company you work for and what you do for a living.
This blog post takes an in-depth look at what every person, no matter how high or low their risk is, should know about what they're insuring themselves against and how much coverage they'll need to make sure their investments stay protected. It breaks down the common insurance points and what they mean to you. For each point, I'll go over the types of risks that are typically insured, whether it's a property or liability aspect of risk and how much coverage your employer will ask you to purchase and why. There will be information on the different insurance companies, as well as details on how to make changes to your policy if you decide to purchase additional coverage or if you're interested in doing so for others.
In order to get maximum benefit from this article I'd recommend either reading it all the way through on pages 1-12 OR printing out a copy of it (higher quality paper should do!) so that you can study it whenever you have time. By reading this and making notes you'll be able to get a better understanding of what all the insurance points mean, when they'll apply to you, and how much coverage you'll need.
What Is Insurance?
The basic idea with insurance is that by paying a small fee each month you're removing the risk from your investments so that if something bad happens to it you won't lose money on your items. If an investment is lost in a situation that's not covered by insurance there will be no financial compensation for it; however, if the investment goes missing because of an insured event then there will be some payment made for it.
There are a few different types of insurance, but typically they're broken down into two categories: property and liability. Property insurance is used to protect your assets; the items that can be valued and purchased. The best example of this is home, auto, or rental property owners who may want to insure their house in case it burns down or their car gets stolen. Liability insurance is used to protect your interests from other people. If you decide to get a dog and the dog bites someone's arm off then you'll likely be held responsible for that damage; however, if you had enough liability coverage then that damage would be compensated for by the insurance company.
Insurance Point #1: Identity Theft Protection Insurance
Identity theft protection insurance refers to the insurance that's purchased to protect your identity from theft and fraud. Although it's not possible to protect against every type of fraud or theft attempt, you can buy insurance to cover the costs involved in stopping a fraud from happening. There are two aspects of identity theft protection: an annual premium that is paid and an annual deductible. The annual premium is what will pay for the actual damage incurred as a result of an attempted identity theft, while the deductible is what you'll need to spend on measures such as credit monitoring and fraudulent detection in order to be reimbursed for any loss incurred. The insurance company will offer different amounts of coverage, but it's suggested that you purchase as much of this as you can afford.
One common example of identity theft protection insurance is seen at the airport when you enter or exit a major airport. If you have to show your passport or driver's license to the security staff there are often identity theft protection insurance cards available for purchase. These cards aren't mandatory, but they're highly recommended because if your ID were to be stolen while traveling then there would be additional costs incurred to retrieve it. The premium is one flat fee per year, while the deductible is usually $100-200.
Best Time to Purchase Identity Theft Protection Insurance: Before you have an identity established.
Insurance Point #2: Liability Insurance
Liability insurance is designed to protect your interests from the accidental or intentional actions of other people. Liability insurance will help get rid of the financial damage that occurs when someone else is injured because of something you did or didn't do. The most common liability insurance is auto and home owners' insurance; however, there are many other types of policies such as rental owners', boat and motor owners', professional liability, and business owners' policies. Policies can be broken down into two categories: premise and third-party liability. Premise liability refers to the insurance policies that are purchased for your premise, such as your home or auto. This covers the damages that can be caused by hazards other than weather conditions such as construction and electrical issues; this type of coverage should be purchased for any vehicles you own because even if you're not at fault for an accident due to another hazard you could still be held financially responsible for damages. Third-party liability refers to the policies that are designed to cover damages from vandalism, theft, or vandalism causing damage to another person's property.
Best Time to Purchase Liability Coverage: Any time you want a higher level of coverage on an investment make sure to purchase it before there's a chance it can cause financial damage.
Insurance Point #3: Property Insurance
Property insurance is used to protect your property from damage or loss. There are several types of property insurance, some of which are designed to cover more than one type of asset in case it causes damage or loss to another. The two categories that are broken down into several subcategories include: dwelling coverage and personal property coverage. Dwelling protection is the policy that you'd purchase for your home so that if something happens to it due to a hazard such as weather conditions or vandalism then the insurance company will compensate you for the replacement cost. Personal property coverage applies to other types of assets including clothing, furniture, appliances, electronics, jewelry, and other valuable possessions. The best way to determine the amount of coverage you need for your personal property is to calculate its replacement value. Replacement value is the amount that an item will cost you if you were to purchase it today; this number doesn't take in account any depreciation of the item, but because most people buy items with the intention of keeping them until they're no longer usable (clothing and furniture, for example) then replacement value is a good indication of the market cost.
Best Time to Purchase Property Insurance: Any time you acquire a new type of property.
Conclusion:
These three types of insurance can be purchased for a single policy holder or distributed amongst a group of people. To find the most efficient way to provide coverage for a large number of people take into account what you have, what you'd like to protect, and how much you're willing to spend on each category. The more coverage the better, but ensure that your costs don't exceed your income for the chance of losing valuable assets is too great!
If you want more information about insurance read some articles online or talk with an agent from your local area. Insurance agents are trained in their respective policy type and will be able to provide insight into your current situation as well as help you determine what's best based on your current financial status.