Is Homeowners Insurance Enough In The Toughest Of Times?
Many people think that homeowners insurance is sufficient to protect them in the event of a loss. However, those unfortunate enough to have lost their home due to a natural disaster or violent crime should always have life insurance as well.
The best way to protect yourself and your loved ones is by taking out both life and homeowner's policies from a reputable provider that will offer you the most coverage for your money.
This article offers tips on how much coverage one should plan on getting in order not to be more than just adequately protected, and lists some of the top providers with competitive rates in North America.
HOMEOWNERS INSURANCE - A KEY CONCEPT
"Homeowners insurance" is a very broad term that covers a number of different types of policies. The process of buying homeowner's insurance coverage can be complicated because state laws vary and homeowners must look carefully at the details of their policies to understand what is covered and what isn't. Homeowners insurance generally includes:
Legal Defense: Coverage is available for legal defense in some states, but can be specific to a type of lawsuit or not covered at all. It is advised that home owners have sufficient legal defense coverage in their policy, regardless of the state in which they live.
Personal Injury: This is not always covered in a homeowner's policy, but those that are exposed to high risk of personal injury due to crime or natural disaster should check to see if this is included in their policy.
Crime: Thefts and other crimes are not covered under homeowner's insurance, which is why many people opt for additional coverage such as renter's or tenant policies. Theft and vandalism coverage can extend to renters as well.
Fire: Most homeowner's policies have a limited amount of fire damage that they will cover and it should be understood by each home owner what situations could result in loss of coverage (for example, if the fire was intentionally set by the home owner). Fire damage is also covered by renter's and tenant policies.
Damage to Your Residence: Most homeowner's insurance policies will cover the cost of fixing structural damage in your residence, but only if you are not responsible for causing the loss.
Loss of Use: This is a tricky concept that some states do not allow, while others are more lenient in allowing homeowners to take out additional coverage to compensate for lost revenue due to a loss. In addition, it is important to know how much loss of use coverage you can expect and what situations will qualify for this coverage.
Loss of Income: Loss of income is a difficult topic to cover in any form of insurance, and home owners insurance policies are no different. Some states will cover lost income due to a loss while others will not.
Claims and Administrative Costs: A deductible may be taken out on a homeowner's policy, but the amount varies from $500 for fire damage to $250 for personal injury claims. This is just one of many claims that can cause a person's insurance premium to rise and they should be aware if this figure is included in their policy or not.
COVERAGE FOR VULNERABLE MARKETS
Most major insurance providers offer homeowners insurance coverage at reasonable rates. However, those in vulnerable markets may be able to tailor their coverage by going through a third party provider that can offer them a better rate and additional protection. Many insurance companies will not cover individuals who are classified as high risk and may even go so far as to cancel an existing policy outright.
For example, homeowners in high crime areas may benefit from getting their coverage from one of the many third party providers that cater specifically to single mothers or families with young children who live in areas where crime is rampant and other major insurance providers refuse to sell. These types of special policies are not just limited to vulnerable markets; there are also special snowmobile, boat and motorcycle policies for those that need them.
In addition, the type of coverage that is available for a particular policy can vary. If the homeowner's insurance policy contains coverage for theft and vandalism, but not for fires, then the same policy may be worth more in areas where fires are common.
LIFE INSURANCE - A KEY CONCEPT
Life insurance covers a variety of different situations. In most cases it can be purchased to include the costs of funeral services if you have no family members to help pay your final expenses. The coverage offered by life insurance companies varies widely and it is important to understand what is covered and what isn't when it comes to this type of plan.
Covered expenses include:
Funeral and burial costs - Should there be no one to pay for your funeral or burial costs, the value of a life insurance policy would cover these expenses. However, coverage varies widely from plan to plan. If you are married and have children, then your spouse may be eligible to receive benefits that are not available to single people. In some cases additional benefits can be added for the surviving spouse such as funds for a college education or even running a household.
Administration fees - The payment made by the insured person's beneficiaries will not be covered by a life insurance payment unless it is specifically stated as such in their policy. However, in some cases the policy will cover the administration fees for the sale of assets acquired by the insured person.
Life Insurance - A Key Concept
Children's Education - This is one of the most important benefits that can be included in a life insurance policy. The amount of education funds that may be included will vary depending on when the policy was purchased, but may cover college costs or even trade school expenses. In addition to covering educational expenses, some policies also include funds to help children with day care or even to purchase a home/car while in school.
Long Term Care - Life insurance can also provide for long term care by including an inflation protection clause. This would allow the policy to pay out a sum of money that is predetermined by the rate of inflation. In cases where the insured person did not have long term care insurance when they purchased their policy, this could be an important benefit. This type of provision may be included in a rider or supplemental policy.
Pension - Under certain circumstances, it is possible for an individual to add this benefit to their life insurance plan. The amount that can be included in most life insurance plans is small at best. However, if the insured person had enough assets and had purchased a pension plan through work, then it is possible that some funds would be available to cover the cost of nursing home care or even other long term care expenses. In addition, many life insurance policies include medical insurance that could be used to pay for long term care expenses as well.
Life Insurance - A Key Concept
Debt Protection - This is a unique type of life insurance that can help individuals with high debt. In this type of plan, the beneficiary may receive a portion of the policy funds once the insured person has died. Because most debt has a time limitation (credit cards) or will require an annual payment (mortgages), it is important to have an experienced agent assist you in choosing the right plan for your needs. Debt protection policies can help alleviate some of the pressure caused by outstanding debts and should be considered if you are carrying large loans or high credit card balances.
Conclusion
Life insurance can be a valuable tool in protecting the family if needed. It is important that you understand how it will work for your family and what the policy will cover. A professional agent will not only be able to provide you with information about the different types of life insurance plans, but they will also be able to help you understand how these policies can benefit your family.
The above article was written by an Agent at Wise Insurance Agency LLC. If you have any further questions or would like to receive a free, no obligation quote on any type of life insurance, please call Wise Insurance Agency LLC at 317-632-4084 or fill out our quick contact form on our site.