Types of Insurance Policies and Why We Need Them

Why Insurance is Our Life Jacket

Insurance is our safety net when preparing for tragedies that might come our way. Without these policies, we may end up drowning in a sea of debt. However, something that is so crucial to our well being can be quite complicated to understand. With so many types of policies, from auto insurance to renters insurance, how do we know which plan best suits our needs? Well, let’s break it down and simplify all the fine details so we have a better understanding of the policies that may be available to you — and why you might need them.

Auto Insurance

An automobile driver will have an accident claim once every 17.9 years on average. There are several options when it comes to selecting your auto insurance policy that proves affordable while providing the protection you need when you have a fender bender or vehicle theft or injury from an accident.

The level of coverage you select for your auto insurance will determine your monthly rate. The higher the out-of-pocket expense (known as the deductible), the less you will pay for your monthly rate (or premiums). If you choose to select a lesser deductible then you will have higher monthly rates.  Some other factors that are part of determining your rate/premiums are your driving record, insurance score, years of driving experience and where you live.  

A local insurance agency will be able to assist you with picking the best plan for you and your family. Every state has different laws that pertain to driving any motorized vehicle and they will be able to walk you through the process. Other details that will be important to you and the insurance agent is if an Sr-22 form is required and proof of insurance coverage maintained for the past several years. These two items are relevant when determining how to locate the lowest rate to fit your financial budget.

Home or Renter’s Insurance

If you own your home or are in the process of buying a new place of residence, then homeowners insurance should be at the top of your list. This policy will cover costs when damage is caused to your property. Whether it be fire or tornadoes, your policy is intended to repair or replace the damage that has been done.  Homeowners coverage can be complicated, be sure to read the policy terms carefully and purchase additional coverage options when necessary. Speak to your agent about the various options available. Again, your rate will be determined by the level of insurance coverage you purchase and what exactly you decide to have placed under the policy.

If you don’t own a home, consider Renters insurance.  There are various levels of coverage to protect you and your family’s personal property.  Break-ins, theft, and fire or wind damage to your property are always a possibility. Give some serious thought to speaking to your agent about Renters insurance.  Prices for these types of policies are usually quite inexpensive.

High-Risk Insurance

If you have had accidents, tickets, or past issues in finding a lower-cost car or home insurance rates, you might want to consider a high-risk insurance agency.  This type of agency has multiple companies that specialize in customers that may have been denied coverage from other companies and may have a claim history or driving history that cause high rates.  Once you have been successfully without incident for a length of time, they can transition you to more preferred insurance companies and your options will expand. Keep in mind as you search through the internet seeking policy protection that you do have options and don’t settle.

Now that we have simplified the confusion, what steps do we take next? Contact local insurance agencies to learn your options.  Don’t settle just because your driving record may not appear to be the prettiest, try a high risk agency that can check for multiple options.