When costs rise and your budget tightens, you may be tempted to skimp a bit on your insurance plans. In the long run, though, this would not be a good idea. You never know when disaster may strike, and if you don't have proper insurance coverage, you could take a major financial hit. Consider the following reasons why it is important to properly insure your property.
The many personal lines insurance policies on the market these days are all designed to help you minimize the risks of life. Severe weather, fire, theft and freak accidents could happen at any time, and these can be devastating. Many people have suddenly found themselves with next to nothing after a tornado or earthquake or flood. Insurance can't stop these things from happening, but it can help you recover from disaster and limit your financial losses.
This is why you must make sure to have the right kinds of insurance and enough coverage. Talk to an insurance agent who can help you determine exactly what you need, calculate the value of your house, car and personal property and make sure that your risk is as low as possible just in case the unthinkable happens.
Insurance policies can also help you repair or replace damaged or destroyed property. If your home is damaged in a storm or a fire, for instance, and is repairable, insurance will likely cover much of the cost. If it is damaged beyond repair, you can use the insurance money to help purchase a new home. The same applies to your car. With regard to personal property, having adequate insurance can assist in replacing lost items. Of course, some things are simply not replaceable, but you can at least purchase necessities and begin to rebuild after a loss.
Some insurance policies are required for legal reasons. If you have a mortgage, for instance, your lender may insist that you purchase enough insurance to at least meet the balance of the mortgage. This protects both the lender and you in case of disaster. Sometimes a lender will actually supply forced coverage for you if you do not have a policy of your own, but this protects only the lender, not you.
Auto insurance is required in nearly ever state although types and minimum coverage vary. Talk to your insurance agent for the details. You will probably want to purchase more than the minimum, but you must make sure that you have at least what the law requires. You will also need to keep proof of insurance in your vehicle at all times in case of an accident.
Finally, be aware that some landlords may require or strongly suggest that you purchase renters' insurance. This actually works in your favor because if disaster should strike your rental property, your personal items would not be covered under your landlord's insurance. You could be out a lot of money trying to replace them.
Your insurance policies also help you deal with liability issues. If someone is injured while on your property, your insurance company can help you with any lawsuits that may arise, cover medical bills for the injured party and pay for any property damage. Check with your agent for a recommendation of how much liability you should carry as part of your homeowner's policy.
Liability coverage is also a major part of auto insurance policies. Again, states will require a minimum amount, and your agent can advise you if you should carry more based on conditions in your area, your driving record and other factors.
Peace of Mind
Finally, insuring your property can offer you at least some peace of mind. If something goes drastically wrong, you will not be left with nothing at all. You will be able to move on with your life and start over.
By now, you should be able to see that properly insuring your property is critical for your well-being and the protection of your loved ones. So talk to your insurance agent today.