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04/04/2012

Don’t Skimp on Your Insurance – Any Kind of Insurance

InsuranceThe Dallas area experienced more than a dozen tornadoes in one day this week. For many families, the process of rebuilding their lives is about to begin. If you had no damage and weathered the storm without incident, first thank your lucky stars. Second, use this opportunity to revisit your insurance policies and ensure you are adequately covered for those unexpected situations.

Let’s be honest. Nobody expects to lose their home in a tornado. It’s supposed to happen to someone else. If it happens to you, is your homeowners insurance policy enough to rebuild? Many homeowners make a critical mistake when purchasing homeowners insurance. They insure their house based on what they paid for it, not on what it would cost to replace it. Spend the extra money to insure the replacement cost of your home. It adds almost nothing to the cost of your policy, but makes a huge difference if your home is destroyed by a storm, tornado or something else. If you have expensive jewelry, antiques, etc., insure them separately with riders or add-ons to your policy, to insure you get the full replacement value for them if they are lost, stolen or destroyed.

Renters insurance is often overlooked and is so important, especially to people renting apartments. A kitchen fire in one apartment spreads fast and can destroy an entire complex. Renters insurance costs very little and will replace all your belongings so you’re not out thousands of dollars of your own money for clothing, furniture, appliances, etc.

If you don’t have life insurance, consider getting some. Life insurance is a little different than others because you’re not insuring stuff. You are paying on a policy that will take care of your loved ones when you die – whether it is of old age or young and unexpectedly. Life insurance is a little more flexible than insuring stuff, because you can choose the amount of coverage you want. Choose enough to take care of your spouse and our children, and be sure they are listed as beneficiaries on your policy. If you can’t afford whole life insurance, opt for term life insurance.

Of course, most of us have auto insurance. If you don’t, you should, if for no other reason than to protect yourself from people who don’t. If someone with no insurance damages or totals your car, you are covered by your own policy. If your car is stolen, you are covered. If your car is new, get GAP insurance, too. That pays what your auto insurance policy doesn’t, so you can pay off your loan and still get another vehicle.

It is okay, in fact, it’s even wise to shop around for the best deal on any type of insurance. Just be sure you’re not skimping  to save buck. This is one of the few times when spending a few more dollars could make a big impact when you really need it.

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