Who Needs Insurance, Anyway?

Insurance. If we’re being honest, it’s an incredibly boring business. Throw the confusion factor in there and it might as well be an alien language to most consumers. But, it’s an alien language that is absolutely necessary to all of us. My goal is to give you a few pointers that makes understanding your insurance needs a little clearer because at the end of the day, don’t we all want to be as protected as we can?

For the everyday person like you and me, our two most expensive purchases in our lifetime will be our home and our car, so we owe it to ourselves to protect them as much as possible! To best understand how to be most protected we must first understand a few basic terms:

Premium – normally given in an annual amount but can come as a six month amount or even monthly amount to be paid in order to receive coverage

Deductible – the amount you must pay before your insurance company steps in and will pay

Liability – this is coverage for damages done to other people, most generally, not you, not your family on your policy and not your own vehicle

Replacement Cost – the actual cost of replacing or repairing your property to original value (you want this!!)

Actual Cash Value – the cost of replacing or repairing your property minus depreciation (what you paid-age/wear/tear)

When it comes to insuring your home, it is most important to have replacement cost whenever available. This insures that you will be covered for damages done to your things in the event of a loss, whether that be fire, water, theft, or other insurable losses, for the most value possible. But for damage from flood or earthquake to be covered requires a special policy. Your expensive hobby or family jewelry can be covered under a homeowner’s policy!! You only need to purchase separate coverage in addition to your original policy.

Every state has a mandatory minimum for auto insurance coverage. Ohio’s is: $25,000 for injury/death to one person, $50,000 for injury/death to two or more people and $25,000 for property damage per accident. I should be clear in saying that this is the absolute bare minimum and you want more protection than this. It is illegal to drive a vehicle without this most basic coverage, but these most basic limits will also be met faster than you can imagine in the event of an accident.

Nothing is more important than your life, you should invest in it. Life insurance coverage will prepare individuals and their families in the event of untimely death and after end of life costs. Life insurance protects those that you leave behind. And I know us millennials are invincible, but the younger you are when you purchase this coverage, the better rate you will get for longer.

I hope this has helped you better understand the confusing world that is insurance. I know it is boring, but it is important when the unpredictable happens. So go read your policy! No, not the whole 200 pages of nonsense, just the Declarations Page. This page will lay out the basics of what you have. Then call your agent and chat about it. Make sure you’ve increased your coverage on your home as values increase, especially if you’ve done work to it. Combine your home and auto and any other policies with the same carrier as this will give you a discount. And ask the questions! We welcome it and you’ll be thankful that you did.