Daily Insurance News https://dailyinsurance.news All the Insurance Nws Your Need Thu, 15 Oct 2020 15:23:37 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.7 https://dailyinsurance.news/wp-content/uploads/2020/10/cropped-din-favicon2-32x32.jpg Daily Insurance News https://dailyinsurance.news 32 32 Understanding College Tuition Insurance & If You Need It https://dailyinsurance.news/understanding-college-tuition-insurance-if-you-need-it https://dailyinsurance.news/understanding-college-tuition-insurance-if-you-need-it#respond Thu, 15 Oct 2020 15:23:37 +0000 https://dailyinsurance.news/?p=508 We buy insurance for things like homes, cars, our health, weddings, and more; but have you thought about buying college tuition insurance?

With the pandemic ongoing and the average cost of college room, board, and tuition in the USA at about $25,000 a year, a four-year university trip can cost a huge amount of money.

It was a good idea to protect your university tuition payments with tuition insurance prior to the pandemic, right now it is more important than ever before. Let’s see how tuition insurance works and if you should buy it before heading off to school this year.

Tuition Insurance Explained

Tuition insurance, like other types of insurance, is a policy you can purchase that will refund your university costs should you need to withdraw from school due to an unexpected medical event or other situation covered by the insurance policy. Most institutions of learning offer total or partial tuition refunds based on their own policies, but tuition insurance takes it a step further.

The insurance works like so, you pay a monthly premium for the insurance policy which covers a set amount of tuition reimbursement. If you are forced to withdrawal from school before it has begun, then your policy will protect your tuition payments. Because the common official withdrawal date from classes is 5 weeks into the semester, many universities have their own prorating system for students who must leave within that 5-week period.

The insurance can cover things like tuition, room, board, books, and other miscellaneous expenses.

What is Covered with Tuition Insurance?

Like other types of insurance, there are different levels of coverage. Usually, a policy will cost about 1% of your total tuition and the amount of insurance coverage you can purchase can vary (think car insurance deductible flexibility as an example). Depending on your level of coverage you can cover more or less of certain areas.

When is Tuition Insurance Used?

What qualifies as an “unexpected” event which leads to a school withdrawal that can kick in a tuition insurance policy? You will want to look at the specific wording of any policy you may be considering, but usually, an unexpected “event” is something along these lines:

  • Injury (major injuries which prevent a student from attending class)
  • Illness (chronic or serious illness which prevents a student from attending class)
  • Depression, anxiety, substance abuse, other mental health disorders.
  • Death

But be careful as pre-existing medical conditions may not be covered if the student was deemed unable to start the semester before it began.

“Illness or injury” also goes beyond physical illnesses and can encompass mental health, substance abuse, or other psychological issues. Considering the high stress of attending university courses, the ongoing pandemic, and personal stress associated with finding your place in the world; it is important to take into considering the mental health component of any tuition insurance policy.

Does Tuition Insurance Cover Covid-19 Closures?

Right now, this is the million-dollar question.

“What if my school closes or partially closes due to a coronavirus outbreak, does my tuition insurance policy kick in then?”

Considering the large number of people who purchased tuition insurance because of the ongoing pandemic, the question is legitimate. So, how does Covid-19 play into this? Unfortunately, tuition insurance coverage only kicks in from a total withdrawal from school. If your campus has been closed and you are sent home to take your classes online, you will not be able to make a tuition insurance claim as technically you are still attending school.

So, online schooling is not something that will get your tuition money back. You may be able to file a claim if you are forced to leave school due to complications following a coronavirus diagnosis where you cannot take classes or complete course work. But tuition insurance won’t payout for your school going to online classes.

What if I’m Getting Financial Aid?

Whether you are getting financial aid, a student loan, or some other form of tuition plan (grants, 529 plan, etc) – tuition coverage is determined based on the amount purchased on the policy. Because a tuition insurance claim payout goes to the insured and not the student loan provider, you can still get tuition insurance if you’re on financial aid.

But remember that it will not cover the costs of any interest or penalties for late payments. If you have a private student loan that is already accruing interest, that interest can continue to accrue even if you’ve made a claim and been paid out from your tuition insurance policy. So, this is something to be very aware of.

Do I Really Need Tuition Insurance?

No matter what the tuition cost of your learning institution, you should make the decision to buy tuition insurance based on your current financial situation. Since most individuals and families may not be able to afford an additional semester of school, tuition insurance is smart.

Consider that if you must leave school for at least one semester, you’ll need to add an additional semester in order to finish. So, if those additional costs (room, board, tuition, books, etc.) will be not possible or exceedingly difficult for you financially, it’s smart to purchase tuition insurance to protect your time and financial investment.

We recommend it.

https://dailyinsurance.news/understanding-college-tuition-insurance-if-you-need-it/feed 0
Buy Wedding Insurance and Protect Your Matrimonial Investment https://dailyinsurance.news/buy-wedding-insurance-and-protect-your-matrimonial-investment https://dailyinsurance.news/buy-wedding-insurance-and-protect-your-matrimonial-investment#respond Thu, 15 Oct 2020 15:20:18 +0000 https://dailyinsurance.news/?p=501 Many people imagine an immaculate wedding when planning to get married. The bride, the groom, the “I do’s”, the vows, dancing, food, champagne, the cake, and of course that first dance as a married couple.

But life is full of risks. Considering the average cost of a wedding is about $35,000 in the United States, a wedding is a big investment. It’s a very smart idea to protect that investment with Wedding Insurance.

With the current situation of Covid-19, wedding insurance is a smarter choice than ever before with all of the event postponements, reschedules, and cancellations we’re seeing across the United States right now.

What is Wedding Insurance?

Similar to other forms of insurance in that it’s smart to have and something you hope you’ll never have to use. There are two distinct varieties of wedding insurance protection:

  • Liability: should your wedding get too rowdy, wedding liability insurance protects against injury and/or property damage to your guests, staff, and the venue. Many wedding venues will require liability insurance (especially if alcohol will be served).
  • Cancellation: this will protect your investment against non-refundable fees should the wedding need to be canceled, postponed, or a vendor doesn’t show up; for a reason covered by the cancellation policy. During the global pandemic, this is a very smart idea as many wedding venues face uncertainty as to if the wedding can happen at all, and if it does happen what it will look like (number of people, dancing or not, etc).

Historically, the majority of couples planning a wedding purchase wedding liability coverage but skip the cancellation portion. This is because many people don’t go into the wedding thinking they’ll need to cancel and most wedding venues only require liability insurance. It is more common for people to get injured at a wedding then the wedding be called off entirely, so having liability insurance is smart (even where not required).

There is also no discrimination from wedding insurers regarding the type of honorees and wedding you’ll be having (same-sex, non-traditional, etc.).

Typical wedding insurance plans start at roughly $100/month and go upwards from their depending on the costs of the wedding venue, the add-ons, and other options selected in the wedding package. Some insurance policies will allow you to add related events like wedding showers, rehearsals, brunches, engagement parties, and more. You can even add insurance on expensive items like attire, jewelry, wedding gifts, wedding photos/videos, wedding rings, etc.

The global pandemic has caused many couples and wedding venues to move the ceremony to a later date. With all the uncertainty surrounding large events during Covid-19, wedding insurance is a must.

What Does Wedding Insurance Cost?

A basic wedding insurance policy usually runs between $150 and $600, depending on the amount of coverage you decide to go with. For general liability accident reimbursement up to $1,000,000 the costs are typically between $180 and $200 a month. Different wedding insurance providers have different fee structures and may consider things like the cost of the venue, the location (city), how many people are coming, if alcohol is being served and more. Be sure to shop around and get more than a few quotes because different companies can have far different costs for the same level of coverage.

Do We Really Need to Buy Wedding Insurance?

Usually the answer will be yes whenever alcohol is served as even responsible people can have accidents like slips or breaking something at the venue. Talk to the vendors you’re hiring for the wedding, how well are they covered with their own insurance policies? This way you can make sure you’re not paying for overlapping coverage so ask your vendors to see a copy of their insurance policy. Then if you’re not fully covered you should definitely buy wedding insurance.

Some venues also don’t have their own insurance so in this case it is a must to buy at least wedding liability insurance. Considering the costs of weddings, it could be a real financial nightmare to pay for the wedding to then have to pay for any accidents or damage after the party.

What is Covered by Wedding Insurance?

Let’s take a look at what is covered when you buy a wedding insurance policy.

  • Site protection: if the venue has no insurance of its own, you’ll want to make sure you have wedding insurance. Wedding insurance will cover costs arising from unavoidable events that lead to a cancellation – like fire, flood, power loss, etc.
  • Weather conditions: this won’t cover rain but if there is weather which causes the wedding to be cancelled, wedding insurance covers rescheduling and all of the details down to flowers, tents, and food + drink.
  • Injury or Sickness: some wedding insurance companies may have an injury or sickness clause for the bride, groom, or other essential members to the wedding. These are usually add-on.
  • Vendor no-show: what if the caterer doesn’t show? What about the florist? These are impossible to fix the day of the wedding so if a vendor doesn’t show up, the wedding insurance will cover costs of rescheduling or cancellation due to a vendor no-show.
  • Military deployment: when duty calls military personnel must travel, often without warning. This means if one of the people getting married will miss their own wedding due to a deployment, the wedding insurance covers costs of rescheduling or cancelling the event.

What is Not Covered by Wedding Insurance?

  • Cold feet: a change of heart is not covered by wedding insurance. You cannot file an insurance claim if one of the people getting married doesn’t show and the wedding is called off. Though some policies have an additional clause you can add for this (typically not a good sign to begin with if you feel you need “cold feet” wedding insurance add-on).
  • Engagement rings: policies often cover the wedding ring, but the engagement ring could be another story so be sure to read the policy carefully before purchasing.

Buying Wedding Insurance During Covid-19

Many wedding insurers are no longer offering new wedding insurance policies because of the high costs associated with so many cancelled weddings that they’ve already paid out for. Considering most insurance policies will never be used, insurance companies are not typically prepared for claims on a huge number of the policies they’ve sold. For this reason, you may have a harder time purchasing a new wedding insurance policy right now because of the uncertainty surround Covid-19.

You should still be looking around though as buying wedding insurance is more important than ever before.


https://dailyinsurance.news/buy-wedding-insurance-and-protect-your-matrimonial-investment/feed 0
What Is Life Insurance and Who Needs It? https://dailyinsurance.news/what-is-life-insurance-and-who-needs-it https://dailyinsurance.news/what-is-life-insurance-and-who-needs-it#respond Tue, 06 Oct 2020 16:47:42 +0000 https://dailyinsurance.news/?p=484 Life insurance may not be a huge priority for you right now but knowing what it is and who needs it is still important. Term life may be a good option for some while permanent life insurance could be better in particular scenarios.

What is Life Insurance?

Life insurance is a contract between a policyholder and an insurer where the insurer guarantees a payout to named beneficiaries following the death of the policy holder.  The policy holder makes premium payments, and the life insurance provider pays a lump-sum amount (aka death benefit) to the beneficiaries when the policy holder dies.

People have different reasons for buying a life insurance policy but usually it is to protect their love ones financially in the case of their death. Let’s take a look at some of the reasons people purchase a life insurance policy.

Who Needs a Life Insurance Policy?

Life insurance is a financial safety net to assist beneficiaries or surviving dependents following the death of the insured policy holder. Here is a look at who needs life insurance:

  • Parents with Young Children: when an income earning parent dies, the rest of the family can be left with financial hardship considering the lost household income. Life insurance can help pay the bills and keep the insured family afloat financially following a death.
  • Parents with Disabled Children: special-needs children or disabled adult children who will never be self-sufficient and who will always need care will benefit greatly from a life insurance policy. Full time care is awfully expensive and the death benefit from a life insurance policy can be used to pay these ongoing costs.
  • Older Parents Who Desire to Leave Children Money:  more than ever people are caring for elderly parents (often at their own time and expense). A life insurance policy here can help a child recoup some of the income lost by caring for their elderly parents following the parents death.
  • Property Owning Adults: If a couple (married or not) will not be able to afford the monthly mortgage payment following the death of one of them, a life insurance policy can help the living member afford the loan, taxes, and upkeep costs for the property.
  • Wealthy Families Expecting to Owe Estate Tax: Life insurance can provide cash to cover estate taxes, so the inheritor receives the full value of the estate.
  • Families Who Cannot Pay for a Funeral or Other Burial Expenses: a small life insurance policy can cover the costs of a funeral, cremation, or other burial variety. Families who cannot pay upwards of $10,000 out of pocket for a funeral should consider a small life insurance policy to cover burial expenses.
  • Young Adults Looking to Secure a Low Rate: healthy younger individuals will pay lower insurance premiums for life insurance. This means that 20-something adults can purchase a policy (even with no dependents) with the expectation they will have dependents in the future. By signing up for a policy so young they have a low insurance rate which they can lock in for a long period of time.
  • Pensioners (Married): some pensions do not have spousal benefits meaning if the pensioner dies their spouse gets little or nothing, while others do but you get less money up front in the idea that if you die your spouse gets the pension benefit. The pensioner can opt to receive their entire pension (not using the spousal benefit if there is one) and use the full pension to pay for a separate life insurance policy. It’s a smart way to get the full pension payment and still have a life insurance policy for the non-pensioned spouse.
  • Certain Businesses: in some companies the death of a key employee (like a CEO) can put serious financial strain on the remining people at the organization. The organization may have an “insurable interest” and can put a life insurance policy on that key employee (like the important CEO) to protect the organization in the death of that employee.

As you can see there are lots of reasons why people purchase a life insurance policy. There are also more than the 9 reasons listed here and you should speak with an insurance specialist to find out if you should be looking at life insurance.

How Does Life Insurance Work?

There are two main pieces to a life insurance policy, the monthly premium (pay-in) and the death benefit (payout). Let’s take a look at each aspect.

Note: whole life or permanent life insurance policies have a cash value component as well.

  • Premiums: this is the money that the policyholder pays to the insurer for the insurance coverage. Following the death of the insured the insurer pays the “death benefit” out to the beneficiaries on the account. Premiums for life insurance are determined a few keyways and the costs will vary based on age, activity level, overall health, family medical history, and more. The premium will reflect what the insurer determines is the policyholders life expectancy. A portion of the premium will also go to the operating expenses of the insurance company. The amount of the death benefit will also affect the premium costs (the higher the death benefit payout, the greater the individuals risk of death, and policies that accumulate a monetary value will have higher premiums).
  • Death Benefit (face value): this is the amount of money that the insurer guarantees to payout to beneficiaries following the death of the policy holder. The insured individual chooses the amount of the death benefit they want based on the financial needs of the beneficiaries. The insurance company will make a determination based on multiple factors if the insured qualifies for a death benefit of that size (aka. Insurable interest).
  • Cash Value: permanent life insurance policies also function as a savings account the policyholder can use for the length of their life. The value grows on a “tax-deferred” basis which is an added benefit. The insured can use the cash value of the life insurance policy to pay the monthly premiums or get more insurance. The cash value can also be used as collateral for a loan or other expenses. When the insured dies the cash value becomes the insurance companies, it does not go to a beneficiary.

These are the three main components of life insurance policies.

Types of Life Insurance Policies

There are several different types of life insurance policies, let’s take a look.

  • Term Life Insurance: A term life insurance policy provides financial protection for a specific length of time, like 10 or 30 years. The premium payment will not change over the course of the set time period for a traditional term insurance policy. After the term length insurance companies may offer you to continue your coverage but at a higher premium rate. This option is usually less expensive in comparison to permanent life insurance.
  • Permanent Life Insurance: This variety of life insurance policy covers the insured for the entire length of their life (as long as they continue to pay premiums). It is usually more costly than a term life insurance policy because it covers the entire length of the insureds life.
  • Whole Life Insurance: This policy variety is similar to a permanent life insurance policy except with whole life insurance the policy accumulates a cash value.
  • Universal Life: similar to a whole life policy except the cash value accumulates interest over time and also the premiums are more comparable to a term life insurance policy. Premiums and death benefit can change over time.
  • Guaranteed Universal: builds no cash value and usually has lower premiums in comparison to a whole life policy.
  • Indexed Universal: a variety of universal life policy which allows policyholders to earn equity-indexed or fixed rate of return on it’s cash value.
  • Variable Universal: this variety allows the policyholder to take the cash value of the policy and invest it.
  • Guaranteed Issue: a variety of permanent life for individuals with medical conditions which make other life insurance policies nearly impossible to qualify for. Guaranteed issue does not pay a death benefit within the first 2 years of the policy following mortality from the medical issues in question but will pay out following accidental death. If the policy holder dies within the 2-year period, the beneficiaries do get their money back from premiums that were paid in plus interest.
  • Final Expense (Burial):  a permanent policy with a small death benefit to cover funeral and burial expenses (though the money can be used in anyway the beneficiary chooses).

How Much Life Insurance Should You Buy?

You should take a look at your financial circumstances and determine what sort of money would be needed to sustain your beneficiaries current lifestyle and standards of living. If you are the main breadwinner and have young children (under the age of 5), you want to have enough insurance coverage to get them to an age they will old enough to support themselves.

What would a nanny cost? What about rent and insurance? Room and board? What about money set aside for their education?

You should look at your beneficiaries and what it would cost to get them to a point where they can keep things going on their own. If your spouse never worked and you have small children, this means you’ll likely need a suitable life insurance death benefit (as long as you can afford it) to cover their living costs.

You want to protect your family in the event of your death and having enough life insurance to do that will vary person to person.

How Do I Qualify for Life Insurance?

Life insurance companies evaluate every application on an individual basis. Because there are hundreds of places to purchase life insurance, nearly every person (in any condition or age), can find a policy somewhere. There are almost 1000 life insurance companies here in the United States, that means you have some options when shopping for life insurance quotes.

These companies also sell different varieties of life insurance policies and some specialize in specific policies for specific people. Then there are brokers who work with individuals to find the right coverage for their particular needs. So, anyone can find life insurance if they look.

How you qualify for life insurance will depend on various factors. Insurers will look at your age, sex, medical history, activity level, job description, family medical history, and more. What they look at will be based on the type of life insurance you are applying for. As a general rule, the younger you are and the healthier, the less you’ll pay for a life insurance policy. The older you are and if you engage in risky lifestyle choices (like cigarette smoking), it may be harder to qualify for certain policies or levels of coverage.

Always be honest when filling out an application. You wouldn’t want to say you don’t smoke and then run into complications down the road because you had illness due to smoking and the insurance company cancelled your policy. The more honest you are the safer your policy will be should your beneficiaries need to file a claim.

Verdict: Life Insurance is Smart for Most

Life insurance is something that can really help your loved one’s in the unfortunate case of your death. As we’ve seen from above some people will have a greater need with a life insurance policy. Young unmarried individuals may have little need now but can benefit down the road by getting a policy while young and healthy. No matter which way you look at it, life insurance is a smart safety net for most people and is something you should be considering. Remember to shop around and get multiple quotes to get the best deal for the longest time frames.

https://dailyinsurance.news/what-is-life-insurance-and-who-needs-it/feed 0
Pet Insurance 101: What Is It and Does My Pet Need It? https://dailyinsurance.news/pet-insurance-101-what-is-it-and-does-my-pet-need-it https://dailyinsurance.news/pet-insurance-101-what-is-it-and-does-my-pet-need-it#respond Thu, 01 Oct 2020 18:24:30 +0000 https://dailyinsurance.news/?p=480 The majority of pet owners pay medical expenses out of pocket at great expense. If you are a high-income earner and can set a “pet emergency healthcare fund” on the side, then pet insurance may not be high on your list of priorities right now. But considering the costs of pet health care and that it’s not easy for everyone to save money, pet insurance looks like a smarter and smarter option.

Pets, like people, can get sick and have accidents. Since you cannot predict the future and don’t want to keep your pet caged forever, being prepared for any trips to the vet is a smart choice.

  • Pet’s lives can be unpredictable
  • Nearly 1 in 3 pets will need emergency medical treatment in a calendar year

Even the most responsible of pet owners can’t prevent their pets from getting sick or needing medical treatment. But like healthcare for human beings, paying out of pocket for checkups, prescriptions, or emergency help can be incredibly costly.

Pet Medical Care: The Costs

Typical dog owner spends between $350 and $700 per year on food, treats, toys, leashes, and other miscellaneous items. (The costs will increase for large dog breeds who need more food). The average costs for the first year for dog owners can be up to $2,000 on average considering all the one of purchases (cages, training, etc.).

The average veterinary visit for a routine checkup can cost $50 to $300 (depending on the animal, location, and individual vet). Vaccines can cost in excess of $150 and that doesn’t count spade and neutering. Just to bring a pet home you can see how the costs can quickly add up.

But these basic costs are just the tip of the iceberg when it comes to the potential of medical costs for your pet. Where pet insurance really comes into play is when there are medical emergencies or necessary surgeries for your pet.

Pet Medical Emergencies

More common than you think, emergency -medical care for pets is a fear of many pet owners. Major illnesses, broken bones, bites, lacerations, tumors, poison ingestion and more; are awfully expensive. Broken dog bones can cost up to $8,000 to mend (not including x-rays or follow up care). Your pet getting under the kitchen sink could be a major problem as well with emergency visits to the vet and even care overnight.

In the United States the average cost for emergency vet trips cost between $700 and $2,000. Considering most people don’t have an extra thousand or two for their own emergencies, the prospect of huge pet medical bills is a real fear for many.

Emergency Care Can Turn into Chronic Care

In the worst-case scenario, an emergency visit to the veterinarian will have lasting effects on your pet. This could be chronic care necessities that can really start to pile up. You’re not only paying for the upfront emergency care but all of the long-term care costs that are associated with it.

Pet Health Emergency Costs

These costs will vary greatly depending on the type of pet and where you live. But let’s take a look at some of the national averages.

Dog Medical Emergencies

  • Ear infections: up to $800
  • Skin conditions/allergies: up to $4,000
  • Eye infections: up to $2,000
  • Pain management: up to $3,000
  • UTI: up to $5,000
  • Cancers/Growths: up to $7,000
  • Ligament injuries: up to $7,000
  • Stomach issues: up to $7,000

Cat Medical Emergencies

  • Ear infections: up to $800
  • Diabetes: up to $2,000
  • Eye infections: up to $5,000
  • UTI: up to $6,000
  • Cancers/Growths: up to $16,000
  • Kidney disease: up to $4,000
  • Stomach issues: up to $7,000

This doesn’t even cover the vast number of possible pet medical emergencies either (like getting hit by a car). You can see how one or more of these can really force pet owners into very tough decisions.
If you don’t have pet health insurance, you could be facing some hard choices. Either put yourself in serious financial trouble to get your pet well or have no choice but to put them down because you can’t afford the costs. Often pet parents have to make this hard choice. If you cannot afford the health care costs your choice may be made for you as you cannot afford what your pet needs to get better.

Insider Look: A Cat Emergency

In 2012 I adopted a cat from the local animal hospital. We took her home and named her “Meow Meow”, a beautiful healthy little one full of life. We had assumed she had been spade considering we got her from the vet, they said she was spayed, and she had spent a few weeks there looking for a home. We also don’t believe in keeping cats indoors as we live in the suburbs on country roads.  The neighborhood feral cat we called “Grey Puss” would come around because we would leave food out for him.

Assuming that our Meow Meow was spade we thought nothing of the two cats spending some time together. Then a few weeks later we noticed Meow Meow started to get very fat. “Geez grandma, we really need to feed her less and help her lose some weight. She’s gotten very heavy extremely fast”, I remember saying. She continued to grow until one evening she started to go into what we thought were convulsions or a seizure of some kind.

I honestly thought she was going to die so I sat with her and tried to keep her calm hoping the convulsions would pass and we could go straight to the vet in the morning. Until I saw a paw coming out of her birth canal!

We finally put two and two together. She had gotten so big because she had gotten pregnant! But she was a young cat and what ensued was bizarre. She gave birth to a single kitten, but it was large and also was still born. Considering we didn’t know she was pregnant and thought that cats usually had litters, we took her straight away to the 24-hour emergency animal hospital to make sure she was ok.

They took her, did tests, kept her overnight and discharged her the next day. But for simply going to the emergency vets office for one night and a few tests, the bill was just under $1,500! This was the real scary part. Considering how little time she was there and what little the vet did, the bill seemed ridiculously high. What if she needed real emergency care?

The vet had said, “if only you guys had Pet Care Insurance, it would have saved you a ton”.  We went home and picked up pet insurance the next day.

Luckily, our Meow Meow was ok and was not in danger but that was a $1,500 bill we weren’t planning on having, after all she was a healthy adolescent cat. This was a real-world glimpse as to why you should have pet insurance.

How Does Pet Insurance Help with Vet Care?

Pet care insurance is very similar to human health insurance.

  • The pet owner pays for coverage from a pet insurance company
  • the pet owner chooses a plan based on different expenses for pet care
  • the pet owner pays a monthly premium for said coverage
  • the pet owner pays required deductibles on vet visits
  • the insurance company pays for covered medical expenses up to the plans limit

There are, however, some differences between human and pet health insurance.

  • Pet insurance does NOT cover pre-existing conditions (for most insurances)
  • Pet insurance plans pay you directly (not the doctor or hospital like human health insurance)
  • Pet insurance has no minimum coverage requirements

Pet Insurance Benefits

Pet insurance has a few key benefits which make it a good fit for most pet owners. Firstly, you pay a little bit upfront every month to ensure you have affordable pet care should your pet need it. You get piece of mind knowing your pet is protected no matter what happens for less than $50 a month (even less for cats). You get reimbursed up to 90% of the healthcare costs for your pet after paying your small deductible.

Wellness care ads a nominal monthly cost and will cover regular items like vaccinations, dental care, nearing & spaying, booster shoots and other standard “wellness” items.

The biggest benefit of pet health insurance is the coverage of emergency costs. With a comprehensive plan you can provide all the best medical treatment your pet needs without major financial risk.

Pet Care Plan Varieties

There are 4 major varieties of pet insurance plans:

  • Accident-Only Coverage: injuries and incident coverage (hit by a car, ligament tears, poisoning, foreign object ingestion, etc.)
  • Accident & Illness Coverage: this is the most common plan pet owners choose. It covers accidents but also illnesses like infections, cancers, allergies, etc.
  • Insurance w/ Embedded Wellness Coverage: covers accident + illness, and can cover vaccinations, heartworm prevention, dietary consultations, tick & flea meds, dental care, and cremation + burial.
  • Endorsements or Riders: these are add-on coverages for things like cancer and do not come standard for most providers.

Over 95% of pet owners who purchase pet insurance go with #2, Accident & Illness Coverage.

What About Pet Care Exclusions?

Different plans have different coverages and you’ll want to look carefully at what coverage exclusions there are in any plan your considering. You don’t want to be faced with a surprise that your pet isn’t covered for something should you need to file a claim.

Pre-Existing Conditions

If your pet has a pre-existing condition that has required care before you apply for coverage, you’ll unlikely get coverage for that specific ailment. Most pet insurance companies do not cover medical expenses for particular pre-existing conditions. However, if there is a cure or it can be cured, some pet insurance companies may allow it. You should know your pet’s pre-existing conditions (if they have any) so you can find out if they can get coverage.

Age Restrictions

Usually your pet has to be between 2 or 3 months old to be able to get pet care insurance. Most pet insurance companies also have an age limit for accident and illness plans. Depending on if it’s a cat or dog the age restrictions could be different. Be sure to find out as if you have a 17-year-old cat, it could be hard or even impossible to get them qualified for a pet insurance plan.

How Much Will I Pay for Pet Insurance?

This will depend on a few different factors like the type of animal, age, your location, the type of plan you’re considering and more. Remember that there are also deductibles, monthly premiums, and co-payments just like human healthcare.

According to the NAPHIA, the average cost for cat health care insurance in the USA is less than $30/month for accident + illness plans, and under $15/month for accident-only coverage.

For dogs it’s a little higher, with the average under $50/month for accident+ illness plans and under $20/month for accident only care.

Where Should I Get Pet Insurance?

Like any other type of insurance, you can purchase pet care insurance from a lot of different companies. But what is the best pet insurance company? We like Pet’s Best and Embrace Pet Insurance the most based on their costs, what is offered, and claims paid.

Pet’s Best: Covers up to 90% of your pet’s unexpected veterinary costs. Popular and a multiple coverage choices to choose from. Accident coverage for “All Ages and Breeds”.

Embrace Pet Insurance:  Diminishing deductibles and fairly evaluated pre-existing conditions, 24/7 Pet Health Line by PawSupport. Convenient smart phone app.

Verdict: Pet Insurance is Worth It

Considering the high cost of pet health care and the high reimbursement rates between 70% and 90% for care, pet insurance is worth it. Like all insurances that are optional, you don’t need it until you need it. If you can’t see yourself being able to afford up to $10,000 for medical emergencies for your pet, then pet insurance is a good idea. If you’re ok paying $50 or less a month for peace of mind on the chance you need to use pet insurance, it’s worth it.

https://dailyinsurance.news/pet-insurance-101-what-is-it-and-does-my-pet-need-it/feed 0
Understanding the Benefits and Drawbacks of Renters Insurance https://dailyinsurance.news/understanding-the-benefits-and-drawbacks-of-renters-insurance https://dailyinsurance.news/understanding-the-benefits-and-drawbacks-of-renters-insurance#respond Thu, 01 Oct 2020 18:21:55 +0000 https://dailyinsurance.news/?p=477 Insurance is one of those things that you really can’t live without. It is required to drive a car, can make a huge difference on medical bills if you fall ill, can protect your home in disastrous weather or as part of a condition of your mortgage agreement. The point is, for different areas of life it is a requirement not a choice. dsfd

But if you don’t own a home and are renting an apartment, is renters insurance something you need? The simple answer is typically yes. Not only do many landlords and buildings require renters to have renters insurance, it is just a smart idea for so many reasons as well. Let’s look at the benefits and drawbacks of renter’s insurance before you sign anything.

What is Renters Insurance?

To put it simply, renters insurance is insurance on your belongings and other things within a rented apartment space. As you don’t own the building, the insurance protects your contents and belongings from theft or damage due to a wide range of reasons. If your apartment is broken into and things like jewelry, entertainment systems, computers, clothing, or anything else of value are taken; renters insurance can pay you for the estimated value of the stolen or damaged goods. Even outside of your apartment you can be protected. If you lose your laptop at the library or lose your handbag in the grocery store, your renters insurance may cover it.

It can go a step further as well. Renters insurance also provides liability protection. If someone is visiting and slips and falls on a wet kitchen floor in your apartment, your renters insurance can cover their medical expenses so you’re not paying out of pocket following a suit. Even if you have a dog that bites someone who must be hospitalized, your renters insurance can cover the medical expenses.

As you can see there are a few key protections that renters insurance provides. But let’s take a closer look at the benefits and drawbacks.

Benefits of Buying Renters Insurance

We listed some of the benefits above, but here is a more comprehensive list.

  • Covers your belongings from events or damage from: fire, smoke, windstorms, water damage, theft, vandalism, lightning and more.
  • Can provide a hotel following a disaster or reimbursement of hotel costs following a disaster.
  • Liability insurance to cover injuries or damage to your property caused by family members like your kids.
  • Coverage of medical expenses for injured guests.
  • Coverage of legal costs if you’re sued.
  • Some policies cover liability and medical expenses for dog bits (check your policy specifically)
  • Protection for your belongings when you’re “off-premises”.
  • Cost is typically extremely low per year for most renter’s insurance policies making them affordable for most renters.

This is a pretty comprehensive list of the ways in which renters insurance can protect renters. Remember that every single policy is different and not all of them will cover all the items listed above. Be sure to check your policy coverage policies and when shopping around be sure to look for policies that include these or let you pick and choose what coverage you need.

Drawbacks of Buying Renters Insurance

Despite the long list of benefits to having renters insurance there are also some drawbacks (albeit a shorter list). Let’s take a look:

  • Costs to the policy can be one of the biggest drawbacks. If you pay for your policy for 3 years, month in and month out, but never need to use the policy it may feel like thrown away or wasted money. (That is always a drawback of insurance, you spend money on something you may never use.)
  • ACV or Actual Cash Value: should you need to file a claim, the insurer will only pay out equivalent cash value of today on a certain item. If an old television that was expensive when you bought it ten years ago is only worth 1/10th of the price today, you’ll only get that percentage. Items like technology lose value quickly so this is a drawback.
  • Earthquakes and floods: Standard renters insurance policies do not cover earthquakes or floods. Despite covering 17 types of inclement weather, these are not usually included and may require a separate piece of insurance, especially if you live in a high-risk area.
  • Expensive items may not be covered by all policies or require additional policy or insurance premiums to offer protection.
  • Deductible: A deductible is an amount you must pay when the insurance kicks in. If you’re deductible is worth less than your damaged or stolen possessions it could be cost prohibitive. Consider a $2000 deductible and a $2000 damaged or stolen Apple laptop computer. If this is the only real thing of value, then your insurance policy may not be worth it. As you must pay $2000 to get the $2000 reimbursement, meaning no help at all. So be sure to look at the deductible of any policy, try to go lower and you’ll have higher monthly premiums. Finding the right policy with a good balance is key.

Verdict: Buy Renters Insurance

We’ve seen a short list of benefits and drawbacks to buying renters insurance. Our verdict is that because of its low costs per year, because of its high range of benefits should you need to use the policy, buying renters insurance is a smart choice. Not only do many landlords and buildings require their tenants to have renters insurance, it has a range of benefits should you need to use it. Be sure to shop around and find a policy that suits your budget and specific insurance needs. You can even bundle renters insurance with other types of insurance in some cases keeping your costs lower. Shop around and get renters piece of mind today.

https://dailyinsurance.news/understanding-the-benefits-and-drawbacks-of-renters-insurance/feed 0
A Beginner’s Guide to Home Insurance https://dailyinsurance.news/a-beginners-guide-to-home-insurance https://dailyinsurance.news/a-beginners-guide-to-home-insurance#respond Thu, 01 Oct 2020 17:35:13 +0000 https://dailyinsurance.news/?p=473 Homeowners insurance, or home insurance, is an incredibly important and often required protection measure for your home against theft and damage. Nearly every mortgage lender (banks, credit unions, etc.) will require homeowners insurance coverage for the total or near total value of the property. They will require proof of homeowners insurance before they approve a mortgage loan, so it’s important to protect your assets but also a requirement for a lender.

Even if you don’t own your home and you are renting, many landlords require that their tenants acquire renter’s insurance coverage. So, no matter which way you look at it, whether it’s a requirement or not, homeowners insurance is an incredibly smart idea. Here we’ll see what homeowner insurance is, what it can cost, what it protects, and how you can get it.

Major Themes

  • Home insurance protects a residence’s exterior and interior from damage, destruction, personal liability (someone injured at your home), and theft.
  • Policy costs are determined by the individual insurer’s risk to file a claim based on their history of the individual/family, home, neighborhood, town, and the home’s current condition.
  • 8 coverage varieties exist (HO-1 to HO-8)
  • 3 coverage levels exist: cash value, repair costs, replacement value/cost.
  • Get quotes from several homeowners insurance providers and check with your current insurer if you have one. Our favorite is Quote Wizard

What Does a Homeowner’s Insurance Policy Do?

Homeowners insurance protects homeowners from financial burden following damage, theft, or an accident in their home. The insurance policy will pay for repairs and legal fees depending on the specific policy details and levels of coverage. It is often required to receive a mortgage and is incredibly important should some disaster strike.

  • Coverage for damage to the exterior or interior of the home
  • Personal liability protection for injuries or damage
  • House, hotel, or motel rental when home is being repaired or rebuilt

Physical Damage to the Exterior or Interior of the Home

If there is damage to your home through natural causes (hurricane, tornado, fire, lightning, etc.) or damage through accidental or purposeful actions; your insurer compensates you for the cost or repairs and even home replacement if necessary.  Damage caused via earthquakes and floods aren’t typically covered in a standard homeowners insurance policy and must be added on (depending where you live). Damage caused by poor home maintenance is usually not covered either. Add-on structures (like a garage) are not typically covered by a policy but can be covered separately.

The contents of your home are also covered with homeowners insurance. Things like electronics, furniture, clothing, appliances, jewelry, artwork, etc.; are covered if they’re destroyed. You can even get covered for things you lose out in the world, like a piece of jewelry, but there can be limits on the amount the insurer will cover. Most policies cover between 50-70% of the contents within the home. If your home is insured up to $300,000, your coverage at 50% would be $150,000 of possessions.

If you have a lot of expensive valuables (jewelry, art, appliances, etc.) you can pay up and add extra protection for your items. Or if earthquake insurance is not covered and you live in an area with a risk of earthquakes, you can add what is called a “rider” which covers additions like this.

Personal Liability

We’ve all heard stories of homeowners being sued by a guest who injured themselves in the home or on the property. Personal liability protection of your homeowners insurance policy will protect you and your assets from a lawsuit of this nature. It could be a friend, neighbor, delivery person, or even a family member. No matter how the accident happened, if it happened in your home or on your property, you could be held liable to cover medical expenses and damages to the person. If you have a dog who bites a friend (either at your home or their home), then your policy can also cover suit expenses or medical expenses.

Personal liability protection can be lower than $100,000 but insurance experts all recommend a higher threshold for liability protection. $250,000 or more will be a safe coverage level but you can also get $1 million in coverage or more through an umbrella policy with a small monthly increase to your premiums. It is highly recommended you do so as even a minor accident on your property can turn costly very quickly in court.

 Rental During Home Repair / Rebuild

In a case where you must leave your home due to damages, your homeowners insurance policy will reimburse you for rent, hotel/motel room, meal reimbursement, and incidental expenses incurred while your home is being repaired. But remember that there are some limitations to the “additional living expenses” covered by a homeowners insurance policy. You can choose to stay at the most expensive hotel around but that doesn’t mean your insurance policy will cover every penny of your stay. You can always pay a higher premium and have these limits increased.

Homeowners Insurance Policy Types

There are several forms of homeowners insurance here in the United States that are more are less industry standards. Depending on your needs they fall between HO-1 to HO-8 based on home value, home variety, and more. Let’s look at the most common and what they cover.

HO-3 Insurance

This is the most popular variety of homeowners insurance. Nearly 80% of homes occupied by the owner use an HO-3 policy. If you’re applying for a mortgage (or have one already), the lender will likely require at the very least this much coverage. The main categories of damages that are covered:

  • Hail & Windstorms
  • Smoke
  • Lightning & Fire
  • Vandalism & Theft
  • Falling Objects & Weight of Snow, Ice, and Sleet
  • Vehicle or Aircraft Caused Damage
  • Riots & Explosions
  • Water Damage caused by Overflow or Discharge of Household Systems
  • Freezing of Water Connected Household Systems
  • Damage to Hot Water, Air Conditioning, Steam, Gas or Fire Protective System
  • Power Surge Damage

As you can see this will cover most types of damage and will be good for most areas of the country.

HO-5 Comprehensive Insurance

This covers what is listed in HO-3 but also other forms of damage (it will cover everything except what the policy specifically excludes). HO-5 policies are only typically awarded to homes that are well maintained in low risk areas (areas with a stable climate and low natural disaster risk).

HO-1 & HO-2 Basic Insurance

These policies are very slim and offer the most basic coverage. They are not widely used and should be looked at carefully as they do not cover the basic damage varieties most homes face, covering less than an HO-3. Your mortgage lender may not allow this level of coverage either.

Other Varieties:

HO-4: Insurance for Renters
HO-6: Condominium Owners Insurance
HO-7: Mobile Home Insurance Policies
HO-8: Older Home Limited Coverage

Homeowner Coverage Varieties

Between HO-1 and HO-8 coverage there are a lot of differences as we saw above. What each policy will cover may be different, but the way in which coverage is delivered is the same. These are the 3 levels of coverage:

Actual Cash Value

This coverage level covers the cost of the home as well as its contents (your belongings) after depreciation.

Replacement Cost

this covers the actual cash value (see above) but does not calculate depreciation. You would therefore be able to rebuild or conduct repairs with costs up to the original value. Coverage for an equal replacement.

Guaranteed Replacement Value/Cost

This level of coverage is the most comprehensive and takes into account inflation rates should you need to use the policy to cover the costs of a home replacement (even if that cost is greater than your policies limit).

What Coverage Level is Right for Me?

Many advisers recommend homeowners to go with Guaranteed Replacement homeowners insurance. This is because it not only covers the cost of your home it also covers the cost of rebuilding your home entirely with inflation accounted for. You should get a level of coverage that is greater than that of your current home’s value. That way if you need to rebuild you are covered for more than the Actual Cash Value because of increased construction costs due to inflation.

So, instead of focusing on the price you paid for your home and mortgage level, look to cover the cost to rebuild. Take your home’s square footage and multiply that by the local construction costs for your area. This way if you need to rebuild you are covered.

For contents within the home and personal property you’ll want to make a thorough itemized inventory. This way if you need to file a claim you have a detailed list of items and costs that the insurer already has approved. Instead of a spreadsheet, you could do a home walkthrough recording on your smartphone or with a video camera (it’s a faster way to get a full list of items). If you have tallied up the cost to replace all of your belongings you can keep that level of coverage, or increase it if you think you’ll need more to replace the items, or less (to cover less but also pay a lower premium).

Understanding Homeowners Insurance Deductibles

An insurance deductible is the amount you’ll have to pay before you insurer will start paying. These numbers can be determined in 2 ways usually:

  • A percentage of the home’s insured value (like 1% or 3%)
  • A flat rate whole dollar amount (like $1,000 or $2,000)

If your deductible is based on a flat whole dollar amount it would work like this: your insurer has approved a claim for repairs in the amount of $20,000. Your deductible is $2,000. This means that the insurer pays $18,000 and you pay $2,000.

The higher your deductible the lower your monthly or yearly premium will be, and the opposite is true in the other direction. A lower deductible will mean a higher monthly or yearly premium. Keep in mind that certain types of policies will have different deductible levels for different types of damages. For example, a hurricane could have a different deductible rate than water damage from a water main break. So be sure you’re aware of what the deductible levels are for different types of insurance claims you may need to file.

What Will Homeowners Insurance Cost Me?

This figure can be quite different from one policy to another for a lot of different reasons.

  • value of the home
  • location of the home
  • cost to rebuild the home
  • city’s fire protection rating
  • distance from emergency help
  • the climate & weather history of the area
  • the level of coverage selected including the deductible and any limits
  • home age & condition
  • history of claims in the neighborhood of the him
  • your personal history of home insurance claims
  • your credit scores
  • and others depending on the insurer and policy

You can also reduce your costs a few different ways. Install a security system, get rid of the kids trampoline, upgrade door & window locks, start a neighborhood watch, bundle your home & auto insurance together, pay off your mortgage, plan for future renovations, etc.

Remember that homeowners insurance is often required and is absolutely necessary. Consider that rebuilding your home could cost hundreds of thousands of dollars out of pocket if you didn’t have homeowners insurance. This makes those monthly premiums seem far more reasonable.

Compare Policies

It’s a smart idea to get a policy quote from no less than 5 different homeowners insurance providers. This way you have a great list of comparisons to make. What are the differences in cost for levels of coverage? Here is a list of basic comparison guidelines:

  • Compare multiple statewide insurance costs from different insurers
  • Perform a health check on the insurance company to see the reputability of any insurance company. The BBB would be an example.
  • Determine who will be handling your claims (avoid insurers who use 3rd party or outsourced claim companies)
  • See the satisfaction level of current policy holders.
  • Get more than one quote
  • Talk to an advisor for assistance

Homeowners insurance, like any other insurance, will have loads of different companies vying for your business. Some have incentives you could take advantage of, but you’ll only know if you search more than one. Be sure to get quotes and do research on no less than 5 homeowners insurance providers.

Get Your Quote

Getting a quote doesn’t have to be difficult either. There are loads of free tools online you can use to compare different homeowners insurance policies and get different quotes.
Our favorite is Quote Wizard. Get a fast and free quote right now.

Verdict: Homeowners Insurance is Critical

It is usually required to get a mortgage and will be absolutely essential to protect you and your family should something happen. You cannot predict the future, but you can make sure you are protected in the future. One of those ways is through homeowners insurance, so be sure you have a policy if you are a homeowner.

https://dailyinsurance.news/a-beginners-guide-to-home-insurance/feed 0
Understanding the Basics of Auto Insurance https://dailyinsurance.news/understanding-the-basics-of-auto-insurance https://dailyinsurance.news/understanding-the-basics-of-auto-insurance#respond Thu, 17 Sep 2020 16:29:05 +0000 https://dailyinsurance.news/?p=449 Auto insurance is a type of insurance policy that protects policyholders from costs associated with a vehicle accident. When an accident happens, as opposed to paying out-of-pocket to repair your vehicle or another involved parties’ vehicle, policyholders pay monthly, quarterly, or annual premiums to an auto insurance provider. The provider then pays costs (all or most) of vehicle repairs associated with the accident or other damages.

How much the insurer covers is based on your individual policy and can look quite different than someone else’s car insurance coverage. There are a few options to consider when looking for car insurance, let’s look at what makes up an individual policy.

Auto Insurance Basics

There are many different factors that will determine how much you will pay annually for car insurance. Things like your age, your location, your vehicle, your driving record, and more; determine how much an insurer will charge you monthly for coverage in an accident. There are also different levels of coverage that you can choose or not. Things like collision coverage, road assistance, and your deductible amount all have different costs that can vary greatly from person to person.

Although car insurance is not a requirement in all 50 states it is in most states and you cannot legally drive a car without auto insurance in those states (like New York for example). It’s still a very smart idea to have even if not a legal requirement because the costs associated with paying out of pocket for car repairs following an accident can be exceedingly high.

How Does Auto Insurance Work?

You pay the car insurance company a premium and the insurer agrees to pay for repairs or costs following an accident based on your individual policy. The three main types of coverage are:

  • Liability: protection from liability regarding property damage or bodily harm/injury.
  • Property: damage to your car or theft of your vehicle
  • Medical: coverage on costs of treatment following an accident (rehabilitation, hospital costs, lost wages, and funeral expenses on some occasions)

You can customize your insurance policy to specifically match your needs and meet your monthly budget. They are typically provided in 1 year or 6-month increments in terms of payments. Policies are also renewable, and the insurer will remind you when your policy requires a renewal.

Most states do require you to have auto insurance to cover bodily harm liability. This will cover some or all the costs associated with death or injury caused by yourself or another driver using your vehicle. Some states also require some level of liability coverage for property damage which pays other individuals for damages to their vehicle or property following an accident.

Other states also require PIP (personal injury protection) which reimburses medical expenses due to injuries received following an accident.  There are also options for “uninsured motorist” coverage when an accident happens or is caused by someone who does not have auto insurance and would therefore have no way to pay any expenses if they don’t have assets. Also, not a bad idea.

Buying Car Insurance

There are many different car insurers these days so it can be a bit daunting when shopping for the right car insurer. There are lots of factors to consider so let’s look at each of them individually.

Injury & Liability Coverage

Putting you and your family’s safety first is incredibly important. This is one of the more important aspects of auto insurance (especially if you don’t have health insurance). Medical professionals will request health insurance first when an accident happens. If you don’t have any the costs of medical bills can be incredibly high so beefing up your personal injury and liability coverage is a smart option. It will cover the medical bills associated with a major accident so be sure to add more personal injury coverage especially if you don’t have health insurance.

Serious Accidents

Always consider the worst first when shopping for auto insurance. If your car is totally wrecked (if it’s not your fault), the other driver’s insurance will cover the costs. If they are uninsured hopefully you’ve been paying for “uninsured motorist coverage” which will cover your expenses. There are other circumstances however where there is no other driver involved in a major accident and you will have to rely on your own car insurance for repairs or replacement of your vehicle. Having enough coverage to completely repair or replace your car is the only way to avoid paying additional out of pocket expenses following a wreck. You should have insurance that covers the entire cost of your car’s value for this reason (or close to its value).

Premium vs. Deductible

These two figures have an inverse relationship. Meaning that if the premium goes up than the deductible goes down. You will need to decide how much you can afford to pay monthly for the premium in relation to what you can afford in terms of coverage should an accident happen. It is common to pay a higher monthly premium so that when an accident does happen you have a lower out of pocket deductible expense to get your car repaired. No matter how you decide to do this, be sure you can pay on both ends. Be sure your monthly premium payment is affordable but also look at the other end. Will you be able to pay the deductible in the case of an accident? Be sure to consider both sides.

Roadside Assistance

Getting stranded is never fun but some insurance policies can cover this scenario when you’re on the road. Being prepared for a breakdown is typically an option you can cover within your auto policy. Things like roadside assistance, towing, flat tire repair, and more can be selected as optional insurance add-ons. For some people, this will work better than a separate AAA roadside assistance membership for example. However, some insurer roadside assistance doesn’t make that much sense and AAA would be a better option despite a separate yearly fee.

Driving Experience and Age

For some individuals, insurance companies have set recommended coverage levels. One example is for young people under the age of 18. Because their experience is lower and they tend to drive more aggressively, having high personal liability coverage (with a lower deductible) is smart because younger drivers are more likely to get into an accident. It’s not just teens who have their driving experience affect their coverage costs.

Drivers who have had a history of moving violations (speeding, DUI, etc.) will have higher premiums for the same coverage. Some car insurers will not even accept you as a client if you’ve had a DUI within 3 years. Esurance, for example, requires no DUI’s in a 5-year time period where Geico is only 3 years. So, driving history is also a factor when it comes to your individual policy offers.

Choosing an Auto Insurance Company

We’ve all seen ads claiming one auto insurer or another can save us money if we choose them for insurance. It’s a competitive market and there are many different insurers to consider. It’s smart to look for some particular attributes when considering any auto insurer.

Cost and Reliability

The cost from person to person, insurer to insurer, state to state; can be vastly different in states where there are no state insurance mandates. You should be looking for insurers who are reputable and have fair costs for coverage. Each car insurance company will likely have a different price quote for the same sort of coverages so it’s smart to shop around. Also, some insurance companies have better track records for ease of filing a claim, while other smaller companies can be more difficult or unwilling to pay. So be sure to choose a known reliable provider. You don’t want to have to fight your car insurance company to pay for auto repairs just because you went with a cheap quote with little coverage.

Buy the Coverage You Need, Not More

Insurers will be more than happy to sell you more insurance than you need. (Check out our article on The Right Amount of Insurance to Have here). Your level of insurance should match up with the cost of your car. If you have an old car that is worth less than $1,000 you don’t need a huge amount of coverage for collision. If you have a brand-new Mercedes, you should have more coverage. Remember if you don’t have health insurance you should increase your level of personal injury liability coverage.

Don’t Let Your Coverage Lapse

You don’t want to drive without car insurance, especially in a state where it is legally required. Be sure you’re up to date with your car insurance and do not let it lapse. Staying current is important for the legality concerns but also to make sure you protected in the case of an accident. There is never a good time for a wreck but it’s even worse if your car insurance just lapsed and all the costs are now on you to pay out of pocket. So be sure you’re current on your car insurance.

Car Insurance Verdict

Even if car insurance is not required by law where you live it’s a good idea to have. When you get into an accident you want to be thinking of you and your family’s health and recovery, not how you are going to pay for auto repairs. That is where car insurance comes into play. Be a smart insurance shopper. It costs you nothing to get multiple quotes and you can save quite a bit for the same coverage from one provider to the next. Also, be sure to get new quotes every few years because you may be overpaying currently.


https://dailyinsurance.news/understanding-the-basics-of-auto-insurance/feed 0
What is the Right Amount of Insurance? https://dailyinsurance.news/what-is-the-right-amount-of-insurance https://dailyinsurance.news/what-is-the-right-amount-of-insurance#respond Thu, 17 Sep 2020 16:24:37 +0000 https://dailyinsurance.news/?p=446 How do you know your family is safe when you go to bed every night, no matter the future? Insurance. But what is the right amount of insurance you should have?

Insurance exists to cover nearly anything the world can throw at you throughout your lifespan. It plays a bigger role in day to day activities than many people are even aware of. But knowing exactly how much insurance to have for your specific situation in life isn’t always so clear.

Insurers are more than happy to sell you more insurance than you need. For example, someone who is single with no children will have far different insurance needs than someone who is married with three children. There are a few known principles to keep in mind when it comes to buying insurance coverage. Let’s look at the main six.

Health Insurance

This is one of the most important insurances you can have but for many it is difficult to acquire due to the high costs of private health insurance. Luckily, the Affordable Care Act provides millions with health insurance who are unable to receive it from their employer or who cannot afford private insurance due to high costs.

Health care covers you in a few different ways all related to medical health. Things like regular checkups, emergency care, pediatric medicine, prescriptions, and specializations. The costs of paying out of pocket for health care are incredibly high in the United States so having health insurance is incredibly important.

Think of a bad ankle break. You go to the emergency room in an ambulance, they must operate, you stay at the hospital and are discharged. That could cost well over $30,000. If you don’t have insurance, you are expected to pay out of pocket. The sad state of healthcare in the United States is that people are being bankrupted by these sorts of medical emergencies or are simply not seeking treatment. So, having health insurance is critical to physical and financial wellbeing.

One of the most important factors to any health insurance plan is the deductible attached to the policy. You are required to pay out of pocket the deductible along with coinsurance costs. If the plan has a $4000 deductible, but also requires you pay 15% of expenses over that amount (up to $10,000) – that is an additional $1,500 you’ll owe. Meaning your costs in any one year out-of-pocket would be $5,500 ($4,000 + $1500).

Assuming you can pay the monthly health insurance premiums and have enough money saved to pay up to $5,500 (for the example policy above), you’ll be ok. But health insurance is rather complex and when it comes to increased costs for pre-existing conditions or denial of coverage, plus the costs, it can get very messy.

Verdict: Get Health Insurance

Due to the ridiculously high costs of healthcare in the United States, health insurance should be at the top of your insurance priorities. Some is better than none after all.

Auto Insurance

How much care insurance you need is far simpler to determine than health insurance. This is for a few different reasons, one of which is that each state requires a set amount of car insurance for the car to be street legal. Meaning you can’t legally drive without car insurance. So that takes away the question of whether you need it or not as if you want to drive you need auto insurance, period.

But based on how much you drive, the type of car you have, where you live, and your driving history; car insurance can very greatly in terms of monthly costs and deductibles. Car insurance usually is determined in a 50 – 100 – 25 set. $50,000 to cover each individual injured (bodily harm), with a max of 100K per accident for two individuals, and $25,000 to cover any property damage. This is a general minimum for car insurance. You can increase these easily through your car insurer if you feel you need more coverage.

Car insurances protect you in an accident but is also designed to protect your assets (home, investments, etc.). If you own a home and have some investments, you should make sure you’re auto insurance covers the amount of your assets. This way if you are sued following an accident, they plaintiff will likely take the insurance payout because it meets or exceeds that of your personal assets.

If you have an older vehicle that isn’t worth much anymore you will also want to skip the comprehensive collision insurance. As it’s not worth paying a higher premium to fix a car that is old and not worth a lot.

Verdict: Auto insurance is a must. Do your best to have your car insurance cover the amount of your total assets. If you don’t have assets that can be the bare bones plan, but if you have assets be sure you’re covering them to the best of your ability through auto insurance.

Life Insurance

Life insurance is another type of insurance that different people will need differently. A life insurance agent will be happy to sell you the largest possible policy, but do you really need that much coverage? There are a few ways to look at life insurance. One is to cover your income and earnings for a set time period.

If you’re the sole bread winner for your family, you may consider a policy that will cover your income for 20 years or more. Or you could look to cover the length of time until your children are out of college. Or you could look for a policy that will cover all of you and your spouse’s current debt. This could include student loans, car loans, credit card debt, mortgage, and could greatly reduce monthly costs to your family getting close to your income level now.

Young people can get term life insurance (which covers you the length of your life) for ridiculously cheap. As you age the cost of coverage will increase. Life insurance should be viewed as a protective asset for your loved one’s should you face an untimely death.

Verdict: Life is unpredictable.

It’s a good idea to have some protection for your family or if you plan on having a family at any point down the road. Costs are low and if the policy needs to be used it can be a lifeline for an already grieving family.

Homeowners Insurance

(You’ll only need this if you own a home, so if you’re renting read on to renters insurance below.)

First, you’ll need to insure the actual physical building. The most complete way to do this is to have what is called a “guaranteed replacement cost” policy. This will cover the entire cost of rebuilding your home from the ground up should disaster strike. You’ll need an accurate home building estimate to determine your recommended coverage level (a different number than a real estate agent’s property appraisal).

Beyond the physical structure is everything you have inside the home. No, homeowners insurance can’t replace any family photos damaged in a fire, but it will cover most everything else. You’ll need to do a complete inventory of what is in your home (furniture, technology, appliances, etc.). Usually the homeowner’s insurance provider will put a 50% replacement to the contents of the home.

If your guaranteed replacement cost is $250,00, $125,000 would be added to cover the contents within the structure.

You’ll also want “homeowner’s liability insurance”. If someone is visiting and falls and breaks their neck, they can sue you for damages and medical expenses (yes this happens more than you might think even if they are family). So, in the case of a lawsuit your homeowner’s liability insurance will cover the costs to a set amount, usually within $300K and $500K. A figure likely to cover anything that could result from personal injury on your property (even if it is not your fault at all).

Don’t forget inflation. There should be some room in your policy that covers inflation over time. Homeowners insurance on the first year of a 30-year mortgage will have far different replacement costs 2 decades from day one. So, the policy should have that in mind.

Home Owners Verdict: a must-own if you own a home.

Renters Insurance

Renters Insurance covers renters from damage or theft of their property. It is incredibly cheap, is required by many buildings and landlords, and doesn’t only protect your things within your apartment.

Far less complicated than homeowner’s insurance, renter’s insurance covers only the contents within your apartment or rented home. The structure is not something you need to insure as you don’t own the actual building, you’re just renting the building or room within.

$5,000 coverage for a single room is usually ok but remember you’ll need a full itemized inventory with photos and dates should you ever need to file a claim. If you have a lot of expensive jewelry or technology, you may want more coverage. Because renters insurance is very inexpensive it’s also easy to pay too much without realizing it.

The last time I had renter’s insurance it covered up to $10,000 of items and cost about $120 for the entire year. That about $10 a month.

Renters Insurance Verdict: it’s a smart choice.

See our more in-depth write up on Renters Insurance and how it can protect items outside of your apartment as well.

Pet Insurance

This will only matter if you have a pet or pets (usually dogs and cats). Health care for your pets is way less than for human beings but that doesn’t mean inexpensive. A complicated surgery for your sick dog could cost thousands of dollars, which if paid out of pocket could be a large financial burden for most.

How much pet insurance you need is also a completely subjective metric. Some people are way more attached to their pets and are willing to pay huge amounts to keep them healthy. If you have pet insurance and your pet gets sick or injured, the pet insurance can open many treatment avenues that you otherwise would not be able to consider due to the cost.

Pet Insurance Verdict: if you can afford it and love your pets, it’s a good idea.

People often think “how much can a trip to the vet really cost?”. The answer can be a lot more than you think and paying thousands out of pocket for your pet may be a financial strain even if it is a no brainer. Having pet insurance doesn’t cost a whole lot and can give you peace of mind knowing your little loved one of the non-human variety is protected no matter what.

How Much Insurance Is Too Much?

We’ve seen from the six main types of insurance how you should be protecting yourself based on your individual need. Be sure to compare different companies’ policy costs and coverages. Ask questions if you have them and eliminate wasted costs by over insuring, but don’t underinsure yourself either. It is a balance you can easily find to be sure you’re covered but also not paying too much.


https://dailyinsurance.news/what-is-the-right-amount-of-insurance/feed 0