What Do I Need to Cover?
Personal Insurance Types:
- Health Insurance: Covers medical expenses.
- Auto Insurance: Covers your vehicle and liability in case of accidents.
- Homeowners/Renters Insurance: Covers your home or personal belongings if you rent.
- Life Insurance: Provides financial support to your beneficiaries in case of your death.
- Disability Insurance: Replaces a portion of your income if you become unable to work due to a disability.
How Much Coverage Do I Need?
Factors to Consider:
- Health Insurance: Consider your medical history, family medical history, and potential future health needs.
- Auto Insurance: Minimum coverage is often required by law, but consider higher limits for better protection. Full coverage (liability, collision, and comprehensive) is advisable for newer or valuable cars.
- Homeowners/Renters Insurance: Ensure coverage is enough to rebuild your home (reconstruction cost) and replace your personal belongings. Consider additional coverage for high-value items.
- Life Insurance: Consider your debts, future education costs for children, and ongoing living expenses for your family.
- Disability Insurance: Aim for a policy that covers at least 60% of your pre-tax income.
How to Choose the Best Carrier
Steps to Evaluate Carriers:
- Financial Stability: Check ratings from agencies like A.M. Best, Moody's, or Standard & Poor's.
- Coverage Options: Ensure the carrier offers the types of coverage you need.
- Price: Compare quotes, but don't choose solely based on the lowest price. Consider the value of coverage and service.
- Discounts: Ask about discounts for bundling policies (e.g., auto and home), having a good driving record, or installing safety features in your home.
How to Read an Insurance Policy
Key Sections to Understand:
- Declarations Page: Summarizes your coverage, policy limits, premiums, and the insured parties.
- Insuring Agreement: Describes what is covered by the policy.
- Exclusions: Specifies what is not covered.
- Conditions: Outlines your responsibilities and the insurer's responsibilities.
- Endorsements/Riders: Additional coverages or modifications to the standard policy.
