How to Decide What Insurance to Buy

You buy insurance to protect yourself against liability or loss that you could never afford on our own. But how do you ensure you are getting the right type of insurance or that it’s worth the cost?  With all the policies on the market, it can be hard to know what you need and what you can do without.

Here are some suggestions for determining which insurance policies to purchase.

Unnecessary:

  • Pet insurance. Instead of buying pet insurance, set aside money each month for pet care. With most plans, premiums rise and coverage declines as your pet ages.  There are also several pre-existing and genetic condition clauses that eliminate a variety of surgeries.
  • Wedding insurance. Skip it. Instead, ask your credit card company what they cover—you may be protected by using your credit card for catering and photography deposits
  • Identify theft insurance. Having your identity stolen is a nightmare, but in most cases you won’t have to pay for it. Federal consumer protection laws will cover you.
  • Flight insurance. Purchasing flight Insurance is like buying a life insurance policy for just one particular flight. You’re better off just buying a life insurance policy and skipping the flight insurance.
  • Extended Warranty Insurance. Unless the product is new to the market, you probably don’t need an extended warranty.  Most products come with a manufacturer warranty and credit cards may offer additional protection.

Debatable:

  • Traveler’s insurance. This can get messy. If you cancel a trip due to a health problem, you may have to prove it wasn’t due to a pre-existing condition. Plus, your credit card company may cover travel expenses charged to your card.

Necessary:

  1. Auto insurance. The law requires it.  At the very least, you need liability with property damage coverage.
  2. Medical insurance. This is a must even if you can only afford catastrophic coverage.
  3. Renter’s insurance. If you’re a renter, be sure to purchase this—it’s typically very inexpensive and it covers theft, loss from a fire, and it may even cover items stolen or lost outside the home.
  4. Life insurance. This is necessary, especially for parents. Meet with a licensed agent to find the policy that fits your family’s needs.

Final Tip: When it comes to insurance, the top consumer complaint is delays in claim handling, followed by denial of claims and unsatisfactory settlements. If you would like to file a formal complaint, visit the National Association of Insurance Commissioners.  Link to https://eapps.naic.org/cis/?pid=15493&nid=10&zid=yn07

 

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