How much are you paying your car insurance? How about your home owners insurance? Do you know how the rates compare to the other insurance companies? These are questions that you should be asking yourself once a year, just to make sure you know that you’re not overpaying on your insurance.
You know what? I can’t think of anything that would be more boring to write about than insurance (don’t worry, I’ll keep it short), but there are very few things that are more important than insurance, so bear with me here. It’s for your own good.
Make Sure that You’re Insured
Obviously, everyone needs to have car insurance. It’s the law. But, what type of insurance do you have, and is it right for you?
If you own a $1,000 car, there’s no reason for you to have full coverage on your car. If you had to, you could scrounge up $1,000 pretty fast in order to buy another car.
If you have an expensive car, you’ll most likely want to have full coverage on your it because it will be incredibly costly to replace. As for the deductible, if you always try to keep $1,000 in the bank at all times, then don’t be nervous about setting the deductible at $1,000. It will save you money every month, and if something does happen to your car, you’ll have that money in the bank.
Now, what if you own a car that’s not a junker, but it’s not exactly brand new? This is the category of my vehicle. I own a Jeep Liberty and it’s worth about $6,000. For this car, it’s all about the car insurance quotes between plans (you also might want to consider cheap contents insurance).
Since I often have at least $2,000 in the bank, I don’t mind a high deductible, but you should get quoted for a lower deductible as well. For me, the $500 deductible was only $7 more per month than the $1,000 deductible. That means I’ll be paying an extra $84 per year for $500 more in coverage. Chances are, something is going to happen to my vehicle in the next 6 years (6*84=$504), so this move is going to pay off.
If you’re a terrible driver and don’t have much in the bank, get more coverage. If you’re a great driver and have a hefty savings account, feel free to go after the higher deductible insurance. You can save some bucks that way.
Other Types of Coverage
Just as an overview, you may want to look into these types of insurances as well. They may not be required, but it may be a good option for your family.
Home Owners Insurance – Your home is probably the most expensive thing you ever bought. This is a must when it comes to insurance.
Income Protection – It protects you against loss of income if you’re unable to work because of accident or sickness. If your emergency fund is low, you might want to consider this, just to be safe.
Long Term Care Insurance– If your savings is sparce and you don’t want to burden your children with your cost of care when you grow older, take a look at long term care insurance. It could be a good option for you.
Do you ever sit down and go over your insurance plans? It’s boring stuff, but it really needs to be done. You never know when something bad is going to happen!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.