You need car insurance to get your vehicle tagged, and if you have a mortgage, your home insurance probably comes out of the escrow account. Health insurance is often provided by employers. The most important thing to know about insurance is that you want to understand your policy before you need a payout.
The Calculations
For your car insurance, the make and model of your car, your driving record, and your age can all impact your rates. If you have a loan on either your car or your home, you’ll need a more comprehensive policy. However, simple variables, such as your zip code, can impact the rate you’ll pay for full replacement coverage on your home. While a paid-off car can be covered with a simple liability policy, you will then need to pay cash or to borrow for the next car. Your home insurance coverage should encompass the full replacement value to rebuild it at today’s prices.
The Oddest Things Aren’t Covered
Even a comprehensive insurance policy is not so simple when you’re trying to figure out what isn’t covered. Uninsured drivers are very common and aren’t covered by accident coverage. Unfortunately, there are many drivers who choose to only get enough insurance to cover their vehicles during registration, and then they let the policy drop. This means that you will need to insure your car to cover yourself and those who choose not to buy insurance by making sure you have uninsured motorist coverage on your policy. Driving without insurance can lead to hefty fines and, in some states, can include jail time. If you’ve been hit by an uninsured motorist, it’s unlikely that the person will be able to pay cash for the damage done to your vehicle or your person. Make sure you’re covered.
Money Left Over
If you suffer damage to your home and you get more money back from the insurance company than the repairs cost, that money is yours. However, during the replacement, rebuilding, or repair process, make certain to keep all receipts so that you can track all expenses. Full replacement insurance policies mean that you can rebuild or replace your home and belongings at today’s prices. For this to work, you will need to carefully assess the value of your home and all of your belongings so that the policy coverage is fair to you and to your insurance company.
Insurance is one of those things that you buy with the hope of never using it. It’s a bit like a fire extinguisher. If you don’t know how to use a fire extinguisher when you need it, it’s worthless. Make sure that you understand your insurance policy before you need it.
Here’s another article you might like: Dealing with a Stubborn Insurance Company? Here’s What You Need to Know
