Tuesday, September 11, 2018

National Preparedness Month Day 11--Insurance

As part of your preparedness tasks, you need to look into your insurance coverages.  Years ago people could self-insure to some extent but with a basic visit to the emergency room costing $100k or more depending on your situation, self insurance is pretty much out of the question these days.  Consider the following types of insurance:

  • Car insurance.  It is the law to have car insurance and for good reason, a simple wreck can cost many thousands of dollars in medical and car replacement costs.  Call around for the best rates as costs can vary by hundreds of dollars depending on the insurance company.  Also, make sure you have reasonable coverage (you don't want to carry a cheap $10k policy when a wreck could cost you $100k in which case you could end up in a lawsuit to recover the difference between what is owed and what the insurance company covered).  
  • Homeowners insurance/renters insurance.  If you own a home (or even rent) it is pretty much a requirement to have homeowners/renters insurance.  One big disaster and you could be left standing in the street with nothing.  Renter's insurance is pretty basic and fairly inexpensive as it usually covers the contents of your home as well as liability in case someone is injured on your property.  Homeowner's insurance needs to be evaluated carefully so that you know what is covered.  Often earthquake damage requires an additional policy as does flood damage, tornado damage is usually covered and some hurricane damage may be covered.  Be sure you fully understand your policy and what it does and does not cover.
  • Life insurance.  Single people with no responsibilities should have basic life insurance to cover the cost of their death (burial/cremation/funeral) should the unexpected happen.  People with more responsibilities such as a spouse, dependent kids, a business, etc. need more coverage.  A financial adviser can give you information on either whole life or term insurance policies as well as help you figure out how much insurance coverage you would need to "replace" yourself  and keep your family/business solvent in the event of your demise.
  • Health insurance.  The fastest way to go bankrupt in the US these days is to have no or poor health insurance and have a major medical incident happen.  Our health insurance situation is the US is an expensive mess but any coverage you can get will be better than nothing.
  • Long-term care insurance.  Most people don't give much thought to how they would cover expenses if they were not able to work for an extended period of time due to an accident or extended illness.  A good emergency fund will help out with this but if you need additional funds to cover a caregiver, a home remodel to accommodate medical equipment, or medical equipment that isn't covered by insurance, this could be a serious drain on your finances.
  • Other insurance.  There are several other insurance coverages to consider depending on your situation including a general liability policy, business policy, riders for jewelry or art, etc.  A good insurance broker can give you more information on these.

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