It’s time to stop thinking about that turkey and start thinking about insurance, the following is a guest post from Baily Harris.
*How Much Insurance Do You Really Need?*
Reducing insurance coverage can seem like a good way to save money, but
doing so could lead to expensive problems later on. At the same time, you
don’t want to buy too much insurance and waste your money on coverage you
don’t really need. The following guidelines will help you determine if you
are under or over insured.
Every state in the nation requires motorists to have some form of auto
insurance coverage. Lenders and dealerships also require customers to carry
a minimum amount of auto insurance on vehicles that are leased or listed as
collateral on an unpaid loan. Minimum requirements can vary depending on
where you live and your personal situation.
Everyone should purchase an auto policy with some form of liability
coverage. Liability covers other people’s expenses when you are at fault in
an accident. The amount of liability that you need purchase is dependent on
the amount of time you spend on the road (your risk level) and whether or
not you have overlapping liability coverage. For example, if you rarely
drive and have an umbrella insurance policy that provides additional
liability protection, you can probably keep the liability levels in your
auto policy relatively low.
Purchasing collision and comprehensive coverage is also important if you
have a nice vehicle. Collision covers damage done to your vehicle in an
accident. Comprehensive insurance provides coverage for non-traffic related
incidents, such as theft, vandalism, and damage from falling objects. If the
value of your vehicle is not equal to one year’s worth of insurance, you can
probably forgo both collision and comprehensive coverage–you’d be better
off saving the money for a new car.
You can also choose to purchase additional coverage such as personal injury
protection (PIP) or underinsured motorist protection. PIP covers your
medical expenses regardless of who was at fault in an accident. This type of
insurance is not necessary if you already have good health insurance
coverage. Uninsured motorist protection helps cover your costs if you are
involved in an accident with someone who has no insurance. This type of
coverage is not absolutely necessary but is worth exploring when you
consider the fact that 16 percent of today’s drivers are uninsured.
Although home insurance is not required by law, you will undoubtedly have to
carry some form of coverage if you are paying a mortgage. Even if you aren’t
making payments on your property, home insurance is still a good buy.
To begin with, you should have enough insurance to cover 100 percent of your
home’s replacement costs. This amount may or may not be equal to the market
value of your home or the outstanding amount on your mortgage loan. What is
important is that it covers the cost to rebuild your home from the ground
You will also want to purchase coverage for the personal possessions inside
your home. The only way to determine how much insurance to buy in this
situation is to take inventory of your possessions. Determine how much they
are worth and how much money you might need to replace them. Coverage is
often limited to 40 to 75 percent of the amount that your home is insured
for. However, you can purchase a floater policy if you think you need
Your home insurance policy should also provide some type of liability
protection so that you are covered if someone is ever injured on your
property. Liability coverage levels vary. As with auto insurance coverage,
your home insurance liability coverage can be kept to a minimum if you also
carry an umbrella insurance policy.
A final home insurance coverage option is loss of use protection. This type
of coverage will reimburse you for hotel bills, restaurant bills, and other
living expenses that may be incurred if you are forced to leave your home
after a disaster. If you live in a high-risk area, loss of use coverage is
Guest post from Bailey Harris. Bailey writes on insurance and related topics