Insurance Tips

Tips are from Insurance For Dummies. Copyright 2001. Wiley Publishing.

Tips on Buying Home Insurance

  • Insure your building for 100% of its replacement cost new.
  • Buy a Home Replacement Guarantee that will rebuild your home even if the cost exceeds your insurance amount. By the guarantee without a percentage cap.
  • Buy liability limits equal to your automobile liability limits.
  • Choose the highest deductible for which your receive adequate premium credit.
  • By Special Perils coverage for building and contents, which covers any accidental loss not caused by a handful of excluded causes.
  • Don’t just accept the standard coverage for detached  structures and contents that come with the policy. Make sure that the dollar amount for those two coverage will fully replace what you own. 
  • Read your policy. Discover what kinds of personal property are excluded or subject to dollar limits. Buy the optional coverages you need to eliminate those restrictions. 
  • Read our policy liability exclusions. Buy the optional coverages you need to cover anything you’re doing that is excluded.
  • If you bring work home, buy the optional business liability endorsement to cover injuries to the occasional delivery person.
  • If you have a home-based business, don’t buy the restrictive  home-based business endorsement. Buy the business owner’s policy instead.
  • Buy the optional sewer backup coverage. And buy federal flood insurance if you’re exposed to flood or heavy rains.
  • Buy earthquake coverage if the risk exists in your area. 

Tips on Buying Life Insurance

  • Cover both incomes. 
  • Cover the homemaker for the amount you would need to hire an outside service to perform the homemaker’s functions.
  • buy coverage for at least 6 to 7.5 times your current income. Add to this amount for final expenses and college costs. 
  • Buy term life insurance, in most cases. Buy cash-value permanent insurance only if your need is permanent.

Tips on Buying Car Insurance

  • Buy more liability insurance than you think you need – $500,000 or more. It’s cheap stuff.
  • Choose the highest deductibles you can comfortably afford for damage to your car. This strategy not only saves you money but also helps to pay for the extra liability coverage you need.
  • Buy Uninsured and Underinsured Motorist coverage in limits equal to your liability coverage limits. 

Tips on Buying Disability Insurance

  • If you’re married, cover both incomes.
  • Consider a supplemental policy if your group disability coverage at work is weak. Many are. 
  • Buy coverage,  ideally, to age 65, or for no less than five years if you’re finally strapped.
  • Choose the longest waiting period you can comfortably afford before coverage begins, such as 60 or 90 days.You’ll save 30 percent or more on your costs.
  • If you expect your future income to increase, add a Guaranteed Purchase Option that guarantees your right to buy more coverage in the future, regardless of your health. 
  • Don’t buy a policy that won’t cover partial disabilities on a long-term basis.