Insurance: a necessity

Insurance. Whilst not the most exciting and romantic topic of discussion, in this world, it is paramount because without them, they can cripple you financially and set you back months or years.

Yes insurance companies are there to make money. And most of the time you are paying money that you should hopefully never have to use. So it can seem a waste. But it is never a waste when you need to use them. By the time you are 30, you most likely are either renting or owning a home, have a vehicle of travel, working etc. Let me put my disclaimer here, you need to assess your personal needs and consider what it right for you. So what type of insurances should you consider? Vehicles; Home; Health; Pet; Travel; Life; Personal and Business Vehicles – if you own a vehicle that you rely on for travel and do not have the money readily available to replace it instantly, you need some form of insurance. Measure the need against what your life would be like without it. Whether it is a car, bike, bicycle etc. If you can survive without a vehicle, ask yourself why you have it in the first place! A few key points:

1. Get the right type of insurance for you. Check what the payout would be, what your excess or upfront component would be. Remember it might be cheaper to cover for fire and theft, but in most cases, it is the small nudge to the side panel when parking that will set you broke.

2. It can take time to go through an insurance claim process. Check the optional extras like hire car. If you have no other form of travel and need your vehicle, this is important.

3. No claim bonus – this is like the holy grail of insurance. The longer you don’t make an at-fault claim, the cheaper the insurance. Guard and protect against loosing it, even if it means out of pocket expenses for minor damage.

Home Insurance – there are multiple forms of home insurance. You can insurance the building (if you own it), the contents inside your building or tenants insurance (if you are a landlord). Look around you and ask how much it would cost to replace everything you have. Really look. Computers, beds, appliances, clothes… it adds into the many thousands. If you can live without them, then ask why you have them. The biggest mistake people make here are:

1. Not getting the right level of contents insurance. Often you have to specifically outline some of your more expensive items (including jewellery or computer equipment).

2. Not taking regular pictures of your belongings so you can substantiate claims. Try this, walk through every room of your home and take a picture, open doors, close up of model numbers on bikes, equipment etc.

Health insurance – this is one of the few insurances that can pay you back. Most health providers offer extras for optical, dental, massage etc. I have to say, health insurance can be very complicated, so it is best to talk directly to your chosen provider and make sure you plan. For instance, if you intend to have children, there can be waiting periods or you may need a different level of cover. Your health is important, so make sure you use every bit possible. The last thing you want to be thinking is “how am I going to pay this hospital bill” when you suddenly find yourself injured. Pet industry is booming and pet insurance is maturing quickly. Check to see whether your health insurance provider covers pets as well. The level of support differs from cover only in cases of accidents, to cancer etc. But common issues such as genetic defects (hip or nasal problems) or knee surgery may not be covered. It is no secret that vet bills are expensive, guard against bill shock! Travel insurance. If you can’t afford travel insurance, you can’t afford to travel. It’s simple. Natural disasters occur, things get lost. Your passport and money are your life-blood and not having either is a serious issue. Check though because you might find your credit card company or travel agent already has inbuilt cover. Ensure your cover has everything you need. And don’t forget domestic travel insurance. If you are a frequent flyer, it may be best to get annual coverage, which looks after road-trips, domestic and international jaunts. Life insurance. If you have a family, have others dependent on your financial support for their wellbeing, then you need life insurance. This wont help you, but it will help those closest to you in the instance that you pass away suddenly. Mortgages, bills, funeral, not to mention legal costs can cripple families when an unexpected death occurs. Read the fine print, make sure you nominate your beneficiary and check occasions when cover is invalid. There can be activities that will exclude a payout such as extreme sports, extreme travel or suicide. Your superannuation, health insurer or credit card may already have inbuilt life related insurances. Be careful though and check clauses about double dipping; that is, having multiple life insurance policies. There are other types of personal insurances that you can consider, for example permanent impairment/disability, salary coverage in case of injury or liability should you operate a business or take part in extreme activities. Often some of these insurances are covered or bundled with your life or health insurance. Many trade related professionals have these insurances, where injury is more likely to occur. Business insurance. In many cases if you have a bank loan, insurance will be mandatory. But if your business is your sole income support, insure it. Don’t forget, often bundling a few insurance policies together can save you money and always ask if there are special deals from your insurance provider.

#insurance #30