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Why Deciding What Insurance to Buy Should Take Longer than 15 Minutes

August 19, 2019

“Spend 15 minutes and save 15% on insurance!”

Sound familiar? If you listen to the radio or watch TV, chances are you’ve come across numerous ads all touting a similar promise: save money on insurance with only a tiny time commitment. It’s true that many of us are strapped for time and the efficiency might sound nice. But should we really be making decisions about insurance in 15 minutes or less?

Decisions about insurance often not only affect the policyholder but can also have reverberating impacts on the lives of family members. Reducing your coverage can save you money, but it might not be the best move for you or loved ones. Choosing the right insurance policy for your individual life circumstances takes time – usually longer than 15 minutes. And, while initially appealing, these ads fail to mention the type and amount of coverage addressed – an immediate red flag for any prudent buyer.  

Unexpected catastrophes happen all the time, and discovering you’re underinsured at the time of a loss can be devastating. It’s these unfortunate circumstances that emphasize the true value of your insurance policy is its features, benefits and loss settlement provisions. Premiums directly correlate to the amount of coverage you receive when you file a claim.

Here are a few considerations to take before deciding on a policy.

·        What if my home is lost due to a natural disaster, such as a wildfire?
If you’re planning on rebuilding, you might want to explore options that guarantee replacement without any cap on the limit. Further, some insurance policies can help cover the cost of living somewhere else while your house is rebuilt, without any time or dollar limits. If you decide to not rebuild or if you’re ready to downsize, certain insurance companies, such as Cincinnati, Chubb, Nationwide Private Client Group and PURE allow you to cash out without depreciation in the event of a total loss of your house and your contents.

·        Do I have enough coverage to protect my assets and revenue streams?
Your insurance is also a critical aspect of preserving your financial future and peace of mind. If you have assets to protect, you’ll want the proper coverage to defend a lawsuit or judgment resulting from an auto accident or injury sustained on your property.

·        Does an umbrella policy make sense for my circumstances?
In addition to your underlying limit of liability, some may want to consider purchasing a personal umbrella policy. These policies may allow you to purchase excess uninsured/underinsured coverage for family members to protect you or loved ones who are injured by a party with insufficient coverage or no coverage. Moreover, in the social media age, an umbrella policy that includes personal injury could be a sturdy line of defense from a party who feels they were damaged by something posted online.

Comparing the multitude of personal insurance policies can be overwhelming. But before you fall for an ad that claims to save you time and money, investigate what options make the most sense for your unique circumstances. A qualified insurance agent won’t simply sell you a policy but illuminate the fine print with each policy to help you make an informed buying decision. While cost is certainly an important factor to consider, it shouldn’t be the sole consideration. Completing a thorough risk analysis with your agent ensures your policy mitigates any gaps or deficiencies and can effectively help you overcome life’s hurdles.

Yes, choosing this route might take longer than 15 minutes. But investing the time up-front can preserve your financial well being (and give you peace of mind!) for years to come.