The Problems and Solutions of Insurance

Insurance: everyone needs it; but few people understand it. Insurance for you home, car, and other things is extremely important. Emergencies do happen and you need to be prepared. One of the ways you can be prepared is to understand insurance, the types of policies you can take out, and the problems and solutions of each type of insurance.

Problems With Medical Costs

The biggest problem with medical costs is that your policy has rules, and failure to follow these rules can actually invalidate your policy. Invalidating your policy, even on accident, will leave you with 100% of your medical costs; which is not possible for the average person.

Solutions to Medical Costs

Your best option is to play it safe. Comb through your policy and read the rules. Know what you can and can’t do before you get sick; not after.

Problems With Your Home

  • Replacement Cost insurance does not always cover 100% of the items in your home. Many policies simply cover what the company sees as big or important item. This could mean that you are left with many costs to replace items that your insurance company will not.
  • Homes that are vacant for 30 or more days are considered abandoned. If your home is the victim of a disaster when you are away, your insurance company may not pay to replace your home or the items within it.
  • Did you know that damage caused by trees is not covered by most insurance? They will not pay to repair your home/property or pay to have the tree or other vegetation removed. Trees and shrubs are covered if they are downed by fire, but it can often take months to be paid for it.
  • Oftentimes floods are not covered under homeowners insurance. Water damage is often covered but not enough that would pay for what would be damaged in a flood. This can easily leave you with a stack of bills you just can’t pay.

Solutions to Your Home

  • Take out a policy that is for sure going to cover most or all of the items in your home. Do not just take out the first policy you read about; compare and contrast several to pick the best option for you and your family. Make sure it covers your home, the items in it, and your property.
  • If you are going to be away from your home for an extended period make sure there is someone there to watch it. Hire a house sitter or ask a neighbor to watch out for you. This way, someone can alert you if there is a problem but that way you can also prove that the property was being cared for even though you were not there.
  • Take photographs of your home before you go away or before big storms hit. These can help insurance adjusters determine what exactly is and what is not covered. It can also help you get paid faster in the event of a fire.
  • If you live in an area that floods easily and is plagued by storms, considering taking out flood insurance. Also, if there is water damage that starts inside of your house do NOT reference the water as a flood. The term will immediately flag the event with the insurance company and you are less likely to be paid for it.

Problems With Your Car

  • Most car insurance only covers your personal car. Your person is covered under certain parts of your policy for when you drive other cars. However, if you total a car you do not own (such as a friends, or rental car) that is more expensive than your personal car; your insurance may not cover the damage.
  • Filing small claims can actually cost you. If you are in a small fender bender that only costs a very small amount, your deductible is more than likely going to rise for more than you collected.
  • Your premiums can be raised by even small traffic violations. Small things such as speeding tickets or parking tickets can loose you a “safe driver discount” and result in higher premiums and deductibles.

Solutions For Your Car

  • You can choose to not drive more expensive cars than you own; it is possible but can be inconvenient. You can also choose to get an insurance rider or take a collision waiver if you rent a very expensive car.
  • Pay for small issues such as cosmetic work or small fender benders. You should be saving your insurance for large claims. That way your insurance will only jump once or won’t jump much because you prove you do not often need it.
  • If you have a lot of small traffic violations consider mistakes that you may be making. You may even want to consider taking a driver’s education class to prove that you want to improve. These classes can subtract points from your record and possibly lower your premium.

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