February 8, 2012

Why Insurance is a must

As most of you may know, I spent a summer doing an Internship for Northwestern Mutual. While I spent most of my time learning the ins-and-outs of Life Insurance, I took a course through Tennessee Tech University covering Insurance and Risk management. I learned a lot about the importance of having all types of insurance. Recently, a fan of the site sent me an email asking to post a guest article regarding the importance of insurance, a topic I would love to cover in detail later. Enjoy!

Insurance is a classic example of "have it and don't need it" versus "need it and don't have it." Although paying for insurance that you never use is a hassle, it would be a bigger hassle to forgo insurance coverage and then wind up needing it.

There many reasons why you need all types of insurance. You need homeowners or building insurance to protect a structure and its contents from fire and to protect your possessions from theft. You need auto insurance to protect your car in the event of an accident or theft and to protect yourself in case you incur liability for a collision. Health insurance pays your medical bills if you get sick or injured, while life insurance protects your family and your assets in the event of your untimely death.

You might think it's OK to go without renter's insurance or to carry only liability insurance on your car. Of course, if someone steals you car or breaks into your apartment and steals your big screen TV, you'll be kicking yourself that you didn't fork out a few extra bucks a month to protect those things.

Although each individual insurance policy, with the exception of health insurance, isn't that expensive, usually costing around $50 a month or less, put all together the costs can be a burden.

One way to reduce your costs on insurance is to compare companies on a price comparison website.

For example, you can use a 
buildings insurance comparison site to find the best and most inexpensive homeowners or renter's insurance policies. In addition to a buildings insurance comparison site, there are comparison sites for all other types of insurance. You can go online and compare car insurance, life insurance -- even health insurance policies. Using these sites could easily save you several hundred dollars a year.

Another way to save money on the cost of insurance is to bundle services with the same company. The most common way to do this is to get your auto and homeowners or renter's insurance with the same company. However, you could bundle any types of insurance a company sells to get discounts. By bundling multiple policies, you could save up to 25 percent on the premiums.