Insurance for Auto, Home, Life, and Health

Are there people in your life who depend on you as a primary bread winner?  If you answered yes then you should look into purchasing some form of Life Insurance to protect your loved ones.

There are generally four types of insurance providers:

• Mutual Insurers (insurance companies owned by their policy holders)
• Reciprocal Exchanges (insurance companies wherein customers insure each other)
• Lloyd Associations (a situation where those managing the insurance policies assume personal risk in the performance of the company by having their own wealth invested in the firm)
• HMOs (Health Maintenance Organizations - health insurance companies that offer their customers health coverage for a pre-paid premium)

At the very minimum, your auto insurance policy must meet the amount of coverage your state specifies.  For example, California drivers must have 15/30/5 in liability coverage (in thousands of dollars).  Please keep in mind the state’s minimum coverage may not be adequate for your needs.  You may want to increase your coverage depending on your risk tolerance, your vehicle, your assets, and your area.

Your contents should be insured according to the cost of replacement.

GAP insurance is additional car insurance that covers amounts not covered by typical auto insurance providers.

For example, when you purchase a car, its value immediately decreases. If you get in an accident where the car is totaled, the insurance company will only pay the current blue book value of the car. However, you might owe more than the current value, leaving you with a few thousand dollars to cover on your own. GAP insurance will cover the remaining amount you owe; often it may also cover the deductible of your primary auto insurance.

Health insurance is an insurance policy that promises to pay for healthcare services for the insured party in exchange for the payment of premiums. The type of services covered and the level of coverage are specified in the policy. Types of health insurance include group or individual policies. Health insurance also covers the delivery of medical care and services.  Insurance plans can be managed care plans or fee-for-services plans.

Home insurance, often also referred to as hazard insurance, home-owners insurance or, in the industry, HOI, is intended to protect you financially against damage that might happen to your home, from fire and flood to accidents and criminal activity. It is intended to cover the replacement cost of your home and, with some policies, its contents. When shopping for insurance, ensure that you are familiar with the replacement cost of your home (this could be more than it would cost to buy a comparable home) and read the details carefully to ensure you will not be under-insured if the worst happens. For example:

• Are the contents of your home covered? To what extent? For example, are you covered to buy new replacements for lost or damaged items or only to buy replacements of equivalent age to the originals.
• If you must rebuild your home, are you covered to bring your home up to current building codes?
• Are special articles you care about like art, jewelery, computers, electronics and photographic equipment covered?
• Does your policy cover 'loss of use' - the cost of living somewhere else while your home is repaired or rebuilt?

Note that certain catastrophic disasters like earthquake and flooding are typically not covered by standard homeowners policies. In the event that these events are realistic concerns, separate policies must be taken out to cover you against these risks.