What, When, Where and Why Insurance

Why to Insure

Insurance is essential for protecting yourself and your family from financial hardships that can arise from unforeseen events. It provides a safety net that helps cover costs associated with accidents, illnesses, or other unexpected occurrences. The primary reasons to insure include:

1. Financial Protection: Insurance helps mitigate the financial impact of significant life events such as death, disability, or medical emergencies.
2. Peace of Mind: Knowing you have coverage can reduce anxiety about potential risks and allow you to focus on other aspects of life.
3. Legal Requirements: Certain types of insurance, like auto insurance, are mandated by law in many jurisdictions.
4. Asset Protection: Insurance protects valuable assets such as homes and vehicles against damage or loss.

With Which Company to Insure (Where to Insure)

Choosing the right insurance company involves evaluating several factors:

1. Reputation and Financial Stability: Look for companies with strong ratings from independent agencies (like AM Best or Standard & Poor’s) that indicate financial strength and reliability.
2. Customer Service: Research customer reviews and satisfaction scores (such as those from J.D. Power) to ensure the company provides good support when claims need to be filed.
3. Coverage Options and Pricing: Compare policies from multiple insurers to find the best coverage at a competitive price. Consider both large national carriers for their resources and smaller local companies for personalized service.

When to Insure

The timing of obtaining insurance is crucial:

1. Life Events: You should consider getting life insurance when you start a family or take on significant financial obligations (like a mortgage).
2. Health Changes: Obtain health insurance before any major health issues arise; this ensures coverage during critical times.
3. Purchasing Assets: Acquire auto or homeowners insurance before purchasing these assets to protect them immediately upon acquisition.

What to Insure

The types of insurance you should consider depend on your personal circumstances:

1. Life Insurance: Essential if others depend on your income; it provides financial support for your beneficiaries after your death.
2. Health Insurance: Protects against high medical costs due to illness or injury; it’s vital for everyone but especially important if you have ongoing health concerns.
3. Auto Insurance: Required by law in most places; it covers damages resulting from car accidents and protects against liability claims.
4. Long-Term Disability Insurance: Important for income protection if you become unable to work due to illness or injury.