Protect Your Assets with Insurance- Part 2

Comprehensive insurance coverage against severe setbacks is essential. Types of coverage include life, health, auto, homeowner’s or renter’s, disability, and liability. Through the purchase of insurance, policyholders transfer the risk of financial losses to an insurance company in exchange for the payment of a premium.

Below are three recommendations to purchase the best coverage for the lowest cost:

• Avoid Coverage Gaps- Keep coverage in force in between jobs to avoid the risk of incurring expenses out-of-pocket. If not immediately covered by a new employer’s health care plan, consider purchasing COBRA benefits to extend group coverage from a previous employer or Affordable Care Act marketplace coverage through www.healthcare.gov.
                                                                         
• Reduce Insurance Expenses- Consider using one or more of the following strategies to decrease the cost of insurance premiums:

• Longer elimination periods (e.g., disability and long-term care insurance)
• Higher deductibles (e.g., auto and health insurance)
• Staying accident-free or, if a driver is in school, getting good grades
• Maintaining a good credit score (for auto insurance in some states)
• Inquiring about available policy discounts (e.g., good driver and non-smoker)
• Paying premiums annually, instead of monthly or quarterly
• Paying premiums automatically vs. by check
• Buying multiple policies from the same insurance company (i.e., “bundling” property insurance)

• Shop Smart- Follow “The Rule of Three” and compare at least three insurance providers. A good way to do this efficiently is to contact an independent insurance agent who represents many different companies instead of a “captive agent” that just sells insurance policies issued by one company.

Insurance is first and foremost risk protection. The University of Georgia Extension fact sheet, Insurance Matters, has additional information about the features of various types of insurance.