Do You Have the Right Insurance?

by MSE Staff | Published 15 Mar 2022 

It is a hot summer day, and you decide to fire up the grill and invite your family and friends over to swim in your pool. Everyone is laughing and enjoying the moment to cool off. You pat yourself on the back and relax. You feel heroic as you look into the blue sky. That is when you hear a loud thud followed by crying. Your best friend’s child is lying by the pool with a broken arm and chipped tooth. The boy is immediately rushed to the hospital. He will be fine the doctors say. A few weeks later your best friend is asking you to help pay for the medical costs. She cannot cover all of the medical costs and since it happened on your property, she’s hoping you will pay for it. You toss and turn at night wondering what to do. You are not even sure what your insurance covers. Insurance is an important part of protecting our assets from common life events. In this blog post we will go over the main categories of insurance and their benefits.

#1 Liability Insurance

Liability insurance protects us from having to pay for damages and injury to other people. For example, a person who is injured on your property might be able to hold you liable for thousands of dollars in medical costs. Your liability insurance is designed to pay out a large portion of those costs so that you don’t have to. Each liability insurance product has different terms and conditions that change depending on what state the insurance is issued in. Understanding the details and having a capable agent that is motivated to serve you is essential for having adequate liability insurance. In order to protect our assets from property damage and bodily injury to others, we use adequate liability insurance.

#2 Property Insurance

Whether you own real estate or rent, property insurance protects us from damage, theft, and loss of property. For example, a homeowner may use property insurance to rebuild after a fire. Likewise, a renter may be able to replace property damaged in a fire. Just like with liability insurance, there are some ins and outs to getting reimbursed. You may be able get insured at actual cash value or replacement cost depending on the type of coverage your agent can get for you. To illustrate the difference, actual cash value means that insurance will pay you the depreciated value of your property while replacement cost will pay you the amount needed to replace the property. We protect our assets from damage, theft, and loss of property by having the right property insurance coverage for our needs.

#3 Health Insurance (United States)

All of us will experience at least one major illness in life. The purpose of health insurance is to protect us from medical bills that come from illness. Health insurance is required by law in the United States. There are a variety of options that determine whether you can receive coverage for medical care outside of your network. Taking a class to learn more about the various types of health insurance available and how they can affect the quality of care you receive is essential. We protect our assets from medical bills and provide ourselves with good quality of care by having adequate health insurance.

#4 Life Insurance

Life insurance protects you and your family during the worst of times. For example, a life insurance policy can provide your spouse with and children with money to compensate the income that you would have naturally provided. There are many types of life insurance products on the market today that offer additional benefits. Understanding the rules and penalties surrounding these products will empower you to have the right conversations with your agent so that you get the most coverage at the lower cost. We protect our assets and our loved ones well into the future with adequate life insurance.

Final Thoughts

We have insurance to protect our assets, our health, and our loved ones from common life events. The four main categories of insurance are liability insurance, property insurance, health insurance, and life insurance. While the terminology and rules behind insurance require us to take a few classes, the reward of being financially literate pays off over time. Adequate insurance means having the right amount of coverage at a reasonable cost. Take a moment to evaluate your own insurance. You may find opportunities to leverage more coverage at a lower cost.