Managing Insurance

Insurance is a necessary part of our lives because it protects us against major financial losses. Here’s a quick look at some of the insurance coverage you should consider having.

The first three insurance policies listed below may be offered by your employer. If you’re looking for a new or better job, these should be some of the things you evaluate when making your decision. For more tips, check out What to Look For in a Job.

• Health insurance pays for some, if not all, of your doctor and hospital bills. Getting medical coverage from your employer is generally a lot less expensive than buying your own policy.
• Disability insurance pays money if you are sick or injured and unable to work for a long time. Many employers offer disability insurance, or you can buy it on your own.
• Life insurance pays money to a person you choose (your beneficiary) in case you die.
• Auto insurance is required by state law. If your car is older, consider carrying liability coverage only. It’s less expensive than full coverage.
• Renter’s insurance pays you money if your possessions are stolen or destroyed in an apartment fire or flood. Check out Do You Really Need Renter’s Insurance? for more information.
• Homeowner's insurance is required when you get a mortgage to buy a home. It covers the same kinds of things renter’s insurance covers (possessions, etc.), plus it also provides protection for the physical structure of the home itself. For more information, see Homeowner’s Insurance.

When you are purchasing any type of insurance, shop around just as you would for any product. Compare costs among at least three companies. Ask how raising the deductible (the amount you pay before the insurance company starts paying) will save on premiums.

Every year, check insurance prices again to see if you can get a better deal somewhere else. Also, keep in mind that the best time to buy insurance is when nothing is wrong. For example, it is much more difficult (and expensive) to buy health insurance after you are sick or to buy auto insurance after you have had an accident. If you think you need a certain type of insurance, buy it as soon as possible so you can get the best rate available.