How you can differentiate between necessary and unnecessary insurance?
There are some questions to help you decide this.
Insurances are a very versatile service, which is why it is easy to get lost in the maze. There was an article before about which type of insurance you absolutely need and which one you can avoid.
Now let’s take a look at how you can decide for yourself that while that particular type may be needed (e.g. home insurance), you’re still throwing money out the window.
The question is very simple, answer the following questions:
Are you insuring because of an emotional attachment?
It has happened before that somebody wanted to insure an object of great ideological value for him, but worthless in the market sense. Understandably, inheritance from grandmother is important, but an insurance is about mitigating the damage. It doesn’t matter how much you would pay e.g. after theft by an insurer, it is sure that it will not give you back the item.
Is it impossible for the damage to occur?
In the case of real estate (apartments, premises, etc.) there are extreme risk averse. Understandably, if they don’t want to risk the work of their lives. If they go to the very first place where they can sign a contract and they are told to a not-so-customer-friendly agent to “cover everything so cant be any trouble,” they’ll literally cover everything.
You will also be protected against flooding in the upstairs studio, you will also be protected against special glass breakage even if there is none in your area, and plants destroyed in your garden due to hail will also be protected in a small apartment.
And the list can be so long, nowhere near its end.
Is the item insured more than once?
Sounds weird, but there are cases. Take a vehicle that is usually parked in the garage at your house. There are home insurances in which car theft can be built in (i.e. if dissappeared from the garage). On the other hand, if the casco on the car also pays against car theft (from anywhere you take it), then in my opinion it is enough to choose this option for one.
Not giving enough cover in case of trouble?
Cheap meat has diluted juice. There are insurances on any subject that are severely underinsured. So in vain you may pay less than in other cases, but they are especially expensive in terms of value for money. And in case of trouble, you may only be able to clean your butt with what you pay as compensation.
Can you solve it on your own without much difficulty?
Pay attention! I didn’t ask here if there was that much. Because you may be able to afford a payout of up to $ 200 million. But you might want to pass this on to someone else. In this case, the question is obviously „no” the answer.
However, in the event that you don’t have a problem rebuilding an on-site ruined tool booth on a plot after a complete collapse, it’s obviously unnecessary to provide.
If you answered “Yes” to any of these, you don’t specifically need that insurance.
If you are unsure, do not know what your policy contains, you can contact us here. Then our staff in this area will help you navigate the maze.
How do you know that you definitely need that particular insurance?
Here are some questions to help you navigate. Since an insurer basically either gives money or pays for the service you use, it makes sense that money will be the focus of the issues.
Would complete reconstruction alone cause difficulty?
I would not overdo it, today it is most necessary to pay attention to over- and under-insurance. If you’ve been reviewing this for over 2 years, it’s definitely worth a question.
Would it be a problem to pay your existing debt in case of trouble?
In the event of either property damage or damage to human life / health, further payment of any outstanding debts would be a problem for many people if left without help.
Obviously, in a situation like this, if it has to be financed out of your own pocket, it has to go in two directions at once. One direction is to repay your existing debt, and the other is to alleviate the caused damage, or to resolve a new direction after the tragedy.
If there was serious trouble, would you have to sell your assets so far?
In many cases, man is at a crossroads: he survives but becomes runaway, or he remains relatively rich but dead. This can affect him and any member of his family.
If you’re not thinking about a social security waiting list, health care can consume a significant amount of money, especially when care other than screening is needed. In such cases, however, one clings to the last blade of grass, even if he has stated healthily that he will not.
Would you leave a debt behind in the event of death?
In the event of a death, if one of the payments is dropped but a loan has to be paid, the bank will not ask. It just looks if the required amount has arrived in the account. This can be compensated by a life insurance policy, but its lack could mean a really hard time to those left here. They don’t make money, but have to pay. This is true even if that time it doesn’t matter to you.
As a business leader, is it important to you to have as little sick pay as possible in your company?
As a business leader, would it be a problem for you or your company if your employees or you drop out of work due to sick pay? Is it important for you to get to work as soon as possible?
The corporate theme can be more interesting. If you look at social securyti-funded treatments, the waiting list can be longer than six months, and if something hurts, either for you or the worker, you need treatment not tomorrow but yesterday.
When you’re busy running your business, you probably won’t overdo screenings. If you take your car to service more often than yourself, chances are that it will revenge itself sooner or later. But who will be sitting in the waiting room for half a day when you have better things to do?
But as long as something hurts, neither you nor your co-worker can focus 100% on the work. This, in turn, is a loss to the company that you, as a business owner pay, even if not directly.
Would the illness of yourself or your family be disproportionately burdensome for you?
Here I mean that you have to pay:
- any medications, vitamins, dietary supplements, etc. taking to the hospital, which recommended by your doctor but the institution cannot provide it? (the medicine may not be available in your country)
- the necessary medical aids even if social security does not or only partially supports the devices?
- also instead of the lost earning, for the family to maintain the previous standard of living. All this despite the fact that the sick / injured family member may have decreased income, but the expenditure may have increased due to the illness / accident.
- modifying your home if necessary so that the patient / injured person can move from one room to another.
- the possible permanent nurse, resp. physiotherapist for a long time. (An physiotherapist occasionally costs is not cheap!)
Fortunately, no one gets up planning something bad for that day. This can still happen. Although marked with only a few bunny ears, the above questions can also be tens of millions of items. (no, no spelling, and no exaggeration).
There are practically 2 things fixed in this case: up to 0 and long lost income, and possibly a starry sky-high cost.
Unfortunately, it has already happened that someone sold everything (house, car, other accumulated wealth) just to save their loved one’s life. What do you do next, how do you rebuild your whole life?
If the answer to any of these is “Yes,” then that risk is definitely worth insuring. We will help you find customized insurance, contact us.
And remember…
That the real insurance policy is still in the community. When something goes wrong, most people expect help from the community they belong to. So first you ask relatives and friends for help. They are interested in (hopefully) getting back on your feet.
So what you’re actually doing: insurance is actually limiting the amount you’d charge these people.
If you have any questions, feel free to write in the Contact menu. I like to read your views and comments in the comments of social media.