Insurance is one of those things that you know you need, and don’t really know how it works. You just know that it’s supposed to be good to have. You want to have peace of mind that you have help when life happens.
Even though you have insurance, you could be like 60% of homeowners that are underinsured. Even if you do have insurance, you could still face a financial loss. Personal lines insurance can help narrow that gap.
Let’s take a look at personal lines of insurance. Keep reading to understand what it is, how it works, and how you can make sure that you’re fully covered for any situation.
What are Personal Lines of Insurance?
Personal lines insurance protects you financially if something happens to your car, home, or health. When you’re facing a health scare or your home has to be replaced, it can get very expensive. For example, the average emergency room visit costs over $1300.
Considering that about 40% of Americans can’t handle a $400 emergency, that can turn into a financial nightmare for many people.
Personal lines insurance can help you cover the costs of the hospital visit, so you may only have to pay your co-pay, which can be about $200. That’s a lot better than
Instead of facing financial losses, you have an insurance plan that helps you alleviate those costs. You can read more about that here.
Types of Personal Lines Insurance
There are many different types of personal lines insurance for different occasions and situations. The one thing to keep in mind is that personal lines insurance doesn’t cover businesses.
If you want to know more about insuring your business, you want to explore commercial lines insurance.
These are the most common types of personal lines insurance that you need to consider.
Do you own a home? What would happen if you had a major storm come through that damaged your home?
If you didn’t have insurance, you would be stuck footing the bill. Considering that a roof could cost about $20,000 to replace, you need to make sure you have insurance.
Most mortgage lenders require some kind of insurance to protect the home, too.
In a rental, you don’t own the property. You do have personal belongings that are important to you that need to be covered.
Rental insurance can cover the replacement costs for all of your belongings. It can even cover costs if something were to happen and you were displaced.
Health insurance is at the front of the national conversation for good reason. Families often go broke to get good health care. In emergency situations, you often see people have online fundraisers to cover healthcare costs.
That’s because the costs of healthcare have skyrocketed in recent years. That causes insurance rates to increase, and healthcare becomes a major issue. The Affordable Care Act has opened the door for more people to get affordable health insurance.
You want to work with an agent that is well-versed in health care policies to make sure that you have adequate coverage.
Auto insurance is a personal line insurance type that protects your car in case you’re in an accident. These policies often cover injuries and property damage as well.
What would happen if you were unable to work? This is especially important if you’re self-employed or you work in an industry where your work depends on your physical ability.
You want to check to see if your employer covers you through your benefits package. If not, then this is something that you need to consider.
Life insurance is necessary at any age. If something were to happen to you and you die unexpectedly, your family would be responsible for funeral and other expenses.
This can be costly. You can help your family out and leave them something by having life insurance. This will be paid out in one lump sum to your beneficiaries.
Review Your Insurance Needs Each Year
As your life changes, your insurance policies should change with it. Did you know that if you bought a new furniture set and didn’t update your policy, it may not be covered if something were to happen to your home?
Something as simple as a job change could impact your auto policy. A shorter commute could actually bring down your premiums.
Reviewing your insurance every year can protect you and save you money. You want to make an appointment with your insurance agent every year to review your policy to make sure you have more than enough coverage.
You’ll want to be prepared to ask specific questions to spotlight any potential gaps in coverage. Did you just do a remodel or landscaping project? Ask if they’re covered under your homeowner’s policy.
Do you have valuables such as a jewelry collection or art collection? Ask if you need additional coverage to protect them.
You should also do an updated inventory before you meet with your insurance agent. Purchases like camera equipment, a new laptop, furniture, or dining room set should be added.
An increase in income can impact your disability policy because the percentage of income covered would increase. You definitely need to bring this up to make sure your policy will cover this increase.
Personal Lines Insurance Protects You from Financial Disaster
Insurance can be complicated and hard to understand. Yet, you know that you need it. Not having insurance or being underinsured can cause financial ruin.
Personal lines insurance protects you in those “What if” situations. What if you can no longer work? What if something major like a flood happens in your home? What if you have a medical emergency?
The list goes on and on. Personal lines insurance can protect you in these and other situations that could turn out to be costly. Instead of lying awake every night, you can rest easy knowing that you can avoid a financial disaster if something happened.
Do you want to know more about protecting your financial future? Check out the personal finance blog for more great content.