Know Your Insurance
Insurance is a critical component in every person’s financial life. It is used to manage risk and transfer the cost of potential minor or major damages to other parties, namely insurance companies. There are different types of insurance for pretty much all of your activities including auto insurance, home insurance, health insurance, life insurance, and business insurance. When searching for insurance coverage its important to shop for rate, deductible, and coverage amount.
This is the cost of insurance coverage, which will be paid on a monthly, quarterly, or yearly basis. The insurance company will charge you different rates depending on what type of coverage you have and the amount of insurance you require.
This is the amount you will have to pay before your insurer will pay any of your claims. For example, if you have car insurance that has a $500 deductible and you get in an accident that creates $600 in damage, you will pay your deductible of $500 and the insurance company will pay $100. The higher your deductible the lower your rate and vice-a-versa.
The coverage amount will directly affect the rate you pay. The more coverage you have the higher the rate that you will pay. Coverage amounts offered by insurance companies will be dependent on the amount of other people insured for the same risk and the likelihood of the risk happening.