Comprehensive Insurance Coverage:
an Insurance Primer



Comprehensive insurance coverage is the foundation of a solid financial plan: protection from loss – loss of your vehicle, your home or belongings, your income, your life. Any one of these losses would create a huge financial burden for you and your family. It could wipe out everything you’ve worked so hard for, and leave your family with nothing.

How would your family’s life change if the wage-earner died? Is it worth the cost of insurance to provide them with enough money to allow them time to mourn, and then help them maintain their home and essential needs? The answer most certainly is yes.

What would happen if your car was totaled, or your home was destroyed? Could you afford to buy a new car or rebuild your home? For most of us the answer is no.

Comprehensive insurance coverage against these types of financial catastrophes is critical as a base upon which to build the rest of your financial plan. The point is to take care of protecting the assets you have already acquired before adding more. When making a personal or household budget, it is very important to include in your list of expenses the cost of this financial protection.



NECESSARY COVERAGE
There are four types of insurance that are considered absolutely necessary to give you comprehensive insurance coverage to adequately protect your financial situation:
  • health / Medicare supplement
  • homeowner’s / renter’s
  • auto / vehicle
  • life

There are varieties of each of these types of policies, and various levels of premiums. You don’t want to pay for coverage you don’t need, but you definitely don’t want to find out you don’t have enough coverage when you try to make a claim. It’s best to ask a professional to help you determine the amount of coverage you need, and can afford.

If you don’t already have an agent, ask people you trust if they would recommend the agent or company they work with. A referral from a satisfied customer says a lot. Consumer Reports is another excellent way to research companies before you buy.

Don’t cut corners by using the cheapest company – this can easily turn out to be a problem if and when you actually need to make a claim.



OPTIONAL PROTECTION
While the first four categories make up the type of comprehensive insurance coverage recommended for everyone, there are many other types of insurance. Your situation may justify additional protection if your monthly budget allows for it.
  • disability
  • long-term care
  • hospitalization
  • flood
  • earthquake
  • fire
  • liability


BUSINESS COVERAGE
If you are a business owner, you have other protection needs beyond the personal coverage already discussed, such as:
  • business & property liability
  • worker’s compensation
  • group health insurance for employees
  • keyman coverage (or key person, or key executive)
  • business owner’s policy
  • director’s and officers coverage

Because this is a specialized field, it is best to use an agent whose expertise is helping businesses protect their assets.



You can get insurance for almost every eventuality: mortgage insurance, pet insurance, wedding insurance, trip cancellation insurance, etc. While most of these very specific protections pay off every once in awhile, most experts will tell you to hold on to your money and avoid these. The concept of having the protection of comprehensive insurance coverage does not include these types of specialized policies! And as with all insurance – make your decision after weighing the potential loss and the likelihood of that loss against the cost of the plan.





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