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Insurance: A Look at the Different Types of Policies You Might Need

by Alicia Isero

Insurance is often considered a necessary evil--you need it, but it's not exactly fun to shop for. Well, before running off to the mall, take some time to nail down your insurance. You'll be glad you did, especially if you end up filing a claim.

"Expect the unexpected." Nowhere is this truer than when considering insurance. The best way to guard against financial fallout when the "unexpected" hits the fan is to insure your family, business, home, car, and health. These steps can make it more manageable:

  1. List the types of insurance you need:
    • Home
    • Property
    • Auto
    • Life
    • Health
    • Business
  2. Next, gather the information you will need to define your coverage.
    • Home Insurance:
      Be prepared to tell insurers if your area is subject to natural disasters, if you conduct business from your home, and what kind of dogs you have.
    • Property Insurance:
      Homeowner's policies often limit coverage for firearms, artwork, business property, electronic data, jewelry, and money. Inventory your property to make sure your coverage is adequate.
    • Auto Insurance:
      Know the make, model, year, and mileage of all cars you plan to cover. Calculate your net worth so that all your assets can be protected from lawsuits.
    • Life Insurance:
      Try one of many life insurance worksheets available online to estimate future expenses and your need for protection. Check the financial ratings for any company you consider doing business with.
    • Health Insurance:
      List any pre-existing conditions and chronic illnesses. Be prepared to answer questions about your medical history and even submit to an examination.
    • Business Insurance:
      Research what risks are typical in your profession so you know how much coverage you are likely to need. Inventory your business property.
  3. For each category of insurance there are ways to save money. Incorporate these when you start your insurance shopping spree. Finally, many insurers offer substantial discounts for those who buy more than one kind of insurance from them.
    • Home and Property Insurance: Save by not over-insuring your home. Don't include the value of the land when determining coverage--it won't blow away, burn down, or get stolen. Install deadbolts, alarms, or home security systems and ask for a lower rate.
    • Auto Insurance: Pay less for car insurance (and maybe stop scaring your neighbors!) by taking a defensive driving class. Other discounts may available as well--good students, people in low-risk occupations, retirees, military personnel, and members of organizations such as Mensa all get breaks. Ask.
    • Life Insurance:The Internet makes getting quotes and checking companies' ratings a snap. In addition, your performance on a physical can affect your rate. Get your blood pressure under control. Don't smoke, drink, or eat heavy meals for a couple of days prior to your exam. If you get an EKG, make sure they do it while you are lying down.
    • Health Insurance: You may get an exam for health insurance, so follow the same recommendations as for a life insurance physical. Get online and make comparisons. You may be able to get a group rate through associations you belong to. The type of coverage you select affects your premiums. Managed care is less flexible but is the most affordable option. In addition, if you have a chronic illness (or maybe you're just a hypochondriac) try a flexible spending plan and pay medical expenses with pre-tax dollars.
    • Business Insurance: Look for professional or trade organizations for your business.Many offer group insurance coverage at substantial savings. Consider purchasing a business owner policy (BOP) which combines several kinds of business insurance into a single package that can cost less.

Finding the right insurance policies means collecting information, organizing your insurance needs, and comparing quotes and features. And the convenience of online quotes means you don't have to drop when you shop for insurance.

Insurance Information Institute
MSN Money
Smart Money

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