insurance basics

Insurance is a topic nobody likes to talk about, not even financially minded people.  The very word conjures up images of less-than-desirable salesmen and money disappearing down a rat hole.  Add in all the negative press the insurance industry gets whenever somebody screws up, and it’s easy to see why we don’t send much respect in it’s direction.

But insurance is a very useful concept.  It’s designed to protect you from catastrophic loss.  If something bad happens to you, so bad that it drains your piggy bank and leaves you sleeping in a large appliance box under the bridge, that’s when you need insurance.

There are many different kinds of insurance and some are highly specialized for business use, but as an individual, there are a few you should be familiar with:

Auto Insurance
Dings, nicks, and total bang ups can be ironed out with auto insurance.  When hail makes your car look like a giant brick of swiss cheese, and the body shop quotes you eleventy-jillion dollars, you’ll be glad your auto insurance is paid up.  It will also pay for damage your car causes to another car in an accident.  Plus, it’s required by law.

Health Insurance
When you need to visit a doctor, dentist, or the hospital, health insurance will pay the bill for you.  Comes in real handy when your appendix goes nuclear.  Due to a number of complex problems, the cost of health insurance has been spiraling upward for a long time, and there’s no end in sight.  There are alternatives to health insurance, however.  Write me if you want to know more.

Life Insurance
Life insurance is the most difficult type of insurance to admit needing.  Life insurance is something you buy because your brother-in-law sells it.  Seriously, when is the last time you looked your sweetie in the eye, dreaming together about the future, and the topic of life insurance came up?  It’s not a question of your probability of dying in the next twelve months, it’s a question of what would happen to your family if you DID die.  Do you want them to have to move?  Do you want your spouse to have to get a second job?

Homeowner’s or Renter’s Insurance
These types of insurance cover your property in the event of a fire, tornado, or burglary.  There has been a rash of burglaries in our area lately (a pox on you and your house, Mr. Burglar!).  I’m sure any of the victims will be glad to tell you how they feel about insurance.  One caveat: if you are renting, your landlord’s insurance only covers HIS property, not yours.  You have to get renter’s insurance to cover yours.

So in spite of the insurance industry’s bad rap, most of it is pretty useful.  You’ll be doing yourself a favor by checking into these basic types of coverage.

This article originally appeared in the July 16, 2008, edition of the Greenhorn Valley View.

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