When improving your financial literacy, don’t forget about insurance!
We often see news articles and posts about “adulting” and the lack of financial education for young people. We make efforts to improve financial literacy by giving advice about employment, mortgages, saving and investing, and automobile costs. What usually gets put on the back burner is equally as important – insurance!
Don’t wait until your mortgage closing or your purchase of a new car to remember you need insurance! Being prepared with the help of an independent insurance agent can save you hundreds of dollars a year, or more. Here are five of the most important insurance products you need.
1. Health Insurance
We all know medical costs are crazy, and most people can’t afford to go without health insurance. If you’re lucky, you have a job that provides it. If you don’t, there are options in the health insurance marketplace. The website can seem daunting, but did you know that we can help? Our health insurance agents would be glad to help you through it. We also have other options outside of the marketplace, to help you figure out your best coverage.
2. Life Insurance
Nobody wants to talk about death, but nobody escapes it. Life insurance is pivotal to financial literacy. If someone depends on you financially, you need life insurance. Even if you are single with no children, you may have a co-signer on a loan who would be responsible for the payment if you died. Term life insurance is a policy you buy at a set annual rate for a period of years and provides a set amount of money to your beneficiary when you die. These policies are generally affordable! Other types of life insurance that can be used as investments are also available. Our agents will help you find the best option.
3. Home Insurance
Most homeowners have mortgages, and banks require homeowners insurance, so this is a hard one to overlook. Often, banks will provide their own financial literacy courses for first time buyers, that cover insurance topics. Our homes are usually our biggest investment, so protecting them is essential. Homeowners policies cover damage to your home and belongings for many events, including fire. They also cover you for liability if someone is injured or property is damaged as a result of your negligence.
What is often overlooked, because it is not required, is renters insurance. Renters insurance covers the same things as homeowners insurance, except for the actual home itself, which is owned by your landlord. You will have coverage for all of your belongings and liability. Renters insurance is extremely affordable.
4. Auto Insurance
The State of Maine requires liability insurance for any registered vehicle, so if you are a driver, you likely know at least enough to buy car insurance. You may not know about what different coverages are included in your policy. If you financed the vehicle, your bank required “full coverage” as well. Liability insurance covers bodily injury or property damage to others when you are responsible for an accident. For “full coverage,” you also need comprehensive and collision coverage for your own vehicle. Collision coverage will pay for damages to your vehicle as a result of a collision. Comprehensive coverage, or “other than collision,” provides coverage for things like theft, glass damage, and hitting an animal. Both of these coverages have a deductible, or an amount that you would pay before coverage kicks in. For instance, if you run off the road and hit a tree, and your collision deductible is $500, you would pay the body shop the first $500 and your insurance company would pay the remainder of the bill.
It makes sense to review your car insurance often. We represent dozens of insurance companies and can find you the right fit. Also, it saves money to bundle your car and home (or renters) insurance for a discount!
5. Business Insurance
Ok, so you may not run a business so you think this doesn’t apply to you. Or does it? With the trend of the “side hustle” you may have some gaps in your standard insurance policies like home and auto insurance. Do you babysit kids in your home? Are you an Uber driver? Do you sell crafts or other homemade items from your home? If there is anything you do regularly that provides an extra income, you might not have the coverage you need. So, give us a call to make sure you’re covered!
Brushing up on your knowledge of these insurance basics will put you well on the path toward financial literacy!