Everyone knows that they need insurance, but to many of us insurance is just another bill that we are trying to lower. Big companies vie for our attention as we scramble to lower our rates. Whole marketing campaigns are devoted to convincing you that if you switch you’ll save. There are even campaigns that allow you to ‘choose your own insurance’ thereby presumably getting the best deal.
Other companies market to our desire to be protected and use emotional language to convince us that only they have ability to be there for you in crisis.
These marketing appeals can obscure the reality of what insurance does and does not do and completely obscure the fact that having the ‘right’ company is not the whole story. If you don’t have proper limits you are left open to potential catastrophe. Dave Ramsey provides a good basic definition of insurance.
Insurance is transfer of risk.
Dave Ramsey
So the appropriate question to ask when shopping insurance is not merely is it cheaper. Nor is it solely based on buying a brand you’ve heard of. You certainly want a reputable company and don’t want to unnecessarily break the bank. BUT bottom line you want to evaluate how much risk you are willing to take and in what respect. For example, I have come across many individuals who have low deductibles on their vehicle for which they pay handsomely and yet they have insufficient liability on that same vehicle.
My question for them is what poses a greater risk, you getting sued for all you are worth, because you were at fault in an accident or having hail take out your car in CO and having to pay 500 instead of 250 for your deductible.
There are many different types of risks and different ways to alleviate the catastrophe potential through insurance. To best evaluate whether you have enough coverage you ought to talk with your local insurance professional as they can help you evaluate appropriate coverages for your situation.