mattlbrody
Expert
- 22
Hi,
My brothers and I are building websites for insurance agents with the goal of generating leads. We're writing articles that are meant to ensure trust. We want to know what you guys (our potential customers) think and what we should do to improve the articles.
6 Insurance Principles
You want to buy insurance, but you don’t know where to start. That’s why we wrote this page. We’re going to outline the 7 guiding principles you should follow to find the perfect policy match for you and your family.
Before going over the principles, we’d like to inform you that these principles are in place because everyone’s insurance needs are different. There is no single package that works for each of us. There’s no silver bullet policy that will completely cover you for a low price. If there was, no one would ever get sued or pay a mechanic after a car accident.
So when you're ready to buy insurance, follow these principles and you’ll start to understand what coverage you need and which ones you don’t.
Cheap is more expensive
Keep it Simple
Don’t risk more than you can afford
A little goes a long way
Weigh the odds
Risk a little if it costs a lot
- - - - - - - - - - - - - - - - - -
Cheap is More Expensive
Every advertisement you see for insurance seems to have the word “cheap” in it. As if cheap is all people ever want. We all want low prices, but not for a policy that doesn’t properly protect us or our loved ones. Yet this word often does sell people, typically people that don’t understand the difference between good coverage and bad coverage. Cheap insurance does make sense if it’s all you can afford. So if you can only afford the bare minimum, then you don’t really have a choice to make.
But if you’re truly interested in being fully protected, cheap is never the way to go. In fact, cheap usually turns out to be more expensive. Cheap food isn’t as healthy and will lead to medical problems later on in life, which can be extremely costly. If you cause an accident where someone is seriously injured, and you have the cheap insurance, you could end up filing for bankruptcy. Own a car? They’ll take that. Your house, that’s a nice gimme too. So the question you have to ask yourself is, do you want to gamble or pay more now and feel secure?
Everyone thinks it won’t happen to them, even though its a common day occurrence in the US. Statistics show that each year,43,000 or more of the United States’ population die due to vehicular accidents and around 2.9 million people end up suffering slight or severe injuries. In a nation full of lawyers (cough, cough, even our leaders are lawyers), are you surprised that companies and individuals get sued for millions daily? And that cheap car insurance you bought, isn’t even going to cover the lawyer fees.
So when you're buying insurance, just remember, buying car insurance is a lot like buying a parachute, you don’t want a cheap one.
- - - - - - - - - - - - - - - - - -
Keep it Simple
The fact is, no one wants to buy insurance. You’re buying insurance because it’s a necessary evil. Our world is full of risk and the only way to defend ourselves is to learn how to manage that risk. From the get go you have 2 choices to make. You could read as many insurance books as you can get your hands on, then take the necessary tests to become an insurance agent, and cover yourself as best you can. Or...you can talk to an experienced local insurance agent and find out what coverage you need and can afford.
Personally, I think it’s best to learn a little about it, then let the experts handle the rest. Just learn enough so you understand the lingo. The first rule of keeping it simple, is leaving the hard stuff to the experts. After all, we all have better things to do with our time than study insurance (well actually, I don’t).
- - - - - - - - - - - - - - - - - -
Don't Risk More than you Can Afford
Deciding what you’re willing to risk can be a tough decision. If you're not familiar with how buying insurance works, there are 2 keywords you need to know before you buy. There are premiums and deductibles. Premiums are monthly fees that you’ll pay to continue your coverage. A deductible is the amount of money you pay out of your own pocket before the insurance kicks in. For example, your premiums could be $50/month, while your deductible is $1000/accident.
So lets say you bought insurance 3 months ago. By this time, you would have paid the premium 3 times. Yesterday you caused an accident, now you have to pay the deductible in order for you to get coverage from the insurance that you’ve been paying for. In total, you would have paid $1150. $150 for the premiums and $1000 for the deductible.
You’ll usually have the option to increase your monthly premiums in order to lower your deductible, or lower your monthly premiums by raising your deductibles. At this point in the decision making process, you have to be really honest about the type of driver that you are. If you frequently cause accidents, having a high deductible isn’t the best idea. On the other hand, if you're a safe driver, having lower premiums would save you money almost instantly.
Another good example of not taking risks, is to make smart gables. Don’t buy collision insurance for that junker you drive if you could afford to replace it with your deductible. When it comes to choosing your policy, know yourself and how much you're willing to spend. Don’t worry, most of this stuff is common sense and we’ll walk you through it.
- - - - - - - - - - - - - - - - - -
A Little Goes a Long Way
Insurance makes sense because you can spend a little now for a lot of protection down the road. If you don’t have the right coverage, you could end up paying huge out of pocket costs.
The trouble is, most of us aren’t millionaires, and we can’t buy unlimited coverage and have complete protection. So we usually buy a policy that makes us feel comfortable, both emotionally and monetarily. Yet so many people are under-insured, even though paying a little bit more would give them a lot more coverage.
For example, the most common type of car insurance purchased today covers $100,000 per person for injuries you cause to others. Do you think that’s enough to pay for all the possible expenses? It would have to pay for medical bills, hopefully it’s not serious. You also have to pay for any lost wages if they miss work, better not hit a stock broker. And there’s the ever expensive compensation for that person’s pain and suffering.
If you’re in a fender bender, no big deal, you’ll probably be covered. Get on an accident on the highway though, and you could end up with a settlement of hundreds of thousands. So what do you do? The answer is simple, a little bit more money will raise your total coverage immensely. You can either increase your premiums or increase your deductible.
On average, increasing your premiums by $50 annually (that’s each year), will increase your coverage by $200,000. Which means you would have $300,000 of protection. If you increase it by $80 annually, you total cover is $500,000. $150 more a year, give you $1,500,000. And if you're already paying $50 or more a month, then $50-$150 more a year really isn’t that much. You also have the option of increasing your deductible. Simply increasing it by $250-$500 more, can pay for the additional coverage that you need.
If you can afford these small increases, it’s a no brainer.
- - - - - - - - - - - - - - - - - -
Weigh the Odds
Insurance is a gamble. The key to gambling is knowing how to play the odds. Insurance doesn’t make sense if the thing you're buying protection for is never going to happen. For example, buying insurance for a nuclear attack and alien invasion (which really is available for purchase), probably isn’t a good bet. Not only are these things extremely unlikely, but what are the chances that you and the insurance company are one of the remaining few who carry on business as usual? Probably not very likely either. So you better keep away from snake oil insurance salesman.
What kind of car you drive will have an impact on your insurance. Not just on your premiums, but also on what type of coverage you should have. Do you want collision coverage for a car that has 1 wheel in the junkyard? If the policy will reimburse you in cash or a new car, then you certainly do. If it doesn’t, then you’d better not make that gamble.
What kind of driver are you? Do you frequently get in accidents? If the answer is yes, get the best coverage you can afford. There’s no point in hoping for the best, when you should be planning for the worst (or in some cases the most likely).
- - - - - - - - - - - - - - - - - -
Risk a Little if it Costs a Lot
The idea here is to avoid insurance when the risk is small compared to the price you’ll pay protecting yourself. Lets say you own a 1999 Ford worth $1000. You caused an accident and are facing premiums of twice as much as you were paying before. Not just for 1 year either, but for several years to come. Your initial premiums just increased from $100 to $200 a year, with a $700 deductible.
The risk of the insurance company, would be $1000, minus your $700 deductible, minus the salvage cost of your car (lets say $100). Don’t forget, you also pay them $200 a year. In total, your cost comes to $1000, the coverage they are willing to give you. If it’s over several years, you could end up paying a lot more and simply losing a lot in the long run. If you ever find yourself in this situation, the smart move is to get rid of the collision coverage.
My brothers and I are building websites for insurance agents with the goal of generating leads. We're writing articles that are meant to ensure trust. We want to know what you guys (our potential customers) think and what we should do to improve the articles.
6 Insurance Principles
You want to buy insurance, but you don’t know where to start. That’s why we wrote this page. We’re going to outline the 7 guiding principles you should follow to find the perfect policy match for you and your family.
Before going over the principles, we’d like to inform you that these principles are in place because everyone’s insurance needs are different. There is no single package that works for each of us. There’s no silver bullet policy that will completely cover you for a low price. If there was, no one would ever get sued or pay a mechanic after a car accident.
So when you're ready to buy insurance, follow these principles and you’ll start to understand what coverage you need and which ones you don’t.
Cheap is more expensive
Keep it Simple
Don’t risk more than you can afford
A little goes a long way
Weigh the odds
Risk a little if it costs a lot
- - - - - - - - - - - - - - - - - -
Cheap is More Expensive
Every advertisement you see for insurance seems to have the word “cheap” in it. As if cheap is all people ever want. We all want low prices, but not for a policy that doesn’t properly protect us or our loved ones. Yet this word often does sell people, typically people that don’t understand the difference between good coverage and bad coverage. Cheap insurance does make sense if it’s all you can afford. So if you can only afford the bare minimum, then you don’t really have a choice to make.
But if you’re truly interested in being fully protected, cheap is never the way to go. In fact, cheap usually turns out to be more expensive. Cheap food isn’t as healthy and will lead to medical problems later on in life, which can be extremely costly. If you cause an accident where someone is seriously injured, and you have the cheap insurance, you could end up filing for bankruptcy. Own a car? They’ll take that. Your house, that’s a nice gimme too. So the question you have to ask yourself is, do you want to gamble or pay more now and feel secure?
Everyone thinks it won’t happen to them, even though its a common day occurrence in the US. Statistics show that each year,43,000 or more of the United States’ population die due to vehicular accidents and around 2.9 million people end up suffering slight or severe injuries. In a nation full of lawyers (cough, cough, even our leaders are lawyers), are you surprised that companies and individuals get sued for millions daily? And that cheap car insurance you bought, isn’t even going to cover the lawyer fees.
So when you're buying insurance, just remember, buying car insurance is a lot like buying a parachute, you don’t want a cheap one.
- - - - - - - - - - - - - - - - - -
Keep it Simple
The fact is, no one wants to buy insurance. You’re buying insurance because it’s a necessary evil. Our world is full of risk and the only way to defend ourselves is to learn how to manage that risk. From the get go you have 2 choices to make. You could read as many insurance books as you can get your hands on, then take the necessary tests to become an insurance agent, and cover yourself as best you can. Or...you can talk to an experienced local insurance agent and find out what coverage you need and can afford.
Personally, I think it’s best to learn a little about it, then let the experts handle the rest. Just learn enough so you understand the lingo. The first rule of keeping it simple, is leaving the hard stuff to the experts. After all, we all have better things to do with our time than study insurance (well actually, I don’t).
- - - - - - - - - - - - - - - - - -
Don't Risk More than you Can Afford
Deciding what you’re willing to risk can be a tough decision. If you're not familiar with how buying insurance works, there are 2 keywords you need to know before you buy. There are premiums and deductibles. Premiums are monthly fees that you’ll pay to continue your coverage. A deductible is the amount of money you pay out of your own pocket before the insurance kicks in. For example, your premiums could be $50/month, while your deductible is $1000/accident.
So lets say you bought insurance 3 months ago. By this time, you would have paid the premium 3 times. Yesterday you caused an accident, now you have to pay the deductible in order for you to get coverage from the insurance that you’ve been paying for. In total, you would have paid $1150. $150 for the premiums and $1000 for the deductible.
You’ll usually have the option to increase your monthly premiums in order to lower your deductible, or lower your monthly premiums by raising your deductibles. At this point in the decision making process, you have to be really honest about the type of driver that you are. If you frequently cause accidents, having a high deductible isn’t the best idea. On the other hand, if you're a safe driver, having lower premiums would save you money almost instantly.
Another good example of not taking risks, is to make smart gables. Don’t buy collision insurance for that junker you drive if you could afford to replace it with your deductible. When it comes to choosing your policy, know yourself and how much you're willing to spend. Don’t worry, most of this stuff is common sense and we’ll walk you through it.
- - - - - - - - - - - - - - - - - -
A Little Goes a Long Way
Insurance makes sense because you can spend a little now for a lot of protection down the road. If you don’t have the right coverage, you could end up paying huge out of pocket costs.
The trouble is, most of us aren’t millionaires, and we can’t buy unlimited coverage and have complete protection. So we usually buy a policy that makes us feel comfortable, both emotionally and monetarily. Yet so many people are under-insured, even though paying a little bit more would give them a lot more coverage.
For example, the most common type of car insurance purchased today covers $100,000 per person for injuries you cause to others. Do you think that’s enough to pay for all the possible expenses? It would have to pay for medical bills, hopefully it’s not serious. You also have to pay for any lost wages if they miss work, better not hit a stock broker. And there’s the ever expensive compensation for that person’s pain and suffering.
If you’re in a fender bender, no big deal, you’ll probably be covered. Get on an accident on the highway though, and you could end up with a settlement of hundreds of thousands. So what do you do? The answer is simple, a little bit more money will raise your total coverage immensely. You can either increase your premiums or increase your deductible.
On average, increasing your premiums by $50 annually (that’s each year), will increase your coverage by $200,000. Which means you would have $300,000 of protection. If you increase it by $80 annually, you total cover is $500,000. $150 more a year, give you $1,500,000. And if you're already paying $50 or more a month, then $50-$150 more a year really isn’t that much. You also have the option of increasing your deductible. Simply increasing it by $250-$500 more, can pay for the additional coverage that you need.
If you can afford these small increases, it’s a no brainer.
- - - - - - - - - - - - - - - - - -
Weigh the Odds
Insurance is a gamble. The key to gambling is knowing how to play the odds. Insurance doesn’t make sense if the thing you're buying protection for is never going to happen. For example, buying insurance for a nuclear attack and alien invasion (which really is available for purchase), probably isn’t a good bet. Not only are these things extremely unlikely, but what are the chances that you and the insurance company are one of the remaining few who carry on business as usual? Probably not very likely either. So you better keep away from snake oil insurance salesman.
What kind of car you drive will have an impact on your insurance. Not just on your premiums, but also on what type of coverage you should have. Do you want collision coverage for a car that has 1 wheel in the junkyard? If the policy will reimburse you in cash or a new car, then you certainly do. If it doesn’t, then you’d better not make that gamble.
What kind of driver are you? Do you frequently get in accidents? If the answer is yes, get the best coverage you can afford. There’s no point in hoping for the best, when you should be planning for the worst (or in some cases the most likely).
- - - - - - - - - - - - - - - - - -
Risk a Little if it Costs a Lot
The idea here is to avoid insurance when the risk is small compared to the price you’ll pay protecting yourself. Lets say you own a 1999 Ford worth $1000. You caused an accident and are facing premiums of twice as much as you were paying before. Not just for 1 year either, but for several years to come. Your initial premiums just increased from $100 to $200 a year, with a $700 deductible.
The risk of the insurance company, would be $1000, minus your $700 deductible, minus the salvage cost of your car (lets say $100). Don’t forget, you also pay them $200 a year. In total, your cost comes to $1000, the coverage they are willing to give you. If it’s over several years, you could end up paying a lot more and simply losing a lot in the long run. If you ever find yourself in this situation, the smart move is to get rid of the collision coverage.
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