Is it worth spending money on insurance?
I should never watch the film, The Rainmaker. All it does is make me angry. The same goes for Sicko, Mike Moore’s film about health insurance in America. We all know stories similar; someone who has paid insurance premiums their whole lives, only to be denied compensation when it’s needed. At the same time, we have probably been bailed out by insurance at some point.
Travel insurance has covered us when we left out cameras on a bus somewhere in Laos, or when our apartment was burgled during our summer holidays. I don’t even like to think how many times insurance has covered my fairly erratic (and often damaging) parking.
So what are the pros and cons of insurance?
The cynic in me thinks that insurance has to be one of the best advertising campaigns ever run. We pay hundreds of dollars to stem a cost that may never eventuate. Life insurance that is never required, a house that is never stolen from. We put our money into private health insurance, and relieve the government of its responsibility to provide free and quality healthcare (which we pay for anyway with our taxes).
We’re being ripped off both ways, and yet we pay it because of the Great What If. What if I got sick, and needed emergency healthcare? What if I were to die, who would provide for my family? What if I pranged yet another car, and needed thousands of dollars to pay for the damages?
The Great What If sits on our shoulders and weighs up the risk. Yes, insurance is, in a lot of ways, a scam. But that one time in a million that you need it, you breathe a sigh of relief that you paid all that money over the years. So how best to negotiate the insurance nightmare; pitfalls, positives and all?
Research
Don’t choose an insurance agency at random; research their policies before you decide. If it looks to good to be true, then perhaps it is. Read the fine print. Don’t choose an insurance company that provides travel insurance, without health costs or that doesn’t cover stolen goods. If you are going skiing, choose a policy that covers you should you hurt yourself skiing.
Insure what needs insuring
For instance, with homeowner’s insurance, make sure you’ve covered the real cost of the house should it need to be replaced. People fall asleep with cigarettes in their mouths, freak storms occur- get insurance that will help you out when the unthinkable happens.
Get your claims in pronto
If you are insured and something happens, don’t delay in notifying the insurance agency. The quicker you can get onto them, the better. Resist the temptation to embellish the story; the easiest story to stick to is the one that actually happened.
The Insurance for Dummies website details the kind of insurance you might need over a lifetime. On top of the usual kinds of life, auto, homeowner and travel insurance, they suggest thinking about disability and long-term care insurance.
The key to insurance is to research companies and policies so that you are covered without paying too much. It’s a balance easier said than done.
How do you ensure you are paying the right amount for insurance?
Any savings tips?
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