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Life has risks. You might have a car accident or your home could be damaged in a storm. Manage those risks by purchasing insurance. To make sure you have the coverage that works for you – and you are paying a fair price for the coverage you have – it’s helpful to get familiar with different policies and factors that affect their pricing.
Most people see insurance as a safety net that will protect them from life’s unfortunate events. However, an insurance policy is much more specific than that. Each policy requires the insurance company to assume liability when a specific type of event occurs. For some needs like protecting your belongings if you’re a renter, the cost is relatively inexpensive, particularly when you consider the value of your belongings that would be covered under a renters insurance policy. To make sure you’re properly protected, it’s important to understand what a policy covers.
Insurance needs vary greatly based on how much you own, the size and value of your household, and how likely it is that you’ll need to make a claim. For instance, a college student who lives in a rented apartment, rides public transportation and has very few assets may just need limited coverage – such as renters insurance and basic health insurance. However, a homeowner with two cars and a family may need more comprehensive coverage – such as homeowners, auto, life, umbrella , and health insurance.
The price of your insurance premiums – which is the amount you pay regularly for insurance coverage – depends in part on the amount of your deductible – which is the amount you pay before your insurance coverage pays anything. As a general rule, the higher the deductible, the lower the premium. Here are some major risk factors that could affect your premiums for a few common types of insurance:
With this information in hand, talk to your insurance agent about the factors that affect your policy rates. You may be surprised to find that making a few simple changes could significantly impact your rates.
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Please review your insurance policies carefully as coverage and exclusions vary.