How to ensure you are not over insured
Introduction
While there are those who will tell you that it is always better to be over insured rather than under insured, there are also those who will remind you that having the right amount of insurance is even better. There are many of us who have insurance the covers us in only rare situations or at a price that is simply not worth paying.
Instructions
While there are many ways that we can be over insured, below you will find just a few ways that you can prevent this from happening. Ensuring that you are not over insured is really a matter of looking at your insurance policy and evaluating if the price that you are paying for coverage is worth the type of payment you will receive if or when you will use that clause in the policy.
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How to ensure that you are not over insured
- Health insurance - Health insurance is a category of insurance that makes many people nervous. Of course you want to be covered in case anything unfortunate happens to you or your family. So many of us sign up for elaborate policies that protect nearly every aspect of risk that we may encounter. The truth of the matter is that you need to evaluate your chances of having a serious injury or illness. Take your age into consideration. Older individuals typically encounter not only more health problems, but more complicated health problems. Take vision insurance for example. Do you have regular eye exams? If you do, are there any problems encountered? If you do not have glasses or need visual aid, why pay so much for the coverage? A similar principle applies to dental coverage. A Dental check up costs about $90 (depending on the office and dentist that you visit). Could you just afford to pay $90 twice a year for check ups instead of meeting a deductible and having to pay premiums? Those who rarely have dental problems find that doing so is a cost effective alternative. The bottom line is that some of us need to realize that it would not be a tragedy to pay out of pocket for things that we choose not to be covered for. In many cases doing so is the more cost effective alternative.
- Limited coverage on your auto - Once you own your vehicle (as in you are no longer making payments to anyone for it) you have the option of changing the coverage on the car from a full coverage plan to a plan that only covers the other driver if you are in an accident. If you find that by the time you have finished paying off your car that it is no longer worth making that monthly investment into your insurance payment for, you may consider switching your coverage.
- Could you be paying less (or nothing at all) for mortgage insurance? - Of all the types of insurance that you want to be sure that you have in order to protect your home, mortgage insurance is probably the one insurance that you can most do without. Working towards accomplishing the goal of meeting the requirements to no longer require mortgage insurance is well worth the effort and can save you a bundle in the process.
Conclusion
There are many areas where we feel safer being over covered rather than not having enough coverage and taking the risk that something may happen to us. However, realizing that there are areas where we can be needlessly insuring ourselves can lead to a course of action that saves you hundreds of dollars a month that can be put to better good.
