Why do you need comprehensive insurance?
If you’re weathering our current economic downturn by squandering insurance coverage, the pennies you save could put you at risk of a financial tsunami. Pinch of pennies on certain types of personal policies like auto insurance, homeowner’s insurance coverage, and one personal injury lawsuit can kill you. If you have assets worth protecting, comprehensive insurance can cover the gaps in your homeowners’ basic insurance and auto insurance policy.
How does comprehensive insurance work?
Personal awning insurance (also called gap insurance) provides an extra coverage cushion that takes the slack between where homeowners are located or the car insurance cap and additional expenses you may incur such as medical payments, property damage, court costs and similar fees. Typical canopy coverage starts at $1 million, but you can buy coverage for up to $10 million. Usually, comprehensive insurance is purchased as an addition to an existing policy. Insurance companies may require that you have a minimum coverage on your home or car (or both) before they sell you an umbrella policy.
What does comprehensive insurance cover?
Before you buy comprehensive insurance, make sure you need it. Analyze your exposure to risks. What is the probability that someone will be injured on your property? It’s higher than usual if you own a dog or have a pool, for example. Do you own valuable assets such as a home, savings account, stocks or other items that could be at risk if you are sued and your insurance doesn’t cover all losses or damages? If you answered yes to either question, you are a good candidate for comprehensive insurance.
How much does comprehensive insurance cost?
You should expect to pay a higher premium (say an extra $150 per year for a $1 million gap policy), but you can reduce the impact with a higher deductible on your primary home or car insurance policy. You can also take advantage of money-saving discounts such as using the same insurance company for all of your policies. You should also compare different policies to see if switching to another company for your basic policies and comprehensive coverage makes sense.
Do you need a comprehensive policy?
Make sure you get the coverage you need. If you own a boat, motorcycle, or RV, for example, add them to your canopy policy. If you rent boats, cars, or recreational vehicles, make sure your canopy policy covers this type of risk. Even if you live in a state that prohibits punitive damages, you can still be sued if you cause death, injury, or property damage in a state where punitive damages are permitted. These are just a few examples of the potential risks. You will need to assess your posture to make sure you have a canopy large enough to keep you safe.
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