I think ‘people’ fear insurance and insurance carrier because:
1.) Someone they know had a loss that had an unfavorable outcome, in their opinion
2.) The person buying the insurance policy is not sure what to buy and not sure of the insurance contract so they fear the insurance itself
3.) Insurance carriers seem scary
4.) Insurance is ‘expensive’ and you really don’t get anything for it
5.) There are a lot of words in an insurance contract
The truth is insurance in a necessity in everyday life if you don’t want to be liable for every little thing that can go wrong. Here are some reasons to find a really good insurance broker:
A.) If you own or rent a home and a friend or relative comes over to hang out, but slips and falls they can sue you. You would want Homeowners or Renters coverage for Liability Insurance and an Umbrella Policy for at least $1m to cover not only your assets, but to be represented in court and/or trial.
B.) That same policy would cover you in the event of a fire.
C.) When you are driving your vehicle you need insurance coverage. If someone hits you or you hit someone else you will need insurance. The Umbrella Policy from example A will help you out here, as well.
There are many, many more examples I could give (and bore you). The bottom line is – an insurance policy is risk transfer i.e. you are transferring your risk to an insurance carrier. As the buyer of the policy it is your duty to know what you are buying. Yes, you should have a broker or agent explain the policy to you, but you should also read the policy, as well. After you have a loss is NOT the time to start reading how your insurance works and what to do in the event of a loss.
There is nothing to fear with insurance or insurance carriers. My advice is to save receipts, maintain pictures or videos of your possessions, read your policy(ies), know what to do or who to call in the event of a loss (auto or otherwise) and know what you are buying.
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