How Does Having Insurance Help You?
Insurance is crucial to financial success. Suppose you can’t get to work because of a car accident, or you become too sick to work for a long period of time. With a leaner paycheck and greater expenses, could you afford to pay your bills? Think about a recent natural disaster you’ve seen in the news. Do you have enough savings to rebuild and refurnish if your home was involved in such an event?
Insurance protects your dreams and everything you’re working to achieve. It helps you manage risk by passing some of it along to a third party — the insurance company — in exchange for the payment of a premium.
Here are three primary reasons to be insured:
- Things happen. Accidents, illnesses, injuries, thefts and natural disasters happen all the time. Any of these events quickly can drain your savings and put you into debt.
- The law says so. Almost all states require drivers to carry auto liability insurance that pays for medical costs, vehicle repairs and other costs. The one state that does not require liability insurance still requires drivers to show that they can provide funds to cover costs if they are at fault. And, with the Affordable Care Act, all Americans (with a limited number of exemptions) either must have medical coverage or pay a penalty).
- Lenders say so. Your car or home can be seized by a lender if you default on your loan. Lenders don’t want to lose their investment, so they insist on certain levels of coverage.