The Importance of insurance, do you have it right?

importance of insurance

The Importance of insurance, do you have it right?

In honor of National Insurance Day (June 28th). We would like to address the importance of Insurance and why it is a necessary evil. To address the importance of insurance for each of us individually we need ask questions about ourselves so that we are seeking the right kind of coverage.

Here are some questions to ask yourself to help understand the importance of insurance:

What is your personal risk?

  • Gathering information about the risks you are exposed to that would result in a loss.
  • Estimate how frequently a loss might occur and the severity of the loss.

How do you handle the risks they have shared? For example

  • Transfer Risk: Using Insurance
  • Avoiding Risk
  • Retaining Risk
  • Reducing Risk
  • Controlling Loss

How will you go about implementing risk management plans?

  • Determine types of insurance needed
  • The amount of coverage needed
  • The levels of deductible needed
  • Prioritizing Insurance Needs
    • Necessary [losses are devastating]
    • Important [losses would result in large debt]
    • Optional [losses recovered with emergency fund])
  • Re-examine your plan and adjust on a regular basis at least once a year

What is the most important thing when looking at any insurance?

Should you plan on having one person do all your insurance or is it better to go to different specialty people?

  • How do you know who the right agent is?
    • You must like them
    • You should take more than one meeting with them

What are the important questions to ask so that we understand what we are buying?

  • Look for what it doesn’t provide
  • Make sure it provides for your specific special needs

This is just the starting point for questions. Once you meet with an agent there are even more questions to come. The good thing is that the YWCA has an Insurance 101 class that helps people understand benefits and a great place to ask question without getting convinced into purchasing a policy. Check out our calendar of events for upcoming classes.