If you’ve never purchased your own insurance policy before, the process of understanding and exploring your coverage options may be overwhelming. In addition to all the technical jargon used by insurance agents, there are a number of factors that play a role in determining which plan you should consider. From home to auto insurance and everything in between, we’ve created a guide to help you understand your options and to ensure you have protection when you need it most.
What is insurance?
In short, insurance is financial protection from the unexpected. When you purchase an insurance policy, you are entering a written contract between yourself and the insurer for a period of time and agreeing to pay a premium for your coverage. Typically, your premium will be based on the amount of risk your insurer perceives you to be. For example, a driver with a number of citations to their name is a higher risk than an individual with a clean driving record.
Who needs insurance?
Insurance coverage needs vary by individual and in most states, auto insurance is the only type of policy you are required to have if you are a licensed driver. However, whenever you have something of value that you’d like to have financial protection from in the event of a loss, you will need insurance.
Auto Insurance 101
If you’re a licensed driver, you need auto insurance. From bodily injury to property damage, this type of coverage is essential and can help protect you from many types of unexpected events. Here are just a few examples of risks you may encounter as a driver that would be covered by an auto insurance policy:
- You cause a minor collision with minimal damage but an individual in the other car is experiencing neck pain.
- An uninsured driver hits your car in a parking lot.
- A tree falls on your car during a storm.
Depending on your needs, there are several different options available to you for auto insurance and many insurance carriers offer optional endorsements such as auto lease coverage.
Protecting your home: homeowners vs. renters insurance
Whether you’re a renter or have purchased your own home, where you live is a major financial investment. As such, you’ll want to be sure you’re protected from unpredictable events like water damage, theft, fires, storm damage, and lawsuits from individuals who were injured on your property.
- Homeowners insurance — this essential coverage protects your home itself and any attached structures such as a deck or a garage, as well as any detached structures at your residence. Your belongings will also be covered up to a certain amount and it’s best to conduct a home inventory once in a while to ensure you have the appropriate amount of coverage for your valuables. Additionally, a homeowners policy covers you should you be found negligent in causing bodily injury or property damage to another party.
- Renters insurance — if you don’t own your home and are renting an apartment or house, we highly suggest you consider this optional coverage. While your landlord will be responsible for any structural damage to the property from storms or natural causes, this will protect your personal property and personal liability while you live at the residence. For example, if you experience a loss due to theft or a fire caused by a neglected candle. Also, if an individual falls and breaks a bone while on your property, you’ll be covered for any legal damages that may arise as a result of the incident.
Umbrella insurance
If you’d like to have a little extra peace of mind, consider umbrella insurance. This policy endorsement will provide you and your family with additional liability protection over the underlying coverage provided by auto, homeowners, or boat insurance. Though no one anticipates facing a multi-million dollar lawsuit, the unexpected can happen and if it does, you’ll be glad you’re prepared. You can learn more about umbrella insurance policies here.
Coverages to consider
Aside from the essential coverages for your home and car, there are several other types of insurance policies you may want to consider.
- Boat and watercraft insurance — your homeowners policy offers limited coverage for these types of possessions. There are endorsements you can add to an existing policy for boats of a certain size, but it’s best to consult with your insurance agent to make sure you’re properly covered.
- Rental property insurance — any property that you do not primarily use as your permanent residence may not qualify for a homeowners policy. Though similar to a homeowners policy, this coverage applies solely to the rental property and is not owner-occupied. Learn more about protecting rental properties here.
- Cybersecurity insurance — the convenience of a technology-driven world doesn’t come without risks. Should you find yourself the victim of identity theft or a cybersecurity hack, you’ll be thankful you took precautions to protect yourself. At Quincy Mutual, we offer several free services to help you prevent and detect identity theft and fraud.
How to obtain an insurance policy
There are endless options when it comes to obtaining insurance coverage. We work with over 500 independent agents who are ready to help you as you explore your options and understand your coverage. When you work with a local agent, you can rest assured knowing that you’re speaking with an individual who can offer hands-on assistance whenever you need it. They will work with you to create personalized coverage unique to your needs and support you through the claims process. Find a local agent near you on our website.