Some consumers I talk to think insurance is expensive compared to the value it provides. This perception of the industry probably comes from those insurance policies most people are familiar with like auto insurance and health insurance which have higher costs compared to the coverage limits they provide. Those policies tend to be more expensive because they see a much higher claim rate than other types of policies.
On the other hand, there are plenty of insurance policies where you can buy a lot of protection for a small amount of money. Personally, I think anytime you can multiply your money by having an insurance carrier assume the risk, thats a great deal!
So here are my top 5 insurance deals that are affordable, useful, and provide a lot of protection:
- Term Life Insurance - This may be controversial to life insurance agents that prefer whole life, universal life, or other products but you can buy a $1 million short term life insurance for pennies on the dollar. The average cost of life insurance is $26 a month which indicates that many people carry this type of insurance. This may not be ideal for everyone but in terms of value, its hard to argue this isn't a great deal.
- Flood Coverage (B, C, and X flood zones) - If you are in what is called a "preferred" flood zone, chances are that you can buy hundreds of thousands of dollars of flood coverage for less than $500 a year. We know this is a good deal because 1/4 of all flood losses occur in these preferred zones and those policies tend to pay out almost as much as they take in premium.
- Renters Insurance - I can't think of a cheaper policy that provides as much comprehensive coverage as a renters insurance policy. You get contents coverage, betterments and improvements coverage, loss of use coverage, liability coverage, medical payments coverage, and more! Not only that but many policies are only about $100 a year.
- Umbrella Insurance - If you already have higher coverage limits on your home and auto, it may surprise you that you can increase your liability limits by millions of dollars for just a few hundred bucks. While liability claims are more rare than property claims, they usually have higher settlements as well which is why we think this coverage is such a great deal.
- General Liability Insurance - While most contractors carry some form of liability insurance, I am shocked at how many professionals don't think they need liability insurance. Your side hustle could easily land you in court for damages and even if you have a limited liability corporation which could limit your personal exposure, what would you do if you were party to a frivolous lawsuit? With proper liability coverage you can have your attorney fees paid by the insurance carrier and if you are required to pay due to a covered loss, your carrier will pay those settlements as well (up to the policy limits)! You get all of this starting at $400 per year for $1,000,0000 of coverage.
You can't go wrong with any of these products but always seek the guidance of a licensed insurance agent for a full review. Keep in mind premiums are decided on a case by case basis for the product you purchase but if you want to see what coverage you should carry, please let me know!
Trey Sinclair
Wells Insurance Agency, Inc
904.259.6296