When it comes to insurance, not all policies are created equal, and not all should be purchased in isolation. If you want the most bang for your buck while ensuring maximum protection, consider bundling Auto, Homeowners (or Renters), and Umbrella insurance. Why? Let’s dive in.
Auto Insurance: Aim High with Coverage
Auto Insurance: Aim High with Coverage
The Best Policy: $500,000 Coverage Per Accident
When it comes to auto insurance, higher coverage is usually better. A $500,000 coverage per accident offers you a substantial safety net. Accidents are unpredictable, and medical bills or damage costs can skyrocket in the blink of an eye. With half a million dollars in coverage, you’re well-protected.
Think of this: you’re at fault and hit two vehicles, one worth $125,000 and another worth $75,000 - on top of that, two people go to the hospital, and each medical stay is $50,000. We are at $300,000 for one accident and haven’t included pain and suffering.
The Second Best: 100/300/100
If $500,000 per accident isn't feasible, a 100/300/100 policy is the next best option. This means $100,000 for bodily injury per person, $300,000 for bodily injury per accident, and $100,000 for property damage. It’s a well-rounded approach to keep you covered from multiple angles.
The downside with this type of policy is that if any individual part goes over $100,000 (i.e., an expensive car or medical bills), you could find yourself at the mercy of the lawyers from an insurance company.
NO MATTER WHAT YOU DO - NEVER GO WITH STATE MINIMUM COVERAGE. And make sure you have under and uninsured coverage on your policy.
Homeowners Insurance: More than Just a Roof
Homeowners Insurance: More than Just a Roof
Home Value Plus
Your homeowner’s policy should cover the current value of your home. But what if your home's value increases? That's why it's a good idea to reassess your policy every few years to ensure you're not underinsured.
Deductibles: The 1% Rule
Your deductible should be around 1% of the total value of your home, provided you have a fully funded emergency fund. Why? A higher deductible often results in lower premiums, and if you've got that emergency fund, you can handle it financially. If you don’t have a fully funded emergency fund, you might want to pay more now for the proper coverage.
Umbrella Insurance: The Safety Net
Umbrella Insurance: The Safety Net
An Umbrella policy acts as a safety net when your Auto and Homeowners policies hit their limit. With lawsuits and medical costs rising, an Umbrella policy is no longer a "nice to have" but a "need to have." They are relatively cheap; sometimes, you can get an extra $1,000,000 in liability coverage for just $25/year.
Why Bundle?
Discounts Galore
Insurance companies love to incentivize bundling. Why? It's simple. When you bundle, you’re putting more of your business under one roof, which makes you a more valuable customer.
Simplified Management
Having all your policies under one umbrella (no pun intended) simplifies management—one company, one renewal date, and often, one payment.
Conclusion
Insurance isn't just about checking off boxes; it’s about ensuring financial serenity. By bundling Auto, Homeowners, and Umbrella insurance, you're setting yourself up for savings and security.
To get the best deal possible, make sure you ware working with an insurance broker - they are typically independent agents that can shop multiple carriers simultaneously and find the best product for you.
