How Much Insurance Do You Really Need?

by OnlineInsurance Staff on August 11, 2010

Most people search online insurance quotes to find the best rates on everything from cars to homes to health and life insurance policies. Little thought is given to how much coverage is actually needed, in most cases. Instead, the focus is almost entirely on cost. Insurance companies, on the other hand, have statisticians to help them figure out what their overall risk is for any policy they issue. They know where they’re exposed, and they take steps to protect themselves.

Buying consumer insurance should be no different. After all, buying an insurance policy is a business decision, and it should be made based on an assessment of your overall risk. That risk should be measured against the value of an insurance policy, not just the price.

Consider the areas of your life where, if something went wrong, you could face financial disaster. If someone were to get hurt in your home, for example, do you have liability insurance to cover their injuries? What’s the maximum benefit? Do you have financial reserves to pay the deductible on your policy or the expenses that might breech your maximum?

Too often, people don’t concern themselves too much with these details, frequently because risk and insurance are thought of as dry, boring topics. They don’t get as much attention as, say, who won last night’s game or which celebrity just got arrested.

The task of comparing online insurance quotes has gotten much easier in recent years, though. Online insurance calculators can help you quickly figure out how much insurance you really need to cover everything from long-term care to sports injuries. Without entering any personal information, you can get recommended coverage levels for almost any type of insurance – instantly and for free.

When you’re researching online insurance quotes, using calculators is a logical next step. They can dramatically cut down on the time it takes to figure out what levels of insurance your situation requires.

In some cases, you may have to do a little additional research on your own to get the best results from online insurance calculators. One long-term care insurance calculator, for instance, did not automatically generate information about nursing home costs. Certainly it would be difficult to do so, since pricing is highly localized, difficult to aggregate, and subject to change.

We recommend doing the extra legwork to generate the necessary inputs. It will help you think through your needs in a step-wise fashion, and simplify the process of comparing online insurance quotes.

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