When we shop for a vehicle, household appliance or a new home, we obviously consider the price of the car, the refrigerator or the house. However, the cost, although a major factor, is never the only one to consider when we take out the checkbook or credit card for the purchase.
When deciding between three different autos, you will compare the features of each and choose what is most important to you. Each special feature drives up the cost. Do you want heated seats because you get cold easily or a navigation system because you travel frequently? Is that top of the line stereo a must because of your love for music? Are side airbags on the list because of safety concerns for your family? How about adjustable pedals due to your height or a rear-seat DVD player for your kids? If you just want the basic model, your cost will be cheaper. But, special amenities, extra comfort and improved safety features that interest you will not be included.
When shopping for a new refrigerator, do you want a touch screen because you’re a gadget geek? Does a new flexi-fridge with convertible compartments appeal to you because you have guests over frequently? Maybe you need an extra-large model with plenty of storage because you have big family dinners. Again, the special features that are important to you will run up your cost. The model without the extra bells and whistles will be less expensive and still cool your food but you may not have enough storage capacity for your groceries.
When buying a home, is the neighborhood where your children will attend school a factor in your decision? Is square footage important to narrowing down the location? Does the home have a fence for your dog or that swimming pool for your kids? Are energy- efficient windows on your priority list or is that three-car garage you’ve always wanted a must have? The “extras” begin to increase that monthly mortgage on your horizon but you have to consider what is most important for your family. You can find a cheaper home but will it be in a safe neighborhood? Is the house’s construction of good quality? Will your purchase reflect what you really need for your family or will you settle on something less just because of the purchase price?
Cost is important and it drives decision making. Just like purchasing a car, when “buying” an insurance policy, price should never be the only factor in deciding what coverage to put in place. Your agent needs to know your individual needs in order to “build” the right coverage for you. Do you have a pool which increases your liability exposure? Are you covered for replacement cost or actual cash value? Do you even know what that means… because your agent should discuss that with you. Perhaps you have a coin or gun collection or some jewelry which needs to be scheduled on your policy in order to protect it correctly. These “special features” should be included in your coverage so that your insurance responds in the event of a claim. Yes, endorsements to your coverage often cause your premium to increase. But if your specific circumstances are not fully discussed with your agent, you likely don’t have the insurance coverage you need.
Like that new car, refrigerator or home, your insurance can be minimal, the cheapest quote and maybe not all the coverage you need. OR you can choose to build in the features that are necessary to protect you and your family. You can “buy” the basic vanilla model or opt for more adequate coverage. It all depends on what is important to you. The reason we buy insurance is because we want it to respond appropriately in the event of a loss. The last thing you want to discover when you file a claim is that the “cheaper” coverage you opted for will not cover your loss.
Are you paying for the coverage you need and that will actually respond in a claim scenario or are you paying less for something that won’t be of much use to you when you need it? KNOW what you’re paying for and remember that your premium price tag is not all that matters.