The Modern Gamble How Much Insurance Do We Really Need?

By: Arty Luna

How much cover do you really need? It is a good and valid question. It seems that some people are just insured for all eventualities. Taking out insurance is really like placing a bet that you just don't want to win. No one wants to make a claim on their health insurance for example, but on the other hand no one wants to be caught short without health insurance when they really need it. This leads to a strange dilemma really if you think about it. Would you bet on a horse and then do everything you can to try and make sure that it doesn't win the race? Is insurance the same? Well I guess if you take out home contents insurance, you pay money - your premium - and if yourproperty gets damaged, you get more money back than you paid. However nobody wills their property to get damaged, in fact the opposite, most of us do what we can to protect our property. If you do have to make a claim, then chances are the next time you go to take insurance, your premium will be higher. Imagine a bookie charging you a tax for every time you placed a bet after you had won.

So the first question that most of us have to consider is what do I need to insure? The list should start with the things that we need to legally insure. These comprise, our vehicle, and if we have a mortgage, although not a legal requirement, but certainly a requirement of the money lender, our buildings or flat. Then we could go on to insurance that will get us out of trouble, holiday insurance being the prime example. Being abroad and suffering an accident or a loss of essentialluggage, is no fun. Being abroad and suffering an accident or a loss of luggage and not having insurance to help you is nothing short of a nightmare. So Travel insurance must place highly on our list. Also high on the list in some countries, USA being a prime example is health or medical insurance, In the UK this is not so essential as thankfully there is the some would say ailing NHS, but still health insurance can mean the difference between a long and a short wait on a hospital list. Life insurance is always a tricky one to think about. Nobody wants to think about their own mortality, but let's face it nothing in life is permanent, especially life. If you have loved ones to think about, then life insurance is a good way to make sure that they can keep afloat financially in the event of your untimely demise. Some insurance companies require you to have life insurance so that your real estate is 'paid off' if you pass on before your mortgage term has finished. So this could also fall into the essential category. It is very important with insurance is that you look at cover levels and make sure that the insurance that you take out is adequate for your needs.

A place you shouldn't economize is with car insurance. Look at the figures, car insurance claims are one of the most typical claims that people make. Most people take out this essential type of insurance, however some are willing to cut corners, especially if they are only planning to use a motorcar for say an hour or so. The risk hereunequivocally far outweighs the pay off. Information from 1 day car insurance indicates that you can take out 1 day insurance for example on a 2.0l focus for one day for approximately for ?10. Drive for that one day without insurance and you could face much higher costs than ?10. Definitely not worth the risk.

So it seems the answer is unquestionable, insure things that you legally have to insure. Insure things that you couldn't do without and couldn't afford to replace if you had to. Make sure that the insurance that you take out has adequate levels of cover and is worth paying the premium for. Take care, look after what is of value to you particularly your health and hopefully you will at no time need to make a claim.

Article Source: http://yourfinance.co.za

About The Author
Arty is an insurance enthusiast. He writes for a number of websites about insurance. In particular he edits 1 day car insurance. A site, you guessed it, about one day car insurance.