Investing in your insurance policy is one of the most evident signs of a responsible, forward-looking financial planning. For a surprisingly small amount of money invested, you can safeguard your future and the future of your family. Still, does it pay off eventually for an individual to keep investing in their peace of mind for years on end? More to the point, what is the cost vs. benefit analysis for different types of insurance policies that a consumer has at their disposal? Check out the text below for some recent, evidence-based insights into the cost-effectiveness of insurance investments.
How Home Insurance Saves Money
Some states force citizens by law or mortgage to carry property insurance. Home insurance saves money on “sudden and accidental” damages such as fires, lightning strikes, theft, riots, storms, or smoke. It can also cover other liabilities, for example, if your kid breaks the neighbor’s window while playing football. In addition, floods, earthquakes, and sewer backup need to be purchased separately. These recent insurance email marketing insights show that automated email campaigns can remind policyholders to review their policies in detail, and more importantly, introduce them to other types of insurance products that can protect any number of their assets through personalized upsell and cross-sell emails. Marketing automation via email helps educate policyholders about what their policies cover, and increase customer satisfaction. This is how eventually, email automation can help brokers and policyholders save money in the long run.
How Auto Insurance Saves Money
Both home and auto insurance fall under the term of property insurance, along with renters and flood insurance (which often needs to be purchased separately). In all 50 states, drivers are required to carry proof of auto insurance, mostly liability insurance, covering potential damages done to others. Why is this? In the case of auto insurance, an average driver will find themselves in around 4 traffic accidents in their lifetime. Even though the traffic accidents in question are usually mild, damages to your own vehicle and the vehicle of the other driver, as well as possible health hazards are also included in your auto insurance.
How Life and Health Insurance Saves Money
Regardless of a person’s lifestyle, or overall focus on their health, a trip to the emergency room or several days spent in the hospital can rack up a bill in the thousands, or more. People have been reported to lose their savings, and go into serious debt. Being that the median savings amount in America is $3,500, which means that the average person cannot afford to pay for an expensive, unplanned, hospital visit out-of-pocket. With the purchase of a health insurance policy, suddenly an unfortunate event such as being struck by a vehicle while jogging, or tripping and falling down a flight of stairs, means that your savings remain intact. Additionally, in the case of life insurance, there is always the aspect of accumulated cash value to consider. Not touching your life insurance savings results in higher interests over the years, even allowing you to use the cash value to supplement your retirement money. Furthermore, solid savings can also be used as a collateral assignment of life insurance. This means that you are more likely to get a loan if you offer a part of your life insurance as collateral.
How Business Insurance Saves Money
Compared to personal insurance, the number of things that you are liable for as a business owner gets exponentially higher with the increased amount of assets which you are responsible for. Not only does business insurance cover you for the usual theft, fire, legal liability, and vandalism risks, it also covers employee-related ones as well. If left uninsured or underinsured, any damage your employees might cause to property, or indeed a person, while working on your premises can cost you your business. Relying on personal savings, in this case, is impossible for most people. With insurance, however, an investment of around $400-$1000 per year can save your business should you run into any bumps on the road, or someone files a lawsuit against you. Being that nearly 80% of all small businesses fail within a 10-year period, this investment pays off big time. Also, keep in mind that damages such as employee injury and contract disputes are highly likely to occur during the first couple of years of doing business.
How Bundle Insurance Saves Money
The rising trend of bundling insurance allows people to handle all of their insurance needs with a single insurer insurance agency. This method of purchasing insurance is getting increasingly popular due to convenience, and bundle discounts. For example, insuring your home and your car with the same insurance brokerage/agency can result in a bundling discount ranging from 5% to 25%. As carrying car insurance is mandatory in all states in the U.S., this is the first insurance product that consumers should attempt to include in their bundle in order to make a quick and easy saving. If you want to spend smart, bundling is a good choice.
Despite your best efforts to stay responsible and mitigate risk, insurance is certain to pay off in the long run. The peace of mind from knowing for a fact you will stay afloat if in the event of a fender bender or someone trips and gets hurt on the icy sidewalk in front of your house. If left uninsured or underinsured, small accidents such as these often prove devastating for people’s finances. Unless you invest smart, you are playing with your future, but tread carefully, and consider tricks such as bundling to lower your costs.