Insurance 101: Things to Consider When Purchasing a New Insurance Plan

By: Samuel Eric


When it comes to purchasing a new insurance plan there are so many different things that you will need to consider that it can often be a confusing task to know what plan is best for your needs. Some insurance is essential to be able to legally operate a vehicle, while other forms of insurance, such as life insurance, will provide you with the safety and security of knowing your family will be financially secure in the event of your death. This article takes a look at some of the things that you should take into consideration before purchasing a new insurance plan.

Insurance Type

The first thing that you will need to do is to decide on the type of insurance plan that you require. Some of the most popular types of insurance include business insurance, life insurance, automobile insurance, recreational insurance and homeowners insurance. Business insurance is designed for business owners, and it can help to protect your company's assets. Business insurance will typically cover two aspects of your business: property and casualty. Property refers to the physical property and any machinery or valuable items that it may contain, while casualty will cover any accident or injury that may occur to a third party. Automobile insurance is legally required and it can cover the costs in the event of an accident, or the theft of your vehicle. Recreational insurance is designed for a range of vehicles and boats. Homeowner insurance is used to protect your property from theft or damage.

Insurance Term

The insurance term refers to how long the insurance cover will run. Many insurance plans operate on a yearly basis, and at the end of the insurance term you will have the option to renew the insurance. Some insurance plans run on shorter time periods, such as on a monthly or bi-annual basis.

Cost

You will need to take into consideration the cost of the insurance plan. It may be worth getting several quotes to make sure that you are getting the best deal around. Many companies will now match or beat any insurance quotes that you are given, so that you know you will be getting the best deal around. Some companies require a lump sum to be paid, while others will let you pay by direct debit on a monthly basis.

The Details and Small Print

Always check the details of the insurance cover. You will need to find out exactly how much you will be able to claim in the event of an accident or damage to your property or vehicle. You will also need to find out what the excess value is. The excess refers to the amount that you will first have to pay if you need to make an insurance claim. Always check the small print to see if there are any circumstances or situations that the insurance does not cover. For example, some homeowner insurance plans will not cover certain forms of natural disasters. Finally, find out what the process is if you need to cancel your insurance plan. Good luck!

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