Insurance for everyone!


Insurance for everyone!


All About Auto Insurance

Dave Ramsay

We spend a lot of time talking about insurance on your health and life, but what about the car?

You might drive a nice car or a beater. You might have enough money to buy a car if your current one is totaled. There are policies that cover you financially if your car is stolen, damaged by another driver, hit by a natural disaster, or if another driver isn’t insured.

Two of the most important types of auto insurance are liability and comprehensive coverage.

Liability Coverage

When it comes to how much liability insurance you should have, that can be answered in one word: lots. Liability auto insurance is the cheapest and best buy in the entire insurance world. It really does pay to have a large amount—around $500,000 or so. If you are in an accident that is “your fault,” the liability insurance covers what is considered to be your fault, like the costs to get a car fixed or someone’s medical bills.

If you don’t have liability insurance at that time, you would be responsible for paying that amount out of pocket, which would not be a good situation. Liability auto insurance is a definite must-have, no matter what kind of car you drive.

Comprehensive Coverage

You should have comprehensive auto insurance as well. Comprehensive insurance pays for when your car is damaged (not due to a collision) or stolen. If your car is expensive, you need it for obvious reasons. If you are driving a beater, it doesn’t cost much to insure, so just keep the coverage. If you have no money, don’t take the risk of having your vehicle totaled, leaving you with no way to get around. Since you wouldn’t get money from the insurance company or your savings, you would be stuck. Don’t put yourself in that situation. Just eliminate the potential stress by having comprehensive coverage.

If you have some money set aside and are driving a less-expensive car, do a cost-benefit analysis. If it only costs $20 a month to insure a $3,000 car, that’s a good deal, since it will take you a longer time to pay more in insurance costs than it would to replace the car if you had no coverage.

Always make sure you are covered in case life decides to hit you ... or your car.


Why Life Insurance?

1. To Pay Final Expenses
The cost of a funeral and burial can easily run into the tens of thousands of dollars, and I don’t want my wife, parents, or children to suffer financially in addition to emotionally at my death.

2. To Cover Children’s Expenses
Like most fathers, I want to be sure my kids are well taken care of and can afford a quality college education. For this reason, additional coverage is absolutely essential while my kids are still at home.

3. To Replace the Spouse’s Income
If my wife had passed away while the kids were young, I would’ve needed to replace her income, which was essential to our lifestyle. I also would’ve needed to hire help for domestic tasks we’d shared like cleaning the house, laundry, cooking, helping with schoolwork, and carting kids to doctor’s visits.

4. To Pay Off Debts
In addition to providing income to cover everyday living expenses, my family would need insurance to cover debts like the mortgage so they wouldn’t have to sell the house to stay solvent.

5. To Buy a Business Partner’s Shares
Since I’m involved in a business partnership, I need insurance on my partner’s life. The reason is so if he dies, I will have enough cash to buy his interest from his heirs and pay his share of the company’s obligations without having to sell the company itself. He has the same needs (due to the risk that I might die), and he simultaneously purchased insurance on my life.

6. To Pay Off Estate Taxes
Estate taxes can be steep, so having insurance in place to pay them is essential to avoid jeopardizing assets or funds built for retirement. Use of insurance for this purpose is most common in large estates, and uses permanent (rather than term) insurance to ensure that coverage remains until the end of life.


What is homeowners insurance?

Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it. Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets. Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility.

Why Do I Need Business Insurance?

Even if you don't think your business has enough assets to be sued, or if you believe because yourbusiness is incorporated, you're shielded from personal liability through the so-called "corporate veil," you still need business insurance. Why? Because absolutely anyone can be sued, judgments can be collected through wage garnishments and bank account seizures, and even corporate veils can be pierced under certain circumstances; indeed, the smaller your business is, the more likely that you can be held personally liable for debts through your personal assets.

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