Nobody really likes paying for insurance. It can seem like a completely unnecessary expense. What are you paying for after all? You put money into a lot of different insurance companies, but you don’t get anything back. There is no physical item for you to grab onto. There is no product or service that you recognize as having value. Until, that is, you need insurance to prevent something catastrophic. In many cases, in fact, coverage will be the only thing that saves you from bankruptcy.
Consider the four following examples. If you get in a car wreck that’s bad enough, having the right auto insurance can make the difference between having everything go back to the way it was before the wreck versus going bankrupt. The same goes for home insurance in the event of a weather catastrophe. Or what about health insurance?
If you are not medically insured, bankruptcy is more common than you might think. And lastly, if you have all the appropriate business protection insurances, that can keep you from financial insolvency in many different professional circumstances.
When you get into a car accident, lots of consequences immediately follow. There is the damage to your car and the car that you crashed into. There would be potential medical expenses if anyone got hurt. Property damage will fit into that equation as well.
If you don’t have the right auto insurance, all of these expenses can come straight out of your pocket and lead to bankruptcy. You will be glad that you have an appropriate car insurance policy in the event of a wreck.
Home insurance is up there high on the list of ways you need to protect yourself as well. As an example, what happens to people’s lives if their home is destroyed in a natural disaster? This might include fire, flooding, earthquakes, or hurricanes.
If you don’t have the right kind of home insurance, you will not have the money to rebuild, and that kind of a reset may put you into bankruptcy. It can take a long time to process a home insurance claim, but when it does happen, you will be back on your feet.
Health insurance is a mess right now. No one can deny that. But if you did sign up for health insurance, you at least have some bankruptcy protection. In the event of some catastrophic health condition, insurance will pay for the majority of it past what you can afford out of your savings and income. The reason you pay so much into health insurance is because it’s such a large pool of people that depend on this capability.
Finally, there is insurance that will protect your business. A big one might be fraud insurance. If someone manages to defraud your company or you are part of some money laundering scheme, that can put you into bankruptcy almost immediately. By having the right kind of fraud protection insurance, you save yourself from this possibility.