Insurance is a product for the “what ifs” in life. A good insurance policy can reduce the financial impact of an adverse event, mitigate financial loss, provide stability and provide peace of mind during difficult times. Some insurance coverages are considered so important that they are required by law. But there are also lesser-known insurance coverages worth exploring. Consider these optional hedges to trade uncertainty for financial protection.
Owner riders. If you have a mortgage, home insurance is mandatory. A basic homeowner policy provides standard reimbursement after a deductible for approved claims due to theft or damage to your property, dwelling, personal property and liability. Such coverage, however, may not be enough. If you have valuable art or jewelry in your home, an endorsement can ensure proper reimbursement if those items are stolen or damaged. Consider an endorsement to offset the liability of owning a swimming pool or trampoline, for example. Other common endorsements cover water damage, identity restoration, and business assets (if you do business from your home).
Tenant insurance. If your personal belongings are stolen or damaged in a rented house or apartment, you may be out of luck unless you take out your own tenants insurance. Look for a policy that includes liability insurance, which provides financial protection in case someone is injured in your rental residence.
Travel insurance. You may want to explore travel insurance before an international trip. A policy that covers unforeseen cancellations is reassuring when planning an expensive vacation with non-refundable reservations. A policy that offers international medical coverage can be a real lifesaver since most US health insurance plans do not reimburse for treatment provided outside the country. The most comprehensive travel policies include reimbursement for medical evacuation and repatriation of remains.
Appliance insurance. Many utility companies offer affordable insurance plans to cover necessary appliance maintenance and repairs. Coverage is generally available for major appliances, including your refrigerator, stove, dishwasher, furnace, water heater, washer, dryer, and air conditioner.
Animal insurance. Veterinary care can be expensive. A pet insurance policy can help pet owners manage the cost of owning a pet. Most policies do not cover wellness care, but cover some or all of the expenses for emergency procedures and major medical procedures.
Life insurance endorsements. Basic life insurance reimburses death from natural causes and most accidents. However, there are exceptions. Insurance companies generally exclude coverage for risky activities. If you play extreme sports or own a private plane, you may want to purchase a life insurance rider.
Review your insurance coverages every year or when you experience a life-changing event. Be sure to shop around, as insurance policies can vary widely in coverage and cost. A trusted financial advisor can be a great resource to help you determine if you have sufficient levels of insurance or if additional coverage is warranted.
Bronwyn L. Martin is a Financial Advisor and Chartered Financial Consultant with Martin’s Financial Consulting Group, a financial wealth advisory firm of Ameriprise Financial Services, LLC. in Kennett Square and Havre de Grace, Md. She specializes in paid financial planning and asset management strategies and has been practicing for over 22 years. To contact her: www.ameripriseadvisors.com/bronwyn.x.martin
