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Insurance: Just How Covered Are You?

Insurance is meant to be a safeguard; something that you can trust to preserve your way of life and your personal finances even if you suffer through the worst possible scenarios in life. We all spend a huge amount of money on insurance, all in the hope that we’ll never have to use it— but we definitely benefit from the peace of mind that insurance offers us.

However, insurance can be problematic largely due to one of the aspects of the process that’s mentioned above: we buy a policy and then hope we’ll never have to use it. We like the idea of having a policy to help secure our finances but, realistically, few of us buy insurance and actually imagine that we’ll ever have to claim on it. We’re all, at heart, optimists, and that means we don’t quite study insurance policies the way we should.

The next time you buy an insurance policy, you should take a half hour out of your day to truly scrutinize it to ensure you’re buying what you think you’re buying. Here’s what you should look out for with each of the most common types of insurance.

Insurance Type: Vehicle insurance.

Check to see if your policy says about… Any restrictions for driving through flood water. Some policies are invalidated if you drive through a flood, so if you live in a flood- or hurricane-prone region, you need to know where you stand on this issue.

Insurance Type: Disability insurance.

Check to see what your policy says about… Preexisting conditions. While you can buy disability insurance even if you have a chronic illness, actually going through the claims process is likely to require the assistance of the likes of You may also find that you’re restricted in the length of coverage for certain conditions, so make sure you know exactly what you have bought — and what it covers you for — before you pay a penny of the premium cost.

Insurance Type: Travel insurance.

Check to see what your policy says about… Activity restrictions; for example, you may find that your policy doesn’t cover you for various “extreme sports” activities, such as bungee jumping or white water rafting. You need to know which activities you can and can’t do while away, so ensure you buy travel insurance that can keep up with you!

Insurance Type: Pet insurance

Check to see what your policy says about… Outdoor activities. Are there restrictions on where you can walk your dog? Is your insurer presuming that you have followed the advice of and ensured your cat is kept indoors at all times? You need to be aware of such conditions, so read through the fine print and ensure your beloved pet adheres to the restrictions set forth in the policy.

In conclusion

As useful as insurance can be, there are often pitfalls that can damage how beneficial it can be to your long-term finances. By ensuring you always know exactly what you have bought with your policy, as advised above, you won’t go far wrong.