Having insurance doesn’t just give you peace of mind, it helps you to:
- Protect the contents of your home and repairing damages, like a burst geyser
- Afford the repairs associated with having a car and being involved in an accident
- Run a small business by managing the risk of ownership, like if a fire should ravage a business
- Replace valuable items
Insurance is even more important today because of the increasing complexity of our lives. Thinking ahead and planning for the possibility of risk will bring you peace of mind, knowing you have a trusted partner by your side to help if anything unfortunate were to happen.
When you buy insurance, you transfer the cost of potential loss to the insurance company. This is made possible by paying a premium – a fee to the company – and it’s based on the cover you choose and your risk profile. It’s therefore pretty smart to manage the risk of loss by paying a premium every month to cover the risk of unexpected events happening which drastically change your circumstances overnight. This small amount will have a big impact should a dreaded disruptive event happen.
Planning ahead is the best way to ensure adequate coverage for what you can afford. Here are some useful budgeting tips for insurance:
- Compile a list of all your valuable items
- Determine the value of these items
- Get a quote from a trusted insurance provider based on the total value of the items you need to protect
- Look at your monthly budget (income and expenses)
- Include the insurance quote into your budget to understand what you can afford
- Identify areas you could reduce spending on and consider spending money on insurance
Ultimately, having insurance and paying a small monthly amount will work out a lot better than having to search for the money to pay for expensive losses, damage or the repurchase of assets. Having adequate cover certainly helps alleviate unnecessary stress so you can get on with what matters most.