There are situations in which people decides to purchase insurance exclusively for the sake of meeting some formal requirements. For instance, in some countries there is an obligation of having an insurance policy for a house whereas others will require an insurance policy for getting a visa. Needless to say, many people are seeing such cases as a mere rule that they have to obey choosing the cheapest option for insurance on the market.
This is a rather poor practice.
Make your insurance policy work for you
Undeniably, to many people purchasing an insurance policy appears as a complete waste of money. That is so since fortunately, only a fraction of people with insurance actually get into a trouble when they will be able to apply for compensation. In rest of the cases, people believe to have just wasted money on their insurance.
In practice, it is not like that. We simply do not know when an insurance policy will be needed, so we buy it just in case. Yet, there are very basic policies with which you will almost never get any compensation. Even though they cost the smallest amount of money, that is exactly the moment when you simply throw it away since the probability of getting anything in a case of any issue is extremely small. Usually, such insurance policies have a very small variety of points covered.
Let’s look at some of the typical situations in which you might wish to have paid more for your insurance policy.
Insurance policy for real estate
Insurance policies for real estate are quite popular and in some countries citizens have to purchase such an insurance for their possessions just like it is required from the owners of vehicle. Certainly, this makes many people reach out for the cheapest possible options as they feel obliged to make such a purchase rather than do it out of their own will. Yet, they forget they still pay their own money and instead of wasting it on a policy that will not help them in case of a trouble, they can protect themselves them from various drastic situations.
For instance, while such a case as a fire can be quite typical for a basic insurance policy, albeit, a lot depends on the exact situation when you are able to count on compensation, there are other more complex situations in which you would definitely prefer to have more protection.
Imagine purchasing a house with a mortgage loan when someone decides to construct an apartment building nearby. Once the construction starts, your house gets distracted by the changes in the landscape of the area. Without a proper insurance policy, you will be left without a house and you will still have to cover your loan.
Getting a basic health insurance for travelling abroad
Another common mistake many people are making when it comes to choosing an insurance policy is purchasing the cheapest possible health insurance for travelling. Actually, you never know what can happen during your trip and a possibility of feeling unwell or even getting into a serious trouble is rather high.
Imagine such a typical scenario as breaking your leg and not being able to see a doctor because your insurance does not cover injuries received during sport activities and the local medicine is too expensive for you. Will you wait with your broken leg until the end of the holidays? It is even difficult to imagine what else can be done in such a situation.
Another common scenario is getting poisoned by local alcohol and not being able to count on a compensation since basic health insurance policies do not cover health issues caused by alcohol.