Advantages and Disadvantages of Insurance

Advantages and Disadvantages of Insurance

Consumers are constantly bombarded with the message they should purchase insurance to protect their homes, credit cards, health, families and even consumer goods such as electronic equipment. Though certain types of insurance, such as car and home insurance, are necessary because they are required by your state or by contract, other types of insurance are optional. There are advantages and disadvantages to most types of insurance

Homeowner and Rental Insurance

If you purchased a home and took out a mortgage, you were probably required to obtain homeowner's insurance as a condition of the mortgage. Similarly, many landlords are requiring tenants to obtain renter's insurance as a condition of their lease. For homeowners who own their homes outright (with no mortgage or lien attached) and renters who are not required to obtain rental insurance, insurance is optional. With this type of insurance, the advantages tend to outweigh the disadvantages. The main disadvantage is the added expense of insurance premiums. However, if your home or rental is destroyed or badly damaged by a fire, natural disaster or other occurrence, you will have no way of recouping your loss if you neglected to purchase insurance