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How Important is it to Protect your Assets from Unexpected Events?

James Clemons | October 19, 2022

Having insurance can give you peace of mind and help you avoid debt.

Summary: Having health, life, auto, and homeoweners insurance will help you stay out of debt when life throws you a curveball. If debt collectors are coming after you as a result of be uninsured, SoloSuit can help you take a stand and win in court.

Your health, life, car, and home are all considered assets. Good health allows you to work, provide an income for your family and live a high-quality life; your car gets you and your family from A to B, and your home keeps you safe and provides shelter. While you may be unable to put a price on your health and life, it costs money to protect them, along with your home and vehicle.

Many people are reluctant to buy insurance, and when they do, they purchase the cheapest one grudgingly because, let's face it, no one is thrilled about spending to protect themselves from what-if situations when money is tight. But what-ifs, accidents, and unplanned events happen more frequently than expected. If you don't have the right cover, it can put you in an extremely difficult financial situation.

Let's examine the four types of coverage you should have and why it is critical for your financial security.

1. Health Insurance

There is no free medical care. It's very expensive. Even a minor accident like a broken arm or a short illness can set you back financially. Also, according to the law, health care workers do not have to provide treatment or services to patients who don't have health care insurance unless it's an emergency.

The Affordable Care Act (ACA) gives people who can't afford to pay for private health an option to join government-subsidized health insurance plans. While these plans are not free, they are more affordable.

Apart from grandfathered health plans, all other plans have to cover some preventive services completely without requiring a co-payment, deductible, or co-insurance, according to the Affordable Care Act.

The preventative services are divided into three categories: adults, women, and children, and each type has a list of preventive measures that the health insurance will cover. For example, adult screenings will include cholesterol, obesity, HIV, immunizations for Hepatitis A and B and the flu shot, and some counseling services. Screenings for women are further broken down into all women, and pregnant women, where all women have access to cervical cancer screenings and pregnant women have access to folic acid supplements and anemia screenings. Preventative measures for children include screenings like hearing, vision, and autism, medications like iron supplements, and immunizations.

People who don't have health care insurance will likely not have access to preventive care since paying for it out of pocket is expensive. If they develop an illness, they will only pick it up later, which becomes even more costly to treat. In most cases, detecting a disease or chronic condition in its early stages is much cheaper to treat and easier to manage. Late detection will have massive financial implications and negatively affect the patient's quality of life and sometimes their lifespan.

Apart from preventive care, health insurance allows you access to medical care. Even if you have to pay a deductible or co-payment, the amount is far more manageable than if you had to pay the entire amount on your own. Without health insurance, many people put off going to a doctor when they are sick as they can't afford the bill or medication. Not getting the proper treatment early on can cause the condition to deteriorate, which becomes more expensive when the patient seeks medical attention.

If you need to update or make amendments to your health insurance policy, make sure you do it between November 1st and December 15th. If you don't buy your insurance or make any changes during this window, you will have to wait for the next year, which can leave you without cover in the meantime. The only exception is if you meet one of the requirements in the qualifying events in insurance which allow you to change your policy or buy a new policy outside the window. Qualifying events include getting married, getting divorced, or having a baby.

2. Life Insurance

Life insurance is essential for people who have dependents. It's particularly true for those who are the primary breadwinners or the only income earners in their family and have young children who rely on them. Depending on your company's benefits, you may opt for group or individual life insurance. Many companies buy group life insurance policies that form part of the employee benefits. If your company does not offer this benefit, or if you would prefer to add an additional cover, you can buy an individual life cover plan customized to your needs.

People may buy term insurance, which will only cover them for a fixed number of years.

For example, you may purchase term insurance for twenty years when your first child is born until they become an adult. Term insurance is a bit more affordable than permanent insurance, but permanent life insurance will cover you for your lifetime, provided you pay the premiums.

Not having life insurance can be a substantial financial burden on your family or loved ones. Without life insurance, your loved ones will have to pay for your funeral costs and settle any outstanding debt you have. If they rely on you for their living expenses, not having life insurance means they will have no source of income.

3. Car Insurance

While you are only legally mandated to have a minimum of liability coverage, it's not enough to protect you if you've been involved in an accident. Liability cover only covers the costs of the other party if you cause a crash. Since liability insurance is mandatory, driving without it can have consequences. You can be issued a fine, have your license or registration suspended, or in severe cases, you may have to face jail time.

Apart from the legal consequences, you will suffer huge financial losses if you don't have the right coverage.

Collision insurance will pay to fix the damages if you hit another car or an object like a tree or drive into a pothole. In contrast, comprehensive coverage will pay for damages caused by natural disasters, theft, or vandalism.

Not having sufficient coverage means you will have to repair your vehicle and pay for any other damages or injuries yourself. Since the costs to repair or replace a car are pretty high, it can sometimes be unaffordable, which means you might be without a car or forced to take a loan to cover the costs.

4. Homeowners Insurance

It's likely that your house is your most significant asset and needs to be protected. Homeowner's insurance protects your home and the contents that may be lost or damaged away from your home and provides liability so that if someone else were hurt or injured on your property, your insurance would pay for the damages.

In most cases, people don't opt for 100% coverage as this is very expensive, but even partial coverage can be a lifesaver if you need something in your house repaired. For example, if you have 80% coverage and a fire burns down your house, your insurance will pay you 80% of the value of your house, which you can use to find another home. Without insurance, you will be left with nothing. Your insurance will also pay for other minor or major damages to your home, so you won't need to fork out the money yourself.

Without homeowner's insurance, you will have to find the money to replace items stolen from your home or outside. For example, if a burglar broke into your home or car and stole your electronics, you would have to replace them yourself. You will also be covered for your personal items damaged in a natural disaster.

Lastly, accidents happen — your dog might bite a guest, or your guest may fall down the stairs because they were wet and slippery. You will be responsible for your guest's medical bills in both cases. Without homeowner's insurance, you will have to cover the costs yourself.

Insurance Can Help You Stay Out of Debt

We've discussed four major types of insurance that can help you maintain your financial fitness should an emergency, accident, or disaster occur in your life. Here's a brief recap:

  1. Health insurance protects you from costly medical bills.
  2. Life insurance provides financial relief and stability to your family if the unimaginable occurs.
  3. Car insurance helps cover the cost of accidents whether you're at fault or not.
  4. Homeowner's insurance can be expensive, but it's worth the cost when the unexpected happens.

Having insurance plans in these four areas can help you avoid falling into crippling debt. Medical bills, funeral costs, car problems, and home damage can all cost a pretty penny. Being insured gives you the assurance that you're protected from life's curveballs.

When you've already been dealt a few curveballs in life, you might be struggling to balance your paycheck and stay on top of all your bills. You might even have some debts you're working to pay off and debt collectors breathing down your neck.

If you are struggling with debt, SoloSuit can help you find the relief you need and fight back against debt collectors in and out of court.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

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"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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