Up to 16 types of insurance “just in case.”
How do you put a value on something you hope to never use?
Insurance is one of those things we pay for grudgingly “just in case” we need it. Because in reality, it’s best if we
don’t as we get dinged
twice if do:
A no-win situation.
You quietly pay for years for your health, auto, mortgage insurance coverage ‒ and then, as soon as you make a claim,
your clean records get whacked and you end up paying more.
Personal insurance like auto and mortgage are the worst offenders. Any claim you make on your personal insurance
coverage gets recorded and increases your “risk” of making another claim. How do insurance companies deal with this
increased (perceived) risk? They increase your insurance premium.
With group insurance coverage, your claims are not evaluated on their own but as a group ‒ in other words,
your claims record is lumped with a bunch of others. The bigger the “group” you belong to (your employer, for example),
the lower the overall risk becomes because it’s carried by the group as a whole. Example: if you make a significant
dental claim using your group dental insurance, chances are your insurance premium will remain constant. Any impact
on your insurance premium isn’t as significant because it’s distributed within the group.
Then there’s credit card insurance ‒ the ultimate group insurance offered by
credit card networks and issuers at no added cost to you. Unlike your personal and your typical group insurance
coverage, there is no “insurance premium” per se to worry about ‒ although this extra feature is taken into account
in the card’s annual fee.
Not many people realize that credit cards carry valuable insurance, and even less realize that there are actually 16
different types and you may even be carrying some of that insurance around in your wallet already.
Curious what they are?
Check out our
extensive blog post about these 16 types of insurance where we look at each type in detail.
First things first, read the fine print:
As with most types of insurance, there are exceptions and limitations ‒ so read the insurance certificate that comes
with your card to make sure you’re aware of everything you’re covered for (and everything you’re not).
Some of the most common things to watch out for: