Ask the Experts: Why is Insurance So Important?

Learn About the Importance of Insurance from NYCM’s Experts and Why You Need It!

At NYCM Insurance, we know the importance of protecting what matters most to you. Although it’s impossible to fully avoid everyday risks, you may be surprised to learn how important having the proper amount of insurance can be. We sat down with a few of our corporate experts to discuss insurance and how life-changing it can really be. Continue reading to learn more.

Insurance Provides Support After an Emergency

“Whether it be home, auto, business, or life insurance- having an insurance policy can be a financial make or break after an emergency situation has occurred,” shares Jon Young, Distribution Division Manager at NYCM Insurance.  Studies have shown that less than 40% of American adults have enough in their savings to cover a $1,000 emergency. In many cases an emergency is going to cost well over that amount. Insurance can provide financial support by paying the cost of a covered loss which in turn, offers financial stability.

 

Insurance Spreads Out the Risk

 An unforeseen event can change everything for the worse, even for the best of financial situations. One of the benefits of having insurance is that it moves a large percentage of that risk from you- the insured, to the insurer. This way, if a covered loss is to occur- it is largely compensated for out of the premiums that have been paid by the collective policyholders rather than out of your pocket.

 

Insurance Encourages the Flow of Commerce

You may be surprised to learn just how much the insurance industry can facilitate the movement of commerce in America. According to the Current Population Survey from the U.S. Department of Labor, the insurance industry is a major employer in the U.S and provides over 2 million jobs on  its own. Insurance also encourages our local economies by reducing the overwhelming fear that adverse accidents can shut down a small business for good. Billions of dollars are paid out every year just claim settlements. Those paid claims allow millions of other businesses, such as auto repair shops and contracting companies, to flourish. The insurance industry also helps support the economy by investing some of their premiums dollars back into the stock market.  

Lenders Often Require Insurance

Whether you are taking out a loan on a home, vehicle, or business, it’s likely that your lender is going to require you to obtain sufficient insurance. It makes sense that the companies that are lending money would want to ensure that they aren’t going to lose out, if for example, your house were to burn down or if your car were in an accident. Without insurance, it’s unlikely that you’ll be approved for a loan. The truth is, you wouldn’t want to be! Not having insurance in the event of a total loss can mean that you’re on the hook not only for the money that you borrowed but also the cost of replacement. “Something that I never fully understood before working in underwriting or in insurance in general, was that there is a significant difference between market value and replacement value,” says Underwriting Vice President Mark Grygiel. “I always thought that if you bought a home for $100,000, you would need to insure it for that same price. It wasn’t until a conversation with my agent, that I learned that you really need to insure your home for the amount of money that it would cost to replace or rebuild it after a total loss. Otherwise it can have a major impact on how your claim is settled, which in turn impacts what you are left paying on your own!”

Insurance Offers Peace of Mind

Life is unpredictable. The premium that you pay can help to guarantee your insurance company will cover damage in the case of a covered and unforeseen loss. This guarantee can not only reduce stress during difficult times, but also provides us peace of mind all year round. “Insurance is a safety net of sorts,”  Jon Young explained. “It’s a promise of financial protection.” 

Having insurance whether it be life, health, home, auto, or business is a critical part of financial planning. From saving you from financial hardship to offering reduced stress and peace of mind, insurance is something that you can count on. To learn more about a home, auto, or business insurance policy with NYCM Insurance, check out the link below and speak to one of our trusted agents.