Common Insurance Buying Mistakes

Unexpected losses can put the best-laid financial plans in turmoil. Insurance coverage is necessary to protect against unexpected costs, property loss, and disability. There are no universal answers to the question of how much insurance is enough. Situations vary.

A single 22-year old, unmarried, in perfect health, without dependents has different needs than a 35-year old working mother of four. But both certainly need insurance coverage.

Some types of insurance are expensive, but that doesn’t mean they’re unnecessary. It’s important to determine your needs before comparing policies.

Consider these insurance buying mistakes:

  1. Choosing deductibles that are too low. By doubling your deductible, you could cut your monthly premium by a third. Save the extra money in your savings account. If you do have a claim, you’ll have the extra available to cover the higher deductible. If you don’t have a claim, it’s money in your pocket.
    • This applies to many types of insurance coverage. Compare deductibles and premiums. Do the math and make an informed decision.

  2. Opting for COBRA. The government has given you the right to continue with your employer’s health coverage for up to 18 months after leaving your job. But you’re required to pay 102% of the premium.
    • You can find a better deal on your own. Shop around and find a cost-effective medical plan. Employer-sponsored plans are overkill for many.

  3. Only carrying enough homeowner’s insurance to cover the market value. This is particularly true if you live in an older, larger home. It might cost far more to rebuild your home than it’s worth on the open market. Ensure that you’re covered for the rebuilding cost of your home.

  4. Buying life insurance when you don’t have dependents. It’s challenging to think of a reason for carrying life insurance when you’re single and dependent-free. Life insurance isn’t necessary for everyone. Avoid paying for policies that you don’t even need.

  5. Buying life insurance coverage for your children. Unless you’re financially dependent on your children, it doesn’t make sense to insure them. Life insurance is to financially protect the people that are left behind. If you’re children aren’t contributing financially, avoid insuring them.

  6. Failing to review a company’s complaints. It’s not all about the premium. Saving a few dollars each month might not be worth the hassle when it comes time to make a claim. See how other insurance customers rate their experiences. Paying a couple of dollars more each month might be worth it.

  7. Failing to review all the options each year. It’s common to stick with an insurer for decades. Avoid letting the past determine the future. Review all of your insurance policies each year. You’re bound to find at least one better option.

  8. Only shopping by premium cost. The monthly premium is often the only factor considered by those searching for a policy. But what are you actually getting for that premium? Remember to review the deductible and all the benefits the policy provides.
    • Avoid paying for features you don’t need.

  9. Failing to buy disability insurance. You’re at least 5 times more likely to be disabled than to die, regardless of your age. How will you pay your bills and care for your family if you’re unable to work? Disability insurance can be expensive, but it’s one of the most important policies to carry.

Avoiding mistakes is an effective way to ensure success. Insurance can be expensive, but shopping around can make the necessary coverage more affordable. Determine your needs and purchase insurance intelligently.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Top 11 Qualities of an Outstanding Insurance Agent

Chances are, at some point in your life, you’re likely to want the services of an insurance agent. Homeowners, auto, health, disability, and life insurances can prevent financial disaster due to a crisis.

A good insurance agent can help you protect one of your greatest assets: your money.

How do you find an exceptional insurance agent? Will you know one when you meet one?

Consider these qualities of an excellent insurance agent:

  1. Demonstrates good listening skills. If an agent pressures you to select a certain type or amount of insurance and hasn’t yet listened to what you have to say, turn around and go the other direction. An effective agent is attentive and listens well.

  2. Takes time to get to know you and your situation. A good insurance agent will sit down with you and focus on your financial needs and desires. His recommendations are solutions that work well with your own personal circumstances.

  3. Returns calls promptly. Whenever you have questions or comments about an insurance policy or claim, a quality agent will call you back within 24 hours if he was unavailable when you called.

  4. Employs quality staff. A good agent understands the importance of having office workers who show up on time, dress appropriately, and use courtesy and kindness when dealing with you. Such an agent realizes that his customer service is only as good as his staff’s professionalism.

  5. Uses tact, understanding, and knowledge. An effective agent understands where you’re coming from. He’ll listen to you and then present you with facts and examples that educate you regarding the insurance you seek.

  6. Shows honesty. He will tell you the downsides as well as the benefits of the policy.

  7. Has the capacity to sell you one of a number of insurance products. The more insurance companies that the agent interfaces with, the better the chance that he’ll be able to find a policy that fits you and your needs like a glove.

  8. Possesses some legal and tax knowledge. A good agent should be able to explain to you general legal and tax ramifications of a policy. Specific legal and tax knowledge, however, should still be directed to an attorney or tax professional.

  9. Is involved in the local business community. He knows many of the local bankers, store owners, and major employers in your town. You might see him at your local street fair or farmer’s market on Saturday.

  10. Is friendly and open with others. A competent agent will have a smile on his face and openly chat with you.

  11. Will refrain from being overly aggressive or pushy. A good agent knows that being too pushy with a prospective customer rarely helps to get a successful sale.

When you’re seeking an insurance agent you can trust, look for these characteristics. Trust your own instincts about whether someone is the right agent for you. Before you know it, you’ll find a competent agent whose focus is to fulfill your insurance needs so you can protect your precious assets.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Do You Have All the Insurance You Need?

Part of your financial plan should include protecting your assets, including your possessions, as well as your income, loved ones and health-related financial concerns. Insurance isn’t very exciting, and it can certainly be expensive. But when you need it, you’ll be glad you have it. Unfortunately, there’s no single policy that will give you all the coverage you need.

Take inventory of your insurance coverage. Do you have these 5 important policies?

Life Insurance

Life insurance protects those people who depend on you financially if you die unexpectedly. Consider the hardships on your loved ones if you should happen to die prematurely.

How do you determine how much life insurance you should get?

Consider these matters:

  • Replacing your income. How much and for how long?
  • Last illness expenses
  • Funeral expenses
  • Would you like to pay off certain debts, like your mortgage, so you don’t leave those behind for your loved ones?

No one likes to think about these things. However, if you deal with it now, it’s something your family doesn’t have to deal with later.

Health Insurance

Health insurance is expensive, but health care is expensive too, really expensive. A simple trip to the doctor can easily be several hundred dollars. A routine surgery that only results in being in the hospital for a couple of hours can be over $10,000.

Health insurance costs are a burden, but the cost of a genuine medical issue can be catastrophic.

If this isn’t something you can get through your employer, be prepared to do some legwork to find a policy that’s right for you.

Long-Term Disability Insurance

This insurance replaces a portion of your lost income if you become unable to work. The cost depends on the amount of income that you wish to replace, your age, health, the length, and the limits of coverage. Policies will also differ regarding what they consider to be a “disability.”

This coverage can also be quite expensive. Hopefully, you can also get this through your employer. If not, sit down with your life or health insurance agent to go over the details of this important insurance.

Homeowners Insurance

If you still owe money on your home, your lender requires homeowners insurance. If you don’t owe money on your home, you should still carry this type of financial protection. Consider how many thousands of dollars your house and the contents would cost to replace.

The price of homeowners insurance is quite small compared to the amount of coverage you’re getting.

Besides covering the structure of the house and its contents, some policies will even cover putting you up in a hotel until your house is repaired. Any injuries that occur to friends and strangers are also covered under your house policy.

Consider what you need; there are a lot of options for benefits, limits, and price.

Automobile Insurance

Nearly all states require automobile insurance to varying degrees (New Hampshire is the exception). Everyone should have coverage, even if you drive a 1975 Chevy Nova that has been paid off for years. Even in that case, you’re still financially responsible for the damage you cause to other vehicles and property.

Without automobile insurance, you might face a lawsuit that could potentially cost you everything you own. Ensure you have all the coverage you need, not only for your own vehicle, but to cover your liability as well.

Conclusion

Insurance isn’t exciting or sexy, but it’s a necessity. When looking at new policies, shop around because prices and coverage can differ widely from one company to the next.

One tip to save some money: Get a policy with a higher deductible. The more you have to pay before the insurance kicks-in, the less that insurance coverage will cost you.

Do your homework and find an insurance professional you can trust. Don’t just focus on what insurance costs you; think of what it will cost you if you don’t have it.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Choosing the Best Type of Life Insurance for You

Life insurance is one of those things that most of us know we need, but we don’t really know what kind to get, how much we should get, when we should get it, or how long we should keep it. Fortunately, it’s not really that complicated. If you understand the options, many times the solution presents itself.

There are two principal types of life insurance:

  1. Term life insurance provides a death benefit for a predetermined number of years. The term varies but is usually between 5 and 30 years. The premiums are fixed over the lifetime of the agreement. The premiums are calculated based on a variety of factors, but age and current health have the biggest influence. It all comes down to life expectancy.
    • Obviously, a 10-year term policy for a 70-year old will be more expensive than the same policy for a 30-year old, all other things being equal. Similarly, two people of the same age and gender will pay different rates if one is obese and smokes.
    • Term life insurance is the least expensive type of life insurance.

  2. Whole (permanent) life insurance has a death benefit and combines it with an investment or savings account. But this policy covers you until your death; there is no set expiration date. The premiums are fixed or can vary, depending on the details of the policy.
    • The premiums are dependent on your age, gender, health, medical history, and more, similar to a term-policy.
    • Whole life isn’t the optimum choice for most folks. While it does accumulate a cash value through the investing/savings aspect, the premiums are several times more expensive that comparable term life insurance coverage. It isn’t the best tool for saving.
    • Whole life insurance does allow the policyholder to borrow against the current cash value. But this diminishes the value of the policy until the money is paid back. Most financial experts consider whole life insurance to be a poor choice.

In between term and whole life insurance, there are several different styles, including universal life insurance, last-to-die and first-to-die policies that cover both spouses, and more. However, if you understand the concepts of term and whole life insurance, it will be easy to understand any other type of life insurance your insurance professional might recommend.

Consider your life circumstances:

  1. Single and no dependents. Most people in this category do not need life insurance. One of the few exceptions might be if you’re parents are not financially well off; you might want to get a small policy to pay for your funeral / burial costs.

  2. Recently married. Consider how your spouse would fare without you. If you don’t have children, you probably don’t need life insurance, yet. However, if your spouse is not well employed and likely to struggle long-term without your salary, it is worth considering.

  3. Expecting a baby. Now is the time most responsible future parents will purchase life insurance if they are able to do so. Consider how much coverage it will take to cover your take home pay until your children are at least 18. You might want to consider the cost of college as well.
    • Remember that life insurance payouts are not normally taxed. You don’t necessarily need to cover your entire salary, just the take home portion. This will allow your family to maintain the same standard of living. If you already have life insurance, you should revisit your amount of coverage anytime a new child is on the way.

  4. Retired. Your term insurance has probably run out by now. Ideally, you would also have a healthy nest egg, your house paid off, and all your kids out of your hair, reducing your need for life insurance. Life insurance premiums at retirement age get very expensive, too.
    • If you do decide to get permanent insurance, now might be the time to cancel it and get the cash value out of the policy. You probably don’t need the policy any longer anyway.

For financial security, you’ll most likely need some life insurance at some point in your life; however, very few people need it throughout their adulthood.

The easiest way to determine if you need it is to consider the financial impact your family would have endure if you were gone. You want to be able to eliminate that impact to the best of your ability.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Tips for Finding a Good Life Insurance Agent

Is it true that a good life insurance agent is hard to find? The vast majority of people living in the United States will at some point face the specter of purchasing life insurance. And when it comes to buying something so important to the lives and protection of your family members, you definitely need a good life insurance agent who can help.

But how do you know when you find a life insurance agent that will inform you about all the products available and honestly advise you regarding how much life insurance you need?

Consider the following tips to find a good life insurance agent:

  1. Talk to your friends, neighbors and family members about their agents. Word of mouth is still one of the best methods for finding a quality professional. When gathering information about agents from your friends and family, inquire whether they have any concerns regarding their agents’ ability to assist you.

  2. Consider professionalism of the staff. When you first call an agent, you’ll probably speak to the agent’s office staff.
    • Are you pleased with how the staff member responded to your questions? Did he/she seem professional and take care of your requests in a timely way?
    • A good agent will have competent office staff.

  3. Contact 3 to 5 insurance agents. This way, you can do some comparisons among the agents to narrow your focus to the agent you prefer to work with. Plus, you’ll want to take the opportunity to find out about their credentials and work histories, which will help you to rule in or out specific agents.
    • Pay special attention to each agent’s diligence in responding to your questions.

  4. Determine how much experience an insurance agent has. Inquire about how long the agent has been selling insurance. Ask whether they’ve worked for other insurance companies.
    • Gather as much information about the agent’s work history as possible. You might even be able to obtain a copy of an insurance agent’s resume to determine his years of experience and education related to the life insurance industry.

  5. Check out an agent’s credentials. The CLU, Chartered Life Underwriter, designation shows an agent has in-depth training on determining an individual’s life insurance needs. It’s a good idea to work with agents who have this CLU designation, if possible.

  6. Focus on obtaining an independent insurance agent. This type of agent can sell a variety of insurance products from numerous carriers.
    • To clarify, if you call a specific insurance company and work with one of their agents, then the only type of policy that agent can sell is one of that particular company’s.
    • However, with an independent agent, you’ll be offered a wider selection of insurance products with a better likelihood of finding one to fit your specific needs.

  7. Trust your gut when it comes to meeting agents. If an agent says right off the bat he has the “right” policy for you, be leery.
    • A good agent will instead listen to your needs and answer your questions. He’ll present the possibilities to you. The final decisions will be yours to make. Although a good agent will advise you, he won’t insist that you get any one particular product.

If you’re looking for a good insurance agent, be ready and willing to expend some time and energy. However, if you make some inquiries, meet with a few agents who have quality credentials, and trust your instincts, you’ll discover an excellent insurance agent to help you find the perfect life insurance to protect your family’s future.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

11 Ways to Save Money on Life Insurance

No one wants to consider a premature death, but failing to do so can create serious financial difficulties for those you leave behind. Getting this aspect of your financial plan under control is important.

There are more than 2,000 companies selling life insurance in the United States, all offering similar products. Finding the right product at the right price for your situation can be a challenge.

These strategies will help lower your premiums:

  1. Consider term life insurance. Term life insurance only covers you for the term of the policy, which is typically 10-30 years. Depending on the length of the term, permanent life insurance premiums can be 10 times higher.

  2. Get in shape. You can get a better rate at 150 pounds than if you’re over 200 pounds. Taking a couple of months to whip yourself into shape could be worth it. You’re also likely to lower your blood pressure, which is another important health factor.

  3. Stop smoking. Smoking is a significant risk factor for an early death. Not only will you get a better rate on your insurance, but you’ll also feel healthier and save a lot of money when you quit smoking.

  4. Start young. You can get a lower rate when you’re younger. Your health is also likely to be better, making it easier to qualify for the best rates. If you wait until you really need life insurance, unforeseen health problems might be a real obstacle.

  5. Shop around. Different companies will evaluate your risk differently. This is especially true if you have a risky job or hobby. For example, some companies exclude skydivers, while others don’t.

  6. Get the amount of coverage that fits your needs. Many people acquire more coverage than they need. Pull out the calculator and come up with a number that makes sense for you.

  7. Consider the future. If your kids will be out of college in 5 years, your insurance needs are likely to change at that point. Likewise, if you pay off your mortgage. You can get term insurance for a non-standard number of years if you ask.

  8. Abstain from alcohol or drink less. Three to four drinks per day can raise your premiums as much as 50%.

  9. Drive safely. Car accidents are a significant cause of death at any age. Serious driving offenses can really raise your premiums.

  10. Avoid guaranteed policies. These policies only ask a few health questions. If you’re healthy, take a medical exam and get a policy with a much lower rate.

  11. Pay your bill annually. Paying monthly will cost more than making a single annual payment.

When you follow several of these tips, you can really cut down on your insurance premiums while still getting the coverage you need to protect your family. Plan ahead before you apply. You’ll be glad you did.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Cutting Costs for Life Insurance

Life insurance is mandatory for your family’s financial security. However, in today’s financial climate, it’s smart to reduce budget expenditures whenever you can. If you want to reduce the amount of money you spend on life insurance, consider the following points. 

  1. Avoid purchasing a guarantee issue life insurance policy. Guaranteed issue life insurance policies tend to be quite pricey and with good reason. Companies who sell such policies guarantee that they will issue anyone a life insurance policy, including people who suffer from physical conditions that would not typically be accepted by life insurance companies.
    • So, if you’re in good health, it’s less expensive to find a regular life insurance policy.
    • However, a guarantee issue life insurance policy might be the wisest choice for you if you’re not in good health.

  2. If you smoke, quit. Underwriters raise the price of insurance by 25%-50% for tobacco users.
    • When you quit smoking and have gone 12 months without using tobacco, you can request that the insurance company remove the extra rating. Doing so will reduce your premiums.

  3. Shop around. Each company underwrites health concerns differently. For example, well-controlled high blood pressure might not even warrant an extra charge with some companies, while other companies will rate up the policy.
    • When comparing rates, ensure you provide the same health information to each company so the estimates will reflect your true health condition and can be more easily compared in terms of price.

  4. Strive for your ideal weight. When shopping for insurance, it can save you money if you’re at an average weight for your age and sex.
    • Each insurance company will rate additional weight differently. After a certain amount of weight, extra pounds will raise the cost of your insurance.
    • If you’re overweight, ask your agent to show you the rating chart. If you’re close to a border weight between categories, you may be able to reduce your price by losing only a couple of pounds before you’re weighed by the company representative.

  5. Cost isn’t everything. Lower priced policies can actually become more expensive. Companies with an A.M. Best rating of A+ or better may charge more, but those extra costs pay off over the long haul. Here’s why:
    • If you go with an insurance company because it charges less and it goes out of business, then you have no insurance at all. So, even though you’ve been paying for insurance, you could actually lose your coverage and all the money you paid if you seek coverage from a risky company.
    • In the event that a significant amount of time has passed since you’ve purchased a policy from a company that goes out of business, your health may have changed enough to make getting another policy difficult.
    • So, the lesson here is to check out your life insurance company’s ratings in advance of purchasing your policy as one way of ultimately conserving your funds.

These are some of the most common strategies that can reduce your costs when you purchase life insurance. If you practice good health habits, shop around, and do business with a reputable life insurance company, you can secure a life insurance policy that both saves you money and provides for your family’s needs in the future.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

What Kind of Life Insurance Product is Right For You?

No one likes thinking about life insurance, but purchasing a policy means your loved ones will not find themselves in a difficult financial situation if you were to die unexpectedly.

A life insurance policy will provide you with peace of mind in case you’re diagnosed with a terminal or debilitating illness. With some types of life insurance, you also have the option to cash out your policy in case of an emergency.

Types of Life Insurance

These are the most common options:

  1. Whole life. A whole life insurance policy is valid for your entire lifetime, provided you pay the premiums. Advantages include a guaranteed pay out for your loved ones, premiums that do not increase, and cash value (which means a portion of your life insurance builds up cash value you can borrow against).

  2. Universal life. Similar to whole life insurance, you can also build cash value with this type of policy. You receive interest on your cash value and most policies have a minimum guaranteed interest rate. Some policies let you choose from various investments within the policy, but such investments don’t come with a guaranteed interest rate.

  3. Term life. A term life insurance policy is a more affordable option. Although the term of the policy can vary, clients typically purchase coverage for twenty years. In most cases, term life insurance policies only include a death benefit. Most insurance providers will give you the possibility to renew your policy once it expires, but the premiums will be re-evaluated.

A term life insurance policy is your best option if you’re on a limited budget and want to secure a death benefit for your loved ones.

However, a whole life insurance policy is a better investment in the long-term since your premiums never go up and you’ll always have the option to borrow against a portion of the cash value of your policy.

Cost Factors

It’s important to understand the factors that affect the cost of life insurance before you buy a policy. The type of coverage you buy influences the cost of your premiums, but insurance providers also look at different factors to assess how much of a risk you represent for them.

These factors influence how your premiums are calculated:
  1. Your medical history, existing health conditions, and weight

  2. Your occupation and any risks associated with your profession

  3. Any risks associated with your hobbies. Dangerous hobbies include sky diving and more.

  4. Whether or not you smoke or drink

  5. Personal information such as your age, gender, and your family history

A no-exam policy is your best option if existing health conditions or bad habits such as smoking and drinking prevent you from securing affordable premiums. Typically, a no-exam policy costs more than other life insurance products, but it might be your best option.

 If you cannot find an affordable policy, look into making a few changes to your lifestyle so that insurance providers will see you as less of a risk. You could, for instance, lose a few pounds, quit smoking, or take steps towards managing an existing health condition.

Also, it’s smart to take the time to compare rates and policy benefits from several companies.

Selecting a Life Insurance Provider

Besides choosing a policy that meets your needs, it’s also important to select a reputable life insurance provider.

 It’s best to buy a policy from a renowned insurance company that will still be around decades from now. Your insurance provider should offer good customer service and take the time to answer all your questions about their products. Checking reviews and reports published by consumers’ associations will also help you choose a provider.

Comparing life insurance products, learning more about insurance providers, and requesting quotes will save you money and help you find a policy that’s right for you. This process takes time, but you’ll enjoy greater peace of mind once you’ve made your purchase.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Maximizing Your Profits from Rental Property Investments

Are you considering becoming a landlord? Do you already own rental property and are searching for ways to increase your profits? If so, you’re in the right place!

Real estate can be a great investment, but it can also be a poor investment. Just like purchasing stock, it’s important to buy the right property.

But the right property is just part of the equation! You also need the right tenant, and the numbers have to work. This article will give you the highlights.

Consider these factors when choosing rental property:

  1. The location. The neighborhood influences the cost of the property, type of tenant, vacancy rate, rent, and the likelihood of experiencing any appreciation.

  2. Property taxes. It’s difficult to predict what the property taxes will be on any individual piece of property. They can be much higher or much lower than expected. Be sure to verify the property tax information.

  3. Schools. Property in better school districts appeals to tenants with children. Rents will be higher in these areas.

  4. Repairs. Be sure you understand just how much it will cost to make repairs now and in the future. How much longer will the roof, furnace, and a/c unit last? How is the siding? Expect to paint the interior and have the carpets cleaned every time you have a new tenant. Budget for unexpected repairs.

  5. The cost and the rent. At the end of the day, the cost of the property and the amount of rent you can expect to collect are the most important factors. If these numbers don’t work for you, nothing else matters.

Once you find an appealing property, use these tips to help you find the right tenants:

  1. Job. Check on your prospective tenant’s employment history. Does she change jobs every 6 months? Does he go for extended periods of time without a job? Can his current salary afford the rent?

  2. Credit history. If a prospective tenant has done a poor job of paying her rent in the past, there’s a good chance she will continue to do so in the future. Be sure you know the credit history of everyone you consider allowing to live in your property.

  3. Interview. Most of us have been around long enough to have a good feel for whether someone is a good person or not. Our intuition isn’t foolproof, but it’s far from worthless. When you’re talking to a potential renter, ask yourself if you would trust them. Do they seem to have their life together?
    • Ask yourself, “Do I believe this person will pay me on time for the next year?”

Some states make it extremely difficult to evict people, so choose your renters wisely.

The Financial Picture

In a nutshell, the principal components are

  1. Rental income. How much money will you collect each month in rent?

  2. Costs. These are all the things that reduce your taxable income. Depreciation, insurance, repair costs, interest, home office, travel to/from the property, and other expenses can all reduce your tax burden.

These are the highlights to get you started. As you can see, there are many factors to consider before making the leap to becoming a landlord. Be sure to educate yourself fully prior to purchasing your first rental property.


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.

Renter’s Insurance and Retirees

Does your house feel empty and oversized now that your kids have homes of their own? Maybe now is the time to move to a condo or apartment. You’d be free of mowing the grass, cleaning out of the gutters, and shoveling the driveway. And perhaps best of all: no more property taxes!

If you decide to downsize your residence and rent instead of own, you’ll no longer need homeowner’s insurance. Even so, you’ll still have stuff to insure, and renter’s insurance is your financial solution.

What Does Renter’s Insurance Cover?

Consider these attributes of coverage with renter’s insurance:

  1. Loss of property. Renter’s insurance will cover the loss of your personal possessions in the same situations that your homeowner’s policy covered. This will include occurrences such as fire, theft, storm damage, and water damage.
    • Be aware that certain types of property like jewelry, high-end electronics, and antiques may require specific coverage with a rider.

  2. Add a rider for earthquakes, floods, or hurricanes. As with homeowner’s policies, damage from earthquake and flood typically are not covered. Separate coverage or a rider is required if these are relevant to your geographical area.
    • Inquire about damage from hurricanes if those can be an issue where you live. After a hurricane, you may find it difficult to collect, so ensure you know what you’re getting up front.

  3. Actual replacement cost vs. cash value. When looking at policies, understand whether the policy covers the replacement cost or the cash value.
    • If only the cash value is covered, for example, you won’t receive enough to fund the replacement of your 10-year old leather couch.
    • Purchasing a policy that provides the actual replacement cost will cover what it really costs you to replace your property, but the premiums will be higher.

  4. Policy limits. Know the limits on the coverage within your policy. Some policies have a cap on the total payout, too.

  5. Liability. Renter’s policies usually cover some liability.
    • For example, if someone slips in your apartment and breaks his arm, you’re likely to be covered.
    • You may also be covered if your dog bites someone, but certain breeds are frequently excluded, so be sure to check on these restrictions if you have a dog.
    • Any accidental damage you cause to the building is also usually covered. So if you trip and put your shoulder through the dry wall, your insurance should cover the cost to repair the wall.

Cost

The cost of coverage is usually quite low – often no more than $100 per year.

The factors that determine the cost include the amount of the deductible, your location, and your specific needs beyond the basics. Discounts are usually available for having safety features like burglar alarms, smoke detectors, and fire extinguishers. Having additional policies with the same insurance company can also reduce your cost.

You can lower your premiums by having a sprinkler system for fire, dead-bolt locks, only non-smokers in the household, electronic payments, and a good credit rating. Electronic payments require less labor to process, so many companies charge more if you mail yours. The other items are risk management issues. A non-smoking household is much less likely to have a fire.

Before you sign up for a specific policy, sit down with your insurance agent and see what other premium discounts might apply to your situation. You could save yourself a bunch of cash.

Document Your Property

Make a list of all your belongings, with photos, before you get your policy. It would be an even better idea to make a video. Store your list or video in a private location online or in a safe deposit box at your bank. Keeping the video in the video camera won’t help you much if the camera gets stolen or destroyed in a fire. The same goes for a list on your computer.

Becoming a renter instead of a homeowner doesn’t mean you no longer need insurance. Your possessions still need to be insured and you still have potential liabilities. Because of this, renter’s insurance makes sense. It brings you a lot of peace of mind for only a little money!


Engarde Financial Group is positioned to educate and serve its clients with other insurance coverages.

We understand that your personal items that you possess are of significance to you. Here at EFG we look at every situation differently. When it comes to your needs there is no such thing as one size fits all. Speak to a insurance professional today so that we can design a policy to cover all the things you love.