ECONOMICS

Detailed explanation-1: -Being over-insured means you have more insurance than you need or can afford. There are several ways you can be over-insured. You might have duplicate or overlapping insurance policies, coverage you don’t need or policies that cover much more than the cost of a potential loss.

Detailed explanation-2: -If you are experiencing over-insurance, you are essentially paying an amount that is significantly higher than the value of your property. Simply put, you’re wasting money. Aside from the cost, over-insurance also tempts the policyholder to make false claims to realize a profit.

Detailed explanation-3: -If you underinsure your home and suffer a devastating loss-flood, fire, theft-then you risk not being able to return to the lifestyle you’ve worked hard to achieve. Yet if you overinsure, you’re throwing money away every year on unnecessarily high premiums.

Detailed explanation-4: -Importance of Insurance Buying insurance is important as it ensures that you are financially secure to face any type of problem in life, and this is why insurance is a very important part of financial planning. A general insurance company offers insurance policies to secure health, travel, motor vehicle, and home.