Over the past fiscal year, you diligently filed your business receipts, monitored your expenses, and worked with a Certified Professional Accountant in order to maximize your tax return.
It’s paid off. For the first time ever, you’re getting thousands back on your tax return. What are you going to spend it on?
Most people fantasize about using their tax return on a big vacation, or as a down payment for a new car. As tempting as these luxurious items may be, they don’t benefit your financial future. What would benefit you, by contrast, is investing that tax return in better car insurance coverage and other sensible personal investments. Here’s what we recommend.
1. Purchase New Auto Insurance, or Expand Your Existing Coverage.
Let’s say that currently you have basic liability coverage and collision coverage in your auto insurance plan. You were on a tight budget when you purchased it. As a result, you wanted your monthly payment to be about $100.
While that liability and collision coverage will cover certain damages after an accident, it doesn’t cover the medical bills, lost income, and replacement expenses for anyone involved in that accident. It also doesn’t cover your vehicle in the event of theft, vandalism, fire, animal collisions, and storms.
By utilizing the extra cash you earned from your tax return, you could add Personal Injury Protection, medical payments, and comprehensive coverage to your auto insurance. This additional protection can cover the unforeseen finance-draining expenses that result from a car accident.
2. Consider Getting a New Health Insurance Plan.
You don’t go to the doctor that often, therefore, as you applied for health insurance last winter, you only wanted a high-deductible catastrophic plan. Since you’re rarely sick, injured, or in need of health care, you prioritized saving money on your monthly payments.
In case of an accident, this short-sighted decision could result in staggering hospital bills that take years to pay off. Instead of rolling the dice on whether or not you may fall ill or get injured, invest your tax return on better health coverage. It may make the difference between you being able to easily pay your medical bills or you paying monthly installments for several years.
3. Look Into New Homeowners Insurance Coverage for Your Property.
Basic homeowners insurance covers lightning, fire, smoke, windstorms, hail, vandalism, theft, vehicle-caused damage, aircraft-caused damage, volcanic eruption, and civil commotion. Broad form coverage, which homeowners typically purchase with basic homeowners insurance, protects your property against damage from ice, snow, sleet, and related issues. For example, it will cover the damage caused by frozen pipes.
Unfortunately, these two common policies don’t cover occurrences such as earthquakes, mold, floods, foundation damage, long-term structural deterioration, water damage, and corrosion. Only comprehensive coverage will cover the cost of these potentially catastrophic events, and prevent you from paying huge out-of-pocket expenses to cover damages to your home.
Your home represents one of your most important investments. To safeguard that investment, try using your tax return to expand your homeowners insurance.
Before you blow your tax return on something frivolous, review our reasons for spending it sensibly, such as on new auto insurance coverage. Contact Confie today to learn which car insurance rates you qualify for. You can also get an auto insurance quote online from us. To learn more, visit our website today.