Broad insurance coverage is the best kind of insurance you can buy. While narrow coverage insurance may make you feel better for a little while, broad coverage saves you money and protects you against more disasters. The broader coverage your insurance policy is, the more chances you'll have for it to protect you.

When you buy insurance, don't make the mistake of buying coverage that's too narrow. Instead, buy a policy that has broad coverage.

The draw of narrow coverage

Even though getting broad insurance coverage makes the most sense, narrow-coverage insurance policies are designed to ease your fears on a particular topic. For instance, at most airports you can pick up flight insurance that will cover you if you get injured in a plane crash.

The odds of you being in a plane crash are very unlikely, however. According to one study, if you were to fly every day, you would have to fly for at least 1,000 years before being in an air accident. The odds of you being in a serious traffic accident are much higher. However, the media gives more coverage to horrific plane accidents, and more people are scared of getting on a plane. Purchasing flight insurance lets you put your fears to rest while you're traveling.

The disadvantage of purchasing narrow coverage

While an insurance policy with narrow coverage has substantial psychological benefits, it actually hurts you financially. You rarely get a return on your investment with narrow coverage, as the policy excludes so many other conditions.

Even if you do get a return on your investment, it may not be sufficient to cover your costs. Hospitalization insurance, for instance, will pay a certain amount of money each day you're in the hospital, but you're guaranteed to get a bigger bill than your hospitalization insurance policy can cover.


Benefits of broad coverage

In contrast to insurance policies that only cover one or two events, broad insurance coverage provides protection against several possible calamities. Comprehensive life insurance, for example, will be paid out if you die in a plane crash, in an auto accident or of old age. The likelihood of your next of kin seeing some benefit to your policy is much greater than if you simply purchase flight insurance. By the same token, comprehensive health insurance will pay not only for your room at the hospital, but also for the medications and treatments you receive.

Another advantage of broad coverage is that it can save you money. Instead of buying separate policies for cancer, hospitalization and other specific types of insurance, you can instead direct that money into a policy that provides broad insurance coverage. You can save money in premiums by combining them into one policy. As an added bonus, you can channel the money you'll save by only paying one premium into an insurance policy that is even more comprehensive. You'll be taking better care of yourself and your family than you would by purchasing separate policies with narrow coverage.

Overcome your fears

In order to avoid the pitfall of narrow coverage insurance policies, you have to prevent your fears from letting you make rash decisions. Even though you may worry about getting cancer, don't buy a cancer insurance policy. It may make you feel better in the short term, but you'll feel worse if you wind up in the hospital with another disease without sufficient medical insurance.

Think rationally about the kind of coverage you want to buy. If you want to protect yourself against dying in a plane crash, doesn't it make sense to protect yourself against dying in some other kind of accident while you're at it? If the cost of staying in a hospital bothers you, why not get a policy that also covers surgical procedures, doctor's visits, rehabilitation therapy and prescription medication?

You might also want to look at statistics before you buy an insurance policy. See how many people have used flight insurance as opposed to life insurance. Look at how well cancer insurance has served people as opposed to more general health insurance. By getting as much information on the policies as you can, you'll be able to make an informed decision, regardless of how scared you feel.

Look for gaps in the policy

When buying broad coverage, make sure you know if there are any gaps in your policy. Some areas of insurance require you to buy separate policies. One example is with homeowners insurance, where damages from earthquakes and floods are specifically excluded from the coverage. If you want protection from those disasters, you'll have to buy a separate policy for each.

Unfortunately, many homeowners don't take the time to discover the gaps in their policies. Ask your insurance agent about what the policy does and does not cover, and do some research for yourself about what kind of insurance you'll need. For instance, you'll need flood insurance if you buy a house in New Orleans. A place in Los Angeles, on the other hand, needs earthquake insurance. You may also want to contact the insurance company directly and find out what broad insurance coverage excludes.