Insurance

Archive for April, 2010

I cannot calculate the number of times I heard this question. Oftentimes it resulted in a good conversation about insurance and what it does for you.

I am a firm believer that the importance of this question lies in an interest to protect oneself from a ‘worst case’ incident. What is the worst case? For a homeowner, how about an accidental drowning at a birthday party? Maybe a driver swerves to avoid a dog, loses control and hits a pedestrian instead. Both tragic. Both carry the potential of substantial loss to the insured.

Follow along with this simple exercise to aid in finding a comfortable protection limit. Imagine a treasure chest sitting next to you. In that treasure chest imagine your valuables inside. Think about your money and savings held in the bank or credit union.  That floats in there. Imagine your stocks, bonds, and mutual funds.. Float that in there too. Don’t forget to float the equity in your home (s) and or rental properties. For some this number alone can be substantial. Put your equity in the treasure chest too. How about your possessions? What would it cost to fill your house or apartment again? These items are subject to seizure and auction. Add up your treasure chest total and hold that thought.