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Insurance is one of those things we accept as necessary, but what if you changed your perspective and realized that insurance is empowerment? Before I lose you, I am not here to sell you anything. This post is about education, empowerment, protection, and saving you money.
When last did you have an insurance claim? Was is a positive experience? Well, let me tell you a few stories.
Many years ago, I had a fairly new car (a Toyota Corolla – no, it wasn’t sexy) and was headed to a wedding rehearsal dinner. I ended up running into the back of a Dodge Ram pickup truck. It bent his bumper, but totaled my car. Thankfully, I had a friend who owned a towing company who would send it to my other friends body shop. There was an Enterprise Car Rental facility across the street, so I actually made it to the rehearsal dinner just a few minutes late. The real problem came when I was told the car was totaled, and that I was responsible for the difference between the value of the car and the payoff of the car (about $2,500.) I did not have what is called GAP insurance. I had not been offered it (to my recollection), nor did anyone educate me as to why I should have had it. I was paying more than I thought I should for insurance, and when I needed it, the “good hands” flipped me off.
How about this one. Imagine you are throwing a party in your home and a guest knocks over a valuable collectible (valued at $5,000.) You simply say “don’t worry my friend, the insurance will take care of it.” So you call your agent who says “you never told us you had collectibles… they aren’t covered under your basic policy.” In this case, you should have had a rider for that item which is a special policy provision to protect just that item against loss or damage.
What about the spouse who loses her husband to a freak accident who is at least relieved to know that he had life insurance. Sadly, she soon learns that $250,000 worth of life insurance will only pay her out about $20,000 per year if invested and they were living on $80,000 per year? If she just uses the money, it will be depleted in less than 4 years. They had life insurance coverage, but certainly not the right coverage. The right coverage might have even cost less money.
I could tell many more stories, but the bottom line is this. If you are going to pay for insurance, doesn’t it make sense to know that you have the right coverage? And if you have the right coverage, doesn’t it make sense to not overpay for it? And if your needs change, doesn’t it make sense to ensure that your policies are updated?
I recommend doing an insurance audit once per year. During this audit, you can discuss any changes with your agent such as newly acquired property, changes in investments, lifestyle changes such as new kids, etc. It also might make sense to have a second opinion, kind of like if you had a medical condition that you wanted to treat. Your agent may be conservative, aggressive, or lazy – any of which can impact how you are protected.
Having the right insurance coverage is empowering. It gives you the freedom to live without fear, knowing that any simple act cannot wipe you out financially.