There was market relief for insurers as the downgrade of Hurricane Irma in the United States raised the prospect that costs for the industry may be lower than initially feared. Newslook
At this point, I’m afraid to turn on a television. It seems as though every time I turn it on I see a new natural disaster sweeping across the Western Hemisphere. Earthquakes, wildfires, tropical storms, and hurricanes have greatly altered, if not completely destroyed the lives of millions of people over the last few months. While I don’t relish using these disasters as opportunities to double-check my own exposure as it relates to insurance and loss of property, I’m going re-familiarize myself with my insurance coverages — and you should too.
Insurance, that abstract product you reluctantly buy, never want to use, but are exceedingly grateful you have, if it in fact covers your horrible incident. Insurance allows us to buy the ability for someone else to take on our personal risks. That might not seem like a big deal, but when you consider how many risks we have, laying your risks off onto someone else is beyond prudent.
I always liked the advice my dad gave me in regards to insurance. “You only should buy insurance on things you can’t personally afford to replace,” he Now that’s an exciting conversation between father and son — insurance! But he’s right. I can afford to replace my smartphone, therefore I don’t insure it. I can’t afford to replace my entire home, therefore I insure it to the brim.
The pertinent question though is “what does standard insurance actually cover?”
While the point of this column isn’t to convince you to maintain a relationship with an insurance agent, I highly recommend you do so. Being able to place your trust in someone to help ease the burden of insurance knowledge is a wonderful luxury.
I emailed my trusted insurance agent and asked what calamities I’m protected against. In about two minutes I had some answers. I’m insured if tornados, a wind storm, or a fire (wild or otherwise), come into my life. But I’m not insured if we lose our home to a flood, war, or earth movements such as earthquakes and sinkholes. I can add earthquake coverage, but the only faults remotely near my home are my own.
And we aren’t covered for termites. Although natural and a disaster, termites are not a natural disaster
I’d never really considered that war could damage my home. My house wouldn’t be covered and neither would yours. It’s a sobering thought.
Knowing your coverage isn’t enough. You also need to take some rather crafty steps to ensure your insurance experience is surely what you want it to be.
To begin, grab your smartphone and do a walking inventory of your property. Make sure to give extended airtime to your most valuable possessions. I don’t care how addicted you are to likes, don’t post the video to social media. If you do, you might find yourself filing a theft claim. You should however consider emailing the video to yourself or keeping a backup copy in an online storage site. You might as well email a copy to your insurance agent while you’re at it.
Passports, vital documents, emergency cash, and whatever else feels crucial to have when faced with losing every possession you own, should go into a fireproof and waterproof box. Let’s call it “the box you hope you never need.” If a disaster knocks down your door, the box you hope your never need will slightly lessen the sting.
More:
October is good time to evaluate your personal finances
4 rules for a financially successful relationship
How mental health impacts financial health
I don’t think anything can prepare you for losing everything you own, but taking a bit of the pressure off yourself only takes minutes. Sadly, the need for emergency plans isn’t limited to natural disasters. The death of a loved one, a job loss, or any other event in which your world is turned on its head, require you to solve seemingly unsolvable problems. Eliminating uncertainty is one way you can make these moments easier.
Take 10 minutes out of your busy day and secure some peace of mind. Email or call your insurance agent and run down the disaster list. Take another 10 minutes and prepare the box you hope you never need. Insurance obviously can’t replace the memories lost, but knowing that you’ll have a financial partner in your effort to become whole again.
Peter Dunn is an author, speaker and radio host, and he has a free podcast: Million Dollar Plan. Have a question about money for Pete the Planner? Email him at AskPete@petetheplanner.com
Peter Dunn, aka Pete the Planner, writes a weekly financial-planning column for The Indianapolis Star and Fox59. (Photo: Provided)
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