Make Sure Your Assets are Covered

Two weeks ago I invited Chuck Worcester, owner of Hometown Insurance, to be a guest on my radio show to talk about the importance of property, casualty and liability insurance. Having Chuck on was a good reminder to incorporate a risk management strategy as part of your total financial plan and, like the other strategies, needs monitoring and updating.

Often home and auto insurance coverage once established are put on autopilot and ignored until filing a claim becomes necessary. It is important to meet with your insurance agent and review the risk management strategy of your financial plan annually. Maintaining the proper coverage for you assets is critical to protect against damage, injury, or claims against you.

As part of the annual review of your coverage, you should:

1) Make sure your coverage is adequate for your assets and make sure all assets that need insurance coverage are covered. Your life changes and so do the assets you own, keep your agent aware of purchases that will require insurance and make sure they are covered.

2) Make sure your agent knows how certain properties will be used (business or property) and who will be using it (employees, family, etc). This is especially important when you are insuring vehicles and equipment or allowing others access to use your property.

3) Make sure you have adequate liability coverage. Insuring against a piece of property being damaged or stolen is not enough you need to have coverage for damage and injury to others. A large claim or lawsuit against you may exceed your policy’s coverage consider a separate liability umbrella policy for greater protection.

4) Make sure you are getting the best coverage for your dollar. Have your agent compare rates and coverage but remember cheapest is not always best.

Losing the use of property due to damage or a lawsuit against you due to negligence, injury or damage to other’s property can be devastating. You can’t control all the risks out there, accidents happen but you need to be prepared, and maintaining an active risk management strategy can offer protection. Don’t ignore this critical strategy from your financial plan.