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Monday, January 7, 2008

Personal Finance QuickTake: Insurance

A friend of mine from work had her kids visiting her for Christmas break. As they were about to go back home they found out that their home was under 13 feet of water due to the flood in Fernley Nevada. Luckily everyone seems to have made it out OK, but the house is probably a total loss.

They have renter's insurance, but they have found out that it doesn't cover floods, since they are in the desert. FEMA is there helping, but it really is totally devastating to lose everything like that.

We are all trying to save money, but it is so important to make sure that you are properly insured. A year ago we had a small house fire, and everyone was OK and we had the extra rider for not only fire, but the water damage that ensued from the fire department putting it out. If we hadn't we would of been out of thousands of dollars.

Every year it is a good action item to do a total review of your insurance needs; Life, Home, Car, everything. A lot of time we can be over-insured, especially on cars that are not worth as much, so you might even save some money! But the wrong time to find out you are not insured is after something bad happens. A small payment a month vs devastating loss is a big price to pay!

Don't be penny-wise and pound foolish...


Fiscal Musings said...

This is a good lesson to keep in mind. As circumstances change, so should our coverage.

RacerX said...

Totally agree. At every major life change (including the new year) you should review your coverage.

It is bad enough to go through a tragic loss without having to be financially devastated.

Thanks for reading!

CatherineL said...

How awful. I used to work in the fire and flood restoration industry. And so many people lost out because they forget to tell their insurers when their circumstances changed - eg. renting out a room, or even the whole house.

You really have to be so careful and make sure you're not underinsured.

RacerX said...

It really is one of those things that seems smallbut can come up and bite you. It is like having a yearly physical. Easy to forget, until you are in trouble.

Thanks for Commenting!

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