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  • Wendell Brock

Got Insurance?

Previously, we discussed risk management and how insurance is a tool we can use to minimize our financial risks. When thinking about your financial plan insurance might not be the first thing you think of, but it is an important element.

Insurance is a contract, represented by a policy, that safeguards you against loss. By collecting small amounts of money (in the form of premiums) from all their policyholders each month, an insurance company creates a large pool of money that can cover the steep costs associated with covered losses. Insurance companies analyze the risk potentials by using mathematics, statistics, and other financial theories. This allows them to price their policies based on how likely it is people will make a claim.

Like many things in the financial world, there are many details and options connected with insurance, so it can feel overwhelming. There are multiple types of insurance ranging from the usual home and auto to the less common wedding or alien abduction insurance. Essentially, if it has value you can find an insurance policy to cover it.

You obviously don’t need to have every type of insurance that’s available, but it is important to have appropriate insurance coverage. If you own a car you will need to have auto insurance, and if you own a home or are renting you should definitely have either homeowner’s or renter’s insurance. We’ve written about life insurance before on our blog and how important it is to cover your family in case something happens to you.

There is also umbrella insurance, which covers personal liability beyond what a homeowner or auto policy would cover. It's designed to cover any injury or damage you may have caused to someone else or something outside the coverage of your other insurance coverage. Umbrella policies create another level of risk management. If you are a part of anything that increases your risk of liability, umbrella coverage may be a smart choice.

We all know that life can be unpredictable. Would anyone have guessed how these last couple of years were going to turn out? Life will always throw the unpredictable at you, but if you are prepared and plan for some of those uncertainties you will have a much better chance of weathering financial storms and protecting your assets. Having the right insurance plan in place can help make sure you don’t drain your emergency or saving funds when life gets stormy.

What financial question keeps you up at night? Reach out at

“I don’t believe in taking foolish chances, but nothing can be accomplished without taking any chance at all.”

-Charles Lindbergh p.49 The Maxims of Wall Street by Mark Skousen

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