illusion

6. Your car and home insurance part two.

Welcome to the Dad Cents, 10 ways to put money back into your budget without stopping the fun stuff, series. The countdown continues with the second of two articles about car and house insurance.

6. Your car and home insurance part two.

What is your greatest risk?

Good illusionists are well trained in the art of drawing our attention with showmanship to  give the perception of magic at work.  As the illusion begins our focus is on the main subject but quickly drawn to a side character using misdirection. Once our attention is drawn, the illusion is complete.

Unfortunately, many of us have had our attention redirected from the main subject by some insurance companies. Now that I have your attention, I am sure you are wondering how, so let me explain.

The first question we need to ask is “What is the main subject?” The main subject is the area of your greatest risk. As you look at your areas of risk in regard to your house and auto insurance, there are two areas in which to look. The first is your cash out of pocket risk due to your deductable, and the second is your liability risk.

Now let’s apply the question, “What is my risk?” to our two areas of focus. If you have a $500 dollar deductable, what is your risk? $500. If you have a $50,000 liability limit, you are at fault and the other driver has $100,000 of medical bills, what is your risk? $50,000!

The focus of most commercials and insurance companies is to help us look at saving us money on our premium! This is good, but at what risk? Hopefully, you can see a hint of the misdirection. Should our greatest concern be our deductable or our liability limit? Our liability limit, hands down.

The chances of having a life-changing  accident are much lower than that of a fender bender but the risk is just too great to ignore.  Most states have minimum liability limits, which unfortunately guide many driver’s decisions.

I would urge you to check your policy and schedule an update with your insurance agent. Having the proper coverage is critical in this day and age. If your liability limits are too low, you may be putting your other assets at risk!

In the next article, I will talk about the ins and outs of house alarms and money-saving  ideas!

Is it possible for everyone to use these ideas? Maybe, but I will make one promise. If you do not try, you will not save money!

Make sure also to watch for our next Savvy Dads webinar!

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Friday, September 2nd, 2011 Teaching 1 Comment

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