AUTOMOBILE INSURANCE : THE CAR AS THE SECOND PROPERTY

An automobile is often the second most valuable property a family owns (home being first) and even more often it is the most dangerous. You may want to protect the value of your automobile for your own sake, but many states require you to carry insurance for the sake of others; to protect other people frompossible damage inflicted via your car. Such coverage extends to liability arising from the ownership and the use of automobiles.

Like the modern homeowners policy, there is a Personal Auto Policy which is more comprehensive in its coverage than the earlier auto policies were. Be aware of the areas excluded from coverage when you buy your policy. Nowhere does it pay more to shop than when purchasing auto insurance! Although price is probably your main consideration do not overlook the service record of your particular agent, the financial strength of the insuring company and the dividends certain companies may pay.

Everything that has previously been said regarding deductibles when discussing other kinds of insurance, applies to property and liability policies also. It cannot be overemphasized that the higher your deductible the more coverage you can afford. You should pay (and therefore budget for it) repair bills under $200 or $300 yourself. That is not the job insurance was meant to do. Protection against catastrophe is what you need and should try and obtain in the most economical manner. Typically a premium increases of $10 or $20 can double or triple your liability coverage. Where else can you find such a bargain?!

The umbrella policy only provides for defense and pays liability claims after the limits of underlying liability policies have been exhausted. For example, if you have auto liability coverage with a $500,000 limit and the court awards Mrs. Maine, a passenger in the car which collided
with yours, $1,000,000, the umbrella policy would pay the additional $500,000 beyond your auto policy limit for which your otherwise would be personally labile. Of course, the underlying limit requirements might be less than you are presently carrying on some of your policies. Check your limits on auto, waterand air craft, CPL, professional policies and any others you may have. If you are able to reduce the underlying coverage to the point where your umbrella policy can take over, you will save premium dollars on these underlying policies!

Extended coverage is available that normally exists only as part of the umbrella (no underlying policy required). Included here would be protection form personal injury claims, (usually found only in business or professional liability policies) such as coverage for proof of ( or in defense of) false arrest, invasion of privacy, wrongful entry, false imprisonment, libel and slander.

If you have no underlying policies in these areas then you must pay a deductible which can range anywhere form $200/$300 to $1,000 or moredepending on the coverage you seek.

All of us would like to be able to get our money back in case something goes wrong in an investment. This is another area where you must allocate risk. ( You should be getting to be an expert at risk allocation!) Depending on your age, temperament and goals, you must be able to look at an investment and decide if it fits within the parameters of your personal " acceptable risk" situation. If accumulating dollars quickly is your main motivation, then of course your risk tolerance will be higher than someone older, perhaps with more responsibility, who neither wants to nor can afford to lose what he already has acquired. Each person looks at a potential investment from his own unique perspective and with different expectations. Promises are seldom guaranteed and expectations may be disappointed. Can you accept the Mpromise of higher interest from a corporate bond versus the increased safety but lower yield of a government backed bond?

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