Ultimate Business Guide
Protect yourself with the right insurance
By Megan Malugani
on how to make insurance work for you:
1. Ask yourself some key questions. Whether Wendroth is
explaining auto, home, life, health, or business insurance, he always encourages clients to think about a few important questions: What do you want your insurance to do for you? Who are you trying to protect? What do you want to protect? "Insurance is a form of risk management," Wendroth says. "I tell clients all the time that we're here to talk about risks. Which risks do you want to keep and which risks do you want to pass to your insurance company?"
2. Prepare for the worst (but don't expect it). You don't want
to spend too much time dwelling on the 'what ifs' of life. But giving some thought to "What's the worst that could happen?" can help you figure out what kind of insurance is right for you. "Take a look at where you're putting your premium dollars," Wendroth says. "You may be able to put them in a different place that would be more helpful for you if you were to suffer a big loss." For example, there can be a considerable savings on a home policy if you move from a $500 deductible to a $1,000 or even $2,500 deductible. The premium dollars that are saved can be applied to making sure that other coverages on the policy are adequate in the event of a large or total loss. "If your home burns down tomorrow, the least of your problems is whether you had a $500 or $2,500 deductible," Wendroth
says. You may decide that it's not important to you that your
insurance kicks in for relatively small losses, but that it fully covers you for the big losses.
3. Review your policies regularly. Wendroth encourages
clients to review all their insurance policies every three to five years. Every life event—including births, marriages, divorces, and home purchases—should trigger you to "check with your insurance agent and make sure everything is okay," he says. "It's no different than going to your doctor or your accountant," Wendroth says. "I do reviews all the time at no cost to the client. Sometimes, they leave spending less than when they got here."
4. Consider a "personal umbrella" policy. Many people don't
know that for a few hundred dollars a year, they can buy a "personal umbrella" policy that supplements their existing auto and personal liability coverage. This type of insurance is particularly useful if you're the person at fault in a car accident, but it can also provide coverage if you are to blame for other unfortunate accidents. The protection is designed to kick in when the liability on other policies has been exhausted. When the unexpected strikes, "there's a world of difference between people who had and didn't have an umbrella policy," Wendroth says.