An Ounce of Prevention

In a recent blog, I wrote of the optimism that people have in that we tend to think that we will not be injured in an activity or in a car accident. That is a logical human feeling. However, as Benjamin Franklin once said, “an ounce of prevention is worth a pound of cure.” Well, preventing accidents is worthwhile but also of great use is the protection that we afford ourselves financially. Toward that end, I customarily write to my clients of the importance of being sufficiently protected by having enough auto insurance and, in appropriate cases, having an umbrella, which covers accidents in the home or on the road. I am struck by how little it costs to have an umbrella. My umbrella provides two million dollars of personal liability and costs a paltry, relatively speaking, two hundred forty dollars. If you are so inclined to have an umbrella, be mindful that you need what is called underlying limits of a sufficient amount on your primary policies. For cars, that usually means having $250,000/$500,000 in optional bodily injury limits under part 5 of your automobile policy.

Homeowners’ coverage only protects you from suit and does not provide any coverage to you or household members for an accident on the premises or elsewhere. With automobile insurance, it is significantly different. That is due to the availability of bodily injury caused by an uninsured car under part 3 and bodily injury insured by an underinsured car under part 12. Those will come to the rescue of you or household members. The problem is that to have sufficient coverage under those parts, you must have at least the same level of coverage under part 5. This requires some financial commitment but it is an investment in you and your family’s protection.