In This Chapter
Checking out homeowner's/renter's insurance
Considering automobile insurance
Looking at umbrella insurance
Planning your estate
In Chapter 16, I discuss the importance of protecting your future income from disability, death, or large, unexpected medical expenses. But you also have to insure major assets that you've acquired in the past: your home, your car, and your personal property. You need to protect these assets for two reasons:
Your assets are valuable. If you were to suffer a loss, replacing the assets with money out of your own pocket could be a financial catastrophe.
A lawsuit could drain your finances. Should someone be injured or killed in your home or because of your car, a lawsuit could be financially devastating.
In this chapter, I explain why, how, and for how much to insure your home, personal property, and vehicle. I also discuss excess liability insurance and how to determine where your money will go in the event of your death.
When you buy a home with a mortgage, most lenders require you to purchase homeowner's insurance. But even if they don't, you're wise to do so, because your home and the personal property within it are worth a great deal and would cost a bundle to replace.
As a renter, damage to the building in which you live is not your immediate financial concern, but you still have personal property you may want to insure. You also have the possibility (albeit remote) that you'll be sued by ...