Many people have some form of risk management policies, but the experts at Broussard Poché, LLP know those policies can sometimes be put on a shelf. It’s time to brush them off and take a look; you may have to do some updating. Let’s review a few risk management strategies.
- Auto Insurance – Review your coverage. Is it still enough? Liability limits should be about $250,000 but limits of $500,000 up to $1 million are better. And if you are upside down on your car loan, consider gap insurance.
- Home Insurance – Is your home insured to its reconstruction cost? This is the cost to rebuild your house, this is not the fair market value. Liability limits should be at least $250,000, but higher amounts up to $1 million are better. If you just put in a pool or got the kids a trampoline, talk to your company. These items may have special requirements or not be covered at all.
- Umbrella Insurance – This one is often overlooked but can be important to your risk management plan. This is coverage that’s in place if you exceed your liability limits in an auto or home claim. Policies with $1 million limits can be obtained for as little as a few hundred dollars annually.
- Health Insurance – This should be reviewed annually to see if your coverage still makes sense. Look at how often you are using the policy and if you are meeting or exceeding your deductible. If you rarely use it, you may want to consider a policy with higher deductibles. This will save on premiums. If you have a high deductible policy, consider utilizing an HSA.
- Emergency Fund – It’s a good idea to set aside three to six months of income for emergencies. Having an emergency fund can help pay for higher deductibles in any of the policies mentioned above. And an emergency fund can help you avoid putting deductibles or emergencies on credit cards.
It’s important to know how much coverage you have before you need it. The financial advisors at Broussard Poché, LLP recommend you go over your coverage annually. Understanding your risk management policies can be crucial if the unthinkable happens.