Sushi Money

It’s been a busy week, especially with school starting up for the kids.  So much news out it’s hard to keep up, but today all eyes are on tropical storm Gustav strengthening and hitting the Gulf coast (and Sen. McCain’s VP pick as well…which doesn’t look like Gov. Pawlenty.  On a side note, last night Wikipedia had a factual narrative that Gov. Pawlenty would be chosen as Sen. McCain’s VP on August 29th.  Guess what?  Today that narrative is gone.  Will Gov. Palin be McCain’s choice?).  Whoever it is, we’ll know today, but the GOP would be wise to postpone any convention celebrations until after we know what Gustav is doing. 

With the possible hurricane looming, gas prices in our area jumped .20 cents a gallon yesterday on the news.  We sure hope that the storm doesn’t impact the people living along the coast as severely as it has in year’s past.  But many of those folks are preparing for the worst, taking no chances, and either evacuating or stockpiling supplies in case of emergency.

Of course you don’t need to live on the southern U.S. coast to find yourself needing emerency assistance.  We live in the midwest where tornadoes come out of nowhere, but more than that are the thunderstorms that can pass with damaging winds and hail.  This year flooding has been the issue for so many across the midwest and in Florida.  And fires on the west coast have impacted thousands of people. 

Laura Rowley talks about how preparing for a disaster can really pay off over the long term.  You just never know what’s going to happen.  I like to think I’m well prepared for almost anything, but just reading the article made me realize that although I have back-up data for financial information, it’s in the same place as my original data.  So if our house burns down or is blown away by a tornado, we could be out of luck.   Time to go over the details, find a new thumb drive and back up some more stuff.

And how about insurance?  That so important topic that is also so confusing most of us never really know what kind of policies we have, or how well we are covered.   But it’s essential to make sure you are satisified with the type of homeowners insurance you have.

“Meanwhile, make sure you have a replacement insurance that covers the real cost of replacing your home, rather than an “actual cash value,” which covers your belongings after depreciation (i.e., if you have a 12-year-old television, you’ll get an amount equal to the value of a 12-year-old television).”

“The NAIC survey found 43 percent of U.S. adults have replacement policies; 27 percent insured their homes for actual cash value; and 28 percent didn’t know what type of policy they had.”

“Even if you do have replacement coverage, insurers have been narrowing the definition of “replacement,” leaving some homeowners with inadequate coverage. To make sure you’re covered, go to AccuCoverage, enter information about your home, and the site will provide the estimated cost of replacement. Compare this to the amount of coverage in Part A of your policy.”

So it’s time to get our house in order, and verify the type of policies we have.  It may be a good time for an insurance review anyway.  As personal incomes have dropped nationally, people are looking for ways to cut back on expenses.  Insurance is often the first thing we think about, but take a hard look at that before doing anything drastic.I know personally we’re going to modify our auto insurance to try and lower costs. 

With inflation at a 17 year high, and consumer spending fading quickly as the stimulus checks are winding down, people are tightening their belts like never before.  But I’m not going to cut back on insurance for our house.  A home may or may not be your largest investment, but it sure is the most expensive thing that most of us will ever own or maintain.  To try and replace that without insurance?  Nope. I’m not willing to jeopardize our entire retirement on that.  Making sure our home is protected by decent insurance is one of the best things we can do.

No comment - Post a comment

« Speculation Demand and the Enron Loophole | What’s Your Long-Term Investing Strategy? »