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Money Matters – Financial Fire Drill: Insurance

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(Photo credit: FREDERICK FLORIN/AFP/Getty Images)

420x316-grad-lee Dee Lee
Dee Lee is a Certified Financial Planner who received a diploma in...
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BOSTON (CBS) – As one prepares for the catastrophes of life we need to consider insurance as a financial tool.

This is a tool that will allow us to protect the ones we love and the stuff we own and it also allows us to sleep at night. A tool to help us keep our families financially safe. You need to know what risks you may face financially and learn to manage them by using insurance.

Homeowners Insurance:  Be sure you are adequately insured for at least 80% of the value of your home. If you have valuables or collectibles you keep in your home you may want to consider adding a rider to the policy so these special items are insured.

Consider taking inventory of your home’s contents. Making a video is the easiest thing to do.

Your homeowner’s policy will cover you if a tree blows down and caves the roof in. But if that 200 year old tree falls in the driveway you will be responsible for cutting it up and getting it hauled away.

If we have an earthquake and we could have a major earthquake here in New England, you are not covered unless you have purchased special coverage. I live west of Boston and have been in 3 earthquakes. All minor but earthquakes none the less.

Flood insurance is also considered special insurance. If the pipes burst during a cold snap and flood the basement you are covered. But if a hurricane brings 12 inches of rain and that dry creek, the one that has been dry since you bought your home 30 years ago, floods your basement you probably are not covered.

Check with your insurance agent and know what is covered if a hurricane does hit or a tornado comes whirling through. And please don’t say it doesn’t happen here. New England has had over 400 documented tornadoes. And this past June, in Central Massachusetts 19 communities experienced a tornado that left 4 dead and debris as far east as Middlesex County.

Auto Insurance:  You are not supposed to drive your car in Massachusetts unless you have insurance. But that doesn’t stop some individuals. Be sure you are covered for uninsured or underinsured drivers and that everyone wears their seat belts in your car.

If you work at home and more people are doing just that, let your insurance agent know. Coverage for a home business and office equipment can be incorporated easily into your home owner’s policy. If you don’t tell the insurance company you may not be able to claim a loss if your home is damaged or vandalized and you lose your office equipment.

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