Hi Lee Phillips here. Not going to talk about a legal topic today but I want to talk about how much insurance you should carry on your home. The insurance industry is a pretty cool industry in fact it’s the number-one asset protection tool that you have. Insurance–it’s an asset protection tool. It protects your a… anyway You need a reasonable amount of insurance. I always carry probably more than I need to but you need it and it’s just–you hope you’re flushing your money down the toilet but if you do need it it’s really important that you get what you thought you were
getting. And the insurance company once there’s an accident or a problem it’s kind of their goal to get out of paying you the thing that you thought that you deserved by paying the insurance premiums. That’s a little cynical point of view
but it’s kind of true too. So you’ve got to be careful. Who is the insured? If you’ve got a building a rental unit in the LLC or something and you carry the insurance
in your name you’re the insured they may not cover that if it burns down because the contract was with you and you weren’t the owner of that piece of property and an LLC was the owner. Your personal residence, that’s not particularly the case. You need to have what they call replacement value on the insurance policy. Yeah, you pay more for it but you don’t want the depreciated value of your four-year-old big-screen TV because the replacement value is you gotta buy a new one and it’s $1,800 bucks but if you take the depreciated value it’s what, $200? So you have to have replacement value as an option or rider or whatever they want to call it on your policy. Additionally you should have an umbrella policy. It covers stuff that it’s kind of not related to your home. For example my son rolled a rock down the hill and hit a car. The insurance company ended up they weren’t going to it’s kind of a fun story the insurance agent went to bat for us and he was arguing with the adjuster who was a lady and she said absolutely not, this is intentional we don’t cover this act, no. and finally the insurance agent said well you go home and you ask your husband if he’s ever rolled a rock. Now in the West we roll rocks there aren’t rocks in the East but in the West we roll rocks. So she went home and the next morning she came back and said we’ll cover it. any rate The umbrella policy allows the insurance to spread out or cover you and your actions your family’s actions beyond what you think of is just your home. Insurance is really pretty cheap when it comes down to the protection that you can get from it. So I always say more than the agent says I need. It’s amazing inflation you can’t build what you couldn’t five years ago when you bought the policy for the same amount of money today, it just doesn’t work. So you need to figure inflation too and you should review the policy every so often. How much insurance do you carry? I don’t know, but I carry enough.