The Financial Checklist Plan
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  • Today's Average Financial Picture
  • Why Learn the Financial Checklist Plan?
  • Past, Present, Future
  • THE Financial Checklist Plan
  • 1. Personal Reserve Fund
  • 2. Eliminate Personal Debt
  • 3. Insuring We're Properly Insured
  • 4. Saving for Retirement and College
  • 5. Paying Off Cars and Homes
  • 6. Building Wealth and Giving and Living Graciously
  • Financial Checklist Blog

Financial Checklist Plan Part 3:
Insuring We're Properly Insured

The Financial Checklist Plan: Insurance Checklist

Insurance You Need

Health Insurance
Term Life Insurance
Auto Insurance
Homeowner's Insurance / Renter's Insurance
Umbrella Policies
Long Term Disability Insurance
Long Term Care Insurance (if over 59 years old)
Identity Theft Insurance

Insurance You Don't Need

Life Insurance that is not Term Insurance
Disease Care Insurance (Cancer, Heart Attack, etc)
Private Mortgage Insurance
Extended Warranties
Water Line Coverage
Credit Card Insurance
Mortgage Life Insurance
Accidental Death Insurance


Auto Insurance:

We would all do well to check our current limits in auto insurance (looking at our 3-numbered liability coverage (bodily injury per person, bodily injuries per accident and property damage), our comprehensive coverage and our collision coverage).  Dave recommends at least $500,000 of liability coverage.  Comprehensive and Collision coverage are likely wise to purchase and have also, though if your financial situation is secure and you drive a lower value auto, it could make sense to consider not having collision or comprehensive insurance.  Good analysis is needed to make this type of decision.

A common car insurance liability policy is one that offers $100,000 / $300,000, / $100,000 coverage.  To help understand this lingo, these numbers in this order:
bodily injury per person, bodily injuries per accident and property damage.  If, for example, you were to cause an accident that resulted in the total loss of the other person's $75,000 vehicle and bodily damage to two occupants in the other car of $145,000 and $68,000, your $100,000 / $300,000, / $100,000 policy would cover the $75,000 property damage completely, and would cover the 2nd occupant's $68,000 injuries entirely, but would leave you on the hook for $45,000 in remaining personal cost for the first occupant with $145,000 in injuries.  This is because your policy only covers $100,000 in bodily injury per person and their cost due to your accident were higher than this limit.  

Do make sure you consider what your current deductibles are on your auto coverage.  If your financial situation and cost analysis allow, consider raising your deductibles to save money on your auto insurance.  As a help, an auto insurance deductible is the kind of thing the personal reserve fund could be appropriate to utilize if needed to pay a deductible.  If you have a strong personal reserve fund, then you are perhaps equipped to take on higher deductibles and save money.

Next, consider Homeowner's Insurance.

A Little Background

Today's Average Financial Picture
Why Learn the Financial Checklist?
Learning from the Past
Remaking the Present
Owning the Future

The Financial Checklist

Creating a Personal Reserve Fund
Eliminating Personal Debt
Insuring We're Properly Insured
Saving for Retirement and College
Paying Off Cars and Homes
Building Wealth, Giving and Sharing

Checklist Execution

Visioning a Different Future
Committing to Change
Investing Wisely