Two examples when insurance doesn’t make sense

As insurance agents, you might be surprised that we don’t always recommend insurance as the best solution.   Just because you can insure something doesn’t mean it makes sense.

An example would be the pocket watch you inherited from your great grandfather. It was given to him after he came back from the war.  The value of this item may be substantial in dollars and cents, but the emotional value is what is truly priceless. Consider the outcome of a claim.  Grandfather’s watch is gone now.  Does the insurance check make up for no longer having the item?  It would be impossible to go out and buy back the same watch or one with the same sentimental value.  In this case, perhaps insurance isn’t important.   If however, the watch is a functional item that you use every day and you would need to replace it, then go ahead and consider a policy.

Another example might be when your teenage son starts driving. He’ll be driving the family car purchased 10 years ago.  It is in great shape but the value isn’t more than about $4000.  Within two months of getting his license, he gets a speeding ticket.  Now his already high insurance rate is going to be higher.  Carrying comprehensive and collision coverage on the vehicle itself to protect the $4000 value (minus the $500 deductible) likely won’t make good financial sense anymore.  Our recommendation would be to think twice before continuing to pay for those optional coverages and to go ahead and strip the policy to liability coverage only.

If you are looking for an agent who will walk you through all of the available options (without any pressure to buy them) we’d love to hear from you!