Insurance can be an affordable way to minimize our potential for a large financial loss due to damage to our personal property, health, negligence, or even premature loss of life.
Risk is the potential for uncontrolled loss of something of value and how we choose to mitigate the risk determines the premiums we pay for insurance. There are three main ways to handle risk: transfer, ignore, or share.
The goal of any risk management method is to minimize one’s exposure to financial loss. Insurance can do this by transferring the risk of financial loss to an insurance company. The problem with this method is that it tends to come with a higher premium then we really want to pay and we begin to feel that we are “insurance poor.”
Another method that a few use is to ignore the risk. Have you ever heard someone say, “If I don’t discuss it, then it won’t happen!” or “It won’t happen to me…”? The problem with this management style is the possibility of large financial loss but it does come with a desirable low cost premium… NADA!
I have personally found (and so have most of my clients) that sharing the loss is the best way to guard against crippling financial loss while maintaining a premium that is affordable. We do this by having higher deductibles, eliminating Comprehensive and Collision coverage on older vehicles and not insuring for every risk possible. However; each person’s level is different depending on the cash we have on hand. We also share the risk for loss by maintaining our personal property through proper maintenance and repairs which limits exposure to chance for loss. Changing the oil, replacing worn tires or windshield wiper blades, replacing burned out headlights and break lights on our vehicles, or taking the time to replace your roof and paint the house can all help to protect you from loss or expensive repairs.
Give us a call now at 281-746-9273 to see how we can help you manage your risk!