Isn’t it stunning and also odd how popular personal financial insurance has become?
It seems new coverage options are written and produced daily like a fresh batch of cookies.
This likely implies the insurance industry discovers new hazards (as they are called in the industry) to support the new offerings.
With the enormous ability to gather titanic amounts of data, the industry is operating as it is supposed to, discover risk.
However, common sense keeps our feet on the ground, and emotions in check.
It’s necessary to realize and prepare for threats, but not all.
For example, if a new home insurance coverage came available named ‘moon coverage,’ for if the moon happened to collide with the Earth with my house in the middle, it would be difficult to keep a straight face to the dear soul recommending it.
A practical and realistic assessment may produce a chuckle at the very idea of coverage for a celestial fender-fender.
The same reasoning is the best tool to evaluate any financial insurance product.
How simple is the insurance coverage to understand?
Clarity tends to certainty.
How would the insurance coverage work in reality?
Is the risk meaningful enough to consider or the coverage worth the cost?
Insurance, true insurance, is not about imagining a moment of loss and then instantly taking an emotional bath in fear so all offered insurance coverage is eagerly bought like ordering one-of-everything off of the menu of a favorite restaurant.
That is a slippery slope, if not self-aware.
Objectively, question the usefulness of insurance coverage.
Don’t fall for the ‘what if’ scenario when the risk remains unquantified.
Engage such frivolity.
Be vigilant and discover how to protect property and life and eliminate any existing ‘moon insurance’.