Insurance vs Assurance

An agonizing senior moment occurs when it is discovered to our dismay that we thought we were adequately insured but were not. This happens, unfortunately, and too often unexpectedly. This happened in New Orleans when adjusters were trying to assess the hurricane damage whether it was by wind or rain (or both). Many discovered they were not covered by their insurance. And some were not insured at all.

Quite recently, a couple awakened to discover they had visitors during the wee hours of the morning. They had left their garage door open a foot or so, just enough for the prowlers to squeeze under. The door to the inside was unlocked giving them entrance to the entire house. They were very discreet visitors, and worked quietly rummaging through several rooms looking for items with potential value. They exited through a sliding door on the lower level taking a valuable television set with them.

Upon contacting their insurance company, they were asked for a receipt vouching for the TV set. Fortunately, they had a receipt. But supposing they had no papers of any kind? Or even worse, what if their insurance would not cover their loss because of an unlocked entry? Or what if their insurance had lapsed?

Another scenario. Insured money. Generally, deposit accounts at banks insured by the Federal Deposit Insurance Corporation (FDIC) are insured up to $100,000 per depositor per bank. FDIC insurance covers checking, savings accounts; money market deposit accounts; and time deposits, such as certificates of deposit (CDs). But it does not cover money market mutual funds, stocks, bonds, mutual funds, life insurance policies, annuities, or other securities, even if they were bought through an FDIC-insured bank. And don’t overlook the Securities Investor Protection Corp (SIPC).

Auto insurance is also a challenging topic. It is ideal when everything is going well. Yet, when a mishap occurs, who is to blame at times becomes cloudy. How much coverage does one really need? Best to err on the upper side, not the minimum. Then there are the iffy things: liability, collision, comprehensive, towing, uninsured and underinsured motorists (the other guy who is cutting corners, living on the edge).

We were on vacation and our son was driving. Some nut in a road grader wanted to turn left (he was off the road on the right of us). Our son saw him moving and he moved leftward to avoid this idiot (what else could he have been?) but he rammed his grader right into us and kept on going. We saw the name on the machine and reported the incident (deliberate, senseless accident) to his employer. Then we turned the rental car in, signed the papers and caught our plane home. Later, we were billed for the time the vehicle was out-of-service but our insurance wouldn’t cover it. We learned.

It is true. There are some very fine insurance agents who make an unpleasant situation palatable. And visa versa. The moral of the story: be sure your insurance is also assurance (guarantee). These two need not be incompatible but they can be.