The other day my grandfather told me that he was thinking about discontinuing his homeowner’s insurance because he’s “paid them enough over the years, but they’ve never given me anything back.” I asked him if he’s ever had a claim, and he said that he had not. So, we had a good discussion about why it’s important to stay insured even when it feels like you’re not getting anything out of your relationship with your insurer.

The way I explained it to him was that you pay a little now so you won’t have to pay a lot when something catastrophic happens. With homeowner’s insurance, you may not ever make a claim and get a check in the mail from your insurance company—but if something expensive happens to your home, you’re going to be very, very glad to get that check in the mail. If you discontinue your insurance now, I told him, you won’t have that kind of peace of mind.

The same goes for any other type of insurance, whether it be motorcycle insurance or renter’s insurance, you make a commitment to paying a little now, month by month, in agreement that if something happens within the terms of your insurance agreement, the insurance company will pay for the damages. It may seem very theoretical now, but it will be very real when you find yourself facing damage that you otherwise wouldn’t be able to pay for.

It’s a choice and it’s yours: would you rather pay a little out of pocket every month to be insurance against catastrophes or would you rather have that monthly payment back and possibly face huge amounts of debt and possible foreclosure when the unexpected strikes?

This entry was posted on Saturday, January 14th, 2012 at 4:30 pm and is filed under Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.