| How to Handle Your Insurances, Part 1 |
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Insurance is possibly the least exciting subject in personal finance. Don't think of it as a necessary evil. Understand it for what it is your protection against catastrophic loss. Get insurance coverage for your business, even your part-time business. Many homeowners insurance policies exclude liability coverage for any activity that earns any amount of money, no matter how small. Trying to reduce your insurance bill, by pretending you're not earning money in your small home-based business, will likely fail. Don't get left without liability coverage. Many businesses can get adequate coverage for a lower premium than you might expect. Ask your insurance provider for information on the type of coverage appropriate to your business. Beware of day-care providers paid under the table. If your day-care provider is paid without a paper trail, chances are the provider is not properly insured in case your child gets injured. Remember, many homeowners insurance policies don't cover activity that produces any income, no matter how small. Expecting your day-care provider to be able to fool the insurance company is courting disaster. You don't want to risk having no money available to cover costs for potentially crippling injuries to your child because of an uninsured day-care provider. To verify the coverage carried by your day-care provider, go to the source: the insurer. Speak to your day-care provider's insurer directly or ask the provider to have the insurer prepare a certificate of insurance, indicating that the day-care service is covered. While this option isn't as good as reviewing the insurance policy, it's one helpful step in a system that has no perfect method for verifying insurance coverage. |
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