<JUSTIN’S NOTE:> Please welcome Farmer’s Agent Chris Papaccio! He is our newest Arizona insurance agent who will be writing for us and providing us insights into the role of insurance. He will be writing alongside our other Arizona insurance agent Mark Fortuna, so please give him a warm welcome. Oh, and don’t worry — I will be whipping them both into ‘blogger shape’ soon.
Hello, and welcome to the first installment from My Insurance Advisors. We have joined with the Arizona Mortgage Team, to provide additional Information about Insurance and how this little word can impact your life and livelihood in very positive ways as well as very severely if you do not know what you are doing.
So I thought we would start with some simple questions:
Q: What types of Insurance should I have?
A: Pretty much everyone has some form of insurance in place — or should — Home Insurance (A.K.A Fire coverage in the mortgage industry), Auto Insurance, Life Insurance (for everyone in your family), and Health Insurance. If you own a business you also have Business Insurance (A.K.A. General Liability) and Workers Compensation.
Q: But the bigger question that I always get is What is insurance? Or Why do I need Insurance?
A: Simply put insurance was thought up a long-long time ago, like during the times of Columbus. The basic idea of Insurance is the transference of risk from one person to anther. So while Columbus was out sailing the ocean blue every once in a while a storm might come and wipe out a fleet of wooden ships. This was an expensive loss to all the businesses that had cargo on the ship. So the royalty pooled together a “fund” where if one lost a ship that guy did not lose everything and become a peasant.
Same translates into our everyday use of insurance. We all buy auto insurance that is a very small price to transfer our risk to a larger pool. So if one of us goes out on the road and causes an accident or sends someone to the hospital and that bill totals $25,000 or $50,000 or into the millions… (yes it happens – for example, what’s the value to you of your son or daughter). That one person does not go into servitude to the family that he injured; the pooled funds of all us policy holders pays out those injuries and everyone’s expenses are covered.
To tie this up, you want to have anything that you value that you can not go out on your own and simple write a check to replace insured: Jo-lo’s bootie, your wife’s diamond, your life, you home, etc. and we all need this because of Murphy’s law– anything that might go wrong …. We all know the rest of that sentence.