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What does “You’re Covered” really mean?

Once in a while, I hear people say, “Yeah, I have insurance for that.”  I used to be one of them.  I got into the insurance business when I was 41.  “Pre-insurance Larry” spoke to his agent when he bought property, built a house, bought a car, moved, bought an engagement ring, and when the bad guys broke into his car or stole his bicycle (we lived in Chicago).  I was the insurance equivalent of someone who only goes to church on Christmas and Easter.

I spent all of 10 minutes making insurance decisions that I had to live with – potentially for a lifetime.  I figured my agent knew what they were doing so I didn’t think too much of it.  I was focused on getting the bank the piece of paper they needed, and the piece of paper I needed if I was in an auto accident.  Other than that, I thought “I have insurance.  I’m covered.”

Wow.  Once I grew up and learned how insurance really works, I realized I didn’t understand much of anything about my insurance, and for years I was setting myself up to “learn the hard way” (AFTER something bad happens).  Fortunately, nothing terrible happened to me so I wasn’t penalized for being an uninformed and disinterested insurance buyer.

The odds are, you won’t have a huge accident and find out the hard way that your insurance doesn’t do what you thought it would do.  But… bad stuff happens.  From where I sit, I see bad things happen to all types of people.  Maybe that’s why I’m no fun at parties anymore?!?!?

For Michiganders, No-Fault Auto Reform has made it VERY IMPORTANT to understand what our auto policy is doing.  Here are some good questions to ask:  What coverage is mandatory vs. optional?  What does your auto policy pay for vs. your health insurance?  What happens if you raise your deductibles and use the savings to get more liability protection?  How can you protect yourself better from events that could really ruin your future?  Now is the time to have a good conversation with your insurance agent to understand what your policy covers and what it doesn’t.  And don’t forget about church!


For more information on No-Fault Auto Reform visit