In Your Interest – by Valerie Rumbough

The economy has caused many of us to stretch ourselves financially. One area that individuals may be able to save is with insurance. It is very important to periodically review policies you have on your home, auto, and life.

Valerie Rumbough

Home prices have fallen in many areas. If this is the case for you, you may need to decrease the replacement cost on your policy. However, be careful to allow for a “cushion” to cover inflation. Remember that you are only insuring the replacement of your home, not the land it sits on. Be careful, however, to keep adequate coverage for the contents. List the items in your home that would need to be replaced. Make pictures of the contents and store them in your safe deposit box. Compare the value of your contents with the amount that is covered under your policy to make sure it is adequate.

Car insurance is different from homeowner’s insurance in that it covers a car’s depreciated value, rather than the replacement value. Inform your insurance carrier if you have high mileage on your car. This decreases the car’s value, which in turn decreases the premium. Increasing the deductible on both your homeowner’s and your auto insurance will save money. Also, combining both policies under one carrier will often generate a discount.

Life insurance is often misunderstood and many people are over-insured in this area. Review what it would take to support your family if you were to pass away today. Life changes, such as children leaving home, increased savings in retirement and other accounts, and insurance provided by employers may decrease the amount of insurance an individual may need. If you are not sure how to figure out the amount you need, consult with your attorney, CPA, or financial professional.

Be a good steward of the resources God has blessed you with.

Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at (800) 723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.