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Are You Sure You're Wisely Insured?

Are You Sure You're Wisely Insured?

| April 01, 2019

An upcoming wedding has this father of the bride suddenly attuned to the wedding industry. I’ve just learned about wedding insurance policies and learned that you can insure against “cold feet” (no kidding).

The sales pitch is weddings cost an average of $27,000. Imagine what a snowstorm or a flu outbreak among the bride and her family could do to the big matrimonial day. A postponement may cause a loss of non-refundable cash deposits to the whole range of wedding vendors. You can also protect against “change of heart.” If the bride or groom gets “cold feet,” then the insurance still pays.

The basic purpose of any type of insurance is to transfer a risk that you’re not willing or able to take to someone (usually a company) willing to take the risk in return for a premium. Thus, you should buy insurance when your potential loss is a very significant amount and the premium is reasonable compared to that potential loss.

Is purchasing wedding insurance wise? Well, it depends on how likely it is that the feared risk occurs and how much loss may result. Then, the risk is compared with the cost of the premium. If the wedding insurance policy costs only $10, then you may say that’s reasonable compared to the risk. What if the premium costs $1,000? Then, perhaps your answer is different. (In case you’re curious, a wedding policy may cost around $400).

Besides the “cold feet” insurance example, what insurance is probably necessary for most folks? I’d suggest health insurance, automobile liability insurance, and home liability insurance. If you have dependents, then life insurance and disability is important coverage. If you’re older and have significant assets, you may not need life insurance any longer, but may need long-term care insurance.

What insurance can you probably do without? Electronics equipment warranties, mortgage life insurance, auto collision and comprehensive (if your cars are older), cancer insurance (if you have health insurance already), and credit card payment insurance.

Jeremy L. White