American Property Casualty Insurance Association
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Jeffrey Brewer







March 31, 2014

April is Financial Literacy Month
PCI Says Protect Your Financial Future by Understanding Your Insurance Policy

CHICAGO - Recent earthquakes, floods, mudslides and tornadoes serve as a reminder that all Americans need to be prepared for the unexpected and April, Financial Literacy Month, is an excellent time to make sure you’re fully prepared for life’s emergencies, according to the Property Casualty Insurers Association of America (PCI).

“Natural disasters and other types of emergencies can occur anywhere, any time and quickly change lives in a moment,” said Chris Hackett, director of personal lines for PCI. “However, there are many things you can do to ensure your financial life and goals are protected from calamity. Using financial literacy month to further sharpen your money management skills and gain a better understanding of the banking, credit, investment and insurance services you use would be a very good start.”

The Federal Financial Literacy and Education Commission outlines Five Principles for managing and growing your money.

EARN – Make the most of what you earn by understanding your pay and benefits. Read more...

SAVE & INVEST - It’s never too early to start saving for future goals such as a house or retirement, even by saving small amounts. Read more...

PROTECT – Taking precautions about your financial situation, accumulate emergency savings, and have the right insurance. Read more...

SPEND – Be sure you are getting a good value, especially with big purchases, by shopping around and comparing prices and products. Read more...

BORROW – Borrowing money can enable some essential purchases and builds credit, but interest costs can be expensive. And, if you borrow too much, you will have a large debt to be repaid. Read more...

“An important key to financial security is understanding your insurance policies and having adequate insurance coverage,” said Hackett. “Whether you’re just getting started on your own, are more established and purchasing your first home or at retirement age, your insurance needs are unique to your specific circumstances. You will benefit from taking the time to create financial goals along with an emergency plan. As part of that process consider the financial implications that a natural disaster or other emergency could have on your family and finances. By having a simple conversation with your insurance agent or company on what your homeowners and auto policies covers you can take steps to ensure you’re adequately protected.”

Steps to Financially Prepare for a Disaster

Insurance is the foundation for keeping a family’s economic safety net strong. The following provides five quick steps to help you financially prepared for a disaster or emergency:

1. Conduct a yearly insurance review of your insurance policy and limits: This will help to ensure you are adequately insured and better able to weather a catastrophic loss. To help you determine how much coverage you may want, check with local builders for the current costs associated with building new homes, and then add at least 10-20 percent. Also, ask your agent or insurer about deductibles and discounts that may be available. Make sure you know the amount of your deductible - it may be based on the value of your home or be a fixed dollar amount. Higher deductibles can help keep the cost of insurance affordable.

2. Talk with your insurance company or agent about additional coverages such as flood or earthquake insurance. The standard homeowners policy does not cover losses that result from floods or earthquakes.

3. Consider things you can do to reduce damage to your property: Taking action to reduce the amount of damage that may occur when severe weather occurs can reduce insurance costs and help speed the recovery process after a natural disaster.

4. Inventory your household items, and photograph or record them: An inventory lists your home’s contents so you can quickly and easily account for all of your belongings and report the loss to your insurance company. Without it you may have to rely on your memory to determine what you lost. The home inventory will help speed up the claims process and ensure you are compensated fully for your loss. Keep the inventory and your insurance policies in a safe place, such as a safety deposit box or online.

5. Prepare for power outages, inconveniences and scams that could affect your finances: When the power is out you may not have the ability to pump gas, withdraw cash from an ATM or pay for things electronically. So, as severe weather approaches, fill up your gas tank in case you have to evacuate, have some cash on hand for emergencies and charge all your electronic devices. After a storm, insurers may be able to assist policyholders with paying for expenses such as temporary housing and eating in restaurants if their property is determined to be uninhabitable due to the storm. Additional living expenses coverage can help homeowners and renters with the increase over normal living expenses.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write over $195 billion in annual premium, 39 percent of the nation’s property casualty insurance. Member companies write 46 percent of the U.S. automobile insurance market, 32 percent of the homeowners market, 37 percent of the commercial property and liability market, and 41 percent of the private workers compensation market.