Tragic Last Words: "It's Paid For, I Don't Need Insurance"

"I don't need insurance, it's not worth much."

"Can I drop my insurance?  I paid the loan off."

"It's paid for, why would I insure it?"

In my career I've heard a few statements like these.

The answer is simple. If it was lost, stolen, or destroyed in a disaster like a wildfire or earthquake, could you afford to replace it out-of-pocket?

Whether it's paid for, or you owe on it outright, it's going to be costly to replace if it disappears.  

Regardless your economic level, your cars, your home, you business, all make up a large part of your assets.  Loss of them hurts financially, and emotionally.  The financing situation is irrelevant in the end. 

No one likes paying for insurance, until they have to make a claim.  Then it seems cheap in comparison.

Recently one of those random fires we're used to in Southern California started.  We usually identify them by which freeway it's closest to. We're a car culture so freeway closures are big. This one started off the 15 Freeway.

A man buys a ranch (and about 100 livestock) to be his retirement home and source of retirement income. It's paid for so it should be a great source of security and income the rest of his life.  

Then one hot (and probably windy) day a fire starts, the area's evacuated, and by the time he's allowed back in, it's all gone.   The ranch.  Most of the livestock.



Click HERE for the photo gallery.

Click HERE for the whole article.  Here's an excerpt:

But he said the fire had dashed all hopes of retirement, particularly since he had no homeowner's insurance or the resources to restore the ranch.

"There is no way to rebuild," he said. "My dream of retirement has been taken away from me."

Note:  The internet version of this story doesn't give as much side info as the paper version did.  The newspaper version twice mentions in the captions that the home / ranch was completely paid for.  He spent years building his assets, lowering his debt,  and developing this plan.  In one afternoon, it's all gone.

I don't know for sure, but what were the odds he didn't insure it since it was "paid-for." When it's paid for, we have a false sense of security that it's "free-and-clear."

It's not "free-and-clear" since its not cheap to replace.

I was hesitant to blog about this story since it so closely involves one man's tragedy, but in reality, this happens a lot in a smaller scale, and similar stories will happen again. Not all make the news.  Didn't want to get too preachy, but sometimes harsh lessons need to be pointed out.

Protect what you love.  Insure what you need to survive.

Related blogs:
Do you need comp and collision on older cars?
Marine leaves life insurance to charity and his friends.
Earthquake Insurance: Should I?
Single Parents: Neglecting Life Insurance Despite Needs
Umbrella liability policies
Protecting the Family Business

* The content of this blog is for informative purposes only. It does not reflect official standing of any agent, agency, or company mentioned on the blog. Nor is this blog necessarilly an endorsement. Please consult with your insurance, tax, or legal specialist before making any decisions. This blog is purely meant to spark the thought process.