Sufficient homeowners insurance
If you own a home, you need to be carrying homeowners insurance. But that’s not all: You need to be carrying enough insurance. If your coverage is insufficient, you might pay lower premiums, but you might also end up in hot water should disaster strike.
It’s a good idea to review your policy every now and then to make sure it does enough for you. For starters, it should cover the cost to rebuild the home, not just what you paid for the home – construction costs can go up significantly over time. Call your insurer and review your policy with them.
Your policy should cover your personal possessions, as well. It’s smart to inventory them in detail; you might want to walk around and take photos or video. Focus on high-value items, such as jewelry, electronics and expensive collections. You may need more than what a basic policy covers, so check with your insurer.
Most policies will offer at least $100,000 in liability coverage, which comes into play if you get sued. It’s often best to get at least $300,000 to $500,000 in coverage, though – and perhaps more if you have substantial assets and a lot to lose.
Another good idea for those with substantial assets is umbrella insurance. It’s a separate policy, often surprisingly inexpensive, that can provide additional coverage beyond the limits of your other policies.
Depending on where you live, you might want extra coverage to protect you from various disasters such as flooding, wildfires, sinkholes and earthquakes. Standard homeowners insurance policies often don’t cover such events. You can learn what risks your home faces at sites such as Riskfactor.com and FLASH.ORG.
Ideally, you’ll also want your insurer to cover some or all of your living expenses if you aren’t able to live in your home for a while.
It’s smart to shop around to find the best coverage you can afford from wellrated insurers at least every few years. Having sufficient coverage can save you a lot of heartache as well as money.
Limit orders didn’t work
I think of dumb investments being mostly buying for the wrong reason or not selling due to greediness. This regrettable investing move of mine was the latter. I held on to my shares of Disney too long, trying to milk every last dime out of the price before selling. I kept placing limit orders to sell, but the price never rose high enough to trigger the sale. I eventually gave up. Then the stock sank sharply. Ugh. – Scott, online
The Fool responds: Limit orders can be handy when you want your brokerage to sell (or buy) shares of a certain stock only if the price rises (or falls) to a specified level. But using them, you do run the risk of never selling or buying if the price never goes where you want it to. It can seem reasonable to wait for a more perfect price before taking the plunge. However, it often makes more sense to just sell your shares if you no longer have faith in the company or have found a better investment – or to just buy shares if you have great longterm expectations for a company.
Disney’s stock recovered after that drop, and set a new high in 2021, but it has fallen sharply since then, presenting an attractive entry point for longterm believers. (Do you have a smart or regrettable investment move to share with us? Email it to Tmfshare@fool.com.)