How are you doing on your New Year’s Resolutions? Every year, most of us make resolutions about how to improve our minds, health and lives. And each year, around this time, most of us tend to lose steam. Lasting change is hard, but we have some easy things you can do to substantially protect your financial well-being in 2025. Read on for 3 easy resolutions.
First and foremost, get your insurance policy out of your desk drawer, glove box or filing cabinet and look to see if you have uninsured/underinsured motorist coverage (UM/UIM coverage). If you don’t, let us explain why you need it. Uninsured/underinsured motorist protects you and your family if you are injured in an accident with an uninsured/underinsured driver. Yes, insurance is required by law in Tennessee but 1 in 5 drivers on Tennessee roads have zero insurance, and many drivers only have minimum coverage which is woefully insufficient if it is a serious accident. In short, if you are injured in an accident with an uninsured or underinsured driver, your chances of a financial recovery are very slim unless you have uninsured/underinsured coverage. With this type of coverage, you would seek compensation from your own insurance company via the uninsured/underinsured portion of your policy. Nearly every week, we are contacted by a potential client who was seriously injured by an uninsured driver or one with minimum limits, and we must explain that there is not much we can do to help. Occasionally, the person who caused the accident has some assets, but that is very rare. Most people that do not have enough money to buy appropriate levels of insurance do not have a lot of assets that can be used to compensate an injury victim.
And that point brings us to the next resolution: check your own insurance policy to verify that you have sufficient insurance given your financial condition. If you have a nice nest egg in your savings account or own your home and you are carrying minimum coverage auto insurance, your assets are at substantial risk in the event you cause a serious accident. Through the legal process, a lawyer can seize your assets to help compensate the injury victim. As such, we recommend you assess your financial condition and then talk to your insurance agent about the adequacy of your insurance coverage. One final thought on this issue: at least in Nashville, there are a lot of Maserati, Range Rover and other expensive cars on the road. Most folks are not carrying sufficient property damage if they cause an accident that damages or totals one of those vehicles, so discuss the various types of coverage available on your policy.
Finally, if you have financed your car or truck, you should consider gap insurance. The best way to explain gap coverage is with an example. You bought a Ford F-150 pick-up truck and you still owe $30,000 on your car loan. You are involved in an accident and your truck is totaled. Your insurance company will only pay you $23,000 for the total loss of your truck based on fair market value, but if you have gap insurance it will pay the difference you owe on your truck’s loan, usually less your deductible. Without gap coverage, you would still have to pay off your car loan even though you no longer could drive the truck as it was a total loss.
So, there you have it: three easy resolutions to help protect you and your family in 2025. We wish everyone luck with their resolutions and a happy and healthy 2025. We are here if you need us.