Carruth Insurance Blog
You and I have worked hard to provide a comfortable life for ourselves and our loved ones into retirement.
Some of us have worked for 40 years to accomplish it. For those of us in good health with good genes, the fruits of our long labor may need to sustain us for 30 years or more.
If you are like me, you spend a good deal of time planning for what might go wrong.
If you’re like me, you spend a good deal of time planning
Typically, market corrections come to mind like the recent COVID-19 scare. We might focus on asset allocation, P/E ratios, avoiding unnecessary fees, re-balancing, or diversification. But we don’t like to consider the possibility of the unthinkable and its effect on our financial plans.
An associate recently shared a story with me about their client and friend. Like you and I, his friend worked hard for decades and had retired comfortably a few years ago. While on a short driving vacation, they stopped for refreshment. Backing out of their parking spot, they unfortunately had an accident with a motorcycle. Both parties to the accident did everything right, the motorcyclist was hearing a helmet. Despite all this, the motorcyclist unthinkably died. There were no charges filed, no tickets issued, but they were later sued in civil court by the motorcyclist’s family. I cannot imagine the grief felt by either party.
Their insurance carrier settled out of court. The $300,000 liability limits on their auto policy were insufficient to cover the settlement as you might imagine. Fortunately, they were adequately insured. They were wise to heed the recommendation of their insurance agent to purchase an umbrella policy that covered the difference, protecting their future.
My father once told me that “We can learn something from anyone, even if it’s what not to do.”
Years ago, I had an old tree in my front yard. It was an ugly tree. An elderly man would stop by every spring in his old truck. Looking for work, he asked to let him cut it down. He must have been in his 70’s. I admired his tenacity and work ethic and I regretted that he had to work at his age so one day I said “yes”.
He was amazingly strong and healthy and did a great job for a good price! But I took a risk that I should not have.
I did not ask for his insurance certificate because I was certain he did not have one. Without him having General Liability and Workman’s Compensation insurance, I would have been liable if he were hurt. If he were injured, my Homeowners policy would have paid for first aid and medical expenses up to $5000. If he had been disabled or killed my Homeowners liability coverage would be activated. But that was only good for $300,000, a fraction of my potential liability.
When we hire individuals to work on our property we should always ask for evidence of General Liability and Workman’s Compensation insurance. It may cost a little more to hire a reputable and adequately insured contractor, but protection of your future is included in that cost. Even if no one is hurt, they might unintentionally cause damage to your property that neither party could afford.
My favorite question to ask when I am looking for a solution is “What would you do if it was yours?”.
I like to partner with fee-only financial advisors like Justin Brownlee of Brownlee Wealth Management and others like them because they have no commercial obligations with respect to their recommendations. Because you are the only source of their livelihood, they have a fiduciary obligation only to you, their client. When you are dealing with someone under a fiduciary obligation, you don’t have to ask my favorite question.
Investopedia defines fiduciary as “The highest legal duty of one party to another, being a fiduciary requires being bound ethically to act in the other's best interests. …”
Carruth Insurance is an independent insurance agency. Because we are independent, we’re not obligated to a single company that dictates what to offer to our clients. We have access to scores of insurance carriers offering auto, home, life, annuities, health, and all types of commercial insurance. This independence frees us to assume the fiduciary responsibility to our clients, finding them the best coverage at the best price. At Carruth Insurance, we work with your fee-only financial advisor as part of their extended team to ensure your retirement future is adequately insured and protected with the best policy available regardless of our interests.
Have a discussion with your advisor soon about your defensive plan for protecting your wealth against risk. Ask them to engage us soon for a complementary insurance review.
Book a meeting with me when you’re ready to talk about your insurance needs.
All the best,
Richard Carruth is Principal and Owner of Carruth Insurance.