If we’re savvy and choose to take responsibility for our personal finances, we buy insurance — for our homes, cars, health, and life. And while it might seem like you’re spending a lot of money on nothing — especially if your life is relatively claim-free — it’s good to remember that what you’re really buying is protection: coverage for your assets, your income stream, your dependents, and more.
A common mistake, though, is to overestimate what your coverage really protects you from. All the risks that are excluded from prevalent insurance policies are spelled out in the fine print. But when’s the last time you scoured your insurance documents?
Here are some examples to note so that you don’t make a costly mistake assuming you’re covered for a potential mishap.
Motley Fool contributor Selena Maranjian, whom you can follow on Twitter, holds no position in any company mentioned.