The No.1 Rule for Buying Insurance


We like to feel like insurance can protect us from anything. When we get hurt, our health insurance picks up the tab. Car accident? Car insurance will pay for most of it. Death? There’s life insurance to take care of that (wait a minute…).

The point is that we so often buy insurance because we’re afraid of what could happen to us. That is, our decision to insure tends to be reactive rather than based on real reflection about what the specific coverage will cost and what it will actually do for us if our worst fears are realized.

And because there’s insurance for just about everything you can possibly imagine, it can be hard to know when to say no. The good news is that there’s one very practical rule that applies to buying insurance (along with a whole lot of other things in life). Ready for it?

It’s moderation.

And just like you might apply moderation to how much you eat or how much time you spend playing Angry Birds on your smartphone, making decisions about insurance coverage involves using your common sense. Find out how in my new article on

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