There are many ways we can “find” ourselves in debt. It may be through over-extending ourselves by taking out too much credit, losing one’s job and not being able to afford to repay the debt we have, there are many ways to wake up and realise, we are in debt.
There are also catastrophic events that can cause us to have financial issues, and possibly be in debt. Fortunately, as we will see, these may not be prevented, but they can be covered or insured for.
Recently there was a major fire in a block of flats near where I live, so near in fact, it was placing my home, and my neighbour’s homes in jeopardy!
While this was worrying, fortunately the fire brigade arrived very quickly and put out the fire. Also, no one was injured.
The cause of the fire is being investigated, and since no one was home when the fire started, arson is being suspected, as well as an electrical fault. That is a wide spectrum of causes.
The gentleman who lived in the flat obviously got the shock of his life when he returned home to find his home not there any longer, at least in the not being habitable any longer.
Now begins the process of cleaning up, and sorting out the damage, and trying to do the work required to make the flat a place you can live in again.
And that will take money!
Where does this money come from?
It can come from credit, loans and credit cards, placing oneself in debt….or it can also come from an insurance policy. Either a contents or building insurance policy depending on if you own or are a tenant in your home.
Insurance is a very valuable tool in financial planning. It is a way to protect our assets, be it our life, car, health, or property.
Insurance is a way of also insuring, pun intended, we do not fall into debt.