When it comes to personal risk management controlling and reducing our risk is where we have the greatest power over the cost of the worst case scenario. Those who pay attention to the facts that make a risk more or less likely and control what they can will not only avoid some of the risk completely, but may also have discounts on their insurance premiums.
Most homeowner insurance companies offer discounts for insureds with alarm systems, or other security devices. Other discounts may be available for homes with fire sprinkler systems. These things not only reduce the risk your home will be broken into, or catch fire but they also lower your insurance premiums. Homeowners may also control the risk of loss by choosing the location of the home, and maintaining it properly. Regular service to furnace systems, fire places and other mechanical systems in the house lower the risk of malfunction resulting in injury or property loss. Clearing shrubs, bushes and other vegetation away from contact with the home lowers the risk of wildfire loss, not to mention some bugs. A well maintained roof provides security in the event of heavy rain or storm.
Everyday, we take controlled risks and look for opportunities to reduce the risks we do face. Some people will always be bigger risk takers then others. Community leaders, political figures and celebrities all face risk the average Joe doesn’t even consider. Some of us may simply decide to accept the position as a leader in our child’s youth group and not understand the implications of the risk. Parents who accept responsibility for other people’s children might control their liability risks by making sure they are never the only adult in charge of a child, and by increasing the amount of personal liability insurance we carry.
Parents might choose to reduce the risk of financial devastation in the event one or both were to die suddenly. Writing a Will or setting up a Living Trust and by purchasing adequate amounts of life insurance to meet their family’s needs. At the same time parents may choose to pay better attention to their health and make fewer physically risky choices.
The key point when looking at the ways you might control or reduce your own personal risk is to consider what the worst case senior might be and what you can do to avoid that loss completely, or recover from it should it come to be. It’s easy to ignore looking at the “what ifs?” and hope for the best, but it is an important part of financial stability to consider all the possible things that might go wrong and control or reduce what you can. The next Blog in Personal Risk Management will discuss Eliminating Risk completely.
Related Blogs:
- Personal Risk Management
- Risk Management: Protecting Your Assets.
- What is “Risk?”
- Retained or Accepted Risks
- Controlling and Reducing Risks
- Eliminating Risks
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