Price vs. Protection: Who Wins?

Bren Sheriff
Bren Sheriff


Price vs. Protection: Who Wins?

When I meet people at seminars or after speaking engagements, many tell me they never realized how exposed their assets truly are. It is an eye-opening moment. Most people believe they are protected—until they discover how easily everything they own can be put at risk.

Let me put it plainly: if you own a car in your name, your financial life is, in many ways, riding on the hood of that car.

Here is the reality. If you own your car, your home, and other assets in your name, and you are involved in an accident that seriously injures or kills someone, you can be sued. And if the damages exceed your insurance coverage, your personal assets—your savings, your home, and more—can be used to satisfy that judgment.

Now, I can already hear some saying, “Not me. I have full coverage.”

That statement is more common—and more dangerous—than many realize.

Many people believe the term “full coverage” means they are fully protected in any situation. In reality, “full coverage” is simply an industry term referring to three types of auto insurance—liability, collision, and comprehensive coverage. It does not mean unlimited protection, nor does it guarantee that all losses will be covered.

In my experience, a significant number of individuals who request “full coverage” assume it will take care of any loss, no matter how large. Unfortunately, that is simply not true.

What is even more concerning is that this misunderstanding often goes uncorrected. Some insurance agents fail to clearly explain what “full coverage” actually includes—and more importantly, what it does not include. At the same time, many consumers focus primarily on price, not protection.

In fact, when people request an auto insurance quote, one of the most common responses is, “Find me the cheapest price.” When I hear that, I know there is a much deeper conversation that needs to take place.

Yes, you may secure a low monthly insurance premium—but at what cost?

In any situation involving insurance, when the choice is price versus protection, it is in your best interest to choose protection. That is the only true reason to purchase any kind of insurance.

There is an old saying: “You get what you pay for.” While that may sound reassuring, it often does not apply to insurance. In many cases, people get far less protection than they believe they have purchased. Insurance should always be selected based on coverage—not cost.

I have never heard anyone brag about how low their premium was after an accident, especially when their policy failed to cover their losses. At that moment, the focus quickly shifts from price to protection.

There is also a Latin phrase, caveat emptor—“buyer beware.” It may sound old-fashioned, but it remains highly relevant. Too often, people lose sight of the true purpose of insurance. Let me be clear: the primary purpose of insurance is to provide financial protection under specific conditions and up to defined limits.

And those limits matter.

If you have what is commonly called a “full coverage” auto policy, it typically includes liability, collision, and comprehensive coverage. But none of these provide unlimited protection. Each has limits—and those limits determine how much the insurance company will pay.

Consider this example under Illinois minimum coverage requirements: $25,000 for bodily injury per person, $50,000 per accident, and $20,000 for property damage.

Now imagine you are at fault in an accident involving four injured individuals. Each requires medical treatment costing $25,000. That totals $100,000. In addition, the other vehicle is totaled, with a value of $50,000.

Your policy, however, will only pay up to $50,000 for all injuries combined and $20,000 for property damage.

That leaves a substantial gap.

And here is the question many people never ask—until it is too late: who pays the difference?

The answer is simple—you do.

That gap can put your savings, your home, and your financial future at risk. This is why understanding your insurance coverage is not just important—it is essential.

The goal is not to have insurance. The goal is to have enough of the right insurance.

Because when something goes wrong, what you thought you had—and what you actually have—can make all the difference between being a winner or loser.  Price vs. Protection: Who wins?

The best to you and yours,

Bren Sheriff, CSA

THIS WEEK’S QUIZ: What is a practical rule of thumb when buying auto insurance?

Answer to last week’s quiz: Currently the Required Minimum Distribution (RMD) age is 73 for most traditional pension accounts. You MUST begin taking distributions from your pension on April 1 of the year AFTER you turn 73 and by no later than December 31 every year thereafter..

For Questions or Help: 773-817-0601 or basheriff1@gmail.com

Disclaimer: The illustrations presented in this column are not, nor are they intended to be, legal, financial, or any other licensed professional advice, you should contact the licensed professional of your choice for advice on your individual situation.

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