24 Protecting Your Assets Protecting your money is easy—you put it in a bank. Protecting your health, your property, and your identity, however, are more complicated. To protect these, you need to take certain steps and precautions. To protect your health and belongings, purchase insurance Having insurance provides peace of mind. If you have the proper insurance coverage, you know that if you’re dealing with an accident, illness, or theft, your insurance will cover some or all or the costs (minus your deductible). What's a deductible? A deductible is the amount you must pay. For example, if your car insurance policy has a $500 deductible and you have an accident that costs $4,000, you pay the first $500, and your insurance company covers the remaining $3,500. The higher your deductible, the lower the cost of the insurance. Auto insurance Purchasing insurance of any kind (health, property, flood, life) is optional, except for auto insurance. Auto liability insurance is mandatory in virtually every state. Here is some important information regarding auto insurance options: Auto Liability Coverage has two components: 1) Bodily Injury Liability helps pay for costs related to another person’s injuries if you cause an accident. 2) Property Damage Liability helps pay for the damage you cause to another person’s car or property while driving. Collision Insurance helps pay to repair or replace your car if it’s damaged in an accident. ComprehensiveCoverageprotectsyourcaragainstdamagenotresulting from a collision, such as vandalism, fire, and theft.