The Millennial Minute: It’s Risk Management…..not just “Insurance”!

There is a BIG difference between having insurance and managing risk.  Not sure what I mean?  Here’s an example:  you purchase a new car and in order to drive it off the lot in NY you need to have proof of insurance- so you buy an insurance policy.  You now have insurance! Wahoo!  Let’s now fast forward a little and you are smiling from ear to ear driving that beautiful new car and somehow you are able to avoid the excruciating temptation to snapchat selfies while driving!  You are obeying the laws of the road and hence lowering your chances of getting in an accident.  Congrats!! You are now practicing good risk management! 

When I talk with clients, friends, family about what I do, the word “insurance” is used a lot.  It’s true, I am in the insurance industry, and I work with insurance policies.  But what I enjoy most about what I do has nothing to do with the 100+ page insurance contracts.  What I really enjoy is helping people understand and manage risk.

Basically I get the honor of helping people, both individually and as a business, work to discover what’s important to them and the risks they have jeopardizing it, and then developing a plan that best combats those risks.  Insurance policies are and will always be a part of risk management.  We insure for the disastrous events we can’t control.  Unexpected things happen to good, safe, honest people.  And when those events happen, those good people need other good people to help put everything back together.

But these insurance policies are only one part of risk management.  The idea is bigger than that. 

I know the idea of “risk management” can be a little abstract.  As I am writing this post I am realizing it’s more difficult to explain than anticipated.  In its most basic form, risk management is the daily decisions we make to protect what’s important to us.  As I said before, driving smart to avoid an accident is risk management.  Eating right, exercising, and not smoking are all parts of managing your health and lowering your RISK of health concerns.  Many of these decisions aren’t complicated and don’t need someone else to advise you on them…………

But good risk management can, and should go much deeper.  Let’s keep with the example of the new car: almost everyone who has car insurance thinks they are paying too much.  Every other commercial on TV has us thinking a better deal is a few clicks away.  But how many of us know what our deductible is?  How did you come up with that number?  Was there any thought or conversation put into that?  Should the deductible for a guy who is a mechanic be the same for a college student who doesn’t know what end of a wrench to pick up?  ….probably not.  The mechanic probably has the resources to take on more risk than the college student.  This is risk management.  Taking the INDIVIDUAL into consideration and understanding what they are willing to undertake and what risk they may need to transfer on to someone else.  Obviously the complexities of a good risk manager’s conversation with their client expand from there, but the basic philosophy is the same.  What is important to YOU the individual? What specifically do YOU need?  All these answers are different for every individual and all help to develop your custom risk management program. 

So if you are taking the time to read this, I encourage you to take a few more minutes to think about how you manage risk and if you have any idea what it is you need to protect.  And if you need help getting started, call me.  It’s what I do every day.  It isn’t being paranoid, or overly cautious, or a waste of time.  I might be a little biased, but in my opinion not taking the time to do so can be real………….Risky Business.