When choosing the proper amount of insurance:

Question

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It is important not to expose oneself to more loss than one can afford to lose. Choosing the appropriate amount of insurance should involve assessing one's financial situation and determining how much risk one can reasonably handle. It is not always necessary to insure every possible exposure, but it is important to ensure that one is adequately covered for the most significant risks. Choosing a deductible should also involve balancing the potential cost savings with the ability to pay the deductible in the event of a loss.

When Choosing the Proper Amount of Insurance