The Third Rule: Keep Your Coverage Consistent.

We already looked at the first two rules of long-term coverage savings.

Now, let's look at the final, perhaps most important rule.

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Rule 3: Keep your coverage consistent.

Very important, but easily missed. This rule says if you're going to put a dollar value on something, at least make sure it's always the same value.

People break this rule all the time with liability coverage. They buy a certain level of liability on their homeowners policy, and a different level on their auto policy. While it's true that very different events have to occur to set these different policies in motion, the result is the same.

A serious auto accident for which you are found at fault has the same effect as a serious accident that occurs in your home for which you are "negligent". The same money and assets will be used to settle the claim.

So it doesn't make any sense to set your financial security at one million dollars for an accident in the home and at $100,000 for an auto accident. (Note: While it is true that some events are more likely to trigger enormous amounts of liability, it's difficult to reasonably set a "roof" on how expensive a bad auto accident could get.)

This rule goes for comparing different types of coverage, too (not just liability here to liability there). A lot of drivers who carry reasonable levels of liability carry little or no uninsured motorist coverage. Financially speaking, injuries caused to you by an uninsured motorist aren't any different from those you're responsible for causing to someone else in a car wreck.

Either way, you're paying the bills. (And, in fact, wouldn't you want the same or better protection for yourself and family, as that you give to a stranger?) It only makes sense: if you have to put a price tag on something, to at least mark it the same every time.

This is our favorite rule. It's so true, but so easy to miss.

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