Our family friend Napoleon Donaldson and his lovely wife Janet are not miserable when it comes to issues that deal with insurance. In addition to life and health policies, they have earthquake, pet and disability protection. They also took extended replacement coverage for their decent and pricey Los Angeles country home. They are also very religious but they believe in double insurance coverage instead of relying only on spiritual insurance. Most couples believe that God will protect their home or belongings from disasters.

When I met with them recently, I took up the issue with them about their "insurance freak" mentality. Hear Janet out "We try as much as possible to prepare for the rainy day." Janet is a mother of three, who, like her husband, is a practicing lawyer in Los Angeles.

But it was fire, not rain that proved their undoing. Eight months after they bought their house in 2005, it burned to the ground in a fire caused by an electric appliance and they discovered that their policy limits fell at least $250,000 short of what they needed to rebuild their home. Their insurance company told them point blank that they are under insured.

It should be noteworthy to state here that in a 2006 survey by insurance-services firm Marshall & Swift / Boeckh, it was discovered that 58% of homeowners nationwide are under insured, with homeowners covered to rebuild about 80% of their homes.

Most individual efforts to find out the right amounts of insurance coverage for their home, cars, pet, etc is usually a tricky and frustrating venture. Your insurance company or agent may be surprisingly of little help to you and may even steer you in the wrong direction.