Is There Insurance for Your Investments?
Ask Money Girl: Is There Insurance for My Investments?
Q. Is there some type of insurance you can buy to protect your investments if the stock market crashes again?
A. There’s no insurance against losing money due to volatility in the stock market. However, the SIPC (Securities Investor Protection Corporation) does offer help to investors in certain situations. If an SIPC brokerage goes out of business and they owe you money, the SIPC works to return your missing cash and securities (such as stocks, bonds, mutual funds, and exchanged-traded funds).
If the brokerage doesn’t have enough funds to satisfy all customer claims, the SIPC will supplement the distributions. They’ll pay up to $500,000 per customer, including $250,000 for cash claims. Find more information about SIPC coverage and search the member database at sipc.org.