My Insurance Philosophygreenspun.com : LUSENET : Country Families : One Thread
Insurance is a tough issue. When you are at an agents office, it can be very overwhelming to decide what types of coverage you want or need. So do your homework first!
Here are the basics: Vehicle Insurance- Most states require a certain mimimum just to drive. It is probably a good idea to increase this amount as much as you can afford. Even a small accident can cost thousands of dollars in car repairs, and for medical payments if someone is hurt. I have been driving for 17 years and have never had an accident, so our rates are pretty good. We have opted for very high coverage becasue we own our house, and don't want to risk a lawsuit. But when the agent quotes you a price for these high amounts, you may go into shock!! Here is the trick, raise your deductible as high as possible. If you always have at least $1000 in your savings, you can have a $1000 deductible. This will save you LOT of money, depending on the insurer.
House Insurance- Try to get "replacement" coverage. This will replace your house back to the way it was originally. Your agent should update the value of your home frequently. Ours does once a year. We know peoplw whose houses burned down, their policy had not been up-dated for years, and they received $25,000 for a home worth at least $75,000. Again put the deductible as high as you can. I have told my agent I am not going to call him if a kid breaks a window, or my VCR is struck by lightning! I am going to call only for MAJOR catastrophes. So my deductible is high, and I only pay $230 a year for over $220,000 worth of coverage. (house and contents)
Life Insurance- This can be hard to afford, so make sure the house and cars are covered first. Then, if you have children, at least get a small policy. This is what we did. Then later, our agent had a special offer for "loyal" customers and we were able to get 4 times the coverage for $10 more a month. We did have to have a physical for the higher coverages, but we passed it with no trouble, (cholesterol, BP, urinalysis, AIDS, and some other stuff that I have no idea what it was! but our numbers were all on the low side of the normal scale they enclosed in the report...) Life Insurance is probably something we will not carry after the kids are gone. This is just our personal opinion. As we save money each year, our savings should grow to the point it is not necessary for us after our kids leave home. It gets more and more expensive the older you get (of course)
We have all of our policies with one agent. He gives us insurance check-ups once a year. We meet and go over all of our policies, he is a great agent. Because we have all of them with this company, our rates on each policy are much cheaper. It really helps the budget, because we are able to have a monthly payment plan. Our payment is deducted directly from our checking once a month. No more trying to come up with $2-3 hundred to pay insurance. I like having a consistent budget.
Health Insurance is covered through work, we do have a deductible each year which we rarely meet. This year because of Brady's broken arm, we will. The cost for one broken arm, so far is over $1000, and he didn't have to have surgery!
-- Melissa (email@example.com), November 09, 2001
I know that insurance is kind of controversial among homestead folks, but I will not go with out health insurance. Fortuantly, we have good insurence through my husbands work, but we scaped it up before he got this job. Its bad enough to worry over an illness or injury without worring about paying for it. I had to take my daughter to a cardiologist a couple of years age-(she's fine, just a slight heart murmer) but his bill was over $1,000! We paid the $20 co-payment. We have minimal insurence on the cars because we drive old car-mine is twenty years old, and we could pick up another one for $1,000. We are both extreamly cautious drivers with excellent driving records-I know accidents can happen to anyone, but I believe they are less likely to happen if you are NOT talking on a cell phone, or listening to the radio or have disruptive children messing around in the backseat. We are very strict about quiet behavior in the car, and EVERYONE in my car wears a seat belt.
We have replacement insurance on the house and contents. Its cheap enough, and like Melissa, we don't call about broken windows and such stuff.
My husband has life insurence, again through his company. We don't have it on myself or the kids thats the one place we had to cut.
Some insurence is automatically deducted-Husbands work. What I did with the car/house which is through a seperate company, is figure how much it cost a year, divide by 12 months and each month put that amount into savings so we have the bills covered when its time to pay.
-- Kelly in Ky (firstname.lastname@example.org), November 09, 2001.
On vehicles, I'd say 100/300/50 on liability is minimum for most people though some states (sadly mine is one) require only 25/50/10. IF you are going to have full coverage insurance try to maintain as high a deductable as you can live with. Of course, if there's a loan, you must not only have full coverage but usually the lender will specify the maximum deductable.
IF you have your vehicle paid in full then it becomes a decision you have to make regarding full coverage or not. My rule of thumg is that if you can afford to take the loss if you are 100% at fault in an accident which renders your vehicle undriveable and unrepairable, skip full coverage. Otherwise, you need it.
The homeowner's coverage to which Melissa refers is commonly known in the industry as HO-1 coverage with replacement cost.
On health insurance, again, I would recommend at least what is known as 'catastrophic coverage' with a very high deductable designed to cover only the very worst situations with deductables in the tens of thousands of dollars. Again, you need to apply what you feel you can cover when you're deciding what deductable to consider.
As to life insurance, term is always a better deal on it's face in terms of coverage per premium dollar. If you're like me and your kids are going or gone, you may not need any at all. I don't. I have one child married and the other graduating college in May with a job lined up already. If I get hit by a bus tomorrow there's more than enough to bury me and divvy up besides. I have no one now I need to consider leaving a large insurance policy.
I hope this helps.
-- Gary in Indiana (email@example.com), November 09, 2001.
My mother died of cancer 12 years ago. She had been taking chemo off and on for over 7 years before she tried a bone marrow transplant that didn't take. That said, I can't imagine what my dad's life would be like now if they hadn't had good medical insurance. That is one I would definitely try to always have, no matter what deductible you have to take. A catastrophic illness can last a long time now with modern medicine and bankrupt even insured people. You never know when you will not be able to work or the spouse may need to be a full time caregiver. Because of my family history, we also carry a cancer policy ($10/mo) on me. Something to think about, check your family history.
-- Ivy in NW AR (firstname.lastname@example.org), November 09, 2001.