Pointers On Insurance

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Pointers On Insurance

Postby dpillai » Wed May 23, 2007 5:07 pm

This is going to be vague question and I sincerely apologize for that.
As I continue to take stock of my fiscal status I am at a point where I am trying to figure out my insurance requirements and take necessary steps to meet them.

I am looking at
1. Car insurance - which I think I am highly underinsured and I need to do something about it
Here are details
Bodily Injury liability and Property Damage Liability - limit - 25k/50k/25k ( what do these splits mean...i know I should know the answer )
Uninsured motorist bodily injury - limit - 25k/50k
Underinsured - limit - 25k/50k
Medical expense - limit - 5k
Comprehensive $500 deductible
Colllision $500 deductible

2. Life Insurance, Health and Disability
I haven't done anything on these and if anybody could provide any online references or books, or tips..something that will get me going in the right direction, I would be very thankful.

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Postby elasticdog » Wed May 23, 2007 8:29 pm

Car insurance can and should be different for people in differing situations. Some more info that might be helpful would be, how old is the car that you drive, what kind of car is it, is it paid off/leased/still making payments, how old are you, do you have a lot of assets to protect in the case of an accident, etc. Answer some of those questions, and you'll get much better responses...

The split for coverage amount means coverage for individual injury/total per accident injuries/property damage

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Postby jdroth » Wed May 23, 2007 9:04 pm

Dpillai, the only insurance post that I can remember posting is actually <a href="http://www.getrichslowly.org/blog/2006/07/28/10-expert-tips-for-saving-on-car-insurance/">10 expert tips for saving on car insurance</a>. I have a friend who works for an insurance company, and she gave me some tips.

Elasticdog is right that many of the answers will depend on what sort of vehicle you're driving.

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Postby brad » Thu May 24, 2007 12:47 am

For life insurance, I wouldn't bother unless you have a family.

Disability is a different story. I never gave much thought to disability insurance until I suffered a severe repetitive strain injury (from computer use) that was so bad I had to quit my job. I couldn't type for more than 5 minutes without my right hand going completely white and numb. For a person who makes his living writing, this was a very scary situation. I went through five years of physical therapy, massage therapy, and other treatments to ease the symptoms, and worked for a few years using voice-recognition software, and now am back to typing again although I have to be constantly vigilant. The whole experience made me realize how vulnerable I was, and really how easy it would be for anyone to become disabled to the point that they would either be unable to earn a living or would have to take a huge reduction in pay.

So I'm a firm believer in disability insurance. Often you can get at least short-term disability insurance through your employer; usually it covers something like 80 percent of your salary and you should remember to update it periodically as your salary changes. You should consider springing for long-term disability as well; many employers offer it as an option and I do think it's a good idea just in case. You can't count on social security to cover you if you can't work. My former brother-in-law became permanently disabled in his early 40s and spent a lot of time in court suing the Social Security Administration to get his benefits; he was lucky to win.

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Postby plonkee » Thu May 24, 2007 12:54 am

silicon valley blogger had a post a while back on disability insurance that I used as inspiration to get mine sorted out.
In mathematics you don't understand things. You just get used to them. John von Neumann

uk personal finance and religion and atheist

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Thank you so much

Postby dpillai » Thu May 24, 2007 7:08 am

for all the advice.

Here are the details that some of you requested.

My dinky little car is a 2002 Ford Focus Wagon w/ 55k on it and all paid up, no accidents so far. We just have one car.

Personal Details
31 yr old software engineer married to 25 yr old teacher in the making. No known health issues (unless I sprain my wrists/back trying to learn olympic lifts)

Assets - I don't have any debt :) besides that I am pretty much broke, no home yet (may be in 2 -3 yrs).

The main driving factor is that we are planning to have a kid sometime next year and I am all freaked about it :) (just financially though..i think) I just want to make sure that i have the right kind and right amount of insurance to take care of the family.

Also, my company is going to be offering a group Short Term Disability and Long Term Disability (the insurance firm - www.TheHartfordAtWork.com) and I wanted to make sure I do my homework and understand the basics. Checking the site the insurance site out they do provide Life insurance too but I couldn't figure out whether it was cash value or term or anything.

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Postby onebigmortarboard » Thu May 24, 2007 8:38 am

brad wrote:For life insurance, I wouldn't bother unless you have a family.

I bothered.

Making my father the beneficiary of my employer's basic life insurance policy (I pay less than $300 a year for a payout of 2X my annual income, although this multiplier will decrease as I age) was a priority for me when I started the job. Given that my mother was already on medical retirement at the time, I wanted there to be the potential for my father to get a decent lump sum if I weren't around for his retirement. I felt so even more strongly after my mother's death.

He'll be in a decent financial position for retirement (currently great health, house is within the last few years of the mortgage, civil service retirement plan, etc.) and my brother lives close by, but I still feel that it's my responsibility to make sure he'll have options if I'm not personally there to care for him late in life.

Obviously, people with spouses and children should draw up those policies with their own families as the first priority. But even people who don't might be in situations where they might want to have life insurance.

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Postby Dollar Bill » Fri May 25, 2007 1:31 pm

The principle of insurance is often misunderstood. Basically, you are transferring your risk to an insurance company for a fee (premium). The more you pay, the more risk it will allow you to transfer. What is seldom realized is that the insurance company will defend you, usually at its expense, up to the limit of your insurance (read you policy or talk to an agent). This is a very important benefit.

The split limits of insurance (25/50/25 in your case) mean that if you are liable for an accident, your insurer will pay on your behalf up to $25,000 to any one person injured and up to $50,000 in total for all persons injured. It will pay up to $25,000 for damages to property.

Your insurance company is always going to try to cut its losses. So, if you have a fender bender with limited injuries and property damage, the claims would probably be settled quickly to avoid administrative and defense costs. If you run a stop light and broadside a car with two or three people in it, resulting in significant injuries and property damage, your insurance company may opt to defend you in court (at its expense) in an effort to keep its liability payouts down. Here’s the kicker: Since you're transferring the risk, it's the insurance company's decision as to how to manage it. In fact, if you cause serious injuries and/or property damage, and carry low liability limits, your company may just max out your policy and leave you to defend yourself and pay for injuries and damage in excess of those limits. Bottom line: the more coverage you have, the longer the company is likely to stick around in your corner.

Check your premium rates to determine the maximum amount of liability limits/premium you can afford (to keep your company’s interest in defending you). For example , you can usually buy two times the coverage for less than two times the premium (25/50 vs. 50/100). And it gets cheaper with incremental additions. We all have a lot to protect: Middle-aged and older folks have accumulated assets at stake; younger folks have future earnings at stake. Insure yourself wisely.

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Postby MossySF » Fri May 25, 2007 2:18 pm

25/50 is just not enough these days. It seems like everybody on the road drives a car > 25K nowadays. Run a luxury BMW off the road and it gets totalled? High-end 6 and 7 series run nearly 100K -- the insurance covering just 25K of it leaves you in a bad position. I personally have comprehensive 250/500 coverage and an additional 1M umbrella. Cost is about $90/mo combined. Increasing the liability limits should be cheap. Shop around!

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Postby jer » Fri May 25, 2007 3:28 pm

I think your liability coverage is dangerously low. One at-fault accident will cause you untold misery for years.

I just checked my policy, which is with Progressive, so I can see what it would cost if the coverage were changed. My liability coverage is exactly 10 times yours, and lowering it to what you have would save me a grand total of $58 for a six-month policy -- on a sports car, which presumably results in higher premiums. And one traffic ticket on my record, which also raises them.

$58? Not worth it.

My advice is to increase that coverage, right away.

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Thank you all

Postby dpillai » Fri May 25, 2007 5:17 pm

so much for your advice. Yes, I realized my liability coverage was extremely low and I am working on upping it considerably. With my emergency fund hlaf way funded I am planning to up my deductible and probably offset the increase in cost.

I am planning to check progressive , since they supposedly give comparison rates, the site mentioned that they would need a credit history check but it also said this

Will checking my credit during a quote affect my credit rating?
No. The Progressive inquiry will only be visible to you and the credit reporting agency. Other companies viewing your credit report will not see the inquiry.

So I guess I am ok getting a quote form them.

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Postby dpillai » Fri May 25, 2007 7:55 pm

Going on Progressive site I found the following quote for my selection

I think I'll choose this once I call them and find out how getting a renter's insurance (if they provide one) affects the total and compares against my current AmFam insurance

Bodily Injury and Property Damage $500,000 Combined Single Limit (CSL)

Uninsured Motorist Bodily Injury (UMBI) $500,000 Combined Single Limit(CSL)-Includes UIM

Underinsured Motorist Bodily Injury (UIMBI) No coverage

Medical Payments 5k/person

Comprehensive $500 Deductible

Collision $500 Deductible

Rental $30 per day ($900 Max)

Roadside selected

Total - $365/6 months

Current AmFam - $502/6 months

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Postby jgs9455 » Wed May 30, 2007 11:53 am

This was a great post.

I had the same coverage A 25k/50k/25k + U3 25k/50k. My friend who works in the insurance industry recomended I go to A 100k/300k/100k + U3 100k/300k.

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I finally

Postby dpillai » Wed May 30, 2007 9:35 pm

decided to stick with American Family with the following

Bodily Injury and Property Damage $250/$500/$250

Uninsured Motorist Bodily Injury $250/$500

Underinsured Motorist Bodily Injury $250/$500

Medical Payments 5k/person

Comprehensive $500 Deductible

Collision $500 Deductible

Rental $30 per day ($750 Max)

Roadside selected

Selected AmFam since I got my Renter's insurance from then and Progressive which was the best alternative didn't have renter's insurance.

Now I need to move on to determining Life and Disability insurance...crap!!!

One of the good sites I found during my search was [url]http://www.insure.com

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Postby jgs9455 » Fri Jun 01, 2007 2:12 pm

Actually I talked to my agent and learned that I had A 50k/100k/50k and U3 50k/100k.
He said for people that don't own a house yet (in my case) this was OK.
If FL retires No Fault next month, I'll remove it and bump my limits to the next level and still save money.

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