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Are we over insured.
Old 11-14-2013, 07:06 AM   #1
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Are we over insured.

Coming up to retirement has caused me to look at my insurance and I really think that I've been over insured most of my life.

Take the car. I have the standard compulsory insurance for bodily injury plus collision and and comprehensive with $500 deductibles. Now that my car is 7 years old and has $120k on the clock I might just drop the collision and comprehensive and save myself $400 a year.

Medical is another area, I could go with a COBRA plan with low deductibles for $5k a year or a Bronze high deductible plan for $2k a year. My max cost per year on the Bronze plan will be $8.35k (premium plus out of packet max) and as I'm healthy I think the Bronze plan is the way to go.

Dental is a different matter as I've had a few crowns and root canals in the last couple of years so I think I'll spring for the $25/month COBRA continuation.

Life insurance, I'm single and have no dependents and so do not buy any insurance over and above what work provides.

House Insurance. This seems pretty difficult to reduce. I pay $1250 a year right now.
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Old 11-14-2013, 07:24 AM   #2
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My collision and comp is not even close to $400/yr. For my 11 yo car, it's under $100. How's your driving record?

I've got an umbrella policy which requires solid auto and home owners insurance. I am only really concerned about liability coverage. The last thing I wan't to have happen is for all my money to go to a greedy plantiff and lawyers. My level term life insurance ends this year and won't attempt to get another policy.
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Old 11-14-2013, 07:34 AM   #3
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My house insurance was almost cut in half by going from a $1k ded to a $7.5k ded. In my case the house is worth a lot less than the replacement insurance value so even backing out the ded, I'm in good shape if the house burns downs. Of course if I have hail damage, the roof is on me. But I don't mind self insuring for the first $7.5k. Never had a claim anyway. knocking on wood....
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Old 11-14-2013, 07:52 AM   #4
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Quote:
Originally Posted by nun View Post
Coming up to retirement has caused me to look at my insurance and I really think that I've been over insured most of my life.

Take the car. I have the standard compulsory insurance for bodily injury plus collision and and comprehensive with $500 deductibles. Now that my car is 7 years old and has $120k on the clock I might just drop the collision and comprehensive and save myself $400 a year.

Medical is another area, I could go with a COBRA plan with low deductibles for $5k a year or a Bronze high deductible plan for $2k a year. My max cost per year on the Bronze plan will be $8.35k (premium plus out of packet max) and as I'm healthy I think the Bronze plan is the way to go.

Dental is a different matter as I've had a few crowns and root canals in the last couple of years so I think I'll spring for the $25/month COBRA continuation.

Life insurance, I'm single and have no dependents and so do not buy any insurance over and above what work provides.

House Insurance. This seems pretty difficult to reduce. I pay $1250 a year right now.
I have kept the Collision and Comprehensive on my 2002 Volvo S60 but then it's only $200 per year. I give myself the 'do over' test to determine whether to purchase the coverage for another year.

I picture my car being damaged and ask myself, "If I had the chance to do it over, would I buy coverage?" If I say "yes," I buy coverage for another year. If I say "no, I'm glad I didn't waste the money on coverage," I don't buy it.

I do the 'do over' test on all decisions that involve "should I, or shouldn't I?".
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Old 11-14-2013, 08:10 AM   #5
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After having talked to numerous insurance agents in recent years, they have convinced me that insurance should have you covered for any major loss instead of every little incident. So, any deductible should be something you can handle without it causing stress to your band account. I went to $5000 deductible on my homeowners and $1000 on the vehicle.
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Old 11-14-2013, 08:18 AM   #6
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After having talked to numerous insurance agents in recent years, they have convinced me that insurance should have you covered for any major loss instead of every little incident. So, any deductible should be something you can handle without it causing stress to your band account. I went to $5000 deductible on my homeowners and $1000 on the vehicle.
I have a 2% deductible. I won't be calling my agent for anything not involving a scorched foundation. I dont' think everything in the house comes up to the deductible. I can put on a new roof for well under 2%.
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Old 11-14-2013, 08:21 AM   #7
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Our annual premium for collision/comprehensive is less than 2% of the value of our vehicles so I keep those. When to drop it and self insure is a judgement call but I typically drop it once the vehicle value is less than $5k. There is no magic to the $5k, it is just where my gut drew the line.

We are both relatively healthy so we have had a HDHP for about 5 years. I think it is the way to go for us as our principal reasons for health insurance is to gain access to negotiated rates for medical services and protect ourselves from the financial cost of a major health event. We generally spend only 1/3 of our deductible in health care costs. For us, HDHP is the way to go and I think it is a great plan for others who are healthy and wealthy enough to afford the deductible should the worst occur.

Your dental seems quite affordable so it would seen sensible to keep it. Ours would be $80-100/month so we self insure.

I'm not sure what you have for a home and home insurance but $1,250 a year would be a lot around here. I just renewed for $546/year for a $200k building with $1m of liability coverage.

Have you considered umbrella coverage?
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Old 11-14-2013, 09:52 AM   #8
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It pays to shop around for auto & home insurance periodically.

How do people here determine if their car is valuable enough for collision/comprehensive insurance?

The other input into my thought is car rental insurance. Since I have collision/comprehensive on my policy, I decline the additional insurance when renting. With Hertz charging almost $29/day for insurance, 5 days of renting will cover the additional cost of collision/comprehensive on my auto insurance policy.
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Old 11-14-2013, 10:01 AM   #9
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It pays to shop around for auto & home insurance periodically. How do people here determine if their car is valuable enough for collision/comprehensive insurance? The other input into my thought is car rental insurance. Since I have collision/comprehensive on my policy, I decline the additional insurance when renting. With Hertz charging almost $29/day for insurance, 5 days of renting will cover the additional cost of collision/comprehensive on my auto insurance policy.
Many credit cards cover car rental insurance, also. I'm definitely an insurance minimalist. Just for catastrophes. I need to bump up my deductible like Johnnie though. I would never turn in a 2k claim, so no reason to have a $1500 deductible. $5k sounds about right, also to me.
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Old 11-14-2013, 12:33 PM   #10
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I'm not sure what you have for a home and home insurance but $1,250 a year would be a lot around here. I just renewed for $546/year for a $200k building with $1m of liability coverage.

Have you considered umbrella coverage?
The house is a two family in New England and assessed at $550k so that's probably part of the high cost.

I haven't considered umbrella
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Old 11-14-2013, 12:54 PM   #11
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If my car is paid off, I decline collision insurance, period. This is true even for my 2011 Porsche Boxster. I find I drive a little more carefully as a result. I've been doing this for decades with only one small claim foregone. So I am ahead of the game now, even if, in my dotage, I should crash around a little.
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Old 11-14-2013, 02:52 PM   #12
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The house is a two family in New England and assessed at $550k so that's probably part of the high cost.

I haven't considered umbrella
In that case the $1,250 seems reasonable.

If you have significant wealth, IMO umbrella is essential. You can pay for it with your savings on other insurance coverage you are considering.
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Old 11-14-2013, 04:29 PM   #13
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Take the car. I have the standard compulsory insurance for bodily injury plus collision and and comprehensive with $500 deductibles. Now that my car is 7 years old and has $120k on the clock I might just drop the collision and comprehensive and save myself $400 a year.
My experience is that you save a lot of money by bringing the collision up to $500 and the comprehensive up to $250, and there are quickly diminishing returns with higher deductibles from that point.
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Old 11-14-2013, 05:00 PM   #14
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I went up to a $5,000 deductible on my car and a $10,000 deductible on my house a month ago. Basically catastrophic. Total insurance for both is about $1,200/yr even with those deductibles. House was a little over $750 and the rest was car. Car is 3 years old.

Not much in the way of weather related events where I live either. That may be a consideration.
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Old 11-15-2013, 08:23 AM   #15
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I'm going through the process right now with getting new quotes on our homeowners policy. One of the problems I face is that even though I give the insurance companies all the details, so I can compare apples to apples, they always change some details to offer a lower rate. Like they might list my roof shape to "hip" style instead of "gable" style, give me more than normal deduction for a wind mitigation survey and just about anything you can think of to show me a lower rate. I just got one quote that is $700/year lower than I currently have. I'm suspicious because the quote is with my current insurance carrier.

I have an appointment today with the "new" agent to get some of these differences clarified. Should be interesting. I'm not telling her the comparison is with the same underwriter. I'd love to go with this new rate but am I getting "apples to apples" coverage?
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Old 11-15-2013, 08:53 AM   #16
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I'm surprised no one mentioned Uninsured Motorist coverage in lieu of no collision or comprehensive on your paid off cars.?
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Old 11-15-2013, 09:07 AM   #17
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I had my eyes opened recently re dropping collision on an older car. My MIL was hit by another driver who admitted 100% fault. Because MIL only carries liability insurance, the other driver's insurance was obligated to only pay her $500, which didn't begin to make her whole. This was in Michigan - doubtless, the law varies in other states.
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Old 11-15-2013, 09:14 AM   #18
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I had my eyes opened recently re dropping collision on an older car. My MIL was hit by another driver who admitted 100% fault. Because MIL only carries liability insurance, the other driver's insurance was obligated to only pay her $500, which didn't begin to make her whole. This was in Michigan - doubtless, the law varies in other states.
There has to be some sort of a misunderstanding here. Why would either party need liability insurance if they didn't have to pay more than $500 when they were liable for an accident?
Never mind - no-fault insurance state.
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Old 11-15-2013, 09:42 AM   #19
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I had my eyes opened recently re dropping collision on an older car. My MIL was hit by another driver who admitted 100% fault. Because MIL only carries liability insurance, the other driver's insurance was obligated to only pay her $500, which didn't begin to make her whole. This was in Michigan - doubtless, the law varies in other states.
That does indeed seem to be a state issue, MI is no fault auto insurance acording to this http://www.michigan.gov/documents/ci...00_25081_7.pdf

You must buy collision coverage if you want coverage for damage to
your car in case of an accident. The other drivers’ insurance will not pay for damage to your
car.


Never heard of that, seems to defeat the purpose of having liability...
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Old 11-15-2013, 10:17 AM   #20
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That does indeed seem to be a state issue, MI is no fault auto insurance acording to this http://www.michigan.gov/documents/ci...00_25081_7.pdf

You must buy collision coverage if you want coverage for damage to
your car in case of an accident. The other drivers’ insurance will not pay for damage to your
car.


Never heard of that, seems to defeat the purpose of having liability...
It's for collision (car damage), not liability coverage.
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