A Comprehensive Guide to Your Insurance Needs

THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE READ MY DISCLOSURE FOR MORE INFO.

 

insuranceInsurance is one of the areas of personal finance that can be difficult to understand.  There is so much disinformation out there.  At one point, I felt confused and overwhelmed by all the insurance options available.

 

I’ll be the first to admit that insurance is not nearly as much fun to talk about as making money in the stock market or optimizing finances, but it is still very important.  But, what is worse than making a ton of money, only to lose it by not being properly protected?  

 

Let’s go over exactly which types of insurance you actually need in each stage of life and beyond.

 

Insurance Needed in Your 20’s

Car Insurance

insuranceLet’s start with something I actually know fairly well.  I worked for an insurance company assessing damage to cars for over two years.  

 

For people that do not have any car insurance, please do not choose to pay the DMV a fee in order to waive insurance (in VA, this fee is $500).  I have seen too many cars totaled and too many people hurt.  You never know when an accident will happen.  

 

According to the car industry, the average American is in one car accident every 17.9 years or about four accidents over their lifetime.  With that said, let’s explore which type of coverage options you should have.

 

Collision Insurance

car insurance Collision insurance will help take care of YOUR car if you are at fault in an accident. When I was handling accident claims, I normally came across four types of deductibles – $100, $250, $500 and $1000.  

 

Most finance gurus will tell you to get a $1000 deductible since theoretically, you should have that money set aside in your emergency fund.  I recommend getting quotes for each of these deductibles to figure out what makes most sense to you.

 

Property Damage Insurance

This insurance pays for the damage that is inflicted on the other car in the collision.  The typical range in Virginia according to USAA is $20,000 to $500,000.  Let’s say that you choose to carry $50,000 coverage.  This will be the amount total paid per accident.  In this case, if you hit two cars, the insurance company would pay up to $50,000 total, not per vehicle.  This means that if you hit two cars but caused $70,000 worth of damage to the cars, the insurance company would only cover $50,000.  You would be responsible for the remaining $20,000.  Yikes.

 

car insuranceThis is where we get serious.  Property damage coverage is not something to scrimp on.  If you live in an expensive city with luxury cars, you will want to have as much property damage insurance as you can afford. Think about it for a second.  If you are in an accident with a Porsche, the damage to repair that car could easily cost more than $50,000.  Do you really want to pay out of pocket for the remainder?

 

Bodily Injury Insurance

insuranceNow, let’s say you caused an accident, and unfortunately, the other party had to see a doctor.  Bodily injury insurance pays for medical costs that they incur.  This can quickly add up if there were significant injuries.   

 

Comprehensive Insurance

Here in the DC area, it’s not uncommon to encounter a deer darting across a roadway.  These type of accidents are surprisingly not handled under Collision, but under Comprehensive.  Comprehensive covers “acts of God”, such as hitting an animal, hail damage, or if your vehicle catches fire.  This also includes if your vehicle is stolen.  

 

Quick side note– I had a friend that use to cover the Fire and Stolen Car division of his company.  He told me that a lot of cars that had been reported as missing or stolen were actually recovered within the thirty days.  So if you ever find yourself in this situation, don’t start shopping for a new car immediately.  

 

Rental Car Insurance

insuranceAdditionally, unless you have rental car insurance, your stolen car would not automatically grant you a rental car.  If you are at fault in an accident, the insurance company won’t give you a rental unless you have this insurance on your policy. Plus, the amount has a cap.  So if you drive a Hummer and you want a similar type vehicle, be prepared to pay out of pocket.  Most people go with the cheapest car option in order to maximize the amount of time that they can use the rental car.

 

Uninsured Drivers (UMPD)

Finally, let’s say that dreaded scenario happens, and an uninsured driver hits you.  Don’t worry; not all is lost.  Most states require insurance companies to cover something called UMPD, Uninsured Motorist Property Damage.  This means that in most cases, you will be required to pay a $200 deductible to your insurance company, and then they will fix the car.  You might be thinking, why should I have to pay for the damage the other party did to my car?  It’s definitely an awful situation, but in this case, if you go through your insurance company, they will subrogate.  That is a fancy word for suing the other party for the damages. If the insurance company is able to recover the damages from the other party, you will be able to receive your deductible back.

 

Medical Expense Benefits

Additionally, if you sustain injuries from an accident, these benefits will grant you reimbursement for any coverages that your insurance company does not cover.  This is a nice benefit, but honestly, it is not one that I currently carry.  This isn’t to say that it isn’t beneficial.  I currently have very good insurance that covers almost all of my medical expenses, so I feel comfortable forgoing these benefits for now.  In the future if my medical insurance deteriorates, I will probably reevaluate.

 

Gap Insurance

insuranceIf you own a car with a loan on it, you may consider getting gap insurance, which is added to your Collision deductible.  Gap insurance covers the difference between what you owe on the car and what the car is currently worth.  As you know, cars lose value the second you drive off the lot.  If you finance your car and experience a total loss in an accident, you are still responsible to pay the outstanding loan.  Unfortunately, the insurance companies will only pay what the car is worth, not the loan value amount that is left on the car.  Therefore, it is smart to have gap insurance if you have a newer car with a large difference between the car value and the loan value.

 

Hopefully I have peeled back the curtain of the car insurance industry, and you are now more knowledgeable in order to select the right insurance coverage for you.

 

Now that we’ve run through the various car insurances let’s turn next to health insurance.

 

Health Insurance

insuranceHealth insurance is currently mandated by law and enforced by the IRS.  Otherwise, the individual is responsible to pay a penalty when they file their taxes.  According to eHealth, insurance premiums for individuals are $4,000 a year, while family plans cost a little over $7,000 a year.  This is expensive, but health insurance is not only vital to your health, but also to your finances.

 

A Harvard Study showed that 62% of bankruptcies are due to medical expenses.  The more interesting part was that 72% of those that filed for bankruptcy had some sort of health insurance.  What that says to me is that individuals are not getting enough insurance to cover themselves when a medical emergency happens.  I encourage you to re-examine your insurance every year to ensure that your health coverage is correct for you.

 

So what are the various types of insurance available to you?

 

1. Health Maintenance Organization (HMO) plans

HMOs are one of the most common health insurance plans you can purchase. With this plan, you are basically buying into an entire network of health care providers who offer their services to you.

 

Although, one of the restrictions of the plan is when you select a primary care provider (PCP), that provider will be the sole coordinator of all of your health services and care.

 

This means that if you want to visit a specialist, you have to go through your PCP for a referral in order to cover your medical costs.  Otherwise, you will have to pay out of pocket.  

 

HMOs are usually best suited for individuals and families that don’t mind having their PCP choose their specialists for them.

 

2. Preferred Provider Organization (PPO) plans

Under a PPO plan, you and your family can see any healthcare provider in the insurance company’s network, including specialists, without a referral.  In most cases, you are not required to choose a primary care physician or to get referrals to see specialists.

 

Families who visit a specialist regularly generally prefer this type of health insurance due to the flexibility it provides.

 

3. High Deductible Health Plan (HDHP) plans

High-deductible plans cross categories.  Some are PPO plans, while others may be HMO plans.

 

This type of health insurance has a high deductible that you have to meet before your health insurance coverage takes effect.  These plans can be right for people who want to save money with low monthly premiums and don’t plan to use their medical coverage extensively.  HDHPs are often coupled with a Health Savings Account (HSA).

 

HSA’s are tax advantaged accounts that can be saved on a pre-tax or tax-deductible basis to pay for qualifying medical expenses, including annual deductibles.  

 

Currently, the limit is $3,400 for Single people and $6,750 for families, with the ability to contribute $1,000 extra if you are over the age of 55.

 

What other insurances should you have in your 20’s and potentially beyond?

 

Renters Insurance

insuranceMost people in their 20s are renters.  Renters insurance covers a tenant’s lost or damaged possessions as a result of fire, theft or vandalism.  It also covers a tenant’s liability in the event that a visitor sustains injuries on the property.  Renters insurance can also provide compensation for alternative living arrangements in the event that your rental unit or rented home becomes uninhabitable due to events such as storm damage or an apartment fire.

 

So why would you actually need rental insurance?  Well, as a renter, if a fire destroys your possessions, your landlord’s insurance policy does not cover you.  The landlord’s homeowner’s policy will cover to replace the existing dwelling but unfortunately not the renter’s contents.

 

Therefore, if you have anything valuable and you don’t have renter’s insurance, you as the renter would be out of luck.  Keep in mind though, renter’s insurance typically does not cover flood damage or earthquakes.  Otherwise, it covers pretty much everything else.

 

So how expensive is Renters insurance?  It’s actually pretty affordable.  You can receive roughly $30,000 of personal property coverage and $100,000 of liability insurance between $150-$300 a year.  This means that it would cost roughly $15-$25 a month to insure your property.

 

Long-Term Disability Insurance

insuranceLong-term disability is something most of us don’t like to think about.  However, according to Social Security Administration records, 3 out of 10 workers will become disabled before they reach the age of retirement.  Further digging into the stats, it appears that 90% of people on disability are due to accidents or sickness OUTSIDE of work.

 

Long-term disability is not that expensive averaging in cost of $250 a year, or roughly $5 a week.  For some of us, that means skipping Starbucks once a week to ensure coverage.

 

Insurance Needed in Your 30’s

Homeowners Insurance

buyer's remorse insuranceIf you own a home, I’d venture to guess 99% of homes have home insurance.  Why?  It’s because when banks lend money through a mortgage to a homeowner, they require that the homeowner buy insurance to protect the bank’s loan.  Remember, you may think you own the home, but until you make that final mortgage payment, the bank really owns it.

 

Homeowners insurance typically covers damage caused by perils such as fire, windstorms, hail, lightning, theft or vandalism.  However, it usually does not include floods and earthquakes.

 

Dwelling Coverage/Insurance

Dwelling coverage pays to repair or rebuild your house, including electrical, plumbing, and heating and air conditioning costs.

 

Other Structures Coverage

This covers damages to detached structures such as garages, sheds, fences and even cottages on your property.

 

Personal Property Coverage

This reimburses you for damaged or destroyed personal items in your home, which could include your televisions, laptops, electronics, furniture, clothes and even athletic equipment.

 

Loss of Use Coverage

This pays additional housing and living expenses if you must move out of your home temporarily while it’s being restored.

 

Liability Insurance

This helps protect your assets and cover your defense costs in the event of a lawsuit because you or your family members are responsible for causing injuries or damage to other people or their property.

 

While insurance rates varies by state, on average it costs roughly $950 a year for an average home worth $188,000 in the U.S.  You can expect to pay more if you are in areas that experience harsh weather conditions, or if your home is more expensive than the average home to insure.

 

Private Mortgage Insurance (PMI)

Unfortunately, PMI is something that is protection for the bank.  In most cases banks require that you pay PMI if you make a downpayment of less than 20% down for your house.  You must pay this PMI until the equity in your house rises above 20%.

 

Here’s the kicker.  Your bank won’t tell you will your equity has pushed past the 20% mark and therefore you may unknowingly continue to pay this for years until you notify the bank.

 

So if you are paying PMI, I strongly suggest that you monitor your equity in your house closely.  If there is a sharp rise in your home’s price and the equity in your home exceeds 20%, you should see if your bank will remove it.

 

Umbrella Insurance

check up insuranceThis policy is normally bundled with either your homeowner insurance and/or car insurance and costs a negligible amount.  When you have exhausted all of your homeowners and car insurance, Umbrella insurance kicks in.  It provides additional insurance in case the claims go beyond your current insurance limits.

 

Umbrella insurance is also not very expensive when you think about it.  Normally, umbrella insurance costs between $15-$25 a month for $1 million to $2 million in coverage.  This is a fantastic deal if you live in a city full of expensive vehicles and are in need of additional protection if you exhaust all your car insurance.

 

Keep in mind when trying to obtain umbrella insurance that many insurance companies require that you have a certain level of coverage on your home and car before you can qualify.  This means that you can’t have $20,000 of property damage and expect the umbrella policy to cover the rest.  Often times, insurance companies require that you have $300,000 or more in coverage before they will consider offering umbrella insurance.

 

Whole Life VS. Term Life Insurance

insuranceOne thing that infuriates me is the discussion on whether to obtain Whole Life or Term Life insurance.  This is where I believe some brokers really try to confuse people.  In my opinion, the only correct choice between the two is Term Life insurance.

 

Term Life insurance encompasses a certain amount of time to cover a certain amount of expenses.  For instance, let’s say you have 15 years left on your mortgage.  Once you pay off your mortgage, you will no longer have any debt.  There is no need to carry life insurance past this if you have adequately saved for the future.  In this case, you would need to buy a fifteen-year term life insurance policy.

 

Insurance brokers sometimes paint Whole Life insurance as a great investment over time with huge monthly premiums.  The pitch may sounds nice, but it’s so false.  Insurance should not be an investment.

 

Whole Life Insurance Is Costly

Let me explain in further detail.  On average, Whole Life insurance is 10 times more expensive than Term Life insurance from the research that I’ve done.  This means that if a Whole Life insurance policy costs $1,200 a year for a healthy 25-year-old, a Term Life insurance policy will in turn cost $120 a year.  Now here’s the difference between the two policies.  The Term Life insurance is fixed over a number of years.  

 

For this example, let’s say it’s a 15 year fixed policy.  Now let’s say that the Whole Life policy is worth $250,000.  The insurance brokers would probably say the Whole Life policy is a great deal.  You pay $1,100 extra dollars every year for the rest of your life, and your family will get $250,000 when you pass away.

 

Now, let’s do some quick math.  Let’s make the assumption you are a healthy individual and will live until the age of 75.  You decide to invest the difference of $1,100 into the S&P 500, which on average has returned 8%, instead of buying a Whole Life insurance policy.  When you pass away at age 75, your family would receive a whopping $648,000.  That is almost a $400,000 difference when you compare the numbers.  As you can see, Term Life insurance is a much wiser option.

 

Insurance Needed in Your 50’s

Long-Term Care Insurance

insuranceAccording to the U.S. Department of Health & Human Services, 7 out of 10 Americans turning 65 will need some form of Long-Term Care in their lifetime.  The current costs for an in-home aide is $46,000, and the cost of a private room at a nursing home is over $92,000 according to Genworth Financial.  The shocking thing is that only 8 million people currently have Long-Term Care, while there are roughly 70 million baby boomers that may need some sort of Long-Term Care in the upcoming years.

 

Much of this is due to the sticker shock many baby boomers receive when inquiring the cost of Long-Term Care.  Long-Term Care for a couple in their 50’s may cost over $3,000 a year and may shoot up in the future for any reason.  Additionally, the longer that the couple waits, the more the insurance will potentially cost in the future.

 

One thing to remember: Medicare and other types of insurance do not always cover Long-Term care, since it is not a medical expense.  So, you will need to check with your provider before making these types of decisions.

 

So readers tell me, did I miss anything?  Is there anything that you would add or change based on your age?  Share your thoughts below.

Mustard Seed Money

Welcome to the website. A mustard seed is a very small seed but astonishingly grows very large over time. My hope is that through your financial journey that your small investment in time, money and faith will grow beyond anything that you could ever imagine.



59 Comments

  1. That was comprehensive. Very nice right up that I’m sure I will be referring back to. I’m not sure that I could add anything. I think you nailed it.

    I will say I switched to Erie Insurance for Home and Auto and saw a nice drop in my rates. Most people in NC have never heard of them but they have been great for me. Recently handling one of those uninsured motorist situations.
    Grant @ Life Prep Couple recently posted…Stop Mindlessly Going To CollegeMy Profile

    • I actually tried to switch to Erie a few years ago (I was also living in NC at the time – Charlotte) but they denied me. Why? Because I had used my current insurance to have a broken windshield replaced two years earlier! Apparently you need “no claims” within a certain period of time for them to accept you. Since then I haven’t made a claim but haven’t taken the time to contact them again for a rate quote.
      Brad – MaximizeYourMoney.com recently posted…How much do you need to save, from any age, to retire a millionaire?My Profile

      • I recently switched over to Erie. They were by far the best rate. We paid at least 20% less than our previous insurance. So it was definitely worth it.

  2. Mustard, thanks! You just made me review my auto policy really closely, which EVERYONE should do. This is seriously a really great write up.
    Just as an real world example for everyone: I pay about $50/month in auto insurance. (We have only one car for the 7 of us.)
    – Collision: This is very expensive, so we take the route of driving a car with a value just under needing us to carry this, and just above ‘too shitty to drive’. So in a way we are self insuring, if you can handle the slight ‘risk’ you can save a ton of $.
    – Property Damage: The policy says $1,000,000/occurrence.
    – Bodily Injury – $500,000/person
    – Comprehensive: We don’t carry it.
    – Rental Car Insurance: We use friends, family, bikes, etc.
    – Medical Expense: This is covered, my employer requires it.
    – Gap insurance: What???? People buy cars with loans and then admit it was a bad decision by insuring the fact that the value is less than the loan. I need to sit down and recover before I can read about the health insurance ……
    (Note: I did learn my reading my policy, that if I drive for ‘livery conveyance’, which means Uber, my insurance does NOT cover me! Check your policy if you are driving for Uber!)
    The Tepid Tamale recently posted…Maybe all is not lost!My Profile

    • Great point about checking your insurance to see if it covers for Uber. You definitely don’t want to start driving for them thinking you have insurance and you don’t.

  3. Nice work! I can’t think of anything you missed unless you own a business.

    Since Mrs. Freaky Frugal and I FIREd, we have fewer insurance needs. We have Auto, Rental, and Umbrella insurance. Umbrella is great for piece of mind since we live in a country where people sue for just about everything.

    We don’t have Long-Term Care insurance, but I don’t plan on getting any because premiums can go up dramatically.
    Mr. Freaky Frugal recently posted…Freaky Frugal or Stupid Frugal?My Profile

    • Thanks for sharing Mr. Freaky Frugal!!! That’s awesome to hear that you reached FIRE. Definitely nice that you could drop some of those insurances. Definitely a cost savers!!!

  4. Oh gosh I wish I had this last year when I was looking over rental car insurance. It was the most confusing (and expensive) thing ever!

    I was so surprised at how cheap renter’s insurance was too!

    “Here’s the kicker. Your bank won’t tell you will your equity has pushed past the 20% mark.” Wow. I did NOT know that. Are you serious? Can we get insurance from the banks?!

    Are annuities a type of insurance too?
    Lily He-Prudhomme recently posted…TFG’s Income & Budget Breakdown (May 2017)My Profile

    • Hi Lily!!! It’s definitely incredibly confusing.

      Yeah it’s crazy that your bank won’t tell you when your equity has pushed past the 20%. That’ why it’s important to stay on top of your finances.

      Annuities are a type of investment. Being young it doesn’t make sense for me to currently own it as I think the market will outperform it.

  5. This is a very comprehensive post MSM. Well done. Lucky for me, I am Canadian, I have basic health care paid for by our government and don’t need to buy private insurance. I also have my health benefits covered by my employer that allows me to also cover my family.

    I must admit that I was one of those suckers when I was younger and I bought whole life insurance. However, I got a bit smarter and bought term life for my wife and kids a few years ago.
    Leo T. Ly @ isaved5k.com recently posted…Would You Borrow Money To Invest?My Profile

    • Thanks for sharing Leo!!! That would definitely be nice to have to not worry about health insurance. I guess there are trade offs in each country 🙂

  6. Awesome list. One stop shop for the insurance products we need.
    The only caveat I would add is that sometime long term disability insurance can be pretty expensive when you get into the more specialized riders like own occupation. Also it usually only covers 60-70% of salary, but if you’re a good saver that shouldn’t be an issue.

    Tom @ HIP
    High Income Parents recently posted…Wedding Crasher: Should we be Spending this Much?My Profile

  7. Great list! I hadn’t thought of breaking it down by age, but i like the idea.
    One important policy feature of long-term disability insurance that I learned about in obtaining a policy is “true own occupation,” which means that if you can’t perform the specific job you were doing, you can collect on the policy. If you don’t have this feature, the insurance company may deny the claim if you can work in a different field, even though you cannot perform your previous profession.
    Of course, it’s more expensive to have this feature in your policy. But if my vision were to deteriorate and I couldn’t work as a radiologist anymore, it gives me peace of mind to know I could collect on the policy and not be forced to work in another field of medicine, or outside of medicine altogether.
    Dr. C

    • Thanks for sharing Dr. C!!! Awesome point on the True Own Occupation. I have to admit I’m not an expert on long term disability so I will definitely need to incorporate this. Thanks for sharing!!!

  8. Extensive list! Thanks for sharing. I don’t necessarily agree with the age buckets. Insurance should be put in place depending on your situation/circumstances. If you happen to have a family in your early 20s or when ever, please make sure you have a good term life policy to cover the unexpected.

    • Thanks for sharing MMP!!! I went back and forth whether to break it down by age. I decided to do it that way because it was easy to remember and divide. But definitely understand your point of view.

    • Sometimes I wonder about whether FIRE folks are underinsured or not. I think at least some of them have taken the risks under consideration and have chosen to self-insure. They have no need for collision/comprehensive auto insurance. Life insurance is unnecessary. As to health insurance, I think they generally have plans that cover catastrophic injury/illness and they will pay out-of-pocket for costs under their deductible. Although it’s possible that a major illness would wreak havoc on their finances. It might also be risky not to have coverage for certain things where you can be sued since the amount you might be liability could be high depending on the situation. And, I’m not sure I would characterize attaining FIRE as purely “luck.”
      Andrew@LivingRichCheaply recently posted…Housing DilemmaMy Profile

  9. I don’t have comprehensive on my car because it’s paid off and worth very little. This works out great because hopefully I can continue to drive it several more years as long as I keep up with routine maintenance 🙂 That’s why I’d prefer to buy used cars now, definitely makes more financially sense overall.
    SMM recently posted…How Do I Protect My Investments?My Profile

  10. This is indeed a comprehensive list. I just recently got umbrella insurance as our assets have grown. Mainly, I decided on that after purchasing a rental property. I don’t know much about long-term care insurance but I’ve heard that you should get it longer otherwise it gets very costly. It might be costly no matter what. Will have to do some more research on that in the future.
    Andrew@LivingRichCheaply recently posted…Housing DilemmaMy Profile

  11. Super list MSM! Not sure about the age ranges as I think one should consider life insurance as soon as they start a family or have someone depending on their income, which often happens prior to one’s 30’s.

    Thanks for sharing another great resource!

    • Thanks for stopping by Amy!!! I debated whether or not to breakdown by age or not. I thought it was a good way to lump together but I can see how it doesn’t apply to everyone.

  12. Hi MSM
    I agree that insurance is one form of risk management which we all have to manage regardless of whether we enjoyed it or not.

    Unfortunately, we cannot see that as a form of investment the way stock or other asset classes can but it’s a necessity part of personal finance risk management, one of which I have just recently written here.

    http://foreverfinancialfreedom.blogspot.sg/2017/06/understanding-your-risk-tolerance-and.html
    B recently posted…Understanding Your Risk Tolerance And Risk AppetiteMy Profile

  13. Great summary MSM – Always helpful to have this information in one listing versus scrolling through the layers of the internet to find the same (or less) quality of information. I’m planning an insurance audit of myself later this year once our house situation settles down. I cannot wait to take everyone out to bid and see what the results are.

    Cheers!
    Bert

  14. I’ve been looking for a simple write-up on life insurance like this one! Since my wife and I are renting and don’t have any debts, we don’t have life insurance at the moment. That said, I didn’t know too much about it before this. So thanks!

    Crazy that 62% of bankruptcies are from medical expenses. Really make me rethink our different coverage options. Great post!
    Matt Kuhn @ Profitable Matters recently posted…Financial Independence: 8 Great Ways to Reach FI SoonerMy Profile

  15. Insurance is one of my least favorite things to talk about. Mrs. Hammocker would also agree that insurance is no fun. But it is so critical to understand. Without proper insurance, risks are exponential. Mrs. Hammocker and I spent a month part time trying to understand the various types of insurance. Thanks for the insights. Insurance can and should be simple.

    • Thanks for stopping by Mr. Hammocker!!! Insurance is definitely not easy and took me awhile to get my arms around and even then I feel like there is so much to learn.

  16. Wow, what a write up. I need to look into our life/disability insurance. We have it, but it’s tied up with our retirement savings account and I don’t know exactly how it works which worries me, though not enough to actually do something about it :-/
    Eliza recently posted…In a rut: Help for when you’re stuckMy Profile

  17. Great overview.

    on the meetup we had this weekend, we actually discussed the need to have a disability or long term sickness insurance. I will have to investigate this.
    Amber tree recently posted…Trade inspirationMy Profile

  18. I would definitely skip life insurance altogether, only 3% of term life insurance policies pay out, EVER. Definitely skip disability, social security offers excellent coverage and most employer coverage is adequate (I talked to a head of HR once who told me in 20 years only two employees ever used our long term care insurance, and then went back to work and this was due to cancer).

    Although a bit low, our deductible on our house policy is 5k (I am not yet ready to go to no home insurance like Mr. Money Mustache does, but am generally supportive) and we only have full coverage on one car with a 1k deductible. The car I rarely drive only has liability coverage.

    The great news is if someone hits you and it’s their fault, you still get paid. This happened to me once when I didn’t have comp/collision and I still got a check from the other insurance company. All the more reason to drop comp coverage.

    I agree with the above commentor about health sharing ministries, that’s my early retirement strategy. i won’t need coverage until 11/1, but that’s the route we will go with Medishare.
    FinancePatriot recently posted…Sun, fun and rum; A review of our family Puerto Rico tripMy Profile

    • Thanks for sharing Finance Patriot!!! I’m not sure I could go without home insurance either. For the amount that I pay, it’s definitely worth the peace of mind in case an accident happens. But to each their own 🙂

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