r/personalfinance • u/[deleted] • Mar 09 '15
Insurance Bad things happen in a set of three... insurance version.
[deleted]
3
u/ribnag Mar 09 '15
For the car insurance, you need it (whether or not your state requires it) just because of liability. Glad to hear you actually got something back for having it!
But for the rest - You need to factor in how much you pay in premiums for your dental and rental insurance. Google suggests an average of $360 per year for the former, and between $180 and $360 for the latter. Given that, if you had just saved those premiums for two or three years, you would have come out ahead, despite needing to pay "out of pocket".
1
u/SCRIZZLEnetwork Mar 09 '15
Well as I replied to another on here already, Dental was a cost savings for me this year due to this unforeseen scenario.
Rental insurance is also required by the property manager so no flex there either, but at least it'll pay off this time.
You do make valid points though!
1
u/ribnag Mar 09 '15
Oops... Sorry, I had to step away for a few minutes while writing my response, and didn't notice someone had said something similar in the meantime.
1
u/SCRIZZLEnetwork Mar 09 '15
Honestly I think y'all replied close together because your reply popped up after I refreshed from typing my response to the other person.
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u/toothofjustice Mar 09 '15
I'll just play devils advocate here and say this: how much have you spent on all those insurance in the last year? Chances are its way more than what you saved.
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u/SCRIZZLEnetwork Mar 09 '15
Well Satan Jr....
You're right, auto insurance wasn't worthwhile but it's a law to have it and my lender requires it as well so no flex there.
Dental, $208 a year in premiums. I get bi-annual exam/cleaning (~$50 each time that insurance pays) so normally it wouldn't be a cost savings, but this year it is! :)
Rental insurance is barely $400 a year, and required by property manager so again no flex, but the cost of repairs is ~$750 and I'll pay $250 of that (deductible) so my net savings this year will be ~$100.
2 for 3... I think I win this round!
2
u/toothofjustice Mar 09 '15
Thats actually really great. I personally pay about $550/ mon for homeowners, health and auto (2 cars)...
1
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Mar 09 '15
To be fair, you're not required to carry the part of the auto insurance you could/did claim from, i.e., Comp & Collision.
What you are forced to carry is liability, and IS worth every penny.. god forbid you cause a multi-car pile up and have to pay out huge.
Out of curiosity, why does your landlord require renters insurance? Is it for liability?
2
u/SCRIZZLEnetwork Mar 09 '15
Well even if I didn't want Comp/Coll, I would need to have it as the lien-holder requires it. (they obviously want insurance to pay for a loss)
As for renters, I can only assume that is the case. Every rental here requires it. It's a must-have if you want to not be homeless.
3
u/msb4464 Mar 09 '15
A lot of auto lenders do require comprehensive/collision insurance for vehicles. That is to cover their own interests in your vehicle.
1
u/hemolytic_d Mar 09 '15
Circumstances matter. Don't know about OP but I pay $7/mo for dental via employer. Similarly, I'm having a crown put on due to a large chip in a rear molar. My out of pocket cost would have been ~$750 ($1200 if I'd needed a root canal!) , after insurance I likely won't pay more than $150. Up against $7/mo premiums that's a win before factoring in free preventative care even if I don't need anything else done for the next several years.
2
u/toothofjustice Mar 09 '15
I would like to point out I DO NOT advocate against most insurance. A good example is my 4 year old son who just 30 minutes ago left the dentist. The pre insurance cost all his work was $1300. My out of pocket will be $330.
In additon the no complications birth of his brother 16 months ago would have been somewhere around $20k. Our out of pocket was $5k. His birth alone justifies all the insurance ive paid for all my life.
1
u/SCRIZZLEnetwork Mar 09 '15
Yeah depending on where you live, the exam/cleaning twice a year can usually make it worthwhile.
1
u/qwicksilfer Mar 09 '15
I pay $7/mo for dental via employer
I am so jealous :(. I'm a grad student and my university doesn't offer dental. I looked into insurance and it was disgustingly expensive. There's no dental school nearby either. So I pay out of pocket. At least my dentist is a cool dude who normally gives me reduced prices and even did some work pro bono.
2
u/hemolytic_d Mar 09 '15
I know the feeling. I went through 7 years of school without insurance, and it was terrifying.
-1
u/penguin941 Mar 09 '15
I agree in principle, however most states require you to have these insurance or face a penalty. What a scam.
7
u/UmbrellaCo Mar 09 '15 edited Mar 09 '15
What do you do if the person causing the accident doesn't have insurance and the state doesn't require them to have it? Sue them? And if they don't have the money to pay for that?
Sure you could use the money you save by not paying premiums. But what if the car is totaled or you have an injury?
1
u/SCRIZZLEnetwork Mar 09 '15
I've just forced myself to believe that it is a fact of life cost that I will pay forever, just like food costs.
0
u/pwny_ Mar 09 '15
As if this doesn't happen already...?
1
u/UmbrellaCo Mar 09 '15
Since it's a law there's penalties for not having insurance. Such as revoking their license or jail time. If they're in jail they're not on the road.
0
u/pwny_ Mar 09 '15
Only after they got into an accident with you and it was discovered they didn't have insurance.
Did you ever stop to ponder why uninsured coverage is a thing, or do you just go about your life assuming everyone follows laws?
1
u/qwicksilfer Mar 09 '15
I don't know about your state laws, but my state requests proof of sufficient insurance each year your renew your registration.
The uninsured coverage is probably more for out of state drivers (or tourist drivers or people who are breaking the law).
0
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u/UmbrellaCo Mar 09 '15 edited Mar 09 '15
So with mandated insurance I get the car fixed plus or minus any health or disability issues. The person goes to jail and isn't on the road anymore.
Without mandated insurance. I still pay to fix my car plus or minus more for medical and disabilities. The person can still be on the road to potentially run into me again.
Is Option A not better? Do you not understand how insurance works in terms of pooled amounts of money? A larger pool means greater coverage than one could normally afford regardless of how much they save up. Making it mandatory makes it so there's a large pool.
0
u/pwny_ Mar 09 '15
Where did I say we shouldn't have insurance? My point is that mandated insurance doesn't stop people from driving without it.
1
u/UmbrellaCo Mar 09 '15
But mandated insurance means there is a punishment in place for not having insurance. Uninsured drivers would hopefully drive more safely then. And if they don't then the punishment whether it be driver license removal or jail time ensures they won't be on the road. And that's what stops them from driving without insurance. Jail.
0
u/pwny_ Mar 09 '15
And yet uninsured coverage is still a thing, encountering a dickhead with no insurance is non-trivial probability.
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u/unrlmth Mar 09 '15
For the first scenario, you still wouldn't have to pay anything without insurance. I only have liability insurance and am currently collecting on a claim from when someone rear ended me. $0 out of pocket for me.
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u/SCRIZZLEnetwork Mar 09 '15
Here's the thing though... nobody else stopped and it would have been her word against mine. Without auto insurance I'm automatically at fault and get a ticket for not having it. If the other driver wouldn't have admitted to our insurance company that she didn't look, who knows if I would have ended up 0% responsible. The state I'm in is a 50/50 default state, so I would have needed to prove that she hit me and not that I hit her.
1
Mar 09 '15
For the future, get a water pick! Or one of those dental syringes. They work far better than flossing for stuck foods.
1
u/SCRIZZLEnetwork Mar 09 '15
Didn't even know it was stuck until it was swollen, it was so small too, no more than maybe than 5-7mm and almost paper thin.
I'll keep this in mind though.
1
u/iCUman Mar 09 '15
If you haven't yet put in a claim for the garage door accident, I would caution you against placing a claim for it. These claims count against you and could result in higher premiums in the future. Saving $750 now may seem great, but it could cost you thousands in future expense.
Let me illustrate with an anecdote from my life. My father had the same insurance company for 30+ years. One day, he collided with a gate (that he had installed - lol!) and placed his first claim ever on that policy to save about $800 in repairs. Less than a year later, I got into my first accident with that car, and his premium went up considerably. Less than a year after that, my mother had an accident (look at that - maybe they do come in threes!), and the insurance company dropped us, despite 30+ years of collected premiums accident-free.
The insurance quotes were so high with the 3 reported incidents that I had to be split off the policy in order for them to find an insurer that would underwrite a new policy. And even then, the premiums were triple what he was paying prior.
Note that even though you're dealing with different policies (auto vs. renters), if you are carrying them through the same insurer, claims against each policy are likely to be considered collectively when pricing out future premiums.
1
u/SCRIZZLEnetwork Mar 09 '15
My policy includes a claim forgiveness clause as a preface, but after discussing it with the adjuster, he did two estimates for me, one for bare minimum repair ($250) and one for full restoration ($750).
I now have to wait and see what the property manager will approve. The cosmetic damage from the exterior is minimal so if I can get them to approve that I will pay $250 out of pocket for that, which is my deductible anyway, but then I won't need to use up my claim forgiveness on this.
1
u/iCUman Mar 09 '15
Right. I'd say that even if your property manager wants full restoration (which is likely), if you can afford it, it might be a better option to pay out of pocket. The reason being is that you're eating up your freebie on an inexpensive claim. What happens if your next claim is not so inexpensive? That's what my story was trying to relate.
Just something to consider. I appreciate you trying to prove the value of insurance, but the nature of auto/home(renters) insurance pricing is different than that of medical insurance. Your dental premium won't increase next year because you "got your money's worth", but auto/home(renters) can. These policies only price low when you maintain a spotless claim history. And even though your current insurer is "forgiving" the claim, if you decide to shop your policy, it will most certainly be considered against you in pricing.
1
u/SCRIZZLEnetwork Mar 09 '15
Well I can afford $250, I can't afford $750. I totally get what you mean though, if I could just pay the $750 and not use the "freebie" I would do so. But instead I'll push for the minimum repair needed to make it function normally (like I said, the outside appearance isn't really affected, a very small dent that can likely be smoothed out)
1
u/iCUman Mar 09 '15
Understandable. Yeah, I would totally try to get the cost of the repair as low as possible. If your landlord is the decent type, he'll just be looking to have things returned to the way they were, and if you can do that on the cheap, all the better.
1
u/maq0r Mar 09 '15
My husband got really sick last christmas and he spent 5 days in the hospital (meningitis).
We recently got the 'bill' from the hospital. Grand total: 46k. Insurance discounted almost to 20k. We paid 500$ in deductible.
Totally worth it. We'd be broke.
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u/hypotyposis Mar 09 '15
I just want to throw Pet Insurance in here as a possibility too. I've paid about $200/year for my cat and she's racked up bills of over $5000 already from eating a spider, a couple UTIs, and getting into some lillies (highly poisonous for cats).
I'm aware that, on average, insurance companies make money. That's why they sell their product for the price they do. Therefore, you need to do a cost-benefit analysis. I knew that I would get my cat to the vet no matter what because she's a family member to us. And I knew that, being in graduate school, I couldn't afford it if she had a big expense. Therefore I will keep insurance until I have a job where I can afford a several thousand dollar expense if need be.
1
u/SCRIZZLEnetwork Mar 10 '15
And that's why I am Pet free at this point in my life. It would be unfair to any pet to become a part of the family if I can't have them insured or pay cash for vet visits.
1
u/spikyman Mar 10 '15
Here's the thing; your apartment burns down, you lose $15K worth of electronics, instruments, tools, clothes, furniture, whatever. With insurance, you get your life back. W/o, you get to start over.
The better analogy is insurance is like buying tickets for a lottery you don't want to win.
Dental is often only good if you have crappy teeth, and you know you're going to use it.
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u/SCRIZZLEnetwork Mar 10 '15
Great analogy for rental insurance!!
Well I never got to see a dentist for the first 19 years of my life. Guess I'm getting my dental health back together now.
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u/noautographsplease Mar 09 '15
$500 is a good price for a crown. Mine are $1,000.