Author Topic: Buying Insurance  (Read 2747 times)

JHC89

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Buying Insurance
« on: October 10, 2013, 08:21:15 AM »
Is there anything you buy insurance for that isn't required by law?

I recently moved out my parents' house and started renting, and my auto insurance provider is recommending I insure everything in my apartment, really just clothes and a laptop right now.

Would I be a sucker for insuring that, or am I being overly optimistic that nothing will ever happen to that stuff?

Thanks for your advice!

secondcor521

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Re: Buying Insurance
« Reply #1 on: October 10, 2013, 08:33:40 AM »
I usually figure that insurance on average is a losing game for the buyer, because the seller has to pay business expenses, answer to shareholders if a public company, and in general hedge against excessive losses.

So I avoid buying insurance unless it is something I can't afford the downside loss on, or if it is legally required.  I also generally go for high deductibles.  So I carry health insurance with high deductibles, home insurance with like a $5K deductible, and liability insurance on my car only - no collision/comp.  I don't carry life insurance, LTC insurance, or disability insurance.

So in your case, yeah, on average you're going to lose money by buying insurance on your stuff.  The real question to ask is this:  supposing someone stole all your stuff.  Could you manage to find a way to replace it or otherwise go on with life without the assistance of the insurance company?  If so, I would suggest self insuring, meaning you keep that risk on your own shoulders rather than paying the insurance company to take it for you.

Megatron

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Re: Buying Insurance
« Reply #2 on: October 10, 2013, 08:41:41 AM »
I always thought renters insurance is pointless unless you have priceless art or some super fancy furniture. You can easily replace a laptop after a year or two of not paying renters insurance. When I was in college, I worked at a Office Max electronics/furniture department on the weekends. We got a 10% commission when we sold people insurance on top of their item. I couldn't believe that people would buy insurance for all the crap. I felt really bad because one guy bought a 20 dollars 2 years insurance on an 80 dollar calculator.

grmagne

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Re: Buying Insurance
« Reply #3 on: October 10, 2013, 08:47:59 AM »
I completely agree with secondcor521. I only insure things if the worst-case scenario will ruin me financially. And even then, I try to save money with high deductibles. In the long-run it's best to invest your money and keep a financial buffer.

The essentials are life insurance if you have children, insurance for your home (if you're an owner), liability insurance for an automobile and (in the U.S.) health insurance. And decline all the optionals on every type of insurance, whether it's a premium waiver for disability, premium waiver for unemployment, accidental death & dismemberment rider, etc. as they're all big money-makers for the insurance companies.

mrpress

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Re: Buying Insurance
« Reply #4 on: October 10, 2013, 08:54:03 AM »
Renters insurance is NOT pointless IMO! It was something like $5 a month when I rented and not only covers your stuff but other tenants stuff if you start a fire. $60/year is easily worth it and you'd have to go without for at least 5 years just to replace a laptop, not to mention clothes, kitchen stuff, etc etc.

JHC89

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Re: Buying Insurance
« Reply #5 on: October 10, 2013, 09:26:59 AM »
Thanks everyone! I should have mentioned that that my roommate owns the place and all the kitchen supplies, furniture, etc. I'm not sure if he has everything insured or not. My laptop there is my old computer from school. I have a separate laptop from work that my company would replace if anything happened.

Given all of this, I'm leaning towards saying "Thanks, but no thanks," to renters insurance.

Cinder

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Re: Buying Insurance
« Reply #6 on: October 10, 2013, 09:28:45 AM »
When I had renters insurance, it actually cost me less to have renters insurance with my auto insurer then to just have auto.  Granted, I probably needed / need to shop around to lower my auto rate, but at the time it actually saved me money.

Nothlit

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Re: Buying Insurance
« Reply #7 on: October 10, 2013, 09:40:19 AM »
I could afford to replace the contents of my apartment, but I still carry renter's insurance for the personal liability protection it offers.

Mega

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Re: Buying Insurance
« Reply #8 on: October 10, 2013, 09:43:10 AM »
When I had renters insurance, it actually cost me less to have renters insurance with my auto insurer then to just have auto.  Granted, I probably needed / need to shop around to lower my auto rate, but at the time it actually saved me money.

Same here. Technically, the insurance company paid me to have renters insurance. YMMV