Author Topic: Do we over insure?  (Read 2247 times)

Roland of Gilead

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Do we over insure?
« on: December 20, 2019, 05:33:01 PM »
Sometimes I feel like we are over insured, at least compared to most Americans.

We have a boat, so we have insurance on that (required by the marina to have certain liability insurance)

New (2018) van, we own outright but have liability, collision, uninsured motorist

We own some mountain property and have liability insurance on that

insurance on our apartment

snowmobile insurance (liability and theft, though neither is required by law)

umbrella insurance policy


All together it is serious money and we have not made a claim in 20 years or more.   I sometimes wonder since most of our money is in 401K and IRAs, which are lawsuit proof, we perhaps spend too much money trying to protect ourselves.

ixtap

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Re: Do we over insure?
« Reply #1 on: December 20, 2019, 05:40:37 PM »
Are your IRAs sheltered in the states each of those things are in?

It seems the only optional insurance you mention is umbrella.

markbike528CBX

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Re: Do we over insure?
« Reply #2 on: December 20, 2019, 06:05:10 PM »
Any collision or theft coverage is likely wasted.

You CAN, being MUSTACHIAN, pay for replacement, right?

Why apartment insurance?
If it is a liability coverage, then maybe. "Stuff" insurance, nope, unless you have a verified original Rodin or other artwork >30% of your Net Worth.

ysette9

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Re: Do we over insure?
« Reply #3 on: December 20, 2019, 09:14:16 PM »
Obviously you have to have mandatory insurance. I think you should have car insurance with really high limits as well as an umbrella policy. Those are your catastrophic insurance policies, along with health insurance. The other stuff you can probably do without in a pinch as it would be insuring things I expect someone with a good stash could replace themselves without too much pain.

Basically, insure against the things that would have a serous negative financial impact.

ysette9

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Re: Do we over insure?
« Reply #4 on: December 20, 2019, 09:15:17 PM »
Are your IRAs sheltered in the states each of those things are in?

It seems the only optional insurance you mention is umbrella.
Umbrella policies are usually really cheap for a lot of coverage.

terran

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Re: Do we over insure?
« Reply #5 on: December 20, 2019, 09:18:53 PM »
It sounds like you have an appropriate amount of insurance, although perhaps too much "stuff" that's needs insurance. If you have low deductibles you might consider increasing those.

robincanada

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Re: Do we over insure?
« Reply #6 on: December 29, 2019, 05:08:24 PM »
Sometimes I feel like we are over insured, at least compared to most Americans.

We have a boat, so we have insurance on that (required by the marina to have certain liability insurance)

New (2018) van, we own outright but have liability, collision, uninsured motorist

We own some mountain property and have liability insurance on that

insurance on our apartment

snowmobile insurance (liability and theft, though neither is required by law)

umbrella insurance policy


All together it is serious money and we have not made a claim in 20 years or more.   I sometimes wonder since most of our money is in 401K and IRAs, which are lawsuit proof, we perhaps spend too much money trying to protect ourselves.

Bought a house in July.  Had issues with the ability of my province to allow me to become a resident.  A deed was not enough.  I needed a mortgage or a job or a bill.  It took a long time to get a hydro bill.

Long story short.  I have no house insurance.  It was built in 1953, thoroughly rewired and such much more recently.  On top of my living room book case is a snazzy antique looking red fire extinguisher unused, expired in 1979.  Came with the house!  I bought 3 smoke detectors and a new fire extinguisher.  I lock my doors at night.  I have yet to lock my back door when I leave my house yet in 6 months.

I have no debts and no savings.  A 2015 Fiat 500 with only insurance on liability, $800 a year. 

So I guess my insurance is the value of the third of an acre the land has if the house burns. 

I have PTSD too.  I felt so insecure when I moved.  I emailed the insurance company before my closing date.... 

Somehow it turns out... I have a lot of faith in bad stuff not happening.  I feel more secure not worrying about things I canít control.  And I save a lot of money with no house insurance.  The 1979 fire extinguisher helped.  And I have nothing that valuable to steal.  I barely use my car in the winter.  I would rather you walk in and take stuff than break my door.  I put the things in my baby barn in the basement in winter.  I would rather my lawn mower and stuff not get stolen.  I guess it could still, but less likely.

I think not insuring stuff, makes many people feel less stress somehow.  I think MMM minimizes insurance not just to save money too.  It is just ďstuffĒ.  My land is worth like $25k or something so I wonít be dead broke.  You are only screwed in this world if you have no assets.  You have $25k.  You can rebuild.  You get to zero assets and you could end up in true poverty grind.  I donít have that risk so... I donít feel insecure. 

Paul der Krake

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Re: Do we over insure?
« Reply #7 on: December 29, 2019, 05:12:33 PM »
Why would you compare yourself to the average person? Have you seen how they run their lives?

LightStache

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Re: Do we over insure?
« Reply #8 on: December 29, 2019, 08:25:23 PM »
I'd drop the theft insurance on the snowmobile and drop down to the minimums required by your umbrella insurance carrier. Other than that, it seems like you have appropriate coverages IMO.

brooklynmoney

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Re: Do we over insure?
« Reply #9 on: December 29, 2019, 09:08:56 PM »
I think someone pointed this out above but you have a lot of big stuff so hence itís prudent to at least have the required level of insurance and the umbrella since you have so much stuff.

Mr. Green

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Re: Do we over insure?
« Reply #10 on: December 29, 2019, 10:21:59 PM »
In our litigious society, liability insurance is critical for anyone with significant assets. No one wants to wake up to a lawsuit but it does happen. The umbrella is really the gold standard there but no one is going to write one without first having coverage on the individual pieces like renter's insurance, auto, etc.

ysette9

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Re: Do we over insure?
« Reply #11 on: December 30, 2019, 08:25:26 AM »
In our litigious society, liability insurance is critical for anyone with significant assets. No one wants to wake up to a lawsuit but it does happen. The umbrella is really the gold standard there but no one is going to write one without first having coverage on the individual pieces like renter's insurance, auto, etc.
This.

I was hearing something on a WCI podcast recently about how some auto insurance policies are changing to require you to hold a good amount of that coverage before an umbrella policy would kick in, should you be sued for huge sums. The idea is that you canít skimp on the auto insurance and hope the much cheaper umbrella policy will give you the big coverage you need. So if you have significant assets, make sure the auto policy has a high coverage limit. I think ours are $500k.

Mr. Green

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Re: Do we over insure?
« Reply #12 on: December 30, 2019, 04:36:18 PM »
In our litigious society, liability insurance is critical for anyone with significant assets. No one wants to wake up to a lawsuit but it does happen. The umbrella is really the gold standard there but no one is going to write one without first having coverage on the individual pieces like renter's insurance, auto, etc.
This.

I was hearing something on a WCI podcast recently about how some auto insurance policies are changing to require you to hold a good amount of that coverage before an umbrella policy would kick in, should you be sued for huge sums. The idea is that you canít skimp on the auto insurance and hope the much cheaper umbrella policy will give you the big coverage you need. So if you have significant assets, make sure the auto policy has a high coverage limit. I think ours are $500k.
We are with State Farm and they require 500k in liability coverage on all the individual pieces before they will write an umbrella. At least the Renters insurance and umbrella are cheap. We save on auto insurance by having a car old enough that there's no point carrying comprehensive or collision.

 

Wow, a phone plan for fifteen bucks!