Author Topic: Insurance  (Read 1960 times)

Giro

  • Pencil Stache
  • ****
  • Posts: 604
Insurance
« on: October 11, 2016, 08:54:25 AM »
I'm trying to figure out how much insurance is enough but not too much.  Of course my insurance agent wants me to insurance every little item.

Do you add riders to your policies for extras like jewelry, art, musical equipment or do you just use your home owner's policy as coverage?
For rental properties, do you just use a fire policy or do insure for contents as well?
What about state minimums for liability ?  Is that enough or should I increase those.

Insurance for property and autos is my biggest expense after taxes and I'm trying to get the prices down.  I have a feeling I'm over-insured.

nereo

  • Senior Mustachian
  • ********
  • Posts: 10767
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Insurance
« Reply #1 on: October 11, 2016, 09:45:25 AM »
Not enough information.

What does your financial situation look like?  Do you have enough liquid assets that you can handle smaller claims? What kinds of insurance do you currently have, what are they insuring and what are your coverages on those assets?


On aggregate, self-insuring is far cheaper than buying insurance. However large claims, while very rare, can ruin all but the wealthiest individuals. Consequentially (and very broadly speaking) choosing high-deductable plans and ones that cover catastrophic losses are generally the most favorable for people with good cash-flows and a fat 'stach.

seattlecyclone

  • Magnum Stache
  • ******
  • Posts: 4979
  • Age: 34
  • Location: Seattle, WA
    • My blog
Re: Insurance
« Reply #2 on: October 11, 2016, 09:54:08 AM »
In general, you shouldn't insure something unless losing it would present a severe financial hardship. State minimums for liability are probably okay-ish when you have few assets; if something comes up you'll give what little you have to the person suing you, declare bankruptcy, and start over. Once you build up a stash big enough that losing it would set you back, increase that coverage.

Giro

  • Pencil Stache
  • ****
  • Posts: 604
Re: Insurance
« Reply #3 on: October 11, 2016, 11:15:05 AM »
I don't think losing any of it would create a financial hardship, so that is good advice to ponder.  Our net worth is maybe 1.5m.  If someone sued could they take retirement accounts?  I will increase above state minimums if that's the case.  I'll look into the state law.  I guess liability is really our only concern.  I'll look into dropping the riders for the extras.  I'm not ready to drop full coverage on the newer vehicles but I will consider dropping to liability on the older ones. 

Thank you.


Tjat

  • Pencil Stache
  • ****
  • Posts: 562
Re: Insurance
« Reply #4 on: October 11, 2016, 11:24:21 AM »
If your NW is 1.5m, I'd personally consider state liability minimums as far too low. A lawsuit probably won't put you out on the street, but it could very well eliminate your financial independence. A umbrella policy is cheap that would nearly eliminate that risk.

Giro

  • Pencil Stache
  • ****
  • Posts: 604
Re: Insurance
« Reply #5 on: October 11, 2016, 11:30:32 AM »
If your NW is 1.5m, I'd personally consider state liability minimums as far too low. A lawsuit probably won't put you out on the street, but it could very well eliminate your financial independence. A umbrella policy is cheap that would nearly eliminate that risk.

That's the first thing that popped up when I started researching.  Looks like it might be my best bang for the buck.  Drop each vehicle and home to state minimum and add an umbrella to the entire policy. 

seattlecyclone

  • Magnum Stache
  • ******
  • Posts: 4979
  • Age: 34
  • Location: Seattle, WA
    • My blog
Re: Insurance
« Reply #6 on: October 11, 2016, 11:41:20 AM »
Umbrella policies generally kick in at a certain level and often require you to have your other insurances (home, auto) cover up to that amount. Just FYI.

Giro

  • Pencil Stache
  • ****
  • Posts: 604
Re: Insurance
« Reply #7 on: October 12, 2016, 06:59:20 AM »
Umbrella policies generally kick in at a certain level and often require you to have your other insurances (home, auto) cover up to that amount. Just FYI.

You were correct! There were coverage requirements for the umbrella but they were satisfied with applying to just one house and one auto.  I think this is going to work for me!!


ender

  • Magnum Stache
  • ******
  • Posts: 4864
Re: Insurance
« Reply #8 on: October 12, 2016, 07:03:03 AM »
Insurance for property and autos is my biggest expense after taxes and I'm trying to get the prices down.  I have a feeling I'm over-insured.

Have you shopped around, too?

Our combined homeowners/auto (with 1M liability on the auto) is about $1k/year.

Though that's without collision/comprehensive, but still, I think adding those both was only going to be a couple hundred more per year.

Giro

  • Pencil Stache
  • ****
  • Posts: 604
Re: Insurance
« Reply #9 on: October 12, 2016, 09:11:02 AM »
Insurance for property and autos is my biggest expense after taxes and I'm trying to get the prices down.  I have a feeling I'm over-insured.

Have you shopped around, too?

Our combined homeowners/auto (with 1M liability on the auto) is about $1k/year.

Though that's without collision/comprehensive, but still, I think adding those both was only going to be a couple hundred more per year.

I'm shopping around now.  We are paying through the nose.  My annual premium is $5500 for everything.  I realize we have a lot of autos and 2 rental properties, but I still think I'm over-insured and over-paying.  I'm looking at dropping full coverage on a few of the vehicles and doing the umbrella.

nereo

  • Senior Mustachian
  • ********
  • Posts: 10767
  • Location: Just south of Canada
    • Here's how you can support science today:
Re: Insurance
« Reply #10 on: October 12, 2016, 09:48:51 AM »

I'm shopping around now.  We are paying through the nose.  My annual premium is $5500 for everything.  I realize we have a lot of autos and 2 rental properties, but I still think I'm over-insured and over-paying.  I'm looking at dropping full coverage on a few of the vehicles and doing the umbrella.

You have "full coverage" on "a lot of autos", plus two rentals... there's your problem.  With your stated NW of $1.5MM there's no reason to hold full-coverage policies.
If it helps with the book-keeping earmark and account for 'self-insurance small claims' and contribute a few hundred to it each month.  Drop the full coverage and carry an umbrella policy for truly large liability claims.