Well Heeled Blog > Insurance

Life & death: do you have your shit together?

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If you died suddenly, will your partner or spouse know how to fend for themselves in the midst of grief? Will your partner or family member know what your wishes were, will he/she have power of attorney to settle your affairs, access your accounts, have enough money to get through the first week, month, year? And if your partner were the one to go first, will you have all of that information? In short, when it comes to life/death planning, do you have your shit together?

That’s the question that Chanel Reynolds, a freelance designer in Seattle, mother of a 5-year-old son, and widow to an avid cyclist and software engineer, wants everyone to ask themselves. She didn’t “have her shit together,” and when her husband died suddenly in a biking accident, she was left trying to figure out where his passwords are, how to access his bank accounts, how to pay their mortgage, how to take care of her little boy and stepdaughter, all while going through the biggest, most devastating emotional trauma of her life.

getyourshittogether Life & death: do you have your shit together?

Now Chanel is sharing her story and helping others via her website: getyourshittogether.org. I first discovered this story via a New York Times article, and this story held extra poignancy for me because of my recent marriage. I have to say that neither CB nor I have my shit together:

  • We don’t have a will – although I do have stated beneficiaries for my retirement accounts, which constitute 95% of my total assets)
  • We do not have a living will or directive – we simply have talked about, in generalities, what constitutes an acceptable quality of life
  • We don’t really know each others’ passwords, or even all the accounts that each others have
  • We do not have a medical power of attorney – even though we are married, CB and I have different last names, so I am worried that in case something happens, we may need additional “proof” that we are married or have the right to make decisions for each other
  • We do not have any life insurance – and maybe at this point we don’t need any, but that is something to be discussed once I get a full-time job

Do you “have your shit together” when it comes to end-of-life or sudden-death scenarios involving you and your family?

3 Effective Ways to Save $200 on Car Insurance

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This is a guest post by Tom Richards. Tom is a risk management specialist who provides tips on finding the lowest car insurance coverage at Cheap Car Insurance Outlet.

Car insurance is an expense we all need to deal with on a continuing basis. If we don’t pay close attention it is easy for us to pay more than we need to. To save the most money on the cost of auto insurance we will look at 3 of the best areas where we can save as much as $200 a year on our car insurance.

1) Mileage Makes Insurance a Variable Cost

It is only naturally we should expect our insurance cost to be reflective of the amount of miles we actually drive. The cost we present to insurers should be less as the risk of getting in an accident or filing a claim drops as we drive less. In the past our car insurance has mostly been a fixed expense where our 6 month policy stays the same. This is starting to change as more and more insurers are adopting usage based technology which easily allows for your mileage to be tracked. Insurers such as Progressive and GMAC claim savings as much as 50% by paying based on the amount you drive and more and more insurers are adding usage based programs. A good way to save 10-20% is focus more on your mileage and look for insurers who will reward you. Possibly you are able to car pool to work a couple days of week or take public transportation? Maybe we can arrange errands in one trip or work from home so we drive fewer miles? An additional benefit of lowering mileage is we will see a drop in other expenses such as gas and upkeep to our cars.

2) Take Advantage of Discounts

Most vehicle insurers will offer a vast array of discounts to lower your car insurance expense. A couple of discounts to pay close attention to relate to the way you pay your bill and if you are consolidating your insurance coverage with one provider. Since interest rates are so low it makes sense to pay your 6 month policy in one payment as your cash will be earning little in interest. Many insurers will offer discounts as much as 10% by paying your bill in full when signing up. Additional savings can be achieved by asking your insurer if they offer 12 month policies. Paying up front for a longer period of time can add to these savings. For those on a tighter budget and needing to pay in installments look at no down payment car insurance strategies to make sure you are not being overcharged. Another good way to save is to combine your insurance policies with one company. By grouping your life, home and auto insurers will reward customers will savings as much as 10%.

3) Shop Around

The easiest way to save as much as 20% or more on car insurance is to shop around. There are several reasons, such as the value of our car drops, our driving record improves or we haven’t been filing claims, which will all help decrease the risk we carry as a driver. Many insurers will not reward your risk reduction and will keep prices at the same level. Getting quotes on the internet will take only a few minutes and is a great to lower your car insurance.

 

My First Car Accident

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For the first time since I’ve gotten my license in 2003, I got into a car accident. Worse of all, I was at fault. Chalk it up to a case of stop-and-go traffic, a sudden braking by the cars in front of me, and my look down to change the radio station to country music… and I bumped into the Honda in front of me.

That was a real bummer. Fortunately, as far as accidents go, it was the best kind of accident to have.

  • I wasn’t hurt, and the driver in the other car wasn’t hurt.
  • He also drove an older Honda (i.e., no expensive import cars that cost $8,000 for a dent in the bumper).
  • The damage, at least to my eyes, was minor. There was a dent in the shape of one of the screws that held up my license plate.
  • My car was completely fine. Not a scratch (and as long as there was no structural damage, I wouldn’t have cared so much about scratches).
  • He was calm and reasonable when we exchanged information.
  • A few hours later, he left a message and said he wouldn’t be pursuing the claim.

I called my insurance and reported the accident as required, and apparently, if the other driver really doesn’t pursue a claim, my insurance premiums won’t increase. I am sad, though, that my previously blemish-free record is now one accident deep. In the state of California, an accident will stay on the record for 3 years and adds 1 point. If a driver gets too many points, he/she can be revoked of license. Aside from the immediate financial consequences of an accident – paying for repairs / damages – an accident also has long-term effect on car insurance rates.

Let that be a lesson to all out there… KEEP YOUR DISTANCE from the cars in front. I really wish I would have given myself more room. Eight years of a perfect driving record down the drain! It didn’t feel like I was tailing the car, but traffic can crunch up faster than you realize, and it’s better to be safe than sorry.

Do you remember your first car accident? What was the lesson you learned?

How Do You Budget for Health Care Costs?

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health care How Do You Budget for Health Care Costs?

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Health care costs can eat up a big chunk of your budget, when you least expect it to. I should know – just ask me how much health care services have cost me so far.

Before this year, I only sought out health services once a year, for my yearly eye/dental/health checkup. This year, however, I am not so lucky. A few months ago, I sprained my ankle, and I am still paying for it (physically and monetarily).

First, I saw an orthropedic specialist ($30 co-pay) and got X-rays (haven’t got the bill yet, but counted toward $500 deductible). I also had some lab work done for my annual checkup ($94), a prescription ($10), and co-pay for doctor’s appointment to get those tests and prescriptions ($30). Now, I am in physical therapy for my ankle, and who knows how much that will cost. Physical therapists are medical professionals, and they don’t come cheap.

Add in my new eyeglasses and eye examination ($160) and dental care, and I am just getting an inkling of the expenses that can incur. I know things can be a lot worse. I don’t even want to think about the staggering sums that should come for a major illness or a trauma.

But as I have learned, medical costs can add up even for someone who is young, generally healthy, and well-insured.

Fortunately, since last year I have been putting $100 a month into a special savings account I dubbed the Health Care Account.  This very creatively-named account has since rolled into a neat balance of $1,000 or so, enough to pay for my deductible and co-pays. I am just grateful that I have insurance and resources for me to make decisions based on what’s best for me health-wise, instead of just focusing on finances.

How do you budget and pay for health care costs?

Joint Car Insurance Policy Between Unmarried Couples

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CB and I discussed the possibility of us combining our car insurance policies once we move in together. As it does with many unmarried couples, it took us some time and research (and discussions) to decide how we wanted to proceed. I actually couldn’t find too much information on joint car policy for unmarried couples, so I thought I’d share what I’ve learned from my insurance agent and other research here.  Disclaimer: I am not an insurance or legal professional, and everything I write here is what I’ve been told / researched on my own. I make no guarantees as to the information’s accuracy or completeness.

  • Some insurance companies will allow unmarried couples to be on a joint car insurance policy. Some won’t.  For example, in California, Progressive permits unmarried couples to go on the same policy, whereas All State does not (I don’t know if domestic partners can have a joint policy with a company that does not allow unmarried couples a joint policy – but that’s something you should check if you are in a legal domestic partnership).
  • Married couples will receive more car insurance discount than unmarried couples because they receive a “marriage discount” as well as a “multi-car discount”.  I am not sure about the financial impact of legal domestic partnership on car insurance.
  • In California, the primary holder of the insurance is the Named Insured. The person (or persons) added on to that policy are Second Named Insured.  The Named Insured can unilaterally remove Second Named Insureds from the policy without informing or receiving permission from the Second Named Insured. In other states, Second Named Insureds may need to give permission before the Named Insured can take them off the policy. Make sure you understand what the requirements are for your state. It’s easy to imagine a scenario (after an unfriendly breakup, perhaps?) that quickly turns ugly.
  • Some insurance companies may require that two people living at the same residence to be “rated drivers” on each others’ cars – i.e. that both parties can drive each other’s cars.  CB and I decided not to have a joint policy, but because we live at the same address, my insurance company will not cover CB if he drives my vehicle. CB is hence an “excluded driver” on my policy.
  • If a driver on the insurance is at fault for an accident, the insurance company will pay out the damages up to the limit of the coverage. The victims can sue for amounts beyond what the insurance company paid – they can sue for the assets of the driver, then, if they so choose, they can go after the other insured person on the joint policy.  I don’t know how common or successful these suits are usually, but just the possibility of opening myself up to such liability is disconcerting.

The last reason is why CB and I decided not to combine our insurance policy. If he causes an accident or I cause an accident, we wouldn’t want the other person’s assets to be at risk of a lawsuit.  We have separate assets, but, well, you just never know.  That’s the reason why my parents insisted I get my own car insurance as soon as I graduated college – it was unwise to open their much-more-substantial-than-my assets to the risk of ME being sued.

If we were married, we would take steps to mitigate that risk (probably through the use of a much higher coverage / umbrella coverage).  But I don’t want to open ourselves up to the risk of liability (however slight) without a structure in place to mitigate it.

Annual Mileage Estimate Can Lower Car Insurance Premiums

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This post has been Consumeristed!

There are many financial issues to consider after you’ve been laid off. Filing for unemployment benefits. Signing up for COBRA or researching health insurance options. Rolling over your 401k. Reviewing the household budget.

I didn’t realize, at the time, that reviewing your auto insurance policy is also a great idea. I’ve been paying around $75 a month for coverage. When renewal time came, I called my insurance carrier to see if there’s any way I can get my premiums lowered without a decrease in coverage levels. Because of my layoff, I did not have daily commute. Even with treks to interviews and job fairs, my new mileage estimate is still far lower than my original figure.

With lower mileage estimates, I decreased my premiums to ~$60 a month and I will be getting a $135 “overpayment” refund from my carrier. I’m only sorry I didn’t do this sooner!

So, the lesson is this: if anything changes in your life that would affect your annual mileage estimate, tell your insurance agent! Some of these changes might be (of course, these changes might also increase your mileage):

  • Change in job situation (ex: layoff, new job at a closer location)
  • Change in relationship (ex: if you are in a long-distance relationship but you have now moved in with each other)
  • Change in living location (ex: you used to live in a rural area but have moved in a city where more nearby amenities)

A reduced annual mileage estimate can very well lower car insurance premiums.

Is Pet Insurance A Good Idea? (or, Would You Go In Credit Card Debt To Treat Your Sick Pet?)

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33 cute puppies Is Pet Insurance A Good Idea? (or, Would You Go In Credit Card Debt To Treat Your Sick Pet?)

People buy medical insurance to protect themselves from the costs of catastrophic illnesses. Now that pets are such an important part of many families, should you also buy insurance for your furry friends?

One option is to self-insure, i.e. put away money periodically for your pet’s future medical costs. As treatment options (and their corresponding prices) increase for pet illnesses, however, steady savings might not be enough to pay for the most up-to-date medication or surgeries for your dog or cat. Personal finance expert Liz Pulliam Weston says the question to “does pet insurance make sense” depends on what type of pet owner you are [MSN Money]:

I still believe most people are better off forgoing pet insurance and instead putting the money they would have spent on premiums into a savings account. Pet coverage can cost $2,000 to $6,000 over the life of an average pet, and the chances are slim you’ll ever need to shell out that much for treatment.

But if you’re the type of person who would do anything to save your pet, including spend thousands of dollars on medical care, pet insurance might be a preferable alternative to going into debt.

Pet insurance is still a minority among pet owners. Personally, I don’t know of any families that carry pet insurance policies. I don’t have any pets right now (I have my eye on a Welsh Corgi in a few years), but if I were in a situation where my dog is very sick, I will have to balance the medical costs with the likelihood of success, the quality of life after the treatment, my dog’s age, and my financial ability to afford the treatment.

A pet – especially a dog – is a huge emotional and financial responsibility. That’s why if I get a dog I will definitely put away savings for routine and unexpected medical costs. Not carrying insurance does not mean that I won’t make adequate financial preparations for my pet. On the other hand, I can’t say that I would pay everything to treat my dog.

A Gai Shan Life raised this very question in her post: where do you draw the line on pets and money? The post details the situation of a lady whose puppy has Parvos, a serious disease that may require thousands of dollars in treatment for an uncertain outcome. This lady is suffering financial difficulty and does not have that kind of money unless she turns to credit cards.

Here’s my answer to the question: If my dog is near the end of its lifespan and is suffering a life-threatening illness, the treatment costs are high but the chance of survival are low, and the prognosis for quality of life after recovery is poor, then I would probably not proceed with the treatment. My focus, at that point, would be to ensure my pet spends the rest of its time, however limited, in comfort. My first financial responsibility would still be to my family.

What kind of owner are you – would you spend thousands, even tens of thousands, on a sickly pet? If so, do you have pet insurance? Would you go into credit card debt to pay for a pet’s medical expenses?

(If you do decide to purchase pet insurance, here are some sites with helpful information and discussions: Dog Time, Yelp Question & Answer, Country Living, and Consumer Tips Reports.)

image source: innocentenglish.com