Insurance Costs

Discussion in 'Homesteading Questions' started by Jena, Jan 20, 2005.

  1. Jena

    Jena Well-Known Member

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    I am going through all our stuff to get ready for taxes. I am amazed at how much we pay for insurance of various types. I know rates will vary, but what kind of insurance do you have? How much are your deductibles? My husband insists on keeping $250 deductibles on everything, when I think we could save a ton of money by going to $500 or even $1000. What do you all do?

    Jena
     
  2. DAVID In Wisconsin

    DAVID In Wisconsin Well-Known Member

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    We have deductibles that are from $1000.00 to $5000.00. I find that this saves us A LOT of money each year. We believe that in the long run, we come out cheaper.
     

  3. cowgirlone

    cowgirlone Well-Known Member

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    We need to make some major changes in our health insurance. DH has insurance through work and it still costs us over $1,000. per month with $500. deductible. Insurance is one of my pet peeves. :haha:
     
  4. Gary in ohio

    Gary in ohio Well-Known Member Supporter

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    For a home I think $250 deductible is way to low. Figuring if you ever use it the total repair cost will be high engough that the $250 would be meaning less.
    $1000 or more on home owners. For a Car, then you need to be a little more carefull, $500 is high enough.
     
  5. Blackthorne

    Blackthorne Member

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    Three yrs ago we changed our farm deductible from 250. to 2,000. and saved $420. that year. The savings has increased each yr since. Right now we have saved $1500.00, so if we had a claim right now, it would amount to an actual $500.00 deductible. If we continue to go claim free we just keep on saving money. Since we would make most claim related repairs ourselves, and the ins co counts our own labor in repairs, we would help eat up the deductible that way regardless. We also get a no claim discount from our company. Same on the vehicles. A $500. ded seems high enough for me on a car.
     
  6. jack_c-ville

    jack_c-ville Well-Known Member

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    A $250 deductible is nuts. I am a wholesale insurance broker and I refuse to write a new account now with less than a $1,000 deductible. $500 may make sense for some people, but certainly never go less than that.

    You have insurance for the big things. If you go filing little claims for a few hundred or a thousand dollars you will get non-renewed very quickly and have trouble getting insurance any place else.

    When a tree is blown down and falls on your house and causes $15,000 worth of damage (probably 60% of the claims I see are exactly that scenario), the $500 is not that big a deal. I had a $20,000 loss to my own house in 2003 and never even felt my $1,000 deductible. I just fixed the damage to the front walk myself and cut $1,000 out that way. The insurance company will add up the total cost of your loss and then subtract the deductible from it. Trust me, in a big loss you aren't even going to feel it and you shouldn't be filing the small ones anyway.

    Do yourself a favor: bump your deductible up to $500 or $1,000 and set aside the difference in premium that you are saving. Stick it in a savings account. In 2 years you'll probably have the $500 in there.

    I take a similar approach to auto insurance. Every car I've ever owned was worth less than $4,000. So instead of paying $600 a year for property coverage on them I just put the money in the bank instead. Since the car is depreciating while the account balance is increasing, before long I have a 'new car fund' that covers more than what the insurance company would pay me and I have effectively self-insured. I say this as someone who sells car insurance; not everybody needs to buy it.

    Liability insurance for the car is a whole different animal, of course. You definitely need that.

    -Jack



     
  7. Ozarkquilter46

    Ozarkquilter46 Well-Known Member

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    Jack is so very right!! We have had lighting come in through the power lines twice. The first time it fried the TVs, computer, kids video games phones. About 2,500 in damage all total. Well we had a 500 deductable and we had had this insurance for 7 years and we filed a claim on it. They paied no problem and when it was up for renew they droped us. No explations just said once you file they don't renew for 2 years with that person company policy. Ok so we found another insurance co. and 4 years later the same thing happened but we only lost the computer and one tv. 1,500 dollars. We filed again with the 500 deductable. Well they payed it then sent us a letter saying they were droping us now and that we would have to find another co. We said you know that happed to us about 4 years ago. She said if you have had two claims within 10 years we were going to be lucky to even find a co that would take us at all. I told her but they were both small claims. She also told us it dosn't matter what kind of claim it was that if they so much as payed a dime we would be concidered high risk and uninsurable!!!! shocked me to death. Well we did find someone but it cost us twice as much they won't insure the house for replacment cost anymore said not till our bad record has run out. But they do insure it for the cost like you would sell it. Our deductable is now 1000 and we have found out the hard way its not insurance its extortion!! Unless you have at a min of 10,000 you don't file a claim ever ever!! We now have 4 years behind us tward our clean record but have 6 years to go.
     
  8. Jena

    Jena Well-Known Member

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    I have never filed a claim on homeowners insurance. I filed a claim on my car (hit and run damage) last year, but that was the first time in I don't know how long. Many years. They said the claim would not count against me since it was hit and run. My kid has filed two claims on her car. Once it was broken into, once she crashed it.

    I have filed claims on my farm insurance every year I've had it. This year it was for my foal that was killed by coyotes and an ATV that burned up. Last year the cows got in the neighbor's corn field and caused quite a bit of damage. I turned it over to insurance for him. Then there was hail damage to a corn field. The combine caught fire year before that and on it goes.

    I still have the same car and farm insurance. They never batted an eye and my premiums are the same as they ever were.

    I always hear these horror stories about insurance, but my experience doesn't follow. I wonder if it's just homeowners that they get all worked up about? Or maybe it's the bigger companies? I dunno.

    Jena
     
  9. BCR

    BCR Well-Known Member

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    To make health insurance affordable we have a big deduction ($4K) based on hospital stay. It differs if there is no hospitalization.

    I won't make a claim if I don't have to. Stories here prove that point. Why give them opportunities to drop you if they can? Thats why I love NASE.org for health insurance through MegaLife. They can't drop you or raise costs on an individual. It is based on the group. Generally you will end up ahead.
     
  10. Quint

    Quint Well-Known Member

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    I have 1500 or 2000 on my home and ranch and 1000 on my vehicles.

    I know someone who has 0 deductable on her homeowners and vehicles. She couldn't get that policy today but she is evidently grandfathered in. She justifies this to herself by saying when soemthing does happen she might not have the money for a deductable. whatever

    I keep a pretty substantial liability coverage 1mil+. In this day of multimillion dollar liability awards it is only prudent.
     
  11. kppop

    kppop Well-Known Member

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    I know someone who has 0 deductable on her homeowners and vehicles. She couldn't get that policy today but she is evidently grandfathered in. She justifies this to herself by saying when soemthing does happen she might not have the money for a deductable. whatever
    ****

    That might be true in her case..and eldery person on a limited income doesn't usually have a large bank account to play with and a deductable of 500-1k could cause major problems..for somer reason they insist on eating everyday ;)

    We personally have an account that is what we call emergency money and it's used only for insurance claims and God forbids. We set this account up many years ago after have lightening strike our house and do over 15k , at that time, in damage. We had to replace every applicance in the kitchen, my tvs, vcr, stereo, hot water heater, water pump, a/c, several outlets (dh did this, he's in the business).

    In order for the insurance agent to cut us a check we had to bring in all the receipts of the replacement items..we had to buy them first with our own money. We were fine with it..we had cash avaible but what does someone do who can't put that much cash up front? What then?

    I don't think your agent has a right to tell you how much of a decductable you want or don't want. You are the consumer and since you are paying the bill you should have the final say. The day my agent tells I'm nuts for keeping a too low or too high decductable on something is the day I look for a new agent.


    kppop
     
  12. jack_c-ville

    jack_c-ville Well-Known Member

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    Ozarkquilter,

    When did you last shop it? Most companies actually only look at claims history over the last 3 years or maybe 5. 10 years is waaaaay excessive. As an underwriter (I wear a lot of different hats being a wholesaler), I would never even consider holding claims that old against someone. I'll rate based on 3 years and only take the previous few years into consideration if there is a string of similar losses that suggests poor maintinence or bad plumbing. Lightning does not usually suggest something like that. I mean, it comes out of the sky and does what it's going to do. It's not the customer's fault.

    However, I did insure one house that was struck by lightning 5 times (!) in only 4 years. Eventually, I was forced to determine that God was trying to make a point of some kind. I non-renewed them for failing to install a lighting rod system after being told to several times.

    Try talking to an independent agent. Not State Farm, Farmers or any of those guys that only represent one company. You want an agent who has access to a lot of different companies and can find you a better deal based on your unique circumstances. Farmers or State Farm agents only have one product to sell and somehow they 'just so happen' to decide that it is exactly what you need.

    If your application came across my desk I would probably write it, provided that you carried a $1,000 deductible on it and agreed to install a lighting rod system within 30 days.

    -Jack
     
  13. jack_c-ville

    jack_c-ville Well-Known Member

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    Your agent shouldn't force you, but it is his or her job to give you their professional advice and then follow whatever instructions you give. An agent who just hands you a form and then sends you the bill isn't earning his commissions. A computer can do that. The agent's existence is only justified if he has a wide body of specialized knowledge and experience and uses it to make reccomendations.

    -Jack
     
  14. kppop

    kppop Well-Known Member

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