We’ve all heard that medical costs are the number one cause of bankruptcy in the United States.  Based on that simple and well-evidenced fact, many people believe that the best protection against a bankruptcy filing is to acquire health insurance.  If you’re insured, the reasoning goes, you’ll be protected against massive medical bills, which should create a firewall between you and a bankruptcy filing.

That argument makes a great deal of sense at face value and there’s no doubt that having coverage will decrease your risk exposure.  However, if you dig a little deeper, you’ll find that having health insurance won’t necessarily provide adequate protection.  Researchers have uncovered an absolutely shocking fact:  Most of the people who filed medically-related bankruptcies actually had insurance in place!

Undoubtedly, the presence of insurance helps many people from running up truly catastrophic debt levels, but the combined weight of the costs and impacts associated with a serious medical condition often outstrip the value of the insurance.

Job losses, inadequate savings, uncovered expenses, co-payments and other out-of-pocket costs can still push even a relatively well-insured person into financial insolvency.  Don’t get me wrong, health insurance is a good idea and a must-have.  It’s necessary if you want to protect yourself from calamity.  In and of itself, however, it is not sufficient to do the job alone.

So, if health coverage isn’t enough to protect you from illness-related bankruptcy, what else do you need to maintain financial solvency in the face of medical challenges?  Here are a few things that can make a difference.

Quality Health Insurance.  Insurance policies come in all different shapes and sizes.  Having “health insurance” is fine, but what you really need is “good health insurance”.  Evaluate your policy carefully and make sure you have the kind of coverage you need to protect yourself and your assets as much as possible.

Disability Insurance.  If you experience a serious medical problem, it may effect your ability to continue working.  You need to have a way to fill in the gap in income during your recovery.  If your medical situation happens to be chronic, you’ll need a long-term way of taking the sting out of being unable to work.  Consider disability insurance options that can take the place of your paycheck, to at least a large extent, in a worst case scenario.  You cannot reasonably rely on Social Security Disability Insurance to serve this function.  The SSDI application and approval processes are time-consuming and benefits are generally inadequate.

Savings and Investment.  If illness or an emergency medical situation strikes, you are going to need cash.  You’ll need it to cover elements of the medical situation and you’ll need it to help replace lost income.  If you aren’t saving and don’t have resources from which you can draw during a period of crisis, you’re at greater risk.  Make it a priority to build your emergency fund and make sure you have sufficient liquidity in your investments to handle a crisis.

Focus on Prevention.  There are many medical crises that you can’t avoid.  However, many of the illnesses and diseases that put people in dire financial straits are avoidable.  You can prevent an increased likelihood of many debilitating medical conditions by improving your habits and lifestyle.  Smoking?  Quit.  Overweight?  Begin work on healthy eating and exercise.  There a million and one examples.  If you’re doing the right thing for your health, you can decrease your risk of illness.  Those decisions may also put money back into your pocket by lowering health insurance premiums.

When we hear that people file for bankruptcies due to medical problems, we only get part of the story.  The truth is that insurance doesn’t offer absolute protection and that many of those who find themselves in insolvency had their problems exacerbated because they lacked optimal coverage, savings, paycheck replacement plans and may have put themselves at greater risk of illness in the first place.

The idea of going “belly up” due to illness is frightening, but there are things you can do to keep yourself from going straight from the hospital into bankruptcy court.

You can often cut your monthly expenses without changing your lifestyle one iota.  Sure, making changes in your behavior is often the best way to curb costs, but there are ways to reduce your cost of living without altering your habits at all.

The only expense involved is a little time and analysis.  You’ll need to do a little research, yank out your monthly bills, jot down some phone/account numbers, and make a few calls.  That’s it.

It’s all about getting a better deal on the things for which you’re already paying.  You might look at these as fixed expenses as you plan your spending, but they’re not necessarily fixed.  In fact, they’re often quite flexible.

You can get a better deal from your existing service providers just by asking.  Trust me, these folks aren’t going to call you to tell you that you can save money.  You must ask.  It helps if you have an idea of potential alternatives when you make the request, too.  When companies find out that you’re shopping around for the best possible bargain, they’re often willing to cut a deal to keep your business.

If you’re willing to do a little homework and to make a few phone calls, you can cut your bills considerably.  Here are a few prime examples of how to save money without changing your lifestyle by making a simple phone call:

Cell phone providers.  Call your cellular telephone provider and tell them that you’re looking for a way to cut your bill.  You might discover that they have a plan that better suits your needs than the one you’re currently using.  If your contract is almost up, the fact that you could opt to take your business elsewhere might also qualify you for some discounting.

Insurance agents. You don’t want to reduce your coverage below what you need, but you do want to get the best possible deal on the policies you’re carrying.  Call your agent and ask them what you can do to reduce your bill.  Your agent makes a living based on commissions and he or she won’t be seeing a commission if you decide to move to a different company or agent.  It’s often possible to tweak your coverage in a way that provides adequate protection at a lower cost.  If you’ve been claim-free for several months, you may also qualify for rate deals.

Cable companies. Do you remember what you were paying for cable television when you first signed up?  If you’re like most people, it was considerably less than what you’re paying now.  Cable companies are always offering great deals to new sign-ups.  Call your cable company and find out what you can do to lower your bill.  It might involve dropping a few channels that you don’t even watch.  It could be a matter of bundling your Internet or other services with your cable.  I once discovered that mentioning a competitor’s deal and alluding to the fact that I might consider a switch suddenly “qualified” me for a better deal.

Credit card companies. Are you paying your bills regularly?  If so, give your credit card companies a ring and ask about getting the interest rate knocked down a peg or two.  It sounds ridiculous, but sometimes you really can score a better deal just by asking.  Are you having a tough time getting those payments to them in a timely fashion?  Call them.  Sometimes, they’re willing to flex a little bit to get you in a position where you’re more likely to keep the money coming their way.

You shouldn’t be overpaying for anything.  Cutting your bills and expenses is a great way to develop greater leverage as you pay down existing debts and avoid future ones.  When you decrease your costs, you increase the availability of funds for smart investment.

Nonetheless, if you’re like most people you probably are spending more than you should.  One way to correct that deficiency is to pick up the phone and to ask for a better deal.

I purchased my first home 9 years ago.  It was an exciting and scary time for me and my family.  I had always dreamed of owning my own home.  Most people think of it as a great financial investment.  While that is true, I never thought of it as an investment in the monetary sense of the term. I viewed it as an investment in improving the quality of life for my family.

At the time, my son was 5 years old… and while living in an apartment was ok… it was time for him to have his own yard so he could run around and play with the dogs.  It was time for me to have my own patch of grass so I could experiment with gardening.  It was time for the DH to have his own space… a little outdoor workshop so he could channel his inner Bob Vila.

You know a place to call our own… a home with the white picket fence so I can raise my 2.5 kids and a dog. Well I don’t really have a white picket fence… it is more like black wrought iron.  I don’t have 2.5 kids… I have 2. And I don’t have a dog… I have a poodle and a terror (also known as a Jack Russell Terrier).

Anyway you get the point… the all American dream!

But buying a home is a big decision.  There are so many things you need to consider.  Which subdivision?  How many square feet?  How many bedrooms?  Which school district?  And so on… and in addition to making those choices, there is also a lot you must learn.

Buying a home exposes you to a world of other little issues that you never had to worry about before… adjustable rate mortgages… fixed rate mortgages… interest only mortgage… and other fancy mortgage loan products, PMI, home warranties, property taxes, homeowner’s insurance, home maintenance, neighborhood associations… this list could extend for pages, I will stop here because you get the idea.

However, of all the issues, I think the biggest one that you should understand before you sign on the dotted line is: How much house can you afford?

They say that your mortgage loan should be no more than three times your annual household income.  So if your household income is $60,000… then your mortgage loan should be in the $180,000 range. But depending on your part of the country… $180,000 can equate to merely a shack (California) or a mini mansion (Mississippi).

But even this 3 times your income rule is relative.  If you have a low interest rate… 3 times your income may be fine… but if you have a high interest rate or get one of these questionable mortgage loans… 3 times your income many not be enough when payments begin to balloon.

Besides the mortgage payment, you’ve also got to take into account the other expenses of owning a home.  A safe estimate is that other expenses will run about the same as another mortgage payment.

Utilities such as electricity, gas, water… $400 a month

Lawn maintenance… $75 a week

Those communication services we can’t do without, phone, high speed internet, cable/satellite… $200 a month

Property taxes… take a pick… this can range anywhere from $1,000 to $8,000 or more per year depending on your state and country laws and the value of your home.

Regular maintenance… cleaning air ducts, shampooing carpet, power washing the exterior to remove mildew, applying fertilizers, spraying for insects, weatherproofing outdoor furniture… and on and on.

And of course… you’ve got your occasional emergencies… plumbing backs up, air conditioner goes out, Hurricane Gustav blows half the shingles off the roof but you’ve got to meet a $5,000 deductible before the homeowner’s insurance kicks in (this is the little emergency I recently encountered).

Then you’ve got the one time expenses… furniture, appliances, and curtains… don’t forget about the curtains.  Some people may not realize how expensive it can be to put up window treatments in every window of a house.

Use a good online calculator to figure how much house you can afford, but don’t forget to consider all the other expenses that come with home ownership.  That will help you understand how much house you can really afford.

Recently, I purchased a new term life insurance policy.  I sat with my insurance guy for about 35 minutes.  For five of those minutes give me several different quotes.  And I spent the other 30 minutes filling out paper work, signing here, and initialing there.  Seriously, I must have signed or initialed over a hundred times.

I know I am one of those who stress the importance of reading the fine print, but when you are actually in the situation… that can be hard to do.  This is usually how it goes…

The insurance guy says… this paper gives us permission to do yada, yada, yada… sign here… we sign. This paper says I’ve advised you of blah, blah, blah… initial there… we initial.  Most times we just take with they say, without reading it for ourselves, and sign next to the X. 

My insurance guy quickly brushed over the forms… explaining page after page of single spaced, 6 point font disclosures in only one or two sentences.  As I recall it… one of those forms I signed gave the insurance company to permission to check out my medical history.  Because I just signed where he pointed, I don’t know how they planned to get my medical history.  It is very likely I signed a form authorizing them access to my “health credit report”.

Yes, health credit report… did ya’ll even know that those existed?  I didn’t.  I learned about it today when I read the Washington Post.  Apparently this is a new resource available to health and life insurance companies. 

There are two health information companies, Ingenix and Millian, which collects the prescription records of 200 million of us.  With our permission (signature on one of those forms we don’t read), health and life insurance companies can have access to our prescription history.  And they can use the information in those files to deny coverage. 

Didn’t they have access to this anyway?

No, not really.  Before the advent of these prescription databases, they would get information from the doctors you listed in your application.  But want if you forgot to mention that in addition to your primary care doctor… you also see a neurologist once or twice a year to get a script for a medicine that manages your minor nervous disorder.  Well, unless your primary care doctor has notes about this in his records, the insurance company may never know.

Yes, the insurance companies may collect samples of your blood and urine samples… but they can’t check it for everything.  They mainly test for the biggies… HIV, cancer, diabetes… your blood, urine and the records from your primary doctor may never give hint to your nervous disorder.

Well… now that they have access to your prescription records… that fact that you have been taking Tegretol everyday for the past three years is a huge flashing red light.  Tegretol has been used to treat all kinds of ailments ranging from damage caused by carpal tunnel to schizophrenia. 

Because of many medications have variety of uses, the insurance company can assume that you have all kinds of health problems… which may or may not be true.  And based on those assumptions they may charge a higher premium or even limit or deny coverage.

Another issue with this health report… what if something in it is untrue? The FTC says that these reports are to be treating like any other report that falls under the Fair Credit Reporting Act.  If you are denied coverage based on the report, the insurance company will have to let you know that this is why you were denied.  And Ingenix or Millian is required to give you a copy of the report.

But even though the FTC issued this order, these health information companies are scarcely regulated.  There is some legislation floating around in Congress that’ll give the feds more control in regulating these companies.  But as of now, the control is very limited.

And regulation about the uses of prescription history is important.  Sparse control leaves the door open for all kinds of people getting their hands on your personal information.  The information could be sold to marketing companies, purchased by potential employers to deny you a job or it just may happen to fall into the hands of your political rival. Ummm… (Could you image if the McCain camp got a hold of Obama’s prescription history?  That would make for an interesting smear ad.)

And about this Inegenix… do we really want them to be the gatekeeper of our prescription history?  For one, they are owned by United Health Care, which is a top health insurer.  It is kind of hard to provide an independent view when your parent company is an insurance company.

And secondly, their questionable practices have been the center of much unrest.  The company was sued by the state of New York for alleged inaccuracy.  And now, there are some folks in Connecticut that hope to bring a class act suit against the company for similar reasons. 

But aside from all that, I do not like this idea of a health credit report.  It just gives insurance companies more ammunition to deny us.  It’s like having insider information.  When Martha Stewart did that, she got hauled off to the pen.  But when insurance companies do it… it’s ok?

I know I was a bit harsh on Obama’s quasi universal health insurance plan.  But now that the insurance companies have this little trick in their bag… Obama’s health care plan is looking a lot more attractive.

In Iowa, a part time postal employee broke his hand. How did he do it? He hit a trailer in a fit of rage. His reward… winning an $8,000 worker’s compensation suit. While the judge agreed that the employee’s behavior was “inappropriate”, he ruled in the plaintiff’s favor because he did not “intend to injure himself”.

In Australia, a truck driver was convicted of worker’s compensation fraud. His story… I can’t work because of a back injury. He was evaluated by doctors and deemed unable to work. He won his claim, sat home and began collecting his insurance checks until he was well enough to return to work. Shortly after returning to work, he filed another claim… citing his shoulders as the problem this time. And for a second time, he was awarded the claim. However, the truck driver was recently convicted of insurance fraud. Apparently while his back and shoulders were too damaged to allow him to work for one company, they were not so damaged that he could not work doing the same thing for a different company.

These are just a couple of the most recent incidences of frivolous and fraudulent workmans compensation claims. It is estimated that 10% of the claims are fraudulent and even more are frivolous. But I am left to wonder why is workman’s comp abuse so rampant?

Well first… what is workers’ compensation? Set forth by state and federal laws, workers’ compensation offers protection to employees for work related injuries (or death) that renders the employee unable to work. If an employee is unable to work, then his livelihood is dramatically reduced. Therefore, under workman’s comp laws, an injured employee can receive medical benefits, a pre-formulated cash benefit to replace lost wages, and other benefits. This protects the workers income. But it also protects the employer from potential litigation that might have resulted from the injury. Businesses are required to purchase worker’s compensation insurance, although the particulars varies from state to state.

So what about this abuse of worker’s comp?

Well, it is three fold? Employees lie, employers lie and medical providers lie… all in an attempt to defraud the system.

Employees lie. They exaggerate, make up or even intentionally cause their injuries. In some cases, they hold another job while receiving workman comp benefits… which in most cases is illegal.

Employers lie… this is usually in an attempt to circumvent paying the appropriate amount of workman comp insurance premium. They sometimes pay employees under the table. Or they may lie about the occupational group an employee belongs to. For example, instead of rightfully classifying an employee as a brick mason, an employer might classify the employee in the less risky class of secretaries.

Medical providers lie. They may do deceitful things such as billing for services that were never rendered, billing for a more expensive treatment when a less expensive treatment was performed. They may sometimes perform unnecessary treatments. There are even cases in which doctors were in cahoots with patients and even gave them kickbacks.

Why should we care? Because workers’ comp abuse affects us all. One estimate states that in Massachusetts alone, the cost of this type of fraud exceeds $400 million. And consequently, this cost is shoved to the rest of us in the form of higher premiums.

So what can we do about it… well first and foremost, we should not participate in these schemes. Secondly we can report others who do. Finally call your legislators and ask them what they are doing to address the issue. It is a small step, but if every one takes the small step eventually, it can create leaps towards solving the problem.

Remember that job I told ya’ll I hated? Well in addition to me daydreaming about Cayo Espanto, I also pictured myself escaping on a Harley. Just me, my hog and the open road. I am not sure if it is its muscle like sculpture or the tough boy image… but there is something I find sexy about a Harley. I don’t have one… I’ve never ridden on one… I have never even touched one… but boy I sure do want one! If I had one… I’d to take long weekend road trips… wind in my hair and a Harley between my legs.

But what I would really love to do is take my Harley up to Canada. Canada is the best place to tour on a motorcycle. If I could, I would spend a year zig zagging across the Canadian roads and stop in every city to enjoy the roses. But first I have to get a bike… and figure out how to operate it.

There is a Harley Davidson shop not too far from my house. They actually rent out bikes and also offer motorcycle driving and safety courses. For the longest time I have been saying that I am going to rent a bike for the weekend… but other things keep coming up and the bike keeps getting pushed further and further down on my list of to do’s

Harley Davidson also offers motorcycle insurance to its riders. I never really thought much about it before, but bikers do need insurance. Biking can be a dangerous hobby. Not long ago the National Highway and Safety Commission launched a huge motorcycle safety awareness campaign.

The problem is that sometimes when people ride bikes for entertainment, they can get too carried away with the exhilaration of it all and fail to exercise caution. But by far, the biggest danger to bike riders is other drivers. They simply don’t see bikers.

But I’ll talk about motorcycle safety in another post. Today I wanted to discuss the basic of motorcycle insurance. Motorcycle insurance is very similar to auto insurance. Depending on which state you live in… some minimal amount is liability coverage is required and other types of coverage is optional.

Liability coverage - In the event that you are legally responsible for damages caused to someone’s property or person (bodily injury) … liability insurance can cushion the financial repercussions.

Collision coverage - If you are in an accident, this coverage pays for repairs to your damaged motorcycle. In the event that motorcycle is not repairable… this coverage compensates you up to the book value of the motorcycle.

Comprehensive coverage - This covers damages to your bike that were caused by anything other than a collision. This coverage also protects you against loss from theft.

Uninsured motorist coverage - This coverage protects you if you are injured or your motorcycle is damaged by an uninsured motorist. In addition to repair cost, it also pays for medical bills and forgone wages.

Other Add-ons - You can also get additional protection such as guest passenger liability, which protects you if your passenger is injured. Most insurance only covers factory equipment, but if you plan to sup up your bike with after market upgrades… then you can get optional equipment coverage. You can also add rental reimbursement or towing coverage.

In order to get a good rate on your motorcycle insurance, you should…

- Keep a clean driving record

- Take a motorcycle rider safety course

- Opt for a cruiser instead of a sports bike and,

- Combine all of your insurances with one company.

I view my home as a conduit for creating lasting childhood memories for my children. Leaving cookies and milk by the fireplace for Santa, running through the sprinklers in the backyard, carving Jack-O-Lanterns on the kitchen table… but my home not only allows my family to have these experience, but it is also my most valuable monetary asset. And for most other people, the same holds true… their home is their most valuable asset.

One thing that we homeowners have in common is homeowners insurance. It is just one of those residual responsibilities that come along with home ownership. Yes, shelling out an extra thousand dollars or more for insurance can be a pain, but it is necessary. Homeowners insurance protects your most valuable asset in the event of tragedy, natural disaster and more.

Most policies are structured in a similar way. The main dwelling, or your home, is covered based on either the actual cash value or replacement cost. Generally, the actual cash value is the market value or the predicted selling price if the house were for sale. The replacement value is how much it would cost to replace the house, brick by brick, beam by beam, in the event of a total loss. Normally replacement cost is more than actual cash value.

Then, other structures, such as fences or outside storage sheds, are covered. More often than not this coverage is 10% of the dwelling coverage. Personal property is also covered as either replacement cost or actual value. This means that the contents of your home, such as electronics, appliances, furniture, jewelry and even flooring, is insured from loss as a result of theft or other destruction.

The typical policy also comes with actual loss sustained or loss of use coverage. This reimburses you for expenses incurred while your home is inhabitable and being repaired. This may include costs such as rental expenses or storage.

Standard policies also include personal liability and medical payments coverage. Personal liability kicks in in the event that you are sued by someone who is injured on your property. This can assist with legal expenses or for the payment of a claim. Medical payments will, up to a specified limit, pay the medical bills for a person injured on your property.

Homeowners insurance may also include a series of endorsements for things such as an inflation guard and lock replacement.

Homeowners insurance can be expensive, but there are things that you can do to reduce the cost:

1 - buy a home in a low risk area

2 - increase the policy deductible

3 - reduce personal property and/or liability coverage limits

4 - combine all of your insurances with a single company

5 - remain loyal to one company - insurance companies often give discounts to loyal customers

6 - install a monitored alarm system, smoke detectors and/or sprinklers

7 - trade your pit bull or Chihuahua in for a less aggressive breed

8 - get rid of the trampoline and put a safety fence around the pool

9 - shop around, rates can vary differently from company to company

While it is good to look for ways to save money on your homeowners insurance policy premium, it is also important that you not be sparing with your coverage. You do not want to end up in a situation where you reduced your coverage to save $100 upfront… but wind up having to pay $20,000 on the backend.

Review your policy annually to make sure that you understand it and to make sure that you have adequate coverage. If you think that you can safely reduce some limits… do so. But if your current limits are insufficient to meet your needs… don’t skimp… increase the limit.

I have vivid childhood memories of sailing in the gulf with my grandfather. I remember one time, he tried to teach me how to fish. He let down the anchor and gave me a pole. I cast it out and after about an hour of trying, something finally bit my line. I was excited. I reeled it in and saw my catch… a small catfish that was not even 8 inches long. Gramps told me to toss it back out because it needed to grow some more. I was a bit disappointed that I did not eat the fish that took me so long to snag.

That little catfish was the first and only fish I caught. I never gave fishing another go. Now I prefer to do my fishing at my local grocery store… or when my grandfather has a bountiful catch, he brings me over a chest full of fresh fish.

My grandfather went boating all the time. And now that he is retired, he goes just about every weekend. He says that being on the open water frees him from the stresses of everyday life. It’s his favorite pastime.

For the past however many years, my grandfather’s homeowner’s insurance policy had an endorsement for boating coverage. But, last week he got a letter from them saying that this additional coverage will no longer be provided. So now he needs to get a boat insurance policy.

My grandfather is a sailor, he’s got boating mastered. He is not a finance person, so he called on me to help. Since he has given me hundreds of pounds of fish over the years, I figure I can pay him back helping him find new coverage. But the problem is that I know nothing about boat insurance. So to can help him make the best choice, I have to discover what it is all about.

My grandfather recently upgraded to a new boat. It cost him upwards of $40,000. While boat insurance is not mandatory, it is wise to have. All kinds of weird stuff can go wrong on a boat… fires, hurricanes, oil spills. And you would not want a $40,000 purchase to be left unprotected.

But in addition to covering damages to the boat, this insurance also comes with liability protection. This is good if someone sues you for injuries that may happen in a boating accident.

And anyway, most marinas won’t let you dock unless you have boat insurance.

So what is covered under boat insurance? Well as I already mentioned, it covers property damage and liability. But it also covers medical expenses and damages caused by uninsured boaters.

Most policies also come with an emergency services add on. That way… if you have any troubles on the water, someone is available to assist by delivering oil or gas or even towing the boat back to land.

There are many homeowners insurance policies that allow you to extend coverage to your boat. But there are also many companies that specialize in boat and marine insurance. The cost of boat insurance can vary greatly depending on coverage. But to get the best price, it is usually better to bundle other insurances. Most companies give a multi policy discount.

Of course, life jackets are a must, but a GPS system can also be very useful. Having this type of safety equipment onboard can help reduce rates. Also, you can bring down the cost of the policy by increasing deductibles and lower liability and property coverage. But be cautious when doing this, because being underinsured is just about as bad as being uninsured.

Now that I know a little bit more about boat insurance, I’m about to go so I can call around to compare some prices.

About two months ago a terrible hail storm hit my area. Actually it seemed to only hit my neighborhood. It happened one evening when I had a class. There was no sign of a storm erupting when I was at school. But on the drive home, I winded up smack dab in the middle of the worse hail I have ever seen.

It is so weird how the weather works. The school I attend is less than 10 miles from my house. And yet while it was a beautiful starry night over the university campus, it was thundering, lightening, raining and hailing over my back yard.

Anyway there was baseball sized hail banging down on my car. The rain was so heavy that I could not see two inches ahead of me. I noticed many other cars pulling on side the road to wait it out. But I kept going. I wanted to make it home to check on my family. And I made it… well almost.

I rolled through what I thought was a small puddle of water. As it turns out, it was more like two foot pool of water. And here is where I learned a valuable lesson… just because conDUCKtors can turn their vehicle into a boat does not mean we are all so skillful. After toughing out through nearly 5 miles of basically driving blind and dodging baseballs… the little engine that could, could do no more. My car came to a complete stop… just 3 blocks away from my house.

I thought… well isn’t this just great! I got out of my car and stepped right into knee high water. It was dark, the water was cold and the rain and hail was still coming. I was praying that lightening did not get to close and that snakes not nip at my legs. It was really kind of scary. But eventually I made it home.

The only thing that remains of this whole experience is the fight with my insurance company and itchy legs (I think I caught something in that filthy water).

So here is what happened to my car…

It was damaged by the hail… The engine was flooded by the little puddle… and the taillight and bumper was smashed (I suppose another car hit it… I don’t really know what happened… I just left the car there in the middle of the road until morning. There wasn’t too much I could do in the middle of a hail storm.)

After I tally what’s all screwed up, I called my insurance company to make a claim. I tell them my story about all how all of this horrible stuff happened to me all in one night. The adjuster said I am sorry to hear that, but I have a story for you… this did not all happened in one night… what we’ve got ourselves here is 3 separate claims… also meaning 3 separate deductibles.

Apparently… the hail damage happened as I was driving… one claim

The flooded engine happened as a result of me driving through the little puddle… another claim

And the damaged rear end happened as a result of an apparent collision…. a third claim

She told me that the first two are covered under my comprehensive coverage, but because the damage was for two different reasons, it is considered 2 different incidents… therefore two different deductibles.

The third is covered under my collision coverage… another incident

I thought that was about the biggest cop out I had ever heard… it all happened at nearly the same time due to the rain.

But nope, I had to come out of pocket with three $500 deductibles.

I am not bashing auto insurance, it is a must have… and it’s the law…

But the moral of this story is please read the fine print. Oh yeah, I guess you can also take a few other things from this little rant … driving in a hail storm is bad, cars are not boats, and leaving a car in the middle of the road ain’t the best idea.

This post was selected to be a part of  Almost Frugal’s Carnival of Money Stories #69. 

$@%# happens! Though we cannot always prevent $@%# from happening to us… there are ways to protect us when it does. There are many types of insurances out there. Some we need… some we may not need. But most of us have at least one kind of insurance policy whether it be life, health or auto. Virtually every home owner has homeowner’s insurance. But very few renters invest in renter’s insurance.

I want tell you a true story. Last week a raging fire engulfed a quadreplex less than 5 miles from my home. One occupant of those apartments is a co-worker of mine. Thankfully no lives were taken in this tragedy, but unfortunately the apartments and all of its contents were completely lost.

The owner’s had insurance on the property which protected their interests… the apartment itself. The contents of the apartments are not covered by the owner’s insurance. Tenants are responsible for insuring their own interest.

In this case only one of the four apartments was covered by renter’s insurance. My coworker’s apartment was not one of the four. So now she is left with nothing. Today at work we held a fund raiser on her behalf. We collected a pretty decent amount of money, but it was nowhere near enough to get her back to her normal standard of living.

If only she would have had the foresight to know that this would happen… But since we can’t all be Sylvia Browne, we need to cushion the blow when $@%# does happens… and believe me it happens all the time. Protecting yourself makes a tragedy less tragic.

Why is renter’s insurance important?

1 - It covers your assets in the event of fire, theft, wind, and other events like lightening striking and sending a surge of electricity through the outlet straight to your brand new fancy big screen tv.

2 - It also comes with liability insurance. Why is this a big deal? Lil Suzy from across the street comes over to attend your baby’s 3^rd birthday party. As kids are known to do, she plays and runs around your home. Lil Darryl from next door is also at the party. He doesn’t like the strawberry ice cream so he tosses it in the trash. But he’s only 2 so his aim is not that good and it all winds up on the floor. He’s afraid to tell you he made a mess so he just leaves it there and it melts. Excited Lil Suzy, who’s still running around, races past the trash can and slips on the melted ice cream. She falls hard, hits the ceramic tile floors and bruises her butt and chips a tooth. Yes, simple childhood accident… only thing is that you are now liable for Lil Suzy’s medical bills and all of her pain and suffering. That can do your bank account some damage… that is unless you have renter’s insurance.

3 - It’s too cheap not to have. Most renters’ insurance policies are less than $20 month… which is nothing to protect your belongings. Some people may think their stuff is not worth enough to be insured, but if you start adding up how much it would cost to replace the items in your home… that number will get really big really quick.

If you get renter’s insurance, you will be doing yourself a big favor. Check here to find the best rates and coverage.