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.

I have come to the realization that I am in the wrong business. I went to the dentist to get a root canal yesterday. He was a nice guy… and it took him all of 30 minutes and $1,200 to end my dental misery. $1,200 for 30 minutes of work! That’s the kind of gig I want.

I am sure there is some logical reason why dental procedures are so expensive. After all dentist have to pay off hundreds of thousand in student loans, buy all kind of fancy dental equipment, pay the salaries of the office assistant. Regardless of why it costs so much, my pockets hurt no less. On the upside… my tooth was saved and I got to feel the Whoo Hoo by using WaMu. But it surely woulda felt better if I coulda feel the whoo hoo with dental insurance.

Oh yeah, and by the way… it doesn’t end there… I still have to get the same tooth crowned next week. That’s another $700 bucks. $700! And I won’t even get one of those cute little stickers and free tooth brush.

I have heard some of the reasons why dental insurance is not worth the cost. But if you ever have to spend $1,900 to have one tooth repaired… your perception of things can quickly change.

Anyway after I left the dentist’s office, I went straight away to the HR folks at my job to find out what dental insurance options were available to me. (Yeah, that’s right. I went from the dentist and right back to work. I figured with $1,200 of work, I woulda at least got doped up enough to put me out for the rest of the day. But nope, I didn’t even get the good, knock you out kinda stuff.)

But back to the dental insurance… my job offers pretty decent group coverage. The premium for a family plan is only $60 a month. While it’s true that each person is limited to $1,500 in benefits per year, it’s still worth it. The annual premium works out to $720, but a family of four can get $6,000 worth of benefits in return. And with the skyrocketing cost of dental procedures, you’ll get to $6,000 in no time. So, that’s a profit of over $5,200.

And one good thing about the plan at my job is that there is no waiting period and I have complete indemnity. I hear that’s the norm with group policies but individual policies are not usually set up this way. The sweet thing is that I can combine my dental insurance with the dental discount that comes as a part of my health insurance. (Yeah, $1,900 includes a 20% discount!)

I think that anyone who’s planning to have major work should look into the dental insurance options that are available to them. If you don’t have a group policy at work, there are many individual policy plans available. But make sure, you read the fine print so that you fully understand what’s covered. For example, cosmetic procedures, such as teeth whitening, are generally not covered.

And finally, don’t underestimate the importance of good dental health. Shoving off dental services can be detrimental to your overall health. An investment in dental insurance is an investment in prolonging and improving your quality of life.

I have never been an insurance salesman (person) per se. But I did work for an investment company that sold variable and universal life insurance, which is a kind of investment/insurance product. But in order to sell the product, I had to have an insurance license in addition to my securities license. So 10 years ago, I obtained a state insurance license.

I enjoyed my experience as a financial advisor because I enjoy financial planning. I did it for a few years, but I soon gave up on it because I felt like I was being asked to push products on people that they did not need. The mission was to sell highest commissioned products, not the best product. And I did not feel right doing that.

Anyway, in my short career as a financial advisor, I realized that many people have no clue about life insurance. They may know the premium and the face value, but that’s about it. Most regular people don’t know the basic difference in life insurance options. And unfortunately, they are being bamboozled by unscrupulous salespeople who are looking for a commission. Not all life insurance salespeople are bad, but there are quite a few who are.

Before you buy your policy, you should understand your needs and understand which type of policy best fits your needs.

Do you need life insurance?

If anyone other than you depends on your income for survival, then yes, you need life insurance.

How much do you need?

It depends. If you have minor children, you’ll probably need enough to cover their needs for until they are at least 18 or out of college. Or if you have disabled children, you’ll need enough to cover them for the rest of their lives. If your spouse is dependent on your income, you’ll need enough insurance to carry him/her until he/she becomes self sufficient or remarried. You’ll also need enough to pay off your debts and funeral expenses.

It really just depends. But in any event, I would venture to say that most people need a minimum life insurance of $100,000, and likely much more. You can go here to evaluate your needs.

The basic types of policies (presented with commission and need rankings)

Commission rankings are shown from highest commissioned sale for agent (1) to lowest commissioned sale (3). Need rankings shows which types of insurance met the needs of most people (1) to which met the needs of the fewest people (3). (Just an aside, the highest commissioned product is needed by very few people.)

Universal Life - Rank: Commission 1 Need 3

Features - Coverage for your entire life, Has both a death benefit and cash account (you cannot choose how cash account funds are invested), Offers flexibility in premium payments

My opinion - final death benefit increases overtime, but most people’s life insurance needs decrease over time as they build other assets and as their children become independent. The premiums are usually 5 or 6 times more than term life. I suggest that you buy a term policy and invest the difference in the premiums in a decent mutual fund. That way you don’t have to die to access to the cash account.

Variable Life - Rank: Commission 1 Need 3

Features - Coverage for your entire life, Has both a death benefit and cash account (you can choose how cash account funds are invested), Premiums are fixed

My opinion - same as above

Whole Life - Rank: Commission 2 Need 2

Features - Coverage for your entire life, Builds minimal cash value

My opinion - almost the same as above. A person’s insurance needs decrease over time.

Most 87 year olds don’t need a $1 million in life insurance. By the time you reach retirement age, you should have accumulated enough assets to take care of your spouse when you pass away. And your children are what? 62, your grandchildren are 38…? They are not dependant on your income. I’m sure they’d rather you spend the premium on pampering yourself in your golden years.

And besides, whole life policies cost nearly 3 times as much as term. Multiply that difference over your life and that is a lot money. Get a term policy, stash the difference in a mutual fund every month and let it ride. You’ll fair off much better.

Term Life - Rank: Commission 3 Need 1

Features - Covers your life for a predetermined number of years… 10, 20, 30, 40 years, Doesn’t build cash value, Least expensive premium

My opinion -It offers the most coverage during the time you need it… at a nominal cost. Term life is the right choice in most situations.

So I know a little about McCain’s health plan, now I mine through Obama’s…

What’s the plan?

The plan is to make affordable, quality health care accessible to everyone.

Why Sen. Obama chose this position?

The cost of both health insurance and health care has risen almost exponentially. Because of the rising cost many poor and working class Americans aren’t able to purchase health insurance. Making health care affordable will reduce the number of uninsured and underinsured.

How Sen. Obama proposed to carry out the plan?

The heart of Sen. Obama’s proposal revolves around the creation of a national health care plan. Under this national plan, every American will be eligible for health insurance, regardless of health or income. Premiums will be less expensive than present day rates. And for those who cannot afford the premiums, subsides will be given. Participation in this system will be required for children and optional for adults.

A system of electronic medical records will also be instituted. The database will make a patient’s medical history readily available to professionals, anywhere. This will reduce medical errors by allowing doctor’s to make better informed decisions regarding a patient’s condition and treatment.

The quality of care will be improved through the research, design and implementation of procedures to eliminate medical errors and resolve inconsistency in services.

Finally, the plan involves the formation of a patient advocacy group… or the National Health Insurance Exchange. The aim of this group will be to make sure that the Obama’s plan is coming together as envisioned. The group will battle private insurance and big drug companies to ensure fairness for the insured.

So… what does all this really mean?

The Democratic candidates have been strong proponents for national health care, which is sometimes referred to as universal health care. There are many countries that have a universal health care system. In traditional universal health care, participation is mandatory, everyone pays the same premium regardless of the health and there are mechanisms to help cover the cost of the premium for the poor (in most cases, this means a subsidy). Premiums are usually prepaid through payroll or some other kind of taxes.

In a perfect world, under a universal health care system everyone gets the same quality of treatment despite their financial means. Poor people have the same access as the wealthy. On the flipside, the wealthy are not able to buy their way to better health.

Though Obama’s plan is often likened to a universal health insurance, there remains one big distinction. Unlike tradition universal health insurance, participation is optional… (well, except for children) and private insurance will still be readily available.

This can be both a good and a bad thing.

Here’s how I see it…

The plan is open to anyone, rich, poor, terminally ill or perfectly healthy - Ok, this is can make for a serious issue. I cannot remember the exact term I learned in a public economics course, but basically this will cause selection bias. If participation is optional, people will only sign up when they need it… i.e. they are so sick that they can’t be insured anywhere else or so poor that they cannot afford private insurance. I see the program as being as a hybrid of a puffed out Medicaid program and government funded hospice.

The participation base will be largely comprised of people who are too sick to be insured anywhere else. Therefore the cost of this program will be enormous because there will be proportionally fewer healthy people to balance it out. I mean, really, why get it if you don’t need… and if you do need it, no need to fret… it will be there, open to you at anytime. What insurance company can keep afloat this way?

Also, people who are able to afford private insurance are likely to remain privately insured. One of the biggest complaints about universal health insurance is that the waiting list for treatments can be very long. But those with private insurance won’t have to worry about this. They can buy their way to the front of the line… to sorta speak.

I think his plan is too hopeful. It’s good for those who participate. But I do not see how making a program that is basically geared to the sick or poor will aid in reducing medical costs. I think it will only help to increase costs.

But I do give him props, the man is sexy!

For the past year, I have been bombarded with all kinds of presidential election issues… which candidate lied about what, whose pastor said this, which delegate voted how, whose wife dresses the snazziest. I voted in the primary election, but my vote was based on who sweet talked me the best that day. I hadn’t given much thought to either candidates’ political platform. So as November nears, I think it is time for me to understand where the candidates stand.

Today I’ll look at Senator McCain’s health policy.

What’s the plan?

The plan is to control escalating health care cost.

Why Sen. McCain chose this position?

Controlling cost would unburden the Medicare and Medicaid systems making the sustainability of the programs viable for future generations. At the current pace, the systems would be an insurmountable financial stress by 2019. Also by controlling costs, the health insurance becomes more affordable for families.

Individuals should be in control of their own fates. This plan will give people more options in their selection of health insurance and medical service providers.

Medical providers would be conscientious in the quality of care because more patient options will stir competition.

How will Sen. McCain carry out the plan?

Insurance portability - when individuals change jobs or move across state line, their insurance plan can follow them.

Restructuring tax credit - rids credit for employer sponsored plan and shifts credit to individual household. Provides refundable tax credit of $2500 for individuals and $5000 for families.

Reduce prescription drug cost - increase competition by promoting the use of generic drugs.

Insurance accessibility - insurance would be available for purchase through various civic and professional organizations

Less expensive and more accessible medical care - encourages the delivery of medical service through retail health care clinics which use nurse practitioners as the primary care provider.

Rosy eyed optimism or real solution?

Political and policy analysts often compare McCain’s plan to Senator Obama’s plan. At some point, I will need to compare to compare the two. But first I want to look at McCain’s plan on its own merit (independent of how it stands up to Obama’s plan).

Offering individual tax credits to buy health insurance sounds good in theory. However every family will receive this credit… whether they use it to buy insurance or not is ignored. I do not think this will help decrease the number of uninsured. Most people are uninsured because they can’t afford the insurance premium. If financially strapped families are given $5000, the money is more likely to be used to satisfy immediate needs (such are food, utilities, housing, transportation) and less likely to spent buying protection for the what-ifs. And besides, health insurance costs a lot more than $5000.

Also offering this credit to every family in essence gives a subsidy to people who don’t need it. Most upper middle class and wealthy families don’t need a tax credit to buy health insurance.

By eliminating tax credit for employer sponsor plan, there would be no incentive for employees to purchase health insurance through their employers. This will result in decreased participation and prompt employers to drop these benefits. If employers drop benefits individuals will not only lose the advantage of sharing the cost of insurance with their employers, but they’ll also be forced to find coverage on their own.

Offering medical services through retail health care clinics sounds good on the surface. But there are no MDs at most of these clinics and the level of care is less comprehensive than that given at a regular doctor’s office. Also, most of these clinics are nested inside retail locations that also house pharmacies. Patients will be urged to fill prescriptions at those pharmacies. Though this may be the most convenient decision, it may not necessarily be the most economical.

While the principle behind the plan seems honorable, I’ll have to give its implications more thought before I cast my vote in November.

As the owner of two little Fidos, I can be the testament … owning pets ain’t cheap. I adore my four legged babies, but they cost me just as much as my two legged babies do. It’s not like I’m keeping tally or anything but… well let’s see -

• Obedience training
• Flea medicine
• Doggy bed, doggy bed, doggy bed and yeah… more doggy beds (they like to see what’s inside)
• Annual check-ups
• Grooming
• This food, oh and that food (for the days they feel like being picky)
• Cute little doggy clothes
• Toys
• Treats
• Heartworm prevention
• Big, meaty hambones
• Shampoo
• Rabies shots
• Electric collar, Pinch collar, Walking harness, Leather collar with the fancy gems
• Combs, Brushes, Dematters
• Toothpaste, Toothbrush
• And let me not forget … re-grassing the yard, replacing the sheetrock, replacing a phone jack, replacing the drapes, snaking the fur clogged drain, replacing the carpet… need I go on?

Oh, yeah multiply that times 2!

My dogs… l love ‘em. They bring my family a lot of joy… but they also bring bills.

Anywho, I was talking to an old friend the other day and she told me that she’d recently found out that her pup was diabetic. She told me that she had to take her dog to the vet often for follow ups and that the dog had to take daily medications.

A diabetic dog? Who woulda thunk it? I had never heard of such a thing. But after doing a little digging, I soon realized that our canine buddies are vulnerable to many of the same ailments that afflict us humans. That was a big shocker to me.

I wasn’t trying to be meddlesome, but I was curious about how she could afford the treatment. She said that the treatment was expensive, but not as expensive as it would have been had she not had pet insurance.

I had heard of pet insurance before, but I never really thought much about it. Now after hearing my friend’s story, I figured I’d better learn what it was all about. God forbid, if one of my babies got sick, I’d want him to get the best treatment available. So I better see what insurance options are available.

I took a look at the 3 top plans. I compared price and coverage. Here’s what I found:

VPI Pet Insurance

The best plan covered accident, illnesses, x-rays, surgeries, cancer, prescriptions, hospitalizations, vaccinations, heartworms, flea control, urinalysis, and dental for $411 a year. For this they’ll pay 90% of eligible expenses, less a $50 per incident deductible. I have to pay the cost up front, but will be reimbursed after submitting a one page claim form and receipt.

ASPCA Pet Insurance

The premier plan which covers accidents, illnesses and well care is $649.20 a year. There is a maximum incident benefit of $5,000 and a Maximum annual benefit of $13,000.

Petplan

The Gold Plan covers up to $20,000 in vet fees, $500 in boarding fees, $500 in advertising and rewards, $500 in loss due to theft or straying, $1,000 for death from illness or injury, and $1,000 for vacation cancellation. Wow, that is comprehensive! With a $50 deductible and 0% coinsurance, this plan is $537.38 per year.

Those are the specs for the crème de la crème plans. There are many more plan options available that are less pricey… some for as little as $6.99 a month.

If you are looking for security for your pet’s well-being (and your pocket), consider investing in pet insurance.