Insurance is for the Unplannable, Unpreventable and Unforeseeable!

by Krantcents · 14 comments

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There is always something that is unplannable, unpreventable and unforeseeable! That is why you have insurance. If you knew when you would have an accident, predict a serious illness or just knew when you needed insurance, you could get it just before you needed it. What do you do? You get insurance at the best possible cost and limits before you need it. What can you do to keep your premiums low?

Auto Insurance – If you drive a car, you need insurance! Rates are developed based on age, experience, driving record, type of car, residence, credit history, annual mileage and claims history. Except for age, you can do something about all the other variables. You can increase your deductible so you take more responsibility for claims. You can even avoid submitting small claims that just exceed the deductible by a few hundred dollars.

Little things such as driving the speed limit, reducing your annual mileage, avoiding traffic tickets, maintaining good credit, taking a safety class, select cars that have a higher safety rating and pay your insurance premium annually. Periodically, shop you insurance policy.  I reduced my insurance premium by lowering my commuting annual mileage. Last, you determine where you live and garage your car. It can mean real savings.

Life Insurance – You just started your career and your employer gives you life insurance. It may not be enough and you want some more. How do you keep the premiums low? It helps if you are in good health and your family history is clean. There are a lot of choices such as whole life, universal life, or term insurance. Term insurance is the least expensive way to have life insurance coverage. The two most important factors are age and gender!

Rates are different for men or women and much lower when you are young. The next important factor is your health! Insurance companies want to know if you smoke or not, health problems such as high cholesterol, heart disease, hypertension, diabetes, obesity, or family history. Except for family history, you can do a great deal about everything else. They also want to know about dangerous occupations or hobbies. Other factors include travel into risky places or military service. Last credit history is another factor.

Property insurance – Location of your home is an important t factor in determining your insurance rates. A wise choice is to consider that factor before you purchase the property. Similar to automobile e insurance, you can choose a higher deductible to lower your premium. It is a way to share in the loss, but limit your liability. Another way is to shop your property insurance often! I usually shop my insurance every two years.

The construction of your home determines the rating similar to a car. The location of your home contributes to the rates too. If you live in a high risk area because of crime or natural disasters, you will pay higher rates. Besides avoiding high risk areas, you can make your home safer. Do not over insure your home! Insure just you home and keep in mind replacement costs.

Health insurance – Health insurance is important because of the cost of medicine and I am not talking about a doctor visit! When you are in your twenties, you probably think you are invincible unless you have an accident or a serious illness. Then you find out how good your medical cover age is or wished you had coverage. Health insurance is expensive and complicated because of the risk. High deductible insurance is meant to cover the most serious of illnesses. If your employer offers insurance, you should take advantage of it.

If your employer does not offer insurance, you may have to buy an individual policy. The best way to keep your rates low is to be healthy which usually means buying insurance when you are young and do not need it. Like most insurance, you buy it for the inevitable unplanned situation where you may need hospitalization. Similar to life insurance, you can get lower rates if you maintain good health.

Final thoughts

Insurance is supposed to protect you from a disaster such as your home burns down or you total your car. . How will you rebuild your home or replace your car without insurance? More likely than not, you probably have a mortgage on your home or a car loan too. There is no question, you need insurance and you can get the lowest rates if you take advantage of some of my tips. Insurance protects your assets such as your home, car and family. Insurance may be necessary for the unplannable, unpreventable and unforeseeable, but you can control your costs!

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Insurance may be necessary for the unplannable, unpreventable and unforeseeable, but you can control your costs!


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Jack @ SeeJackSave February 6, 2014 at 3:27 am

Insurance is so often forgotten as an important part of a person’s financial plan – probably because it’s a downer to think about the negative things that could happen. I find when people do remember to consider insurance they over do it. Not having it can be crippling if something bad should happen, but it can bleed you dry if you get too much.

Krantcents February 6, 2014 at 6:57 am

I agree! Insurance is for the expense you can not plan for that could literally bankrupt you.

Money Beagle February 6, 2014 at 9:34 am

We just signed up for life insurance at rates that are locked in for the next 20 years. It’s great to know that we have this as this is the most important time for us given the age of our kids.

Krantcents February 6, 2014 at 12:19 pm

Good job! One of the biggest reasons for insurance is for spouse and children to replace income. I suppose a close second is for paying off debt. In both cases it is income replacement for the survivors.

Alex February 7, 2014 at 11:31 am

Good article. If only we could look into the future to determine costs!

Krantcents February 7, 2014 at 4:53 pm

When I buy insurance, I always try yo look into the future. Worse case scenario. Is it worth getting less insurance to save cost and take a higher risk? Never! I would rather take on a higher deductible.

Untemplater February 9, 2014 at 11:59 pm

Thank goodness for insurance. I got super sick for like 4 weeks last year and after a bunch of tests was finally able to get medicine to get me better. I can’t imagine if I had to pay hundreds, maybe even thousands of all of those costs in full out of pocket. Dental too is such a relief to have.

Krantcents February 10, 2014 at 7:54 am

I know what you mean! I am healthy, but I spend a couple thousand dollars on just prescriptions a year.

Jon @ Money Smart Guides February 10, 2014 at 5:50 am

I recently got married and my wife and I are now getting updated quotes for our insurance policies. We’re passing on the life insurance part for now since we don’t have anyone depending on our incomes, but will look into term life insurance when the time comes.

Krantcents February 10, 2014 at 7:57 am

Insurance is also used for income replacement and for debt repayment too.

Fehmeenk - Loans and Lifestyle Blog February 11, 2014 at 7:54 am

Insurances is just one of those things you sorely regret not doing once the need arises. It may seem like an unnecessary risk but health insurance along with home insurance is definitely something one should not compromise on because they protect your most valuable assets.

Krantcents February 11, 2014 at 4:08 pm

Living in eathquake country, it is a no brainer for earthquake insurance.

Marvin February 12, 2014 at 2:16 pm

I hate buying insurance but I know the second I dont’ have any is when something catastrophic will happen.

Krantcents February 12, 2014 at 4:17 pm

I would rather fork over $1,000 versus thousands for the repairs to my home or car never mind income replacement if I died!

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