Insurance – You Don’t Need it Until You Need It

I've had my fair share of mishaps with insurance. When I graduated college, I thought I'd save on car insurance by not getting theft insurance. And you guessed it – my car was stolen within my first few months in DC. We didn't get insurance for my husband's phone only to have it pick-pocketed in Ethiopia. When I was younger, I thought it was safer to put my mother's diamond ring in checked luggage than to have it on me. You can guess how that ended. In 2010, I was hit by a drunk driver one Wednesday morning, only to discover I didn't have uninsured motorist coverage to pay my hospital bills.

Dear reader, I'm sure you aren't as stupid as I am. But I would also bet that you have no idea what your coverage entails. And maybe you haven't even gotten insurance for everything you should.

I’ve posted about the beauty of pet insurance. What about insurance for your electronics? Got it. Travel? You bet. And medical, dental, car, renters, homeowners, valuable personal property, umbrella, AND professional liability insurance. I got all the insurances.

In this post, I want to focus on managing the insurance you have, though you should make a list of things you want to be covered for and get the correct insurance for your situation.

Pay the setup costs. Scan your brain for all the insurance you currently have, research, and get insurance for stuff you think you might need. Then log in to all the relevant accounts to pull your insurance policies.

Also, ask your work and alumni associations what insurance they offer. I found out my university offered the cheapest pet insurance to faculty members (strange thing to offer, but I’ll take it!)

You might not know this, but your credit card probably offers you insurance coverage. When our luggage was lost for two weeks last year, our credit card covered whatever the airline didn't. Our credit card also covered repairs on a rental car.

Also, review your policies. When I took a look at my homeowner's insurance policy, I noticed it said that my house had old fixtures. It had recently been remodeled. You'd think flagging this would raise our premiums, but it turns out it's more expensive to try to rebuild a house in an old-style than a new one – when I corrected the error, I saved $820/yr. The point is, make sure your premiums are based on the most up-to-date information.

Put it all together. I created an insurance manager note in Evernote (though you can do it with other software and programs if you like) that includes type, company, renewal date/term, cost, payment method, and notes. The payment method is useful if you ever lose your credit card, then you have a quick way of knowing what recurring payments are associated with which cards (or if money is coming out of a bank account, you can make sure to have enough in there). In the notes, I include things like whether the insurance is tax-deductible or when it has to be purchased (for cell phones, it's 14 days from the day you get your new phone). I also note if I decided not to get a type of insurance (in my case, flood and long-term care insurance) to remind myself why I had made that decision.

Each insurance type is linked to a note that includes the actual policy with a summary at the top (like my policy number, deductibles, max payouts, etc.).

Produce reminders. Once a year, a week before the renewal date, I review my coverage to see if anything should be changed. Change of address. New family members. New property. When I moved from DC to California, earthquake insurance became relevant. Anyways, I create a reminder in Evernote to bring up the relevant insurance note the week before the renewal. At that time, I also check the premium hasn't gone up too much, and if it has, I research options to switch providers.

Performance Notes. Every person is different, but I've found I get annoyed when I have insurance with high deductibles. In DC, our car window got broken multiple times. And it always cost like $499 to fix. So with a $500 deductible, I was always paying the whole thing out of pocket. It raised my premiums, but I decided on a lower deductible. I notice the hundreds of dollars I have to pay when something goes wrong, more than the monthly insurance payments I have to make. If I go through a claim process with a provider, I also make notes to make sure that I understand the process so that things go as smoothly as possible the next time.

Admittedly, being on top of your insurance situation takes time. But the confidence and security of knowing you are covered are priceless. Well, it actually costs me $9200/yr (that includes health insurance!). But still, happy to have it.