Insurance: Why Pay Now When You Can Pray Later?

Originally published in 2009.

There are many different types of insurance. Basically anything can, and is, insured. Most people have at least one type of insurance, the basic ones being health, car, house, accident and life insurance. Here are some pointers on how to save money on insurance, by NOT buying unnecessary coverage.

Home insurance

You normally insure your house against damage. The most common damage is fire. Okay, you might have to get an insurance policy for fire in case you fall asleep smoking, BUT you can save a lot on the little other extras.
For example, Hurricane coverage. Lets say you live in an area in the hurricane path, like for example, Florida or Luisiana. Coverage is expensive. But, do you need it? Hurricanes like Katrina and Andrew caused a bit of damage, but most houses in Florida weren’t harmed, same in Luisiana . The odds are in your favour. So, cut out the expensive hurricane and water damage item from your policy. When was the last time you saw that happening?
The same goes for tornadoes if you live in the mid-west. If you’ve seen tornadoes on TV, youll have seen they are very strong, but don’t cover much ground. The chances of being hit straight on by one are very small.
And last but not least, earthquake coverage. Large quakes are very rare, Again, don’t waste good money on coverage.
Back to fire insurance. If you do get a fire insurance policy, get the least coverage that you can. For ex.: If your house is worth 300.000$ get a policy for not more than 60.000$ The idea behind this is that a fire will start in one room ( 20% of the house or less) and the Fire Department will put the fire out before it spreads to the rest of the house. It’s not often a whole house burns to the ground.

Health Care Insurance

This covers a lot of ground. There are all types of coverage, from general health care down to specific health problems, like cancer, etc.
Try and get some coverage that includes the normal doctor visits and the ordinary medical tests. Something that will pay for the ordinary visits.
As for the specialized coverage, hospital bills, cancer or aids care, transplants, etc. these policies have a high cost. You’ve heard of horror stories of people losing their homes and everything they own due to some complicated medical condition. They just did things wrong, they signed the papers saying they would pay the cost of treatment. Truth of the matter is that they aren’t needed. In real life, Society ( and the Government ) are not going to abandon you in your hour of need. Just go to the local hospital and ask for help. Health care companies are among the most caring ones in the world.

Auto insurance

Ok, you have to have a minimum coverage as required by law. But why more ? You drive excellently, never have more than four or five drinks and know you have to stop most times at the red light.
Now it’s even better if you just bought a new car. New cars have normally a two year warranty or guarantee. Should you crash the car during this time you just return it for a new one. It’s just like when you buy a TV and it breaks during the guarantee, isn’t it?
As for a used car, if you have an accident you do what everyone does…just blame the other guy, he will have coverage, so your covered.

Life insurance

Wrongly called “life”. That’s how they named it so as to sell it. It’s really death insurance, your death. The idea behind this policy is that in the event of your death your loved ones get a bunch of money. Now, lets study this:

First of all, if your young, under 50, why should you be worried about death ? Young people don’t die, old ones do. You’ve got a lot of years ahead. In this case a life insurance policy is just throwing good money away.
Now, what if you are over 50? Here we want to break down the age groups involved:
a) from 51 to 70 – This is where you have to consider insurance, in case you die. If you have some savings ( added to what you saved by following all our previous advice), a house and a car, the kids are grown up and on their own, etc., do you really WANT them to be happy about you dying? In this age group the premiums are higher and the amounts insured lower, so why bother. It’s not as if you are going to enjoy the cash. If anyone suggests that you get life insurance, have them pay for it.
b) From 71 to 100 – Don’t even bother to ask about an insurance policy. Either they wont sell you one ( pretty wise, I think ) or they will ask for huge amounts in premiums, for very low amounts payable.

Accident insurance

This is a good one. For 60/70 dollars you can get flight insurance that will give you 1 million if you die. Sounds good, But, again, when was the last time a plane went down? You are betting against very very large odds. And, of course, if you win it means you didn’t.
Ordinary accident insurance covers death and dismemberment. If you read the policy, they put a price on every part of your body. It’s gruesome. But if your worried something might happen to you or if you are accident prone, try and keep the cost down. One way of cost cutting is to see if the insurance company might consider leaving some body parts out of the policy. For example if you are right handed you can eliminate the left hand and even the left arm from the policy. Insuring one eye only lets you keep watching tv. And as for toes and fingers, you have to calculate how many you can spare.

By following all these tips you can practically cut out insurance as an item in your budget. The amount of money you can save over the years is staggering. But then, just as a precaution take up prayer immediately.