Dissecting Our Deductibles – Renter’s Health Automobile Insurance

Each month, our health insurance premium is deducted from my wife’s paycheck.  Every year, I pay our annual renter’s insurance premium.  And, once every six months, I pay our automobile insurance premium.  The premium is the amount charged, by and insurance company, for actual coverage.  But, not only do we pay insurance premiums, we are also, in the event that we actually need to use the insurance, must pay a portion of the expense, not covered by the insurance company, called the deductible.

Renter’s Insurance –

We live in a house provided by my employer, as part of my compensation.  My employer carries coverage for any damage to the house itself, be we carry coverage for the contents of the house – our stuff.  We have had our current policy for more than ten years.  Our annual premium is less than $150.  Our deductible, for most events, is $1000.  I must say, for the price, our renter’s policy is a great deal.  I would strongly suggest to anyone who is renting an apartment or living in a house that they do not own, that you get a renter’s insurance policy.  Coverage will vary from policy to policy and company to company, so shop around and compare prices.  In most cases, the higher the deductible, the lower the premium.  One note – always keep enough money in your emergency fund to cover your deductible costs.

Health Insurance –

We have health insurance through my wife’s employer.  Our annual family deductible is $2000, with a per person deductible of $1000.  After we meet our deductible, our insurance company then pays 90% of our expenses.  Again, it is important to us to keep enough money in our emergency fund to cover and deductibles.  My wife just had our baby, so we’ve now met our annual family deductible.  By the way, when we arrived at the hospital to have the baby, we had to pay our portion, up front.  It was fun to see the look on the cashier’s face when I handed her a stack of hundreds.

Automobile Insurance –

Our automobile insurance covers our three, paid for automobiles.  We choose to pay for ‘full coverage’.  Our semi-annual premium is about $600.  For less than $100 a month, we are able to fully insure our automobiles.  I’ve been with my current insurance agent for more than 18 years.  I have no doubt that I could ‘shop around’ and find a lower premium, but I know my agent by name and he answers the phone when I call.  My wife was in an accident several years ago, and within 15 minutes, our agent was taking care of our claim.  We raised our deductible to $1000 three years ago, and this reduced our premiums more than 15%.

How our deductibles affect the amount of money we keep in our emergency fund –

If you total our renter’s insurance, health insurance, and automobile insurance deductibles – $1000 + $2000 + $1000 – you get $4000.  For us, that’s our ‘rock bottom’ emergency fund amount.  If we maintain a minimum of $4000 in our emergency fund, at all times, then we can be confident that we can pay all of our deductibles.

By the way, as I type this post, I’m holding baby number three!  How cool is that?  New babies STILL rock!

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