Comments on: Consider Self-Insurance Against Calamities

By: jeremy schaedler

jeremy schaedler — Mon, 21 Jun 2010 21:47:25 +0000

Hey Jim, I think you have a great srategy for evaluating when to self insure and when to insure through an insurance company. I think its a great idea for people who are not real risk averse to practice using higher deductibles and saving the difference. I would wager that insurance companies have much lower claims with clients who practice this method.

By: Michael

Michael — Fri, 12 Mar 2010 22:52:01 +0000

If you have a good driving record, I would suggest Amica for car insurance. They dont insure “High Risk” users, so if you have a ticket or accident in the past 3 years, you may be denied. At 23, no accidents for 3 years and a policy of 100/200/100 with a 500$ deductible, its only 900$ a year(of course PIP and everything else required by the state of Florida). Furthermore, as many may know, insurance companies generally do a 6 month policy. They will tease you with a low rate for the first 6 months and yank it up on renewal. Amica is one of the few insurance companies that does a 1 year contract. Lets just say, i am very happy with my insurance company.

By: TheMadTurtle

TheMadTurtle — Fri, 12 Mar 2010 20:27:19 +0000

Yup! Since the birth of my son, I’ve taken out a hefty term policy on myself for that very reason. I’m the sole breadwinner, so the insurance would give my wife and son enough to live on with just the interest. Later, they can use some of the principle to pay for college or something.

By: echidnina

echidnina — Fri, 12 Mar 2010 17:04:59 +0000

Yeah, life insurance definitely isn’t suitable for people in all situations.

By: eric

eric — Thu, 11 Mar 2010 09:03:36 +0000

This is a good topic. I love the car insurance idea and that’s something I’m doing also.

By: Chris

Chris — Wed, 10 Mar 2010 17:51:03 +0000

It depends on if you have people other than you who depend on your income.

By: Chris

Chris — Wed, 10 Mar 2010 16:25:34 +0000

I agree…not worth the hassle

By: Soccer9040

Soccer9040 — Wed, 10 Mar 2010 13:54:08 +0000

It sounds like you already have a pretty sweet deal on your insurance. Probably not worth self insuring with those pay back periods.

By: aua868s

aua868s — Wed, 10 Mar 2010 07:41:49 +0000

have been avoiding life insurance…its time i got one

By: jsbrendog

jsbrendog — Tue, 09 Mar 2010 19:23:03 +0000

this is an interesting idea. I like it for car insurance. maybe I will try it out once I get my car

By: Shirley

Shirley — Tue, 09 Mar 2010 16:18:29 +0000

At $715 per 6 months for full coverage on 3 cars (1995-2000) the savings would take longer to even out than we will probably be driving.

By: Jim

Jim — Tue, 09 Mar 2010 15:46:55 +0000

It does require self-discipline but if you want to save money, you have to pay for it somehow and extra work is the easiest/quickest way.

By: Fred

Fred — Tue, 09 Mar 2010 15:05:43 +0000

This is the basic concept behind Health Savings Accounts (HSAs), and its a great one.

Another positive aspect of self-insuring the initial loss is that it makes smarter consumers.

Let’s say you get into a car accident and need repairs. With some effort, you could find a carpool to/from work for 2 weeks while the repairs or made, or you could spring for a rental car @ $30/day or more.

If *you’re* paying the $30/day, carpooling starts to sound pretty good, even if you do “have the money” saved already for it. If the insurance company is providing the car, there’s little incentive not to take it.

But, as with so many things, self-insurance requires on-going self-discipline. HSAs help with this because they put the funds out of reach, but they still make them available if you absolutely need them.

By: Brandon

Brandon — Tue, 09 Mar 2010 14:54:26 +0000

Actually, thanks for posting this. I noticed my medical payments coverage was only $1,000 per person for at-fault accidents and because of a recent experience, I now know even the most benign emergency room visit easily will cost $1,250+ before insurance. I increased the coverage to $5,000 for only $3.02 per month (it will take 110 years before this change could be self insured at that rate for even one person in one accident)

By: Brandon

Brandon — Tue, 09 Mar 2010 14:40:29 +0000

I have a 2000 and 2006 car insured with GEICO. For fun I tested changing my current deductible for collision from $100 to $1000. It saved a total of $79.80 over 6 months which calculated out would take 5 years 7 months to recoup in self-insurance. If I raised comprehensive to the same level from the same level it would increase to a little over $100 savings for only a 50 month recovery time.

The only real savings to be had would be if I completely removed collision, comprehensive, emergency road side assistance, and rental reimbursement from my older car. That would save $136.30 per 6 month period. The KBB private party value is $2,485 which would take 109 months to save up.

In summary, I have seriously cheap auto insurance through GEICO. $605.10 6 month premium for two cars with 50000/100000 bodily liability coverage and similar coverages for other levels along with $100 deductibles for comprehensive and collision, Emergency Roadside Service on one vehicle (the other has it as part of an extended warranty) and Rental Reimbursement.