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In the last two months, close friends of mine have had disaster strike: a home fire with total loss declared and a catastrophic brain injury that will require months (years?) of rehabilitation. I spent a lot of time cuddling my children tight, donating–yes, even on our tight budget–to GoFundMe for both of them (read about the amazing Sandy and Jessica), and combing over our insurance policy coverage.
None of us like to imagine worst-case scenarios, but we must take responsibilities seriously to protect those that depend on us. We like to be responsible parents, so we know we need insurance for health, life, auto, and home. Here are some things we’ve done to save money for each area, while maintaining appropriate coverage.
Health
My family puts a strong emphasis on health through physical activity, good habits, and healthy, wholesome foods. Luckily, most of us are well most of the time. However, I have two chronic illnesses that could require significant costs without great insurance. One is only manageable through (pricey) maintenance medication (found after several years of flares, treated with steroids that may have contributed to the development of the second condition), but the other I’ve gotten under control through diet and exercise. However, doctors like to monitor all of the complications that these conditions increase my risks for, so I also have more frequent specialist appointments and lab work than the typical “healthy” 37-year-old. We limit these costs as much as we can by using generics and always going to in-network practitioners.
I am blessed to have access to great family insurance, at a relatively low cost, through my employer. We also have a tax-advantaged Health Savings Account (HSA) where we put a designated amount tax-free into an account (in the form of payroll deduction) that we can use to pay deductibles, eyeglasses, medications, and other needed care. We pay attention to this amount to ensure we are using it well. Some years we under estimate (the year Min broke his leg and I needed physical therapy for a back injury was one), but thanks to the change in rules that allow up to $500 to roll over from year to year, we now do a bit better with our estimation.
Life
Min and I each have term life insurance with low monthly rates. We estimated coverage for each of us by considering: 1) the mortgage 2) college/education costs for both kids, and 3) income support replacement (for me) or supplemental childcare costs (for him). I got my 30-year plan right before J was born, but Min only quit smoking that year. For him, we got a 10-year plan and then another 20-year plan when H was born to replace it at the non-smoker rates. We are each covered well through the times our kids would need support for around $50/month.
Auto
We drive very safely and not very far (around 5,000 miles/year for my car and around 7,000 miles/year for Min’s). This saves us money. We shop rates around annually, but for the last three years have been unable to beat our current rates with Geico. We get only the coverage we need (no Comprehensive/Collision for cars older than 6 years). Min drove a 20 year old, 2-door beater with two young children in car seats until it was unsafe to do so.
Home
We bundle our home with auto for some savings. We make sure to let the company know when we make updates that reduce insurance rates (like replacing the HVAC last year). We keep our deductible fairly high and maintain our home well (fix small issues early on so they don’t become issues and practice fire/water/electrical safety). This is an expense we are trying to reduce, but don’t really have many options right now.
Disability
I have a great disability insurance coverage through my employment, but we do not have coverage for Min or supplemental coverage. Min doesn’t work right now, so disability insurance didn’t make much sense for him. I did look into additional coverage for me, but unfortunately my medical conditions make any such coverage that I would qualify for cost prohibitive. Instead, I work on keeping my health great and minimizing risks to my health that could result in disability (like not driving as much or engaging in high-risk contact sports/activities). I don’t live scared or anything like that, but my desire to jump out of a plane is not as great as my desire to provide for my family.
That’s about it. Big takeaways: Shop around, buy only what you need, minimize the risks through preventative action. Our family is adequately covered for accidents and problems without a great deal of expense.
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