These days you can buy insurance for anything. Your new digital camera. Your cell phone. Your rental car. Your newborn baby. This Slate article titled ‘Risky Business: Should you ever buy rental car insurance?‘ sums up my thoughts on insurance in general very well – you should only purchase insurance to protect you from something really significant.

Examples include the death of a spouse that you depend upon for income or care, your house burning down, and needing serious medical care. After that, what constitutes ‘significant’ will be more of a personal decision. For some, $1,000 may be significant, while for others it may be a drop in the bucket.
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If you have renter’s or homeowner’s insurance and have to file a claim, it will be infinitely easier if you have documentation of all the stuff you own. But who really bothers to do this? I know I should, but I haven’t.

So when I read in this month’s Kiplinger’s about a free home inventory software at KnowYourStuff.org, I checked it out. First, you snap digital pictures of each of your rooms and then import it into the software. Then you go through each room and itemize all your stuff. You can add useful details like how much you paid, scanned receipts, serial numbers, and so on. It’s still tedious but it does help keep it all together. I really like the idea of being able to just e-mail a digital inventory to myself, as well as burning or printing out a copy to safely store elsewhere.

A while ago I asked out loud “Is Pet Insurance Worth It?“. My conclusion was no, so we started putting $20 a month into an ING sub-account instead. Well, we have a spaniel, and he got an ear infection. We ended up taking him to the vet today since it was getting worse. Total cost for checkup + medication + ear cleaning solution: $88.50. Money saved up so far in ING: $80.

I wanted to see how much VPI pet insurance would have covered if we actually had it. I think it would’ve been covered, under “otitis externa”. Why can’t it just say “ear infection”? But there is a $50 deductible per incident, so we are actually ahead so far with the self-insuring. In the end, I still think pet insurance should be used as catastrophic insurance, if you couldn’t afford $5,000 surgery.

Every since I quit my job in July, I have had no dental insurance. I just had x-rays and a cleaning in June, so I figured I was good at least until the end of the year. As Open Enrollment is here, I have decided not to be added onto my wife’s dental plan again for 2006. Here are my reasons why:

» It costs an additional $45 a month (pre-tax). So that would be about $540 pre-tax or $390 a year post-tax.
» I have never had a cavity (knock on virtual wood) or any other tooth issue, floss and brush, and I get regular cleanings.
» I am still going to get the semi-annual cleanings and maintenance stuff. If I pay cash, my dentist (who I like and want to stay with) says it will cost about $200 a year. Not a bad annual savings.
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I finally got around to applying to an HSA-eligible high-deductible health insurance plan today on eHealthInsurance. (Please see my previous posts on getting quotes and HSA pros and cons). I kind of dropped the ball, as Open Enrollment for my current insurance ends on 10/31, and I may not get my decision until after that. I was trying to get a State Farm-brokered plan from Assurant (only $65/month), but they don’t take applications that far ahead of time (I need to start 1/1/06). I don’t have any medical problems except for elevated cholesterol, but that might have raised my rate significantly, and I didn’t want to take that chance. At least it is a no-committment application.

Still on the search for the best health insurance plan that will let me contribute to a Health Savings Account (HSA). I need to contact my State Farm agent for one more quote, and then I can start crunching some numbers. First, I wanted to write down some basics of what I’ve found out about HSAs, including Pros and Cons. Overall, I think of them as a Traditional IRA for healthcare expenses.

Who’s eligible:
Anyone under age 65 can contribute to an HSA if they buy a high-deductible health insurance policy. The policy’s deductible must be at least $1,000 for individuals or $2,000 for families.

Pros:
» Contributions are tax-deductible, even if you don’t itemize.
» Portable; Like an IRA, it travels with you, not your job.
» Rolls over each year, unlike a Flexible Spending Account.
» Earnings grows tax fee (also like an IRA).
» No taxes on withdrawals used to pay healthcare expenses.
» Possible to invest in mutual funds to boost long-term returns
» Some companies match contributions to HSAs, like others to 401ks.
» HSAs are inheritable.

Cons:
» You’ll have to pay for everything (at least partially) out-of-pocket, including things like routine visits and prescription meds that you may not have been used to paying for.
» High-deductible health insurance means you have to have money on hand to cover the whole amount if needed.
» Best suited for young and healthy people, if you usually max out your benefits a lower deductible is probably best for you.
» You are limited to certain HSA providers.
» The account and maintenance fees can be high, some don’t let you invest in stocks.
» Watch out for exclusions of pre-existing conditions in the policy.
» Since these have only been around since 2004, there isn’t quite as much competition as would be ideal for a consumer.

How much can I put in?
You can contribute up to the amount of the deductible to an HSA, but no more than $2,600 for individuals; $5,150 for families. And you can add an extra $500 if you were born before 1950 to help with health care costs in retirement.

The biggest health insurance comparison site is eHealthInsurance.com.

School’s keeping me pretty busy, but Open Enrollment ends October 31st, so I need to get going if I’m going to look for alternative health insurance. I’m no expert, but I’m learning – a big website on Health Savings Accounts (HSAs) is HSAInsider.com, and the best rate quote comparison site seemed to be eHealthInsurance.

Going on eHealthInsurance, I typed in my info (male, 27, non-smoker, full-time college student) and actually found a lot of good big-name options. For some reason I thought I’d only find smaller companies. Both Kaiser Permanente and Blue Cross/Blue Shield came with an HSA compatible option for just under $100/month.
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We just entered the Open Enrollment period for my wife’s work, so we have to choose what health insurance options we want for 2006. This is actually pretty good timing since I am now also eligible for health insurance for as a student at my University.

Since I left my job in July, I’ve been added onto my wife’s health plan for an additional $200 pre-tax a month, a pretty good deal. Next year, it’s only going to be $160/month. I don’t have any current health conditions, but I feel it’s very important to stay covered at all times. The insurance plan is a pretty decent PPO, especially if you stay in-network (I don’t really have any preference towards any specific doctor). In-network, the plan has a $200 annual deductible per person, and an annual out-of-pocket maximum (including the deductible) of $1,200 per person. There is a $2,000,000 lifetime maximum benefit.
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I apologize if my post topics are a week late, I am a bit late processing this stuff. Several bloggers have touched upon this subject, all making good points. In light of current events, you can see how emergency funds are important. What if your ‘really stable’ job turns into rubble? At the same time, your house is underwater, and your car is an aquarium. Your online savings account is going to be a bit hard to access without electricity. Even something in a safety deposit box isn’t so safe. I like to think of emergency funds as Real Life Insurance, protecting your current way of life, not protecting against your death. So I’d like to brainstorm different ways of having some backup money first. In no particular order (more like stream of consciousness):

1. Cash – I usually keep less than $200 of cash in the house, but I’m definitely going to put more in the house. No electricity = No ATMs and No credit card swiping machines.

2. Liquid Savings/Checking Accounts – Of course not all emergencies involve loss of power, and having thousands of dollars in cash under your mattress is not going to earn you any interest. And it’s FDIC/NCUA insured.
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We got 1 month of free health insurance, when we got James, but we didn’t renew. My first instinct was “This is a scam. Pet insurance? Give me a break.” But then my wife’s family dog, who is less than 10 years old, broke her back just jumping around the backyard. Two surgeries and $2,400 later, she’s miraculously still with us, and limping about happily. I think the main reason pet insurance has come to be popular these days is due to the recent advances in pet healthcare, and the accompanying costs. Did you know your dog can get MRIs and chemotherapy for cancer? So I decided to take another look at dog insurance.

I lost the name of the company that we got the free month from, so I such searched for some companies available online. The three main ones I found were VPI Pet Insurance, PetsHealth, and PetCare.
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Ok, so here are my final decision on auto insurance (for now until I get all-new quotes), and how it affected my premiums. I’ve also linked the previous entries that talked about each item. Again, these are tailored for my own personal situation and preferences.

Liability Coverage – Bodily Injury/Property
I’m keeping it at $250k per person, $500,000 per accident, $100k property. This is supplemented by my $1M Umbrella Policy. No Change.

Personal Injury Protection – Kept at minimum. No Change.

Comprehensive Coverage – Deductibles – Keeping the $100 deductible. No Change.
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Ok, I’ve been struggling with this ever since Christian at the nameless blog introduced to my head that uninsured/underinsured motorist coverage might not be a good idea. I had it at $250k/$500k/$10k mostly because I thought it was required to maintain my umbrella insurance. It turns out this is partially true. If I keep it like this, I also get $1M coverage for myself and my family under the umbrella policy. However, I can drop that part and still have the $1M liability coverage against being sued by others. And that’s my main worry, being sued by another driver.

There seems to be two schools of thought on uninsured coverage: Either drop it completely, or buy as much as you can afford.
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