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| insurance [2024/06/03 01:43] – created qlyoung | insurance [2025/10/06 03:33] (current) – embellish qlyoung | ||
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| + | ===== insurance ===== | ||
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| + | Oh, uh, none of this is legal advice, I'm not a lawyer and hold no credentials associated with insurance, etc. | ||
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| + | Now I know what you're thinking. This is so lame, this isn't the culture, look at this loser using his personal syndication platform to write about boring ass insurance of all things. I'm gonna go read a phrack or gwern or the new yorker or whatever it is you read. | ||
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| + | You're right. Anyway, on to the article. | ||
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| In May 2024, prompted by something random, I did a complete review of all my insurance policies (except for medical) and learned a lot of things about insurance which I should have learned about 10 years ago. Here I've jotted down some of what I've learned in the hopes that maybe it will prompt someone else who was similarly uninformed to learn these things. | In May 2024, prompted by something random, I did a complete review of all my insurance policies (except for medical) and learned a lot of things about insurance which I should have learned about 10 years ago. Here I've jotted down some of what I've learned in the hopes that maybe it will prompt someone else who was similarly uninformed to learn these things. | ||
| In short: **If you are American and most of the contents of this page are new to you, you are probably at risk of having your life ruined and should learn about insurance** | In short: **If you are American and most of the contents of this page are new to you, you are probably at risk of having your life ruined and should learn about insurance** | ||
| - | Being underinsured is very dangerous in the US. | + | Being underinsured is very dangerous in the US. It's one of those risks that will probably never materialize into a real problem but if it does, it can ruin your life without recourse, game over. Here in the US we love having these little life-ruining booby traps sprinkled around, that way everyone has to spend time thinking about them instead of pursuing happiness or whatever. |
| All of the information here is available online, but here's some rough notes on what insurances the average American might want and what they cover. Not legal advice. | All of the information here is available online, but here's some rough notes on what insurances the average American might want and what they cover. Not legal advice. | ||
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| I am going to make some blanket statements here that none of the websites that talk about this will make, which will certainly not be true for some people, but will likely be true for most people. Please understand that these are only my opinions and you need to fully understand your own situation to make accurate judgements. Do not believe what you read here. | I am going to make some blanket statements here that none of the websites that talk about this will make, which will certainly not be true for some people, but will likely be true for most people. Please understand that these are only my opinions and you need to fully understand your own situation to make accurate judgements. Do not believe what you read here. | ||
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| - | Other thoughts: | ||
| * If your liability limits on your auto policy are at or below 100/200/50 for both BI/PD and you have no umbrella policy, you are likely underinsured | * If your liability limits on your auto policy are at or below 100/200/50 for both BI/PD and you have no umbrella policy, you are likely underinsured | ||
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| Let's see, what else... | Let's see, what else... | ||
| - | * **Low assets does not make you are safe from huge liability**. "Good luck getting blood from a stone" - wrong. Your wages can be garnished. | + | * **Low assets does not make you safe from huge liability**. "Good luck getting blood from a stone" - wrong. Your wages can be garnished |
| ===== Auto ===== | ===== Auto ===== | ||
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| | Property damage liability | You are responsible for paying for damage to someone else's property | Expensive | | | Property damage liability | You are responsible for paying for damage to someone else's property | Expensive | | ||
| | Bodily injury liability | You are responsible for paying for someone' | | Bodily injury liability | You are responsible for paying for someone' | ||
| - | | Collision | Your vehicle is damaged by collision with something that is not someone else' | + | | Collision | Your vehicle is damaged by collision with something that is not covered by someone else' |
| | Comprehensive | Your vehicle is damaged by something other than a collision (e.g. hail) | Moderate | | | Comprehensive | Your vehicle is damaged by something other than a collision (e.g. hail) | Moderate | | ||
| | Uninsured/ | | Uninsured/ | ||
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| * Many insurers require that bodily injury liability and property damage liability have the same limits | * Many insurers require that bodily injury liability and property damage liability have the same limits | ||
| * Medical benefit - this one kicks in before your medical insurance deductible for very specific vehicle-related situations. For example, you are standing on your car in order to clean your gutters and fall off - your medical insurance would cover the medical costs, but the medical benefit from your auto policy could pay out to cover your medical deductible. | * Medical benefit - this one kicks in before your medical insurance deductible for very specific vehicle-related situations. For example, you are standing on your car in order to clean your gutters and fall off - your medical insurance would cover the medical costs, but the medical benefit from your auto policy could pay out to cover your medical deductible. | ||
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| + | UMBI/UMPD warrant their own point. Why do you need to pay to insure yourself against someone else NOT buying insurance? That doesn' | ||
| In May 2024 I noticed my auto insurance policy had a limit of $50k USD for property damage liability coverage. That's the coverage that pays out if you are liable for damage to someone else's property (usually their car). This seemed rather low since many cars on the road are themselves worth more than $50k, and even a car worth less than $50k may be loaded with property whose value exceeds $50k. You could also hit a house or something else and cause more than $50k of damage to it and be liable for that. In all of those cases, with just $50k of coverage, you would have to pay the remaining costs out of pocket. Depending on the liability amount and your financial situation that could range from annoying to life ruining. | In May 2024 I noticed my auto insurance policy had a limit of $50k USD for property damage liability coverage. That's the coverage that pays out if you are liable for damage to someone else's property (usually their car). This seemed rather low since many cars on the road are themselves worth more than $50k, and even a car worth less than $50k may be loaded with property whose value exceeds $50k. You could also hit a house or something else and cause more than $50k of damage to it and be liable for that. In all of those cases, with just $50k of coverage, you would have to pay the remaining costs out of pocket. Depending on the liability amount and your financial situation that could range from annoying to life ruining. | ||
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| Prior to my grand review I did not understand umbrella insurance. Now that I understand I am of the mind that nearly everyone should have it. | Prior to my grand review I did not understand umbrella insurance. Now that I understand I am of the mind that nearly everyone should have it. | ||
| - | In short, umbrella insurance covers you for liabilities in excess of any other policy. Suppose you crash your '99 Camry into a McLaren Artura (about $300k), totaling it, and you have $150k of PD liability coverage. After that pays out you are still liable for $150k. If you do not have an umbrella policy you are screwed and must come up with that $150k out of pocket. If you do have an umbrella policy, your umbrella policy kicks in after your auto policy has hit its limit and covers the excess up to its maximum, and you pay nothing out of pocket. | + | In short, umbrella insurance covers you for liabilities in excess of any other policy. Suppose you crash your '99 Camry into a McLaren Artura (about $300k), totaling it, and you have $150k of PD liability coverage |
| You are probably thinking, wow, that sounds very nice. It must be expensive, right? Nope! When I got quotes for them recently, an average $1M umbrella policy was around $150/yr. Relative to an unexpected 5 or 6 figure out of pocket expense, that is extremely cheap. That is why I think most people should have an umbrella policy. | You are probably thinking, wow, that sounds very nice. It must be expensive, right? Nope! When I got quotes for them recently, an average $1M umbrella policy was around $150/yr. Relative to an unexpected 5 or 6 figure out of pocket expense, that is extremely cheap. That is why I think most people should have an umbrella policy. | ||
insurance.1717379036.txt.gz · Last modified: by qlyoung
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