Walk With Money » Insurance

What to Do When You Can’t Possibly Prepare Enough

admin — Mon, 07 Jun 2010 20:20:02 +0000

Ellen writes in with a very difficult story:

I am a huge fan of yours and have used much of your advice to simplify the money matters in my family, but my family is currently in a crisis that I have never seen discussed on your site.

In early April, my family was in a severe car accident. We were driving my mother’s van at the time and we were t-boned by a hit & run driver. My children’s car seats protected them from any damage and I walked away with only some muscle strain, but my husband was not so lucky. He had to be transported to a local hospital via ambulance due to a severe flexion neck injury.

Let me take a minute to review our household’s current standings: My husband works 40-hours a week in a fairly physical job. I work 32-hours a week. We work alternating schedules so that we do not need daycare for our two children. All of our benefits come out of his pay check because he gets a better benefit rate as a full-time employee. We had 6 months worth of savings for living expenses.

My husband has been out on FMLA ever since and will be until at least early July, when the doctor will decide whether he can return to work or needs to find a new line of work. Our FMLA expires at that point and the hospital that he works for will probably help him find another position, but we are currently unsure what that might be or if he will be able to continue working the convenient hours he is working now.

In the meantime, because we were the victims of a hit & run, the vehicle insurance is going to pay out to the uninsured motorist limits. And that’s the part that’s difficult. See, since uninsured motorist is a “final pay” settlement, we can’t get any help financially until Aaron is back to work. Normally, under the rights of subrogation, your health care will pay out, then place a lien against the settlement.

Unfortunately, though we work for a health care provider, our insurance will not pay out. At the 30-day mark of his accident, I had to pay the hospital bill, which wiped out a good bit of savings. Since this bill was to our employer, we could not afford to let it languish. The same is true of the ambulance bill. Also, his doctor bills. I have to pay enough to keep them out of collections (I’ve worked too hard on our credit to let that happen) and enough to keep the office letting him see the doctor.

We’ve been scraping by, but it’s a close thing. My husband has now exhausted his sick leave, but the lion’s share of the bills are paid. We figured that with his short term disability (which we pay for with our benefits), we would get by. Unfortunately, his short term disability claim has been denied. Since there is no subrogation clause in our short term disability policy, they won’t pay out in the case of 3rd party causation of the time off work. This was not something that even our HR Benefits people were aware of. (Obviously, this is an employer subsidized plan with an outside company, unlike our health insurance.)

Now, we are a month away from my husband returning to work, and my income is not enough. The catastrophic string of events that are unfolding just keep rolling in at us. I have applied for a credit card (we currently don’t have any, except one very small emergency card) to start putting some living expenses on and I will unashamedly run it up and pay it off when the settlement comes. The only things we have to pay now are rent, gas, food, and our vehicle insurance.

So, the obvious question is, knowing that I had stocked a huge …

Best Money Tips: 25 Factors That Affect Car Insurance Premiums

admin — Sat, 29 May 2010 10:20:13 +0000

Welcome to Wise Bread’s Best Money Tips roundup. Today, we share how to really save on car insurance, how to get over buying used, and how to make an awesome banana pudding!

Do You Need Renters Insurance?

admin — Thu, 27 May 2010 07:20:13 +0000

Do you live in a property owned by someone else? If so, are your personal belongings properly protected in the event of an unfortunate catastrophic event? If you live in a medium to large city and watch your local news, you see it all the time. At least once a week, there is a report of an individual or family that lost their home due to a fire. You may think you don’t have to worry about someone else causing a fire and burning down your apartment building because you live in a single-family dwelling. Fires can happen there too. Yeah, the risk of loss is not a great living in a single-family residence as compared to when you are living in a building with multiple families.

It doesn’t matter where you live or what type of dwelling you live in when it comes to weather related events. If you live in tornado alley, you have a pretty good chance of your home being hit by a tornado. Even if you don’t live in tornado alley, your home can still be hit by a tornado. According to the National Weather Service, tornados can happen at any time and in any place if the conditions are right.

Maybe it’s not even a weather related event that causes you to lose your belongings. Your belongings can also be stolen by a deadbeat (aka burglar).

If you can’t afford to replace all of your belongings at one time or think it will wipe out your savings in order to replace your belongings, you probably should consider purchasing renters insurance. Renters insurance is very affordable and well worth the cost for the peace of mind it provides. Speaking of cost, you can get a very good rental policy for less than $300 a year; most times it will cost less than $200 a year for …

7 Money Saving Ideas For City Slickers

admin — Thu, 27 May 2010 03:20:05 +0000

I moved into a big city in the last year, DFW to be a bit more specific, and I have been amazed at all of the fun things and all the options that have opened up to me since I got here. The only downside is that lots of these options cost money. Generally speaking, people think living in the city costs more and it certainly can. Here are some great ideas to save you city slickers on some of your hard earned income.

Zipcar

Zipcar is a car rental company catering specifically to those in the city. You are covered for insurance, gas, and some free miles are thrown in. If you live in the city, then this is a great way to get a car when you need it. Everyone needs a car for something at some time; we just don’t want the hassle of dealing with all the stuff that goes with it. So this is a great idea for when you need a car for a short time. It’s not in all cities yet, but it’s in a lot of them.

Public Transportation

Let’s go back to the basics. You pay taxes, and parts of those taxes go to city transportation. Most cities have it by now and it can make things pretty simple. Just because other people have a car doesn’t mean that you have to have a car. Keeping up for looks can also keep you high in debt.

The only downside public transportation is that it can be hard to lug large items through everything.

Groupon.com

Groupon.com is all about the purchasing power of a large group comes right to your doorstep. One really good deal is set up each day and through group purchasing power, you can get great discounts. There are things like this in lots of cities and it’s a great way to take advantage of what people are offering. When businesses compete for your purchase, you are on the winning end and group purchasing can get you some great discounts.

Happy hour

We all know what it is, so why don’t you make a note of when and where these happy hours and special discount times are located. Businesses do this to help you and why not take advantage of it. Write down when it is, so when you go out you will know where to go so you don’t spend as much.

If you’re going to go spend money having fun and can do the exact same thing for half the price, then you pretty much know where to go don’t you?

Volunteer

Volunteers …

May Is Going To Be Expensive

admin — Thu, 13 May 2010 15:20:07 +0000

Don’t you hate those months when it seems like everything comes due at the same time. Thankfully, those months don’t happen all the time or I’d be up a financial creek. I’m also happy that I’ve already planned for those expenses in advance and tucked the money away in a special savings account.

As much as it sucks that I’m going to be emptying out my pre-planned expense account, it’s nice that the money is there for those expenses and I’m not trying to figure out where the money is going to come from or having to whip out the credit card.

What’s going to be draining my bank account this month?

Auto. In Georgia, vehicle tag registration fees are due on or before your birthday. My birthday is on May 25th so I need to send a check to the county tax commissioner before my birthday or I’ll be subject to a late fee. They late fee is pretty steep (10% of the amount of the ad valorem fee and 25% of the tag fees). I’ll be stroking them a check for almost $400 which includes the annual license plate/registration fee, ad valorem tax and mail fee. It sucks paying a nice chunk of change for just a sticker. For that kind of money, you would think that we would get a new tag each year. Nope, I’ve had the same tag since I moved here 10 years ago.

Insurance. My auto insurance comes due this month. In order to avoid a $2.00 fee each month for paying in installments, I pay the bill for the six month premium in full. I save $12.00 by paying in full and I also get a paid in full discount. In addition to saving money by paying in full, I also get …

Pros and Cons of Being a Homeowner

admin — Thu, 06 May 2010 08:20:03 +0000

This past weekend, I finally got around to doing some long overdue tasks around the house. One of the major things I had planned to do was pressure wash and seal the deck. I’ve been meaning to do it for quite awhile but it was one of those things that I kept putting off over and over again. As a homeowner, if something needs to be done around the house, it’s up to me to get it done or pay someone to do it for me.

If you are a homeowner, a house maintenance fund is a must. There will be things that need to be done that you don’t have the time or ability to do on your own. From what I’ve heard, the best rule of thumb is to set aside at least 1-2 % of the cost of your house for your maintenance fund. I keep at least $1000 set aside for any emergencies that may come along. I bought my home brand new so thankfully, I haven’t had anything major come up yet.

With all of the affordable properties out there, you may be thinking of taking the leap towards home ownership. If you are thinking about becoming a homeowner, consider these pros and cons:

Pros:

Freedom. I like being able to make any changes in my home whenever I want. There are several things I want to do around my house and if I have the money to do it, I can. If I don’t like my paint color, I can change it without having to ask anyone.
Tax Benefits. As an unmarried person with no kids, there are not a lot of things to reduce the amount of the taxes I owe the government. As a homeowner, I get to write off the interest I pay to the mortgage company each month. In addition to being able to deduct the interest I pay on my home loan, I can also deduct the cost of my homeowners’ insurance and property taxes.
Equity. Each month that I make my mortgage payment, a little bit of the money (and I do mean a little bit) goes toward the principal balance. After 30 years, if I make all of my payments as agreed, …

Best Money Tips: The Perfect Pie Crust

admin — Sun, 11 Apr 2010 08:20:22 +0000

Welcome to Wise Bread’s Best Money Tips roundup. Today, we give you expert tips for making the “perfect” DIY pie crust, how to know if you need gap insurance, and whether an 850 credit score is even possible!

Should You Hire a Financial Adviser?

admin — Thu, 08 Apr 2010 05:20:02 +0000

As you start to build up your net worth, the question of whether or not you should hire a financial adviser becomes more important. However, the answer is not a simple yes or no. Some people do quite well without a financial adviser, some people need one, and on rare occasions, some wish they never had one. Even though I’m a financial adviser, I don’t believe that everyone should hire a financial adviser.

Photo by Miguel Virkkunen Carvalho via Flickr

In fact, I don’t think anyone should hire a financial adviser unless and until they can answer two questions:

relationship

2. Are you ready to take advice?

What do you want to get out of the relationship?

Let’s tackle the first question, what do you really want out of your relationship with a financial adviser?

This may seem like a really basic question but I think you’ll see that it really isn’t. For example, some people hire financial advisers because they want better investment results. Fair enough…but let’s look at this issue a bit more carefully.

Do you want an adviser who will beat the market every year?

If this is your real motivation, forget about it. It’s impossible. No financial adviser can beat the market year in year out. If they have a great streak for a number of years, chances are they’ll disappoint you sooner or later. And you’ll bail on them exactly when that happens. There are investment strategies that work, but nothing works all the time.

Don’t hire an adviser for above-market performance. It’s not something you can hang your hat on.

Are you looking to hire an adviser because you need a financial plan?

If so, you may not need a money manager. You should just hire someone who can put a plan together for you. A plan you’ll understand and more important, one you’ll implement.

If you need insurance, you can get that online much cheaper than through a planner or an insurance agent.

Have I discouraged you from hiring a financial adviser?

I hope not.

Good Reasons to Hire a Financial Planner

I think there are two very good reasons to hire a financial …

What Happens When a Bank Fails?

admin — Tue, 23 Mar 2010 14:20:13 +0000

On September 28th, 2007, my bank went bankrupt and closed its doors…goodbye, Netbank. The moment you first find out that your bank failed is a scary moment. First thought: “I know I should have figured out what FDIC Insured meant.” Second thought: “Google, can you save the day today?” How do you know if your bank failed and went bankrupt?

Photo by pedrosimoes7 via Flickr.

Banks don’t typically announce that they are closing the doors. The FDIC won’t tell you anything is in the works until it is done. Don’t expect to know beforehand. Fortunately, it is possible to do your own homework and do a bank rating save search just to get an idea of the bank’s financial strength.

But when they eventually fail it won’t be hard to find out. They will have something on their website and doors. Don’t forget that the news stations love this kind of news, as people stay tuned when their money is on the line.

What Should You Do When Your Bank Fails?

Step #1: Relax (assuming you had less than $250,000 total worth of accounts)

If you don’t already know, this is a good time to learn about FDIC insurance.

Banks are required to purchase insurance to cover their savings in case the bank goes bankruptcy. This insurance covers you up to $250,000. If a bank fails and you have less than this amount in savings, you will get your money back.*

* Some people talk about a catastrophic situation where multiple banks close at one time. In this case, if there were ever more claims than money available, then it could theoretically be possible that you would not get your money. But, this is a long stretch.

If you have more than the FDIC insured balance when the account closes, you may not receive all your money back. David Barr says that, on average, people get 0.72 cents per dollar above the insured amount. It does range from anywhere between 0.40 – 1.00 per dollar.

Tip: If you currently have more than $250,000 in savings at a bank, split up your money between multiple bank savings accounts. It simply is not worth the risk of having huge sums of money in one account.

Step #2: Contact the Bank or Assigned Representative

When the bank fails, the FDIC will assume all assets and attempt to sell the bank as soon as possible. You will be provided with a contact number that will help answer any questions you have. Before contacting the bank you will need to organize your financial documents so you know exactly what open accounts you have with the bank.

The most important question is who is purchasing the bank? …

Your Take: Does Unemployment Insurance Reward Laziness?

admin — Fri, 05 Mar 2010 13:20:43 +0000

The Huffington Post shared the thoughts of Sen. Jon Kyl (R-AZ) on unemployment this week:

Unemployment insurance “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work,”

The title of the article is a little misleading. In quotes, Kyl said that benefits dissuade people from job hunting, not that they “make people not want to get a job,” as the title states. While I didn’t hear or read about the debate, it seems like a stretch to take the quotes and twist them to match the title.

However, unemployment benefits do act as a disincentive. You get unemployment benefits when you are unemployed, you don’t get them when you are employed. If you remain unemployed, you get paid for not working… so in that respect Kyl is right. Given that base unemployment benefits lasts 26 weeks (not including the extensions from the stimulus package), I’m inclined to think that it’s not unfair for Bunning, or others, to ask how we are going …