I never really understood insurance until I got married and bought my own. Now, I completely understand why my mom dreaded calling the health insurance company to iron things out. Though these principles won’t get rid of all of the headache, they will provide some useful guidelines for choosing the most basic kinds of insurance you might need.
Basic Guidelines
- Have insurance in the first place. In general, it won’t shield you from all costs, but it will prevent you from financial disaster. I remind myself of this all the time when things are good and it seems like my insurance isn’t doing anything for me. This applies to any type: health, auto, life, home, etc.
- Set the deductible as high as you can afford, but not so high that it’s unbearable. Because we have done this, we don’t pay anything for our health premium each month. Since I took the time to compare plans, we also ended up with the lowest out of pocket maximum and receive some money in a health savings account every year.
- Don’t buy coverage you don’t need. We just have liability insurance on our cars since they’re old and not worth having full coverage. We also got rid of our dental and never signed up for vision because they weren’t worth it. (I detailed how I keep my vision costs down here.)
- Shop around for the best price. This is tedious to do for anything, but it can save a lot. Employers generally have better insurance coverage than private companies. Our health insurance comes through James’s work, and we have car and life from USAA. We called a couple of places before getting homeowner’s insurance. Ultimately, we saved over $100 a year and got better coverage.
- Change your coverage when your life changes. We dropped full coverage on our car when we didn’t need it as collateral on a loan. Our other changes have been because of employment, new cars, and adding new people to the family. In the future, more children may need vision correction or have more cavities, so we will reconsider getting vision and/or dental coverage. Plans themselves can change from year to year, so I always check to make sure we’re getting the best deal for our situation. The mostly applies to our health insurance.
- Know your benefits, and prepare to make some phone calls when necessary. Our only real issues have been with health insurance. Sometimes, communication between the insurance company, billing company, doctor, and hospital get mixed up, and things don’t get paid that should be. If something doesn’t seem right, call them. You might have to make more than 1 call to straighten things out, but do it before you pay anyone. Getting a refund for overpayment usually takes weeks, if not months. I wouldn’t wish this situation on anyone, but I think it’s pretty common, unfortunately.
Though getting and using insurance can be frustrating, it’s a necessary part of life. Choose wisely. A few hours of research can easily save thousands of dollars.