Should I Get Roadside Assistance Coverage Insurance? Hell Yeah!

1989 BMW 335i CoupeEvery winter, I make the 180 mile trek from San Francisco to Squaw Valley, Lake Tahoe to enjoy the epic snow. There is truly nothing more magical than spending hours riding on powder and having a beer or two in the outdoor hot tub when you’re finished! Oh, the stories I could tell you about what happens in the hot tub.

On the other hand, there’s nothing more frustrating than getting a flat tire at night in the mountains while it’s snowing. I know how to change a tire, but I sure as hell don’t plan to risk my life changing a tire in darkness on a one lane road in the mountains while cars zoom by. I might get a nice settlement if I do get into an accident. But, I also might lose a leg in the process!

Every month, I spend 98 cents to get roadside assistance insurance for Moose. Add up the cost over 84 months of ownership, and we’re talking $83 worth of premiums. And you know what? My roadside assistance insurance is worth every penny! I already mentioned how my alternator died just as I was pulling into my garage thank goodness. A tow truck came when I got back from vacation to follow me to my mechanic thanks to roadside assistance. What I haven’t told you about are my other more traumatic incidences!

IT WAS A DARK AND STORMY NIGHT

Should I Get Disaster Insurance For Earthquakes, Floods, And Hurricanes?

Earthquake Fault Lines In SF Bay AreaHurricane Sandy is a stark reminder of the importance of getting disaster insurance. Actuaries estimate insurance companies will likely have to pay out more than $25 billion in claims as a result. Looking on the bright side, this means those paying for insurance are able to collect. On the dark side, lives have been turned upside down.

As a long time resident of San Francisco, I wonder about getting earthquake insurance every single year. San Francisco lies close to the San Andreas fault line which could start shifting at any moment. The last big earthquake was the Loma Prieta earthquake on October 17, 1989 which killed 63 people. After 23 years, perhaps we are due.

California mandates insurance companies send earthquake insurance prospectuses to all homeowners every single year. Each time I look over the earthquake insurance documents, I get this much closer to getting insurance, but I never go through with it because of the enormous deductible of around 10-15%. In other words, if my home is worth $2 million dollars, I’ve got to pay the first $300,000 out of pocket first before getting anything from the insurance company. Furthermore, the yearly premium is around $5,000.

A CHECK LIST TO DECIDE WHETHER OR NOT TO GET DISASTER INSURANCE

How Does An Umbrella Policy Work And How Much Does It Cost?

Umbrella PolicyWe’ve talked about all the different types of auto insurance. I’d like to now talk about whether you should get an umbrella policy given this was the most brought up next step in the comments section. An umbrella policy is also known as a personal liability insurance.

When you’ve spent a lifetime building assets for your retirement, the last thing you want is to get sued for all your’re worth. Accidents happen all the time and the more you are worth, the more the injured person will go after you. If someone in a $160,000 Porsche 911 Turbo GTS runs you over after running a red light, you’re probably more inclined to hire a lawyer and sue for big bucks than if you were run over by a 1985 Honda Civic!

Auto insurance policies only cover so much. My auto insurance policy has a maximum $500,000 liability per accident. I could get more liability, but the increase in premiums would make my insurance less worthwhile. My car is only worth about $5,000 max. Because I have assets over $500,000, I elected to get an umbrella policy to cover the rest of my net worth.

The chances of getting sued for over $500,000 is slim because: 1) I’ve got to be found negligent in the accident, 2) I’ve got to create massive damage in the accident, 3) The victim needs to go through the process of suing, 4) The victim needs to win, 5) Cases are usually settled out of court for less, 6) I drive half the national average, 7) I’m a pretty careful driver with a slow car, and 8) I’m a nice guy! Unfortunately, even nice guys get unlucky sometimes.

If I do get sued for say $1 million, I’m safe because my auto insurance coverage will kick in to pay the umbrella policy deductible, and then my umbrella policy covers me for the rest. The picture above illustrates the point clearly. The only out of pocket expense I incur will be my auto insurance deductible of $1,000.

SCENARIOS WHERE AN UMBRELLA POLICY MAKES SENSE

Auto Insurance Basics And Recommendations For Everyone

Car wreck

Why you need auto insurance!

Besides the purchase price of a car, one must also calculate the potential maintenance cost, and auto insurance cost. We often focus on the first two costs, but seldom do we realize the auto insurance cost differential until we’ve purchased the car!

I was so happy to negotiate $2,000 off the initial asking price of a $14,000, black on black, BBS wheels equipped 1997 M3 in 2003 that I didn’t realize my auto insurance would jump from just $500 a year to $2,000 a year!

Had I realized my auto insurance would jump so much, I probably would have negotiated even harder, or reconsidered buying a sports car altogether. Always get an auto insurance quote before you purchase a car please!

Having auto insurance is a law you don’t want to break. Accidents happen all the time whether they are your fault or not. If you end up wrecking someone else’s car and injuring a passenger, not having any car insurance could literally wipe you out financially and put you in poverty for the rest of your life! Check for a better auto insurance quote via Esurance online. They provide comparison quotes so you know you’re getting a great deal.

AUTO INSURANCE BASICS

In Search For Empathy For The Unemployed

Unemployed Daughter With FatherMy no crying streak came to an end recently when I went to the Employment Development Department (EDD) to help out an unemployed friend and learn a little bit more about the process for my book.

Alex and I sat down in front of one of the public computers to get the EDD to resend a paper copy of the Continuing Claim Form.  Because Alex finally received his accrued vacation as part of his severance, he clicked “Yes” to the very first question of the online Continuing Claim Form questionnaire:

“Did you receive money other than wages (vacation, pension, etc) for the two week period ending XX/XX/XX?”

Instead of getting approved to receive unemployment benefits for the past two weeks like usual, the system denied his benefits and told him to file a paper claim form instead!  After verifying with the EDD in person, receiving vacation payment does not preclude one from receiving unemployment benefits if there is no set return date for employment.  Alex dodged a bullet and finally did receive his unemployment benefits a few weeks later.

During this process, I noticed a roughly 35 year old woman accompanied by her 65+ year old father (see picture).  I glanced over at her screen to see that she was editing her resume in order to apply for one of the many CalJOBS that were listed in the system.  The father sat quietly behind her daughter, waiting patiently for her to finish.

When the daughter finally submitted her resume to the various opportunities online, her father said, “Great job daughter, I’m so proud of you.

SADNESS AND HOPE