A Mother's Guide to Sanity

One of the easiest ways to control the price you pay for insurance is to adjust the amount you're willing to pay out of pocket in the event you should suffer a covered loss. It's a fact the Higher the Deductible the Lower the Premium.

It would seem logical for most insurance consumers to purchase personal homeowner, or auto insurance policies with the highest deductibles they could conceivable pay in the event of an insured loss with a deductible. In fact, my husband and I always maintain the highest deductibles as we can, understanding that in the event of a loss we are going to need to pay our deductible first. Why pay more for a lower deductible all the time, when we certainly could afford to pay $1,000.00 or more "IF" something happens?

But, what does keeping very high deductibles mean during an economic crisis and widespread, prolonged unemployment?

It means that while we all hold our breath and consider what we need to do to protect our own family budget, credit, and assets insurance needs to be a huge part of the planning. A very high deductible might be perfect when things are going well and everyone is working but, may be catastrophic if not planned for during your own family financial crisis.

If unemployment is a possible risk for your family, have you made a plan for managing your personal insurance? If you are like the majority of consumers the number one thing you may fear is the loss of your medical or health insurance. While, consumers have the opportunity to continue coverage with C.O.B.R.A. the premiums to do so are generally very expensive. Some of the costs I have been hearing are well over $1,000.00 a Month for the average family with two parents and two children. No Job, no income and a new bill for over $1,000.00 a month! Sure!

If you are still working, have refinanced your home for the Best Loan you can possible afford... If you are hiking through 2 feet of snow to make it to your cubicle everyday and have a very brown nose... If you are planning for what to do--IF--there isn't the regular income don't forget to really look at your personal insurance.

My husband is still working, however each Friday is filled with great anxiety and the majority of his "peers" are unemployed or expecting to be unemployed at any given moment. How Stressful is that! It isn't bad enough that we lost nearly half or our "retirement" portfolio, lost equity in our real estate investments, and suffered the horrors of the high gas prices. Now, we have to work with less and plan for unexpected economic crisis. Who would have planned for all of this last year?

Our Insurance Plan for this period of time is rather simple. We have set aside the funds to cover the deductible in the event we suffer an insured loss with a deductible requirement. It's there and we don't intend to touch it or lower our homeowner, auto comprehensive, auto collision, or liability umbrella deductibles at this time. While still employed we have adjusted our spending and saving habits and made sure to manage our insurance risks.

If our personal financial situation should change then it would be time to review our position. In our insurance plan we have decided to maintain the savings for our higher deductibles unless or until we find ourselves in real financial crisis. If it becomes clear holding these funds in reserve for deductibles is less and less possible and we "need" every penny we can find, our first course of action will be to use the reserve funds to pay the additional premiums to lower our deductibles.

Let's all just hope it doesn't come to the point where paying a deductible is impossible for families! Be sure to review the deductibles you have for your own personal insurance and consider the implications a loss might have on your financial situation.


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It's safe to say our current economic issues won't be resolved quickly, most Americans should be well past the denial stage. If you're like most people I know, you may have started taking some strategic steps financially in anticipation of the economy's effect on your personal situation.

The best financial plans of a year ago, may not have even considered the mass unemployment issues we see today. Anyone still employed with a job making more then minimum wadge may feel secure but, I'll bet they know at least one person who has lost their job.

As we all rush to review our financial planning and take strategic steps to adjust to the current economic situation it's very easy to overlook something that very well could become the most important.

Have you reviewed your current Personal Insurance Policies? I mean, have you taken the Actual Policy out and read each page? Have you read your policies and understood exactly what they cover and exclude? Do you know what the limits, conditions and terms are for the insurance coverage you purchased back in the day?

It is important for everyone to take the time to carefully review their personal Auto, Homeowner, and Liability insurance coverage. Logic, if not statistics, would alert an average person to understand one very important fact about bad economic times:

There will be More Insurance Claims Made--when, people are out of work and financially struggling.

Have you taken the time to consider the implications of the fact that when things are financially difficult for a large number of people--more people will make insurance claims for losses they may not have claimed in the past.

You as an auto or homeowner may make a claim for a loss this year, that your might have just fixed on your own last year! Have you investigated the finacial stability of the insurace carrier you have?

I will be writing a lot more about insurance in future post on this blog, so now might be a good time to find your policies and check them over.



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