We’re “Covered” – But We’re Broke….

Print Friendly, PDF & Email

Insurance – over-insurance, excessive insurance, really – is arguably one of the reasons why so many people are having trouble making ends meet.

When you add up homeowner’s insurance, health insurance, car insurance, life insurance – that’s five types of insurance – the total tab can easily be more than $10,000 a year. The average person probably pays three or four grand a year just for homeowner’s insurance and car insurance. And that average person is working with an average (gross, take home, pre-tax) income of less than $50,000.

We’re “covered” – but we’re also broke as a result. Maybe the money we throw at insurance could be used more rationally?

Personal example:

Our house is paid for so we don’t have to have home insurance. I have already reduced our coverage to the bare minimum, with the highest deductible available.

It’s still more than $800 annually.

Now, $800 per year (fixed, assuming no increase in the premium over time – which isn’t likely) is $20,000 over 25 years. That’s a big pile of money even before considering the even bigger pile of money I could make by investing that $20k in other things.

But, what about the risk?

Well, there’s not much risk that I can see. We do not live anywhere near water (so zero flood risk). Tornadoes in the mountains? It can happen, I suppose. But it’s also extremely unlikely. It has not happened here in at least 25 years. What else? Fire? I doubt it. My wife and I are home almost all the time. If a fire did start – possible, but not likely – one of us could probably put it out before much damage happened.

Bottom line: I assess our risk of a major/catastrophic loss at almost nil. And the smaller stuff you pay out of pocket anyhow – or should, if you’re smart – because if you don’t, the insurance company will “adjust” your premium right through the proverbial roof.

So why should I spend $20,000 on insurance when I could keep that money, invest that money – and thus, have that money to pay for whatever might come up? The odds of us facing a loss that amounts to more than $20,000 (or even $10,000) during the next two decades is probably slim to none.

Meanwhile, $20k would buy a new top-of-the-line roof and leave $10k left over. Or, I could completely finish our basement and add $50,000 in value to our home. Etc. I could then – if I needed to – draw money from the equity in our house to deal with whatever problem might – again, might – and probably won’t – arise.

Or I could buy at least 2-3 acres of land… something having real value that, if I had to, I could convert into cash very quickly.

I think it’s reasonable to assume the small risk that some catastrophe might happen in exchange for the sure thing of money in my pocket (and available for a rainy day) that hasn’t been pissed away on “coverage” I will likely never need. This is the kind of calculation that many – most? – people just don’t make.

Car insurance is not much different. No, it’s worse – because the car insurance mafia has made their “product” mandatory. Government goons force us to pony up – exactly like mafia thugs who threaten to smash the store windows and “tune up” the owners of restaurants and little shops who don’t pony up for “protection.”

Not only do we pay, we pay through the nose – for a policy that will very likely refuse to do more than cut a depreciated check for the “wholesale used” value of our car if some schmuck T-bones it.

Second personal anecdote:

My sister and her family were vacationing in a ski area of CA. A brand-new Mazda driven too fast by an inept driver on a snow-covered road collided head-on with their 2001 Honda Accord at about 25 MPH. No one was injured but my sister’s Accord received appx. $6,000 in damage to the front end, which of course resulted in this otherwise perfectly good car (before the wreck) being declared a total loss by the insurance co. of the other driver. The accident was without question the other driver’s fault. This was never challenged – and the driver of the Mazda freely admitted responsibility

Nonetheless, the insurance company tried to “settle” for an amount that was literally $2,000 under average current retail value for the Accord based on absolute BS such as (seriously) “dusty engine compartment” and so on. They also would not acknowledge that my sister had very recently (three weeks prior to the wreck) spent $800 on a major tune-up/service and had receipts to back this up.

She spent more than a month threatening to sue – even to the extent of hinting that “personal injury” might become an issue (I know it’s Maggoty but this is what they force people to do – and I recommended she try this; when dealing with gangsters, sometimes it’s necessary to adopt gangster tactics, etc.) before they finally “adjusted” their settlement offer closer to fair market value, but she still ended up with less than what they would have gotten had they sold their Accord on the retail used car market (before the wreck) and without enough money to replace their totaled Accord with an equivalent condition used Accord.

Bottom line: She would have been better off just putting $500 aside for the past 10 years. It would have been exactly the same as the lowball “settlement” the insurance company trotted out – and it would have been a lot less hassle. Had she put that $500 ($5,000 over ten years) into a very conservative investment that returned a profit of 5 percent, she’s have ended up ahead – and never had to deal with the insurance company’s shysters.

Final anecdote:

I deliberately went without health insurance for most of my 20s, even though I had a full-time salaried job that offered it. I judged that it made more sense for me – a young, healthy adult who didn’t smoke or drink, who exercised regularly, etc. – to skip “coverage” that I almost certainly would never require vs. the sure thing of having some savings – savings I ended up using as a down payment on my first house. Had I been forced to buy insurance instead – as today’s young people will be forced to under Obamacare – there is no way I would have been able to come up with the 10 percent down payment that was required at the time, which would have meant no house for me. Which, in turn, would have lost me all the money I ended up making on the house I bought (the real estate market was still good in those days) and that would have meant I would not have owned my next house outright – paid for with the money I made off the first house.

If I’d spent the money on insurance, I probably would not have a roof (of my own, at least) over my head right now …. but I would have been “covered”’….




  1. I am going through a similar thought process right now re: health insurance. The latest $100 a month increase has put it up just too high for me. Plus I have a $10,000 deductible so I pay everything out of pocket anyway. Currently I have health insurance but I don’t have long term disability insurance. I figure I have about an equal chance of being wiped out financially by either one. The disability coverage is like $80 a month. The healthcare is now $700 a month.

  2. while I don’t think anyone will shed any tears for them, auto insurance companies and health insurance companies are required by the govt to carry all of those other people that refuse to insure themselves and end up being a burden on society because of it.

    Typically uninsured drivers are amongst the worst and often end up injured and in need of medical care. What should happen is they be required to pay their own way or depend on charities, but since hospitals cant turn anyone away, the burden for their health coverage falls upon both the govt and also private insurers who have their bills increased so the hospitals can make some of that lost money back.

    I imagine if the govt didnt force people to take care of deadbeats then insurance costs would be reasonable, just like they were 50-60 years ago before Uncle Sam became Auntie Freedom.

    • When a company, or companies of a particular industry team up with the state to create a monopoly or cartel the state has conditions. These conditions are usually something useful to those in political office.

      A good parallel would be transit companies. Ages and ages ago transit companies sought government protection from new technologies or grants of right of way that gave them monopoly. These deals came with conditions. Street car companies had to maintain roads to keep their right of way or government regulated fares for transit service. It varies case by case but the cartel or monopoly worked for a few years until the political conditions on the deals drove the companies bankrupt and government took them over.

      Insurance companies will eventually suffer the same fate as the government demands more and more be covered while not allowing price increases to compensate.

      • “Insurance companies will eventually suffer the same fate as the government demands more and more be covered while not allowing price increases to compensate” – That’s the part that bothers me. The number of Takers continues to multiply while the number of Payers not only grows smaller, it grows less able to bear the ever-increasing burden of the Takers – imposed by force – on them.

        So long as insurance companies can use the police power of the state to force people to purchase their “product” (as in the case of mandatory car insurance and soon-to-be-mandatory heaf cayuh) there is no check, no incentive for the insurance companies to do anything except jack up the costs imposed on the Payers, who have no choice but to keep on paying.

        If they could say, “no thanks – your premium raise is unacceptable; I am going to cancel my policy (or not buy one from you) and shop elsewhere, or consider other options” it would be much harder for the system to function as it does now. There would be immediate an unavoidable pressure to deal with the Takers by (among other things) using force to make them pay for the costs they generate. This (using force to make people who incur costs bear the costs) is moral – unlike using the police power of the state to force Jones to “cover” the costs of random strangers over whom he has no control and bears no responsibility for.

    • Another problem (with health insurance) is that the system enables providers – doctors/hospitals – to treat, for example, a thug without insurance but with several bullets in him as a result of a gang shooting, then transfer the cost to “the government” (taxpayers) or recover it by jacking up the treatment costs of the paying customers. Illegals fall into this category as well. So long as it’s possible for the system to compel “Smith” to pay for the irresponsibility of “Jones,” rather than have Smith be responsible for Smith and Jones be responsible for Jones, the run-amok costs and (worse) loss of our liberty will only grow worse.

      • There is no difference between a thug getting injured and a healthy 20 year old that decides to not spend any money on insurance and gets very sick or injured. You only have two options. Send them both out the door or others end up paying.

        • I have a better option, Cloveroni:

          Thug: Let the doctor/nurse treat him if they wish – at their expense.

          Sick uninsured 20-year-old: Put him on the installment payment plan. Let the doctors/nurses donate their skill; hospitals their facilities.

          Charity is a wonderful thing. Forcing others to be charitable is not.

          You think people have a “right” to heath care? Then you should provide it, if you wish. But don’t tell others they have an obligation – enforced at gunpoint – to do so.

          There is no such thing as a right – a real right – to threaten others with violence in order to provide you or some other person with a material benefit.

          That so many Americans no longer understand this is depressing – and ominous.

          Think about it, Clover: If every person has a “right” to health care (that is, a claim on the the physical facilities such as hospitals; the time/skill of doctors/nurses; the tools/equipment/medicines made by other people, etc.) then surely they also have a right to a house, a car, a good job… whatever else they “need.” It is not possible to logically argue against a “right” to housing or a car or a good job – distributed by the government, enforced by the threat of violence against those who will be compelled to provide it – if you have already conceded that people have a “right” to health care (that is, to use the force of government to make other people give them medical treatment).

          Again, you reveal the mindset of a slave – or a slavemaster. To you, other people are things to be told what to do – and threatened with violence if they do not.

          The idea of leaving peaceful people alone in liberty to go about their business and allow them to live their lives – to pursue happiness – is a foreign to you. Everything must be controlled – for the good of “society.”

          And for the sake of the power of those who run it.

        • Eric on your comment “Sick uninsured 20-year-old: Put him on the installment payment plan. Let the doctors/nurses donate their skill; hospitals their facilities.”

          Since a 20 year old does not insure himself because he would rather go out drinking or partying and having a good time, you expect others to donate their skill, time, hard work and education for free.

          Nothing more than a taker taking advantage of others.

          • Clover, you really are an idiot. You literally can’t make an argument that’s based on the plain meaning of words. You just change the terms of the debate, redefine things according to your Cloverish idiocy and then blather along a new trail instead of keeping on the main path.

            I don’t “expect” anyone to donate their time/resources/skills, etc. I stated that if they wish to, they may do so. I also stated that no one should be forced to “donate” their time/resources/skills, etc. That is theft, simply defined.

            What befalls some random 20-year-old (or thug criminal) does not impose an obligation on me (or on you) other than whatever help we may wish to provide, voluntarily. If not, too god-damned bad.

            Idiot assholes like you don’t get this. Your pea-brains start with the unquestioned (and unquestionable) premise that the costs of someone’s misfortune, bad luck or whatever will necessarily be transferred to “society,” therefore we need This or That mandate, law, program or what-have-you… instead of questioning the premise (of the cost transfer) itself.

            The thug? Let the asshole die. If a doctor wants to donate his time (and the hospital has the means to donate its resources without transferring the costs onto others) then fine. But neither has the right to treat the thug and then demand – at gunpoint, through the government – that you and I and everyone else “chip in” to “help” … or Else.

            But the poor thug! He is suffering!

            Clovers never ask about the suffering of innocent people who had nothing to do with the thug’s plight but who are going to be threatened with asset seizure, prison, even lethal violence, ultimately, if they decline to “help” the thug.

            What you are, Clover, is a great grasping octopus of collectivism that seeks to embrace everything in your suffocating tentacles.

            Your type – not very intelligent, unread, ignorant of history, not able to think conceptually, unquestioning of authority; indeed, reverential toward authority and instinctively collectivist – has transformed what was once a free country where individuals were responsible for themselves – and obligated to no one except those to whom they owed an obligation – into a controlled, directed, straight-jacketed corporatist-socialist-fascist Gulag, growing more overtly authoritarian all the time.

            This is all fallout from the War Between the States – and the victory of the Yankees. If I could have one wish it would be to travel back to 1861, to first Bull Run, and whisper in PT Beauregard’s ear… don’t stop the advance. Take Washington. Lincoln and his cabal of corporatists would have collapsed along with the North’s desire to force the South back into the “union” at gunpoint. And that would have changed the course of a mighty river of history… and changed what is to what might have been.

          • Speaking of Lincoln’s war. There was a science fiction book written about a time traveler who was going to go back to the civil war with the plans for a full auto assault rifle that could be constructed using mid-19th century technology so the south would win.

            Perhaps aiming for stopping the slaughter of native americans would be a better a point. That’s really where the evil seems to have gotten it’s real firm grasp on things.

            • Yes. Herman Goering observed acidly – and rightly – at Nuremburg that America had no compunction about committing what amounted to genocide when it served its interests. (Ditto the British empire.) Our hypocrisy is nauseating.

              During the War Between the States, Lincoln, through generals like Sherman and Sheridan, practiced the art of war just like the Waffen SS; most notably the deliberate targeting of civilians, wholesale looting and raping, etc. Such policies were later brought to bear against the Plains Indians, then again the in the Philippines and many other places besides. It became the American way of doing business.

              Lee reportedly said shortly after the end that had he known how “those people” intended to treat the defeated South – and the extent of their corruption and brutality – he would never have surrendered, even if it meant death instead.

          • Clover: Your premise is irrelevant. What you’re trying to do is imply that people have some obligation to give – and if they don’t give freely, then they should be forced to. Because to a Clover, people owe others by mere dint of the need of others.


            No one owes anyone anything unless they’ve agreed to assume some obligation or have in some way done harm that creates the obligation as a result.

            If a person feels inclined to help someone else, that is their right as well as to their credit. Wunderbar.

            But what you can’t stand is the concept of voluntarism – and the idea that people don’t owe one another anything except goodwill and live – and let live.

          • PS: I do the most charitable thing one human being can do for another – I respect his right to be left the fuck alone. I do not try to have the guuuuuuuuuuuvernment steal his money, or take away his liberty… The most priceless things in this world; the things you piss all over.

          • Sorry I guess I did not have to ask the question. I know that libertarians are only for themselves and are only capable of taking.

            • Clover, you’re the one who advocates taking from others – using the guuuvernment as your bully boy. So you’re not only the taker, you’re a coward, because you don’t have the balls to confront people physically, yourself, and actually take their money yourself or take their property yourself – or try to force them to do what you want them to do on your own. You hide behind “the vote” and “the law” instead.

              I would not be surprised to learn that you’re some kind of guuuvernment employee, or otherwise “earn” your money by having the guuuuuvernment force other people to pay your salary.

          • Clover, the selfishness argument is rooted in the belief that one can make good people at the barrel of a gun. It’s the same mentality that thinks putting people in cages for years will reform them and solve their problems (such as drug addiction). It’s the same basis upon which people fight religious wars too. It’s how concentration camps and gulags are created. Saving people at the barrel of a gun from themselves.

            It’s sick and twisted and needs to come to an end. It’s killed millions too many already and has to stop before it kills billions more.

            And if you must know I am finding that libertarians are very often generally like myself, the wealth creators of society, part of the ever shrinking productive class. We make/create/develop things for a living that add to human civilization, that increases the wealth so more people can eat. You have the government point a gun at someone and take from him to feed someone else.

            Do you think Eric’s books magically come into being? His books alone probably help to feed hundreds of people if not more. From the clerk at the book store to guy running the printing press to the sales guy that convinces bookstore chains to carry it. What have you done?

            The products I’ve worked on probably helped feed tens of thousands world wide by now. From ma-pa shops to clerks at major chains to small manufacturers of parts and many many more. That’s what wealth creation does. What have you done?

            • It’s interesting, isn’t it, that “liberals” (that is, leftist statists) are considered humane and caring – because they advocate taking other people’s property, by force, in order to “help” whatever the cause du jour happens to be.

              Meanwhile, people who (as the country song goes) “…don’t want nothin’ from no one, if I can’t get it on my own” are regarded as selfish by these same left-liberals… .

              Rightist statists (Republicans; “conservatives”) are just as bad in their own way, of course.

              It’s depressing how few people understand – and more, desire – liberty for themselves. And are willing to grant the same liberty to others.

              America is afflicted by the disease of power-lust.

              So many people have this sick urge to force others – by any means necessary – to do what they think they ought to; to provide funds to support that which they think is good and right.

              The notion that people not only ought to but have a right to be left in peace unless they’ve harmed or threaten to harm someone else; that no person has the moral right to compel someone else to provide material “help” to them… it’s alien to millions of people, the Clovers all around us.

          • Funny how Eric and others here say the guuuvernment is so bad because he read some story somewhere of what is or has happened across the ocean or what happened during the civil war. I live today and in the US.

            Eric says how bad our guuuvernment is but kisses the ass of terrorist or drunks that are both trying to kill us. The priorties are out in left field. He says the police may do something bad so he comes up with dozens of things that they may do but in effect have not or never will.

            He thnks it is ok to screw the guuuvernment out of funds and hurt the guuuvernment but never thinks that the guuuvernment is not an external organization but in effect is the people that get screwed if you lie and cheat the guuuvernment.

            • You equate objecting to absolutely random, utterly arbitrary searches (e.g., TSA; “safety checks”) and the chucking of due process and the rule of law with “kissing the ass of terrorist (sic) or drunks that are both trying to kill us…”

              That’s demented and sad, but typical Clover-think.

              Your type is eager to destroy this country – the liberty and openness and right to be left alone unless you actually did something that made this country what it was, anyhow – in order to “save” it from an endless roll call of bogeymen, usually exaggerated to a hysterical pitch as if by some old fishwife.

              But even granting that there are drunk drivers out there – and it’s certainly possible that a terra attack could happen – is it really worth America becoming a police state in which random “screenings” and “pat downs” are commonplace? Where police don’t need to have a reason – and I mean probable cause – to detain and interrogate people? To break into their homes on a cop’s “hunch” or “feeling”? Where all the government has to do is point its finger at you, call you a “terrorist” – no proof, no trial, not even formal charges – and it can literally snatch you off the street, imprison you indefinitely in an “undisclosed location,” torture you – even kill you? (The current Chimp has asserted his “right” to do precisely that).

              This is the reality you’re cheering on, Clover. A Sovietized, Nazified (take your pick; the names don’t really matter when the substance is the same) America where “security” and “safety” – as defined by the government – trumps liberty and freedom. Where the individual has no rights the government is bound by law to respect; where only the government’s “rights” matter.

              I understand you think it’s all for the greater good and that if you’re not guilty of anything, why, what have you got to worry about… But only a fool trusts any government with such arbitrary power. And I realize you are precisely that.

              “Screw the government out of funds”… Excuse me? Did the government earn the funds in question? Or was it the people from whom those funds were taken?

              Today’s lesson: “The government” is just organized force within a given geographic boundary over which it lays claim. It is controlled by some of “the people,” a very small minority of them, who exercise near-unlimited power over the rest – who may not (and in fact don’t) consent to being controlled and fleeced by this entity, this organized band of looters and thugs that is no different than the Mafia but likes to pretend otherwise.

              PS: You do “work” for the government, don’t you? In which case, you’re a parasite who lives by feeding off a helpless host organism. How does it feel to be a parasite? A useless eater? I can’t begin to imagine…

          • In response to :

            “and it’s certainly possible that a terra attack could happen – is it really worth America becoming a police state in which random “screenings” and “pat downs” are commonplace?”

            Damn right is worth random screenings and pat downs to insure that millions of people would not stay home because there is no security taking place. It is better that it bothers you that there is security taking place than to shut down an important industry or kill hundreds of people. You have all the right in the world not to take public transportaton or go to public events. You have all the rights in the world to charter your own plane.

            • Clover, you support arbitrary and random “screenings” – including physical stops, “show us your papers,” pat downs/scans. Do you know what the meaning of the word arbitrary is? Random? If you approve of randomly and arbitrarily detaining people and subjecting them to searches, etc. then you have conceded limitless unaccountable authority to the government – by definition. Because if such things are done randomly and arbitrarily – that is, for absolutely no specific reason relating to any specific individual – and you say that’s ok then you have given away any possible argument you could make against any action taken by the government – including randomly and arbitrarily seizing people and imprisoning them. Or interrogating them with “enhanced” techniques. And possibly much worse than that. If law enforcement is random and arbitrary, then there is nothing to random and arbitrary things being done to anyone, for any reason. Including you.

              Do you see?

              The whole point of having probable cause and due process is to prevent arbitrary and random – that is, lawless – actions by the government.

              Random and arbitrary actions can be codified and decreed and made “official” – but they are anathema to the rule of law. To justice. If people who have done nothing, given no reason to even suspect they may have done something, are no longer free to go in peace about their business, then we no longer live in a free country. By definition. We live in a police state exactly like the old Soviet Union or Nazi Germany. In both cases – in all such cases – the government merely had to assert some broadbrushed “interest” (including, as regards both Nazi Germany and Soviet Russia, “combatting terror”). Such regimes depersonalize people, then dehumanize them – and that is the road which leads to Dachau or the Gulag.

              Neither began mass murders until they’d laid the groundwork, just as is happening here in the US.

              Courtesy of moral and ethical imbeciles such as yourself.

            • PS: I know you work for the government, or in some other manner collect a government check. Right? I would not be surprised to learn you’re a government skool teechur. Maybe one of those useless eaters at the DMV…

              Prove me wrong. I will eat my left shoe if you actually earn a living in the real (private, not connected in any way to the government) economy.

          • As long as the system doesn’t force other people to pay for the care of these dirtbags… .

            No one – gangbanger or not – has “right” to health care anymore than they have a “right” to a car or any other material benefit that must necessarily be provided by others; in other words, by using the government’s monopoly on legal violence to force them to provide such things (or the means to acquire such things). A need for something does not confer the right to make someone else provide it – to force them to give it to you – anymore than the street thug’s need for your money entitles him to shove a gun in your face in order to take it from you.

            Theft is theft.

            Theft does not become a “right” because a majority voted to do the thieving, or because a law was passed sanctioning the thievery.

            Not many Americans understand this – or respect this – anymore. Which is why America is no longer America.

  3. The true scam of auto insurance is that we have to pay liability on the car. Liability is a function of the driver, not the car. I should pay that once, I can’t drive more than one car at a time.

    Although now we all have the forced purchase of health care insurance to look forward to. Meanwhile the society of perpetual children in which we live can’t figure out they are being scammed… again.

  4. I think that is a judgment call.

    You need to decide what is financially more prudent for your situation.

    For some people, I think it could make financial sense to go without buying and insurance policy.

    One caveat is that you actually put the money that would be spent on the insurance policy and put it in a “rainy day” fund. It the beginning it will be difficult, but once some funds are saved up, it will be easier and easier.

    If you are unlucky and have a series of accidents, then this may not work well.

    A catastraphic insurance policy with a high detuctable could be used to help cover for a devastating loss. I have no idea how “reasonably priced” these could be.

    I remember looking the my auto policy comparing a state minimum vs. a std. policy. There was very little difference in price. I did not think it made sense to pay for the min. policy considering the amount of coverage I would be giving up compared to a std. policy. I am sure the the ins. company purposely does this (policy pricing) to help convince people to buy a std. policy instead of a minimum policy.


Please enter your comment!
Please enter your name here