Managed Car Insurance...

Today's the day auto insurers propose new rates for car insurance in MA. MA is the only state which state regulators set the auto insurance rates. This article in the Boston Herald discusses the new proposal. So today insurance makers will show state regulators new proposed rates. These rates if accepted will go into effect April of 2008.

The reason for the regulation of car insurance in MA is the fact people are terrible drivers. About 30 years ago the state attempted to have a free market car insurance, but rates tripled. Hence the current system in place is one which manages risk for all drivers by making insurance affordable. Basically it penalizes all "safe" drivers.

So should I support this new car insurance? Well when we lived in CA, we paid a premium being under 25 with new cars although we were good drivers. However since moving to MA, DH does not have the best record. So honestly this managed system of car insurance benefits us a lot. After DH's accidents our insurance only went up $100/year. Not to say we weren't paying a lot for liability insurance about $2k/year for 2 cars and 2 drivers.

However, I cringe when I think what our rates might be if we were to go to a competetive rate system. I think we're personally better off under the current system and so are most MA drivers. Everyone we know has a lot of damage to their cars, even supposedly good drivers. Friends who have moved from elsewhere and never had accidents before, claims that they've had tons of accidents/damage to their cars since coming to MA.

So will this system really work? Can a truly free market system work for car insurance in MA?

Dental Update #3...

To summarize, I refused to pay $350 for a cancelled dental appointment in July. I have sent back proof about changing insurance, I have sent proof the dental office was not eligible for coverage with my new insurance (they are but OUT OF NETWORK). I called and reported them to the insurance company, and it turns out they have been reported multiple times for violations of misleading people to get work done when it wasn't covered.

I have written two more letters saying I'm not paying it. Got another 3rd letter saying I'm responsible for the $350.

What are my options? My DH says to keep saying I'm not paying. This time to explain the cost of the cancellation was way above the reasonable guidelines of the state. They were deceptive, which they were but refuse to acknowledge. I also reported them to the state dental office, but hey they obviously don't care and have been reported before.

Can they send it to collections? How will this affect my credit? What are their recourse? Should I offer to settle for $50?

Medical Insurance

Well we pay $48 every two weeks for our blue cross/blue shield PPO coverage for DH and myself through his company. Overall deductible in network is Zero, overall coinsurance maximum in network is Zero.

Now to important stuff family planning is $10 copayment, Infertility treatments $10, Labs and X rays is Zero, Maternity Services is Zero, annual Ob/gyn visit is $10 copay, 1 annual eye exam for $10 copay, well baby is zero. Not to shabby, and much more comprehensive than I would expect. Of course nothing matches what we had from DH's grad school where everything was covered no copay, but I think this is pretty generous medical coverage for little money.

The only issue is that we don't often go to the doctor now so we're currently not using our $600/year benefits. It'd probably be cheaper out of pocket, but when we have kids or are trying to have kids I'm sure that will change. Anyway though our medical insurance is about to get a work out because we're going to go for genetic counseling for DH's retinities pigmenosa. I'll post afterwards what it cost us.

Vision Insurance

DH's work provides vision coverage for $120/year per couple. However it only covers up to $115 for contact and $100/year for glasses. In our family I am the only one who needs contacts, and yes I'm looking into Lasik corrective surgery. Unfortunately my vision has been deteriorating still and with pregnancy I'm not sure if I should even get it now. But that's another discussion.

Well the point is that our medical plan covers one eye visit a year with copay so I did that last year, because DH forgot to sign up for vision. Turns out it's not worth the money. It's a hoax and only worth it if two people need coverage. If not we're better off getting the prescription, filling it at Costco, and using a FSA for the tax break. Which is exactly what I did this year. So my contacts will cost us about $80 overall and we don't have to pay for vision.

Sometimes insurance can be such a crock. Tomorrow I'll probably discuss our medical coverage, which is really good coverage for a great price and cover amazing amounts of stuff for pregnancy.

full or partial car insurance?

Well for the past 3 years we've been carrying only liability on our cars. Our cars are a 99 toyota corolla and a 00 ford focus. The savings were substantial because we were under 25 for a chunk of those years, and our rates have been dropping.

However since we've moved to NE it's gone up. When we got here unfortunately we decided to go with liability again. Also unfortunately my DH had three car accidents within a span of 3 months (yeah probably why I don't buy a new car). But seriously I wonder what is the break even point of coverage and should we have been carrying full coverage?

Well where we live it cost approximately $1k more for full coverage and that's with a $1k deductible. In CA it was the same thing, so we dropped it. The cost of either of our cars $4k would be made back in 4 years right? Actually sooner if you consider we'd have to fork over a $1k deductible.

But on another message board someone said they paid for full insurance because they couldn't afford to replace their car. However the difference in full coverage versus liability was a lot less. Mine's high because it's a state run insurance program, so bad drivers like my DH is paid for by good drivers. Thank god he had all his accidents here, not in CA.

I thought about it and decided, I would still wouldn't cover my car if I couldn't afford to replace it, and save the few bucks. Why? Because of that stupid high deductible. If you have to fork over $1k anyway, you could set aside the difference every month into a car fund and buy a cheap used car for $2k probably by the time your car was totalled if not more.

Of course this is all based on the premise that you'll save the difference. I know I'm not saving the difference, but I like not having a deductible. Of course if DH has another accident I'm not fixing his car he can drive it all beat up, if it drives and if not, then he's getting a $1k car period.

Do you need life insurance?

I'm going to write a few posts about insurance, life, car, home, and umbrella policies. But to start I'll discuss whether I think we need life insurance as DINKS in their 20s with some assets.

I'm constantly fighting internally over my internal desire for life insurance and the fact I don't need it. DH says no way, not until we're pregnant are we getting life insurance. His logic is that he gets 2x his salary from work, and as the breadwinner that amount will more than adequately take care of me. With our assets and his insurance I could live in our house if I choose for at least 5 years. If I die, he can manage the mortgage note solo and our current assets will more than take care of burying me. So his position is that we don't need insurance. My position, it's a really cheap rate and I feel nervous.

Right now we're both below 30, and rate are exceptionally cheap. However, I do acknowledge not having dependents makes it somewhat difficult to justify paying for life insurance. Also I am constantly wavering between 20 and 30 year term life insurance. Experts say long enough for your youngest to be done with high school. But we don't even have kids and we're not sure when they'll come or how many we'll have. So how do I know we'll have enough? But do we really need 30 years? I think we'll be self-insured probably by 20 years from now, so is it necessary to buy the longer term?

Another major issue that prevents me from buying life insurance is that I make very little money, and DH is starting his career (1 year) and the growth potential for both of us is huge. So if we were to buy 10-20x my income it'd be 300-600k. But I'll outstrip that when I graduate, and if we bought 10x DH's income it'd be minimally 1 million. But this really are our lowest earning years so if we buy now will be underinsured in say 5 years? What do we do if our income doubles or triples when we finish school? Suddenly will 500k policy be enough if we make $250k/year?

I guess this is part of the reason I am not currently pushing for life insurance. I feel as though we don't have enough information about our future. We're not sure when we're having kids, we're not sure how much we'll be making, we're not sure how long we'll need it for. I wonder if this is a problem other 20-somethings face when you feel as though your starting out and getting prepared, yet not all the information is in front of you...