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MY LATE FATHER SPENT his entire career, from the time he dropped out of college to marry my mother until the day he died at age 61, in the insurance business. My father was also a huge fan of the San Francisco 49ers, our hometown NFL team.
Last year, the 49ers cruised through the playoffs, led by the team’s dynamic young quarterback, Brock Purdy. But then, in the NFC Championship game against the Philadelphia Eagles, Purdy was injured early in the game. The backup quarterback then went down with a concussion. The 49ers had to play more than half the game without a functioning quarterback. The Eagles won easily and advanced to the Super Bowl.
The NFC Championship debacle prompted the 49ers to sign an experienced young quarterback named Sam Darnold to be Purdy’s backup. As it happens, Purdy stayed healthy this season and Darnold has hardly played at all. Still, my father would have approved: Darnold is the insurance that helps 49ers’ management—and the team’s fans—sleep better at night.
As an insurance man’s daughter, I got the message early and often that life is full of uncertainties and even danger, and that there’s no such thing as too much insurance. But as I’ve gone through life and started questioning various beliefs, especially about personal finance, I wonder if I’ve occasionally overdone things.
Insurance we have now. We currently have insurance for life, health, dental, vision, our cars, our home, umbrella-liability and long-term care.
Insurance we’ve dropped or soon will. My husband and I purchased our term-life policies from my dad when our kids were born. We wanted to not only protect them, but also provide for each other. We’re both counting on the other’s pension, which will have 100% survivor benefits. Our term policies end in 2025 and 2029, and we have no plans to renew them. Our kids are grown and, by then, we’ll be drawing our pensions.
Until recently, we also had disability coverage to protect our income. I dropped mine within the past year when I realized that I could get up to a year of paid medical leave if I needed it. On top of that, if I got really sick or was permanently disabled, I’d just retire, since I’m so close to the finish line anyway.
I should mention that I was happy to have disability coverage when I had to go on bedrest during my second pregnancy. My husband was finishing law school at the time and I was supporting the family, so the complete loss of my income would have been catastrophic.
Learning to appreciate insurance. Despite wondering sometimes if we’re over-insured, several recent family events have made me appreciate the value of insurance. Our 20-something daughter has been in two separate car accidents in the past 18 months. Both times she was a passenger and both times she was seriously injured, requiring an ambulance ride and emergency surgery.
As it happened, the driver at fault in her first accident was well insured, and his insurance company offered her a generous and fair settlement. Not so with the second driver—he has the minimum coverage required by state law, and that won’t come close to compensating my daughter for her lost wages, let alone for things like physical therapy or counseling for post-traumatic stress.
Fortunately, we carry underinsured motorist coverage on our own family policy, and she may be able to get additional funds that way. She was also informed by the district attorney prosecuting the driver that there’s a state-run crime victims compensation fund that she can apply to. This has been quite a learning curve.
The other family situation involves my mother-in-law, now age 83, and her long-term-care (LTC) insurance. She and her husband purchased the LTC policy some 20 years ago. Now, she’s in the advanced stages of Alzheimer’s and needs to activate the policy for in-home caregivers. Her husband is also over 80, and has a hard time managing things like LTC insurance portals and claim forms. We’ve been helping him from 400 miles away, including several conference calls to the LTC insurance provider. Again, we’ve had to learn a lot quickly.
Getting acquainted with my mother-in-law’s LTC policy and procedures has made me think about our own coverage. Do we need LTC insurance? Ironically, thinking this through has made me realize that while my in-laws perhaps didn’t need it, my husband and I probably do. My in-laws are very well off and could pay as they go for care. At $1,000 a month, their LTC premium is expensive. Even though they’ll be using it now, the coverage may not have been worth it. By contrast, because we bought our LTC policies when we were in our 40s, they aren’t as expensive, plus we don’t have the resources that my in-laws do to self-insure.
We carry maximum liability coverage on our auto insurance, plus a substantial umbrella policy. My dad was the first to advise us to get umbrella insurance: “If you lose a lawsuit, you could be working for someone for the rest of your life.”
My husband’s torts professor in law school also urged his students to obtain coverage: “You’ll be earning money once you’re practicing lawyers, so you could be targets in a lawsuit.” Seeing how our daughter’s life has been upended twice by other drivers has reminded us that good liability coverage is both prudent for us and responsible toward others.
Insurance on the go. Our most recent insurance acquisition is an annual travel policy. I bought it earlier this year after reading an article on The Points Guy website. I had vaguely assumed that we didn’t need it because a combination of our own health insurance plus travel protections offered by credit cards would take care of any emergencies.
It turned out I was underthinking this. The medical insurance we had didn’t offer coverage while traveling abroad, so we changed policies during open enrollment at the end of 2022. As for the credit card coverage, that can be cumbersome to use, and there are lots of ways to do it wrong. Maybe most important, our travel policy gives a generous allowance for emergency transportation, whether being airlifted to a hospital or taking an unexpected flight home.
This travel policy is not the same as one you might buy when booking a pricey cruise or land tour. Those are primarily to cover your investment in the trip itself. The annual policy we bought does provide some modest benefits for things like trip delays or lost luggage, but the primary benefits are for medical emergencies. The policy I bought from Allianz costs $560 for my husband and me, and it covers every trip, domestic or abroad, during the year. It also has a generous allowance if a rental car is damaged or stolen.
I hope we’ll never need to cash in on many of our insurance policies, but I’ve learned to expect the unexpected. While insurance doesn’t solve every problem, it can remove a major stressor in a difficult situation. I shudder to think what could have happened if our daughter didn’t have access to medical coverage and to auto insurance when she was a victim of those car accidents. The lack of insurance could have compromised her care, ruined her financially, and put extra pressure on us just as we’re trying to settle on a retirement date.
My dad wasn’t always right. But I think he nailed this one.
Dana Ferris and her husband live in Davis, California. She’s a professor in the writing program at the University of California, Davis, and is the author or co-author of nine books on teaching writing and reading to second language learners. Dana is a huge baseball fan and writes a weekly column for a San Francisco Giants fan blog under the nom de plume DrLefty. When not working, she also loves cooking, traveling and working out. Follow Dana on X (Twitter) @LeftyDana and check out her earlier articles.
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I agree with some of your choices of insurance to keep, but not all. My experience is that most vision expenses (regular exams, eyeglasses, etc.) are reasonably predictable and insurance doesn’t seem like a good deal. The one major vision expense that I’ve had, a detached retina, was covered by my regular health insurance.
I’m less certain about dental insurance, but my sister asked her dentist and he said that his experience is that it’s rarely a good deal for his patients.
Some experts suggest dropping auto collision coverage if you have an older car. My semi-annual car insurance premium is only about $425 for all coverages, so I’ve kept the collision coverage.
I’m lucky enough that I’m very likely to be able to self-insure at least a couple of years of long-term care, so I don’t have any insurance. When I was younger, I might have considered it if I could get a long exclusion period (the waiting time before coverage begins), but New York State doesn’t allow companies to sell policies with more than 3 months exclusion.
I should have clarified that my vision and dental coverages are both benefits paid for by my employer, so that’s a no-brainer right now. My husband also gets those coverages through the pension system (he’s retired from a state agency), so we have double coverage for both. We pay a bit extra for a more deluxe vision plan through his retirement. We both wear glasses, and I have a complicated prescription, so it works out pretty well for us.
As for LTC, we bought those back in our 40s, again through group plans through the state. I’m ambivalent at the moment about whether I’d do it again, but we’ve saved a lot more money since we bought the policies. At the time we got them, it seemed prudent (and was cheaper).
After many decades of coverage, I had my first loss on my personal home, the shingles needed replacement. I like to be a ‘One and Done’ person, pay for the best fix once and be done.
I now have rubber shingles made from recycled tires, and the highest deductible available on the house policy. The shingles cost about $2,200 extra to put on and will last longer than I will. My premium is $648 a year so I’m happy.
Assuming you are a homeowner in Davis CA, I am curious why you didn’t buy earthquake insurance?
It wasn’t required. There hasn’t been a major earthquake in our area since the late 1800s. We worry more about fires around here.
The first year I was eligible for Medicare I took “advantage” of no premium advantage plan’s dental benefit to have a partial redone. The fact that there was insurance reduced the amount the dentist could charge as they were in network, and with the 1K benefit I paid very little with my HSA. Also took “advantage” of the vision benefit to have a final covered eye exam and some reimbursable cost for glasses. Then per Medicare rules I switched to a plan G before the first year was up.
In our state, Uninsured Motorist won’t cover property damage, and only covers medical to the extent that you aren’t covered under your own health insurance. So, who gets to determine what your insurance company owes you for “pain and suffering”, lost wages, and other hard-to-quantify damages–you? Right. IOW, in this state UM ends up being mostly “gimmick” insurance, that sounds good on paper but would only pay off in the most long-shot of scenarios, and would likely require an expensive and time-consuming lawsuit by you, all to get your own insurance company to pay off what you thought they should cover you for. Good luck with that.
Which is a good reminder–make sure that your insurance actually covers you for what you think it covers you for, and not for…some far-fetched long-shot scenario. Caveat emptor.
You’d be foolish to decline UM coverage – if your state permits it. In most states it’s a mandatory coverage. How much is the UM premium you’re complaining about? It’s usually quite inexpensive.
This is a practical review of various kinds of insurance. I have no idea what the statistics show but I worry many, especially those with young children may have thought of life insurance but not disability. The peace of mind one enjoys due to prudent financial planning, including appropriate insurance coverage is invaluable.
I went on bedrest at age 28 during my first pregnancy for 4 1/2 months and we suddenly lost half our income. That got my attention, and we’ve had disability coverage ever since (until just recently).
So true Jack. Not many agents put much effort into selling it either. I also found that workers I felt needed it the most, (such as construction trades and truck drivers) couldn’t get through underwriting. That is also true for LTC insurance.
Excellent article. My wife and I have excellent medical insurance through her work, and because of that, we chose not to have medical insurance on our automobile policies. Are we making a mistake?
I don’t think so. We don’t have medical coverage for our car insurance for the same reason.
An excellent article; thanks. I remember sitting in the bleachers at a high school wrestling tournament years ago and I found myself chatting with the gentleman sitting next to me. Turns out he was a personal injury attorney, and he asked me how much uninsured motorist insurance I had. He then shared that in that large town at that time, if I was ever hit by another car there’s a statistically likely chance that the other driver is either unlicensed (and hence uninsured) or carrying the bare minimum insurance. He then proceeded to tell me some horrific stories he’d dealt with. Prior to that conversation I hadn’t realized just how common it is to need uninsured motorist insurance.
In my daughter’s second accident, the maximum she can recoup from the driver’s policy is $15,000. She had a badly broken ankle—I mean REALLY badly, couldn’t walk for almost five months. She’s a server and bartender, so she’s been completely out of work (drawing some disability, but certainly not enough to cover her expenses). It’s been six months now and maybe she’ll go back to work part-time in February if the doctor says it’s OK. You can see that $15K won’t come near cutting it, and there’s no point in suing the guy. He was under the influence and is going to jail and didn’t have any money anyway. But our underinsured motorist coverage and the state victims’ fund will come closer to making her whole financially.
Ugh. I guess, statiscally speaking (as that lawyer told me years ago) if someone hits you there’s an increased chance they’re irresponsible in other aspects of their life (like having adequate insurance or even being sober). Best wishes to your daughter for a speedy and full recovery!!!
Thank you!
Nice article, most of which matches what I do or did. I had term life while I was married with resident step kids. I had disability coverage above that provided by my employer while I was working (particularly important for singles, as Jonathan pointed out recently). I have had an umbrella policy for many years, and I have renters insurance now I am in a CCRC.
I’m so sorry to read about your daughter. I have uninsured/underinsured coverage on my car. I also still have comprehensive even though my car is a 2007 – Erie is about to pay more than the car is probably worth to fix some damage I caused by scraping a concrete pillar.
I currently have Medicare, Medigap Plan F, vision and drug coverage but I have abandoned dental. I have never had LTC coverage – I have moved to a CCRC that accepts both Medicare and Medicaid, and promises to keep me if I run out of money, and consider it my LTC coverage.
Congratulations on the travel insurance – I wouldn’t travel without both medical and evacuation/repatriation coverage. I self-insure for interruption/cancellation.
Thanks, Kathy!
Thanks, Dana, for personalizing the importance of being adequately insured.
For those who volunteer, checking with the non-profit regarding its volunteer and/or directors and officers insurance coverage is also prudent.
That’s a great point. I’ve been on the boards of four different non-profits over the years. Between being married to a lawyer and the daughter of an insurance man, I’ve always been well aware of those liability issues. Some years back, I was on the board of our church, and we had to let a staff member go for cause. It was ugly and for awhile it looked like he would sue us. I argued strongly for a generous severance package to try to head this off, in no small part because I knew I and the other board members could be individual targets.
I was in management (department chair) at the university for a few years, and there were several difficult situations that arose during my tenure with employee unions and with a lawsuit after layoffs. I couldn’t believe how much time I had to spend talking to lawyers, attending grievance hearings or depositions, and gathering documents for discovery. In that case, I knew the university had to provide legal representation, but I was also keenly aware that I needed to do EXACTLY what the university’s attorneys said or I could be on my own if I was individually sued.
I also learned a lot about what to never say in an email or text (both discoverable if there’s a lawsuit) and to keep receipts on EVERYTHING.
Ah, I’m so glad my days of documenting everything and carefully considering emails is behind me. I, too, worked in higher ed. And always (and still do) carried decent umbrella coverage.
As a retired dentist do not buy any form of dental insurance or those savings plans. Many Many dentists do not participate because of low fees and many that do participate look for ways to jack up fees by saying this and that is not covered. Pay out of pocket for dental expenses, although dentistry is very expensive. Good parenting and home care and kids nowadays can be cavity free
Ken, thanks for your comments. My dentist offers a plan for $325 annually per family member, covers 2 cleanings a year as well 15% discount on all services. I feel this is a good way to soften the cost of dental service when needed.
We get it provided through our employers, thankfully.
And don’t forget renters insurance. I want to scream every time I hear of a family losing everything in an apartment fire. I had to rent an apartment for a couple years during my divorce. The multi policy discount I received as a result of buying the insurance was actually more than the insurance itself, causing my total cost of insurance to decrease.
As for any kind of insurance, a good rule of thumb in my opinion is to only insure the things you can’t afford to self-insure; if my $300 TV stops working I can just buy another one, but if that un or under insured idiot hurts me I’d better have the right coverage. That coverage doesn’t add much to my premium, and my umbrella policy only costs me $140 per year…. That’s cheap peace of mind.
Because we live in a condo, we have “walls-in” homeowners insurance, which is sort of like renter’s insurance. But I do need to add a rider for some artwork we’ve acquired in recent years and for my husband’s musical instruments. It’s on my to-do list.
I completely agree about the umbrella policy. We’ve had one since my husband finished law school and started working, and we’ve increased it since.
As it turned out, the publication of this article (which I submitted a few weeks ago) was very well-timed. On Sunday the 49ers, led by still-healthy Brock Purdy, completed a dramatic second-half comeback in the NFC Championship game to advance to the Super Bowl.
Dana,
Loved your article. Please find a way to get it published where it will be seen by younger readers.
As a business owner, I thought we were insured for everything. One of my installers drilled a hole in a long stainless steel counter at a new MacDonalds in the wrong place. The customer rightly so demanded we pay to replace the entire counter top.
When my insurance agent told me it wasn’t covered, I expressed my dismay saying he told I was covered for everything. He assured me that I was. However, I just wasn’t covered for extreme stupidity.
My wife’s LTC policy saved us. Too bad the industry is having to keep raising premiums. My kids may never buy it.
I still carry massive amounts of insurance. I like peace of mind.
Thanks!—and sorry for that painful wake-up call!
It’s been my experience that non-group dental and vision coverage generally is not worth the cost. I dropped both two years ago.
On an ongoing basis both expenses are routine and can be managed.
When a large dental bill comes along, such charges are either not covered or there are very limited benefits.
The most expensive vision care is usually covered as a medical expense, even under Medicare.
Self-funding the routine may be a better way.
I used to have employer coverage for dental, but the coverage I’ve been buying since that went away hasn’t been worth the money. I just had very expensive periodontal work that wasn’t covered and haven’t renewed this year.
However, I have had VSP vision coverage for many years. At $14/month it has been well worthwhile.
My agent won’t even sell a dental policy unless the client insists.
Our dental and vision is employer-provided and we have double coverage for both. We still pay a lot out of pocket for our annual vision expenses—glasses, that is. I have a very complicated prescription and expensive taste in frames(!).
As for dental, a few years ago I needed an extraction, graft, and crown. The process took 6-8 months, and even with the insurance, we paid about $5K out of pocket. Yikes!
Have you considered using an FSA (Flexible Spending Account) or HSA (Health Saving Account) for your expected out-of-pocket expenses?
The expensive taste in frames will get you every time.
My wife had an implant to one tooth a few years ago. It cost nearly $8,000 and not covered by the so-called dental insurance we had at the time. Individual coverage is too susceptible to adverse selection so benefits are very limited.
A friend of mine lives in Puerto Vallarta half-time and told me I should go to Mexico to get my dental work done. Apparently they have very good dentists and it’s MUCH cheaper for these Cadillac (sorry!) procedures. You can pay for your plane ticket and hotel and have a nice vacation and still come out ahead.
We’ve been to Mexican dentists twice. Yo can definitely save alot of money. Many Mexican dentists were trained in US dental schools. But do your homework. If you have a bad outcome or something goes wrong, you may have very little recourse.
I’m very sorry to hear of your family’s painful troubles, Dana. My wife and I were just talking about the car accident my daughter was involved in and how we imagine the worst when she now travels from home. As you write, insurance doesn’t solve all problems, but it can ease part of the stress.
Same. Lots of anxiety buttons have been pushed, for her and for mom.
Thanks for your article, Dana. I have been working on getting an umbrella policy. The personal finance writers all say how cheap they are, not so for us.
Our oldest daughter got her license and we added a 3rd car last year. So I am still trying to adjust to the increased expense of auto insurance. Just bringing the auto liability high enough to add an umbrella policy gave me sticker shock!
Thanks for the reminder to complete this important task!
It’s easy for old farts like me to say how cheap our umbrella policies cost, we often forget how expensive kids can be.
And to Jamie’s point, you have to have upgraded liability coverage on your autos and home to qualify for umbrella insurance. You can’t just have minimum coverage and add the umbrella policy.