WEBVTT - Why You Are Probably Underinsured #233 0:00:00.080 --> 0:00:02.840 Welcome to How the Money. I'm Joel and I am Matt, 0:00:03.080 --> 0:00:25.799 and today we're discussing why you are probably under insured. Joel, 0:00:25.840 --> 0:00:27.600 the word on the street is that you don't have 0:00:27.640 --> 0:00:31.680 any insurance. So I'm not skating through life like that, man. 0:00:32.479 --> 0:00:33.800 And the other word on the street is that I 0:00:33.800 --> 0:00:35.879 have all the types of insurances. I'm over insured. Man, 0:00:35.880 --> 0:00:38.320 you're reading too much Reddit. All right, let's stay off it. 0:00:38.640 --> 0:00:40.519 Uh No, we are going to talk about insurance, but 0:00:40.600 --> 0:00:42.919 we're gonna talk about when you should have insurance, when 0:00:42.920 --> 0:00:45.199 you probably shouldn't have insurance. Uh And we're gonna talk 0:00:45.240 --> 0:00:47.240 about it in the form of the types of insurance 0:00:47.240 --> 0:00:49.279 that you should probably have. We're gonna talk about the 0:00:49.320 --> 0:00:51.400 types that you probably need to have, the types you 0:00:51.479 --> 0:00:53.480 don't need to have. And we are going to answer 0:00:53.520 --> 0:00:56.440 that question why most people probably are under insured. The 0:00:56.440 --> 0:00:58.920 answer is pretty short, but we'll make sure to cover 0:00:58.920 --> 0:01:01.440 that as well. Unless you think insurance is boring, will 0:01:01.480 --> 0:01:04.720 make insurance really fun this episode for the first time 0:01:04.920 --> 0:01:06.920 maybe ever. But Matt, before we get to that, you 0:01:06.959 --> 0:01:10.760 did something that was borderline frugal or cheap. I'm not 0:01:10.800 --> 0:01:13.199 sure where you landed in that and trying to tackle 0:01:13.240 --> 0:01:15.360 a repair to your rental property. Yeah, you're ready to 0:01:15.400 --> 0:01:17.640 hear my frugal win. I'm ready. It's totally a frugal 0:01:17.680 --> 0:01:20.120 win at this point. If it doesn't work out, then 0:01:20.160 --> 0:01:21.520 it's gonna end up biting me in the butt and 0:01:21.720 --> 0:01:24.399 it'll be considered a cheap move, cheap tail. Yeah. Well, 0:01:24.400 --> 0:01:27.039 at one of my properties in between tenants, one of 0:01:27.080 --> 0:01:29.959 the shelves in the refrigerator, right, you know, you get 0:01:29.959 --> 0:01:31.920 your glass shelves and they kind of canda lever and 0:01:31.920 --> 0:01:34.280 they're on the little brackets in this glass shelf. It broke. 0:01:34.760 --> 0:01:36.920 Totally sucked because I knew that meant I was gonna 0:01:36.920 --> 0:01:38.959 have to order a new part. Looked up that shelf. 0:01:39.240 --> 0:01:42.039 It cost something around a hundred and twenty bucks for 0:01:42.120 --> 0:01:45.000 a brand new glass like I don't know, Ken Moore 0:01:45.360 --> 0:01:48.560 refrigerator shelf, which seems like a little bit of overkill 0:01:49.040 --> 0:01:51.960 for a refrigerator shelf. Absolutely, And plus this refrigerator only 0:01:51.960 --> 0:01:55.480 has like two shelves left, so it needed to have 0:01:55.480 --> 0:01:57.919 another shelf in there. But then I had a wild idea, 0:01:57.960 --> 0:02:00.040 and I called up our local glass shop and I 0:02:00.560 --> 0:02:03.200 got a quote on a piece of glass that would 0:02:03.240 --> 0:02:06.480 fit in that shelf. That were the exact dimensions. Uh, 0:02:06.480 --> 0:02:08.799 and it was going to be less than thirty bucks, 0:02:08.960 --> 0:02:10.840 So of course I jumped on that. Man, we're talking 0:02:10.880 --> 0:02:13.000 a quarter of the price. I thought this was a 0:02:13.000 --> 0:02:15.040 great way to save some money. So if you happen 0:02:15.120 --> 0:02:17.160 to be in a position like this, maybe where you 0:02:17.160 --> 0:02:19.440 you know, busted out a shelf in your your refrigerator, 0:02:19.800 --> 0:02:22.720 look to a local glass company instead of ordering that 0:02:22.840 --> 0:02:26.040 part directly from the manufacturer. Some people would break a 0:02:26.080 --> 0:02:28.639 shelf and they'd be like, I need a refrigerator now. Well. 0:02:28.680 --> 0:02:30.480 I was really close to doing that because I wasn't 0:02:30.480 --> 0:02:32.600 even sure if this was a part that they still made, 0:02:32.600 --> 0:02:34.560 because this is an older refrigerator. And I thought, you 0:02:34.600 --> 0:02:36.520 know what, Okay, it's finally time to to get a 0:02:36.520 --> 0:02:38.679 new fridge. But then I thought, man, that fridge works 0:02:38.720 --> 0:02:41.359 really well still. It's it's old, but it still works. 0:02:41.639 --> 0:02:43.960 You know, we talked about refrigerators recently. How you got 0:02:44.000 --> 0:02:45.840 a new one. This is also the kind that's got 0:02:45.840 --> 0:02:48.799 the freezer over the fridge. But it's just a solid fridge. 0:02:48.880 --> 0:02:50.720 And I wasn't yet willing to to buy a floor 0:02:50.760 --> 0:02:53.440 model yet at the local best buy. But one thing 0:02:53.480 --> 0:02:55.519 I did want to mention that if you are going 0:02:55.560 --> 0:02:58.359 to order a piece of glass on your own, make 0:02:58.400 --> 0:03:00.960 sure that you get tempered glass, because that's the kind 0:03:00.960 --> 0:03:03.560 of glass that is used in a fridge, right. It's 0:03:03.600 --> 0:03:05.520 it's the special kind of glass that when it breaks, 0:03:05.840 --> 0:03:08.720 it like breaks into a million pieces. That way, there 0:03:08.760 --> 0:03:10.760 aren't like big sheets of glass that end up like, 0:03:10.880 --> 0:03:13.799 you know, slicing into your arm, that kind of thing. Uh, 0:03:13.840 --> 0:03:15.920 it's stronger, I think as well. I don't really know 0:03:16.000 --> 0:03:18.400 how tempered glass works, but so they have to special 0:03:18.520 --> 0:03:20.360 order it. It's not something that they can cut in 0:03:20.440 --> 0:03:22.840 person because that kind of defeats the whole purpose of 0:03:22.840 --> 0:03:25.399 it being tempered. I don't exactly know how temper glass works. 0:03:25.400 --> 0:03:27.120 I just know that they had to order, uh, that 0:03:27.200 --> 0:03:29.639 exact dimension, So make sure you get the exact dimensions 0:03:29.680 --> 0:03:31.880 they'll order it. It shows up, you slide it in there, 0:03:31.919 --> 0:03:33.280 and you're good to go. Man. Well, I love you 0:03:33.440 --> 0:03:35.800 ended up saving ninety bucks, and that fridge it's going 0:03:35.840 --> 0:03:38.400 to keep on going. I hope it continues working well 0:03:38.480 --> 0:03:40.760 for years and years for you, man. And it's just 0:03:40.760 --> 0:03:42.320 such a great idea to do whatever you can to 0:03:42.400 --> 0:03:44.680 extend the life cycle of the plants like that. Yeah, 0:03:44.800 --> 0:03:46.480 that's one of the things I hate is something that 0:03:46.520 --> 0:03:48.680 works pretty damn good except for like one little thing 0:03:48.760 --> 0:03:51.560 that you can't replace or that seems too expensive to replace, 0:03:52.080 --> 0:03:54.400 and then that thing gets hauled off to the landfill somewhere. 0:03:54.440 --> 0:03:55.880 So it's a good way to kind of keep some 0:03:55.920 --> 0:03:58.200 of these giant appliances from ending up in the dumps 0:03:58.240 --> 0:04:00.160 as well. Yeah, no doubt. All right, let's make in 0:04:00.200 --> 0:04:01.680 the beer that we're having on the show today. This 0:04:01.720 --> 0:04:04.800 one is called p B and J Sour by Shades Brewing, 0:04:04.960 --> 0:04:06.840 So it's a sour ale that tastes like a peanut 0:04:06.840 --> 0:04:09.600 butter and jelly sandwich. And we'll give our thoughts on 0:04:09.640 --> 0:04:11.440 this one at the end of the episode. Yeah, the 0:04:11.520 --> 0:04:13.840 huge things to Andy for donating this one to the show. 0:04:14.000 --> 0:04:16.200 But Joel, let's talk about insurance, buddy, let's do it. 0:04:16.279 --> 0:04:18.159 Let's get onto the subject at hand. We're talking about 0:04:18.160 --> 0:04:20.880 why our listeners, why a lot of them out there 0:04:20.920 --> 0:04:23.839 are probably underinsured, and Matt, the thing is a lot 0:04:23.920 --> 0:04:26.040 of them might not even know it. So in this 0:04:26.080 --> 0:04:28.400 episode we need to discuss a few types of insurance 0:04:28.560 --> 0:04:31.000 that everyone should be considering that that might not even 0:04:31.040 --> 0:04:33.200 be on their radar, and I said, we're gonna try 0:04:33.240 --> 0:04:34.800 to make it fun. We're gonna do the best we can, 0:04:35.360 --> 0:04:37.520 but it's still insurance. It's still insurance. It's still kind 0:04:37.520 --> 0:04:39.320 of a boring topic. But we're gonna do our best 0:04:39.360 --> 0:04:41.880 not to sound like insurance sales people because that would, 0:04:41.920 --> 0:04:44.400 of course be annoying. And we're going to try and 0:04:44.440 --> 0:04:47.279 discuss how to think about insurance well too, so we 0:04:47.320 --> 0:04:49.440 don't overdo it and spend too much, but we also 0:04:49.600 --> 0:04:52.239 don't want to forsake it altogether when we do need 0:04:52.400 --> 0:04:55.760 to be insured. And first, let's discuss the overarching role 0:04:55.800 --> 0:04:57.599 that insurance should play in our lives, Matt, because I 0:04:57.600 --> 0:04:59.520 think that can kind of be helpful as we're attempting 0:04:59.560 --> 0:05:02.360 to frame this conversation and helping people think about the 0:05:02.480 --> 0:05:04.760 role that insurance plays in their lives. Yeah, so it's 0:05:04.760 --> 0:05:06.680 a good point. You know, it definitely depends on what 0:05:06.800 --> 0:05:09.000 type of insurance that we're talking about. You know, some 0:05:09.440 --> 0:05:12.880 like health insurance, you'll probably want to utilize often as 0:05:12.960 --> 0:05:15.440 that's how you actually realize the value of that insurance. 0:05:15.440 --> 0:05:18.920 But then most others, like home and auto insurance, you'll 0:05:18.960 --> 0:05:21.160 you want to just view as a necessary backup plan. 0:05:21.600 --> 0:05:23.599 It's there in case you need it, but you're you know, 0:05:23.600 --> 0:05:25.960 you're mostly hoping that you won't need it. It's kind 0:05:25.960 --> 0:05:28.440 of like that through to six months emergency fund. It's 0:05:28.520 --> 0:05:31.440 there to provide some peace of mind, and then you 0:05:31.440 --> 0:05:33.760 can actually utilize it if you find yourself in a 0:05:33.800 --> 0:05:36.960 precarious position, maybe involving you know, job loss or a 0:05:37.000 --> 0:05:39.800 major unforeseen expense. Yeah, that's a good primer. I think 0:05:39.800 --> 0:05:41.719 that helps set up the conversation. Right. Some of these 0:05:41.880 --> 0:05:43.800 insurance products that we're gonna talk about are ones that 0:05:43.839 --> 0:05:45.920 we hope we never use, so we're gonna talk about 0:05:45.960 --> 0:05:47.560 how you buy it then if you're hoping not to 0:05:47.640 --> 0:05:49.839 use it. And then other types like health insurance, Yeah, 0:05:49.839 --> 0:05:52.080 you're gonna use it frequently, even just for a regular 0:05:52.080 --> 0:05:54.720 doctor visit. Right, Yeah, Okay, how about quick little analogy, Joe. 0:05:54.720 --> 0:05:56.120 It makes me think of if you have a little 0:05:56.200 --> 0:05:58.600 kitchen fire. There are some types of insurance that are 0:05:58.680 --> 0:06:01.200 like using a fire extinguisher. Like if you have an 0:06:01.200 --> 0:06:04.600 actual kitchen fire, which you hope rarely ever happens, you 0:06:04.640 --> 0:06:06.800 do want to use the fire extinguisher and put it out. 0:06:06.839 --> 0:06:09.080 That would definitely be the case for something kindastrophic happening 0:06:09.120 --> 0:06:11.640 to your actual home or you know, life insurance, that 0:06:11.680 --> 0:06:14.400 kind of thing. But oftentimes once you use it, uh, 0:06:14.480 --> 0:06:16.200 it's kind of like a one time thing, you know, 0:06:16.279 --> 0:06:18.320 like you use it and then you lose it, you're 0:06:18.360 --> 0:06:21.440 likely going to have to completely replace that policy. But 0:06:21.480 --> 0:06:23.880 then there are other types of insurance, like health insurance 0:06:24.080 --> 0:06:25.960 that you can view as more like a tool. In 0:06:25.960 --> 0:06:27.560 that case, it makes me think of like a rainshood. 0:06:27.600 --> 0:06:29.760 So you're doing you're cooking, you haven't had a fire yet, 0:06:29.760 --> 0:06:31.320 but there's a lot of smoke, and so you want 0:06:31.320 --> 0:06:32.600 to make sure to kick that fan on and get 0:06:32.640 --> 0:06:33.960 that smoke out of there because you don't want to 0:06:33.960 --> 0:06:36.040 cough on that stuff. Is that preventative measure? Yeah, there 0:06:36.080 --> 0:06:39.920 you go. Yeah. But part of the problem with insurance 0:06:39.960 --> 0:06:44.000 to Matt is that buying insurance is so not fun, Like, 0:06:44.080 --> 0:06:46.360 it's not a joy to do, and so most people 0:06:46.400 --> 0:06:48.719 avoid it partly because of that. It's either a something 0:06:48.760 --> 0:06:51.480 they haven't thought about or be it's something annoying, and 0:06:51.480 --> 0:06:54.120 so they're just putting it off. Nobody really wants to 0:06:54.120 --> 0:06:56.279 spend their money on insurance either, right, It's not a 0:06:56.320 --> 0:06:58.800 sexy purchase. It's not like getting a ski do or 0:06:58.880 --> 0:07:00.839 a jet ski or whatever you I don't know, you know, 0:07:00.880 --> 0:07:02.640 one of those awesome things to play on the water, 0:07:02.720 --> 0:07:04.120 or a boat. I mean, there are so many fun 0:07:04.120 --> 0:07:05.840 things you can spend your money on. An insurance it 0:07:05.920 --> 0:07:08.000 certainly is not one of them. It just kind of 0:07:08.080 --> 0:07:10.640 exists in the background for so many people. But it's 0:07:10.640 --> 0:07:13.440 important to realize right that certain insurance products are really 0:07:13.480 --> 0:07:15.920 important for us to have, and in those instances, it's 0:07:15.960 --> 0:07:18.320 essential for us to go ahead, bite the bullet and 0:07:18.360 --> 0:07:20.880 do the grown up thing right, because what we're really 0:07:20.920 --> 0:07:23.840 doing if we don't have the insurance that we need 0:07:24.200 --> 0:07:26.200 is we're putting our our finances at risk, and in 0:07:26.240 --> 0:07:28.680 some cases we're putting a whole lot of our net 0:07:28.720 --> 0:07:31.160 worth at risk by not being properly insured. I'm kind 0:07:31.160 --> 0:07:33.160 of still wondering why why you use boat or a 0:07:33.160 --> 0:07:35.560 ski do as an example instead of like a bike. 0:07:37.000 --> 0:07:39.080 I just think of like and we use bike as 0:07:39.160 --> 0:07:41.640 as examples way to bout some problems and when we 0:07:41.640 --> 0:07:43.240 need to appeal to other people. When you think about 0:07:43.280 --> 0:07:45.440 the goofiest, most quote unquote fun thing you could spend 0:07:45.440 --> 0:07:46.880 it on, I don't know. My mind always goes to 0:07:47.040 --> 0:07:49.080 like a jet ski or something like and I'm like, 0:07:49.520 --> 0:07:51.280 I see like the smiles on people's faces when they're 0:07:51.320 --> 0:07:53.680 riding around on those things, just happing a blast. Yeah, 0:07:53.680 --> 0:07:55.400 it looks like they're having a good time. But Joe, Okay, 0:07:55.440 --> 0:07:57.920 you mentioned properly insured though, Like that's another question that 0:07:57.960 --> 0:07:59.280 we should ask, like what does it mean to be 0:07:59.440 --> 0:08:02.680 properly insured? And that's largely determined by a lot of 0:08:02.800 --> 0:08:05.120 individual factors. You know, whether you own a home or 0:08:05.160 --> 0:08:08.200 whether you rent, if you have dependence like a partner 0:08:08.280 --> 0:08:10.880 or a child, and you know where you are in 0:08:10.960 --> 0:08:13.720 the wealth building process. So we're gonna get into the 0:08:13.720 --> 0:08:16.720 specifics while also giving you know, some general guidelines for 0:08:16.880 --> 0:08:19.200 how to think about insurance, and then which types of 0:08:19.240 --> 0:08:22.160 insurance are most important because you know what you need 0:08:22.280 --> 0:08:25.080 insurance wise, that will vary from you know what your 0:08:25.120 --> 0:08:27.640 neighbor you know, or your best friends sitting across from 0:08:27.640 --> 0:08:30.680 you what they need. With each type of insurance we discuss, 0:08:30.920 --> 0:08:33.920 will attempt to bring up the nuances of how your 0:08:33.960 --> 0:08:37.320 age and how your life stage will impact that decision. Yeah, 0:08:37.320 --> 0:08:39.720 there's gonna be a lot of helpful information in this episode, 0:08:39.720 --> 0:08:42.720 but also it's not going to be completely comprehensive because 0:08:42.840 --> 0:08:44.840 we're talking about a lot of different kinds of insurance, 0:08:44.840 --> 0:08:46.520 and we're gonna do our best to kind of run 0:08:46.559 --> 0:08:49.959 the gamut, but we're not going to dive incredibly deep 0:08:50.160 --> 0:08:52.760 because the episode would just be way too long then, So, 0:08:53.000 --> 0:08:55.160 but we'll talk more about insurance, and in particular, we'll 0:08:55.160 --> 0:08:57.320 get to some of the insurance policies that you should 0:08:57.360 --> 0:09:00.360 be avoiding. First off, we'll get to those right after 0:09:00.360 --> 0:09:12.600 the break, right, Juel, back from the break talking about insurance, 0:09:12.679 --> 0:09:15.120 and let's start to cover now some of the most 0:09:15.160 --> 0:09:18.280 common types of insurance that we hear brought up. And 0:09:18.320 --> 0:09:19.720 here's the thing. Before we get into some of the 0:09:19.840 --> 0:09:22.920 legits insurance policies that people should consider, let's talk about 0:09:22.960 --> 0:09:25.520 some of the popular ones that we want folks to avoid, 0:09:25.880 --> 0:09:29.400 including extended warranties. Man, those are basically a type of 0:09:29.440 --> 0:09:33.520 insurance that many people often get when buying products, especially 0:09:33.720 --> 0:09:36.400 consumer electronics. They sell it right there at the register. 0:09:36.800 --> 0:09:38.680 But those are actually one of the worst types of 0:09:38.720 --> 0:09:40.520 insurance that we can buy. Yeah, Man, I think one 0:09:40.559 --> 0:09:42.760 of the problems with extended warranties is it's got this 0:09:42.880 --> 0:09:46.280 positive connotation for people when when we're protecting your investment 0:09:46.360 --> 0:09:49.560 exactly exactly, but well, you don't realize there's so many 0:09:49.559 --> 0:09:53.000 reasons why, and extended warranty is a bad bat and 0:09:53.040 --> 0:09:56.800 that's because you're ensuring a rapidly depreciating asset and also 0:09:56.840 --> 0:10:00.040 typically one that rarely breaks. Yet typically a third of 0:10:00.120 --> 0:10:02.760 people end up purchasing them. That's in large part because 0:10:02.880 --> 0:10:05.600 they're sold and Matt, that's what the problem is in 0:10:05.640 --> 0:10:09.160 a lot of insurance areas is that products that are 0:10:09.160 --> 0:10:11.640 not good for people are often sold to them. They're 0:10:11.679 --> 0:10:14.160 not typically something that people go out there looking to buy. 0:10:14.200 --> 0:10:16.240 But that is of course specifically true when we're talking 0:10:16.280 --> 0:10:19.080 about extended warranties. And let's take a modern flat screen 0:10:19.120 --> 0:10:21.280 TV for example, right, the failure eight for one of 0:10:21.280 --> 0:10:23.680 those TVs that you bring home within the first three 0:10:23.760 --> 0:10:27.720 years is like five. There's an incredibly small chance that 0:10:27.800 --> 0:10:29.480 your TV is gonna break down and you're gonna have 0:10:29.520 --> 0:10:31.800 to repair it within the first years of ownership that 0:10:31.840 --> 0:10:34.280 you'd be covered by that extended warranty. But on a 0:10:34.320 --> 0:10:36.920 five TV, you'd likely be paying something like a hundred 0:10:36.960 --> 0:10:40.079 and fifty dollars for that insurance policy, that extended warranty 0:10:40.120 --> 0:10:42.640 that you're unlikely to actually use and That's the way 0:10:42.640 --> 0:10:45.000 it is for so many gadgets and personal electronics that 0:10:45.040 --> 0:10:48.280 we buy. If you were to consistently buy extended warranties 0:10:48.720 --> 0:10:52.600 on every personal electronic device that you brought into your life, 0:10:52.760 --> 0:10:55.280 you'd be forking out a lot more money over time 0:10:55.559 --> 0:10:57.720 than you would be saving yourself when it comes to 0:10:57.760 --> 0:11:00.680 repairs for for those devices that you brought home. Yeah, 0:11:00.760 --> 0:11:02.199 you know when when it comes to these warranties, Man, 0:11:02.480 --> 0:11:05.960 since we're human, we always remember the one time that 0:11:06.080 --> 0:11:09.080 an extended warranty actually came through in a clutch, not 0:11:09.240 --> 0:11:10.960 the dozen other times that, you know, what we paid 0:11:11.000 --> 0:11:13.680 for it and when we didn't actually need it. Oftentimes 0:11:13.720 --> 0:11:16.160 we're better off self insuring, and what that means is 0:11:16.240 --> 0:11:18.079 just having you know, savings and money in the bank, 0:11:18.640 --> 0:11:20.920 or just finding a cheaper way to ensure our products. 0:11:20.920 --> 0:11:23.720 For for instance, cheaper insurance for a cell phone would 0:11:23.720 --> 0:11:25.240 be just to have a case on it. Just think 0:11:25.240 --> 0:11:28.040 about how much more affordable and stylish uh that case 0:11:28.080 --> 0:11:30.280 would be versus you know, paying for an extended warranty. 0:11:30.559 --> 0:11:34.120 And additionally, when you are buying any electronics, it's incredibly 0:11:34.120 --> 0:11:36.240 helpful to make sure that that purchase is done with 0:11:36.280 --> 0:11:39.440 a credit card that extends the manufacturer's warranty, you know, 0:11:39.520 --> 0:11:42.720 basically giving you some of that additional coverage for free. 0:11:42.960 --> 0:11:44.679 And even if you haven't put it on a solid 0:11:44.720 --> 0:11:47.839 credit card, don't forget about just the manufacturer's warranty. Uh. 0:11:48.160 --> 0:11:51.200 Oftentimes with electronics you have at least one year and 0:11:51.200 --> 0:11:53.000 you know what, even if there is a problem and 0:11:53.000 --> 0:11:55.000 maybe you're just outside that one year window, reach out 0:11:55.000 --> 0:11:57.040 to the manufacturer like I did recently with our with 0:11:57.080 --> 0:11:59.040 our dishwasher, and you know what, maybe that really worked 0:11:59.040 --> 0:12:00.520 out for us. They were willing to make a one 0:12:00.520 --> 0:12:04.280 time courtesy repair and we've got basically a bran new dishwasher. Yeah, 0:12:04.280 --> 0:12:06.240 the credit card I used to buy the computer that 0:12:06.280 --> 0:12:09.160 I bought a year ago, double the warranty from from 0:12:09.160 --> 0:12:11.600 the manufacturer. I have a four year warranty on my computer. 0:12:12.000 --> 0:12:14.320 That's so good, right, Who needs the multi hundred dollar 0:12:14.480 --> 0:12:17.360 policy that goes along with it, the extended warranty. Basically 0:12:17.360 --> 0:12:19.160 they'd just be throwing money out the window if I 0:12:19.200 --> 0:12:21.080 got that. And at the same time, to Matt, one 0:12:21.080 --> 0:12:23.120 of the things people can do is to make sure 0:12:23.120 --> 0:12:25.600 they look at ratings on a site like Consumer Reports 0:12:25.679 --> 0:12:27.600 or JD Power and they can find out which products 0:12:27.640 --> 0:12:30.280 are more reliable before they make the purchase too. I 0:12:30.320 --> 0:12:32.600 feel like that's so helpful and actually gives you peace 0:12:32.600 --> 0:12:36.160 of mind in avoiding the extended warranty altogether. All right, now, 0:12:36.200 --> 0:12:39.160 let's talk about pet insurance. That's another type of insurance 0:12:39.200 --> 0:12:41.880 that we don't think is a good idea for most people. 0:12:42.200 --> 0:12:43.880 And it's actually a question that's come up a good 0:12:43.880 --> 0:12:46.640 bit in our Facebook group. Obviously, people want to make 0:12:46.640 --> 0:12:49.680 sure that the furious member of their families taken care of. 0:12:49.760 --> 0:12:52.000 That's kind of the reason that people think about getting 0:12:52.000 --> 0:12:53.680 pet insurance. They want to make sure that their little 0:12:53.679 --> 0:12:56.000 pets okay if something were to happen. And I'll give 0:12:56.000 --> 0:12:58.520 a caveat here, if you have, in particular an older 0:12:58.559 --> 0:13:01.480 pet or a breed that's particularly prone to health issues, 0:13:01.840 --> 0:13:03.480 it could work out in your favor to have a 0:13:03.520 --> 0:13:06.440 pet insurance policy. But for the most part, the numbers 0:13:06.480 --> 0:13:08.840 just don't make sense when it comes to buying pet 0:13:08.840 --> 0:13:11.640 insurance for your dog or your cat or your hamster. 0:13:11.679 --> 0:13:15.000 I don't think basically, you're better off having a larger 0:13:15.000 --> 0:13:18.040 amount set aside in savings than paying those monthly premiums 0:13:18.040 --> 0:13:20.960 on that policy, and hoping it pans out. Uh. And again, Matt, 0:13:21.000 --> 0:13:23.440 when you're working with somebody like a local vet, you 0:13:23.440 --> 0:13:25.440 can talk through payment plans if you do have to 0:13:25.440 --> 0:13:28.280 have a procedure for for your dog or cat, and 0:13:28.320 --> 0:13:32.000 you can also look locally for other resources in order 0:13:32.000 --> 0:13:34.560 to find discount care for your pets health care needs. 0:13:34.920 --> 0:13:37.440 But pet insurance, when you're on the numbers, it just 0:13:37.559 --> 0:13:41.040 doesn't typically work out for people in most cases to 0:13:41.120 --> 0:13:43.000 have insurance on their pet. Yeah, I mean, you know, 0:13:43.040 --> 0:13:44.280 this is a good one to bring up because I 0:13:44.320 --> 0:13:47.240 feel that oftentimes people they spend so much money on 0:13:47.280 --> 0:13:49.520 their pets, like I'm pretty sure like all the dogs 0:13:49.559 --> 0:13:51.280 in our neighborhood and have been to the doctor more 0:13:51.360 --> 0:13:55.079 often than I have in the past. Deck, I don't 0:13:55.080 --> 0:13:57.520 think it might be worth asking ourselves, you know, is 0:13:57.600 --> 0:14:00.960 this truly necessary? Obviously there are times when it's necessary. 0:14:01.040 --> 0:14:03.120 But I also think that oftentimes people need to to 0:14:03.160 --> 0:14:05.560 not feel guilty for not having that kind of insurance 0:14:05.640 --> 0:14:07.839 on their pets. Um and related to them. And let's 0:14:07.840 --> 0:14:10.920 talk about life insurance, but not for you know, grown ups, 0:14:10.920 --> 0:14:13.360 but for kids. Uh. This one really frustrates me. Life 0:14:13.360 --> 0:14:17.959 insurance should be specifically purchased for replacement of income, and 0:14:18.000 --> 0:14:20.640 that's why you should not have policies on your children. 0:14:20.960 --> 0:14:23.720 Yet there are lots of companies and insurance folks that 0:14:23.840 --> 0:14:27.080 love selling these policies and their expensive whole life policies 0:14:27.120 --> 0:14:29.960 at that they are a major money maker for companies 0:14:29.960 --> 0:14:32.120 that sell them. Uh And similar to pet insurance, it 0:14:32.200 --> 0:14:34.800 can be an emotional decision. There's a lot of potential 0:14:34.800 --> 0:14:36.800 guilt involved, you know, like, if I don't get life 0:14:36.840 --> 0:14:38.800 insurance for my kids, do I love them? Well, of 0:14:38.840 --> 0:14:41.080 course you do. But maybe instead of getting life insurance, 0:14:41.120 --> 0:14:43.000 you can open a five twenty nine account, or you 0:14:43.040 --> 0:14:45.720 can just start saving for their future in other meaningful 0:14:45.760 --> 0:14:48.000 ways instead. What makes me think about the the the 0:14:48.000 --> 0:14:51.360 Gerber life insurance policies that show up in the mail. Basically, 0:14:51.360 --> 0:14:53.440 once you have a kid, you'll start getting these mailers 0:14:53.720 --> 0:14:55.480 and they're basically trying to convince you to buy life 0:14:55.520 --> 0:14:57.520 insurance for your kids. You don't need it, yeah, And 0:14:57.520 --> 0:14:59.160 one of the reasons I think that that a lot 0:14:59.200 --> 0:15:01.720 of parents do you get that is one out of 0:15:01.720 --> 0:15:04.200 guilt and then too because they're like, well, if something 0:15:04.280 --> 0:15:08.080 terrible would happen, right, Funeral costs are expensive, but they're 0:15:08.080 --> 0:15:10.680 not all that expensive, and again you're better off being 0:15:10.720 --> 0:15:14.200 self insured against the unlikely event as opposed to having 0:15:14.200 --> 0:15:18.680 insurance for the incredibly improbable thing. And Matt another similar 0:15:18.720 --> 0:15:22.320 thing is unemployment insurance. Right. This insurance covers your essentials 0:15:22.320 --> 0:15:24.520 if you were to lose your job, and it sounds smart, right, 0:15:24.560 --> 0:15:26.560 and in particular in the pandemic these days, it sounds 0:15:26.600 --> 0:15:27.920 really smart. It's like, oh, man, I wish I had 0:15:27.920 --> 0:15:31.080 had that, but you'd be better off skipping that insurance 0:15:31.080 --> 0:15:33.640 and self insuring again by having a couple of months 0:15:33.640 --> 0:15:35.880 of expenses on hand. And by the way, we keep 0:15:35.920 --> 0:15:39.160 mentioning this as the antidote to the worst insurance policies 0:15:39.160 --> 0:15:42.080 out there, that it's substantial savings and being self insured, 0:15:42.160 --> 0:15:43.680 but there's no way of getting around that. That's going 0:15:43.720 --> 0:15:45.920 to be kind of a theme throughout this episode that 0:15:45.960 --> 0:15:48.000 in order to avoid some of the worst types of 0:15:48.000 --> 0:15:50.880 insurance that cost a lot and that you're really in 0:15:50.920 --> 0:15:54.080 all likelihood not going to need their more specific types 0:15:54.120 --> 0:15:56.080 of insurance, well, then you do have to do a 0:15:56.120 --> 0:15:58.920 good job of being a diligent saver and having money 0:15:58.920 --> 0:16:01.080 in the bank so that any of these things were 0:16:01.120 --> 0:16:03.560 to happen, you do have the savings on hand to 0:16:03.600 --> 0:16:07.200 pay for the procedure or cover your monthly bills if 0:16:07.240 --> 0:16:09.080 you were to to lose your job. And at the 0:16:09.080 --> 0:16:11.600 same time, map there's unemployment insurance through the state. All 0:16:11.640 --> 0:16:14.200 fifty states offer this, and obviously that's been a benefit 0:16:14.240 --> 0:16:16.520 to a lot of people recently. So they need to 0:16:16.560 --> 0:16:19.800 specifically have unemployment insurance. It's just not there for most people. 0:16:19.880 --> 0:16:22.280 It feels a little bit redundant. And you know, you 0:16:22.320 --> 0:16:24.960 mentioned having that emergency fund set up. I feel like 0:16:25.000 --> 0:16:27.040 that's this is a case for having maybe a larger 0:16:27.080 --> 0:16:29.120 emergency fund as well. You know, if if you are 0:16:29.120 --> 0:16:30.880 looking at some of these different types of insurance and 0:16:30.960 --> 0:16:33.040 you're thinking, oh, that one would really come in handy 0:16:33.080 --> 0:16:34.960 because you know, I have a pet, or oh my 0:16:35.040 --> 0:16:37.920 job is a little unstable, you know, so maybe unemployment 0:16:37.920 --> 0:16:39.920 insurance might be handy for me as well. These are 0:16:39.920 --> 0:16:43.200 all reasons maybe to like increase your emergency fund instead 0:16:43.200 --> 0:16:45.600 of you know, at the bare minimum of two thousand, 0:16:45.640 --> 0:16:47.880 four hundred and sixty seven dollars, bump it up to 0:16:47.960 --> 0:16:50.080 three months, and then maybe for each additional thing like 0:16:50.080 --> 0:16:51.560 oh I have a pet, well, then maybe bump that 0:16:51.640 --> 0:16:53.920 emergency fund up to four months. Then say, maybe you've 0:16:53.960 --> 0:16:57.080 purchased a bunch of fancy electronics, maybe it's worth bumping 0:16:57.160 --> 0:16:59.600 up from four most to five months. Essentially, the more 0:17:00.040 --> 0:17:02.320 sort of like liability that you have, it's worth having 0:17:02.360 --> 0:17:05.119 additional cash on hand. And then the added bonus is 0:17:05.160 --> 0:17:07.240 that you're going to be earning interest on that money 0:17:07.280 --> 0:17:09.719 as it sits there in your own account. Granted, you're 0:17:09.720 --> 0:17:11.760 not gonna be earning that much these days, but I'd 0:17:11.840 --> 0:17:14.240 rather take any interest than none at all, Joel. And 0:17:14.280 --> 0:17:16.359 then lastly, let's let's talk to about kind of like 0:17:16.400 --> 0:17:18.639 some of these hyper specific types of insurance, like like 0:17:18.680 --> 0:17:22.320