Episode-1290- Insurance a Hole in Many Preppers Lives with Jason Adkins

Insurance isn’t a sexy topic, it isn’t like growing a food forest, building a solar system or tweaking accuracy out of your AR or AK, but it is important.  The most common disasters people experience each day are…

  • Serious injury or death of a loved one
  • Loss of a job
  • Loss of a home due to storms or fires
  • Loss of your ability to work due to injury
  • Automotive accidents
  • Legal attacks

All of these areas are far more likely to hit you based on disaster probability then a major pandemic or say a global economic collapse.  So it makes sense to insure against such events where and as you can.  Jason Adkins is currently an insurance claims adjuster and previously worked as an insurance agent.  He joins us today to discuss insurance from a prepper point of view and how to make smart decisions about what to buy and what not to buy.

Resources for today’s show…

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41 Responses to Episode-1290- Insurance a Hole in Many Preppers Lives with Jason Adkins

  1. Will listen for sure. Insurance is a huge expense in our lives, with our health insurance now $700 a mth. (even though we’re healthy and I haven’t been to a dr. in 15+ years), life, flood, home, car, etc. etc. It takes a huge bite out of a budget. What gripes me are the high premiums and all the nuanced ways that insurance companies wiggle out of paying anything when disaster does strike.

  2. It seems that whenever I am concerned or thinking about something with preparedness and survival, there is a TSP show related to my thoughts. I just did a post in my blog today on creating a family binder and reviewing insurance policies. http://apinchofhomestead.com/2014/01/29/a-good-idea/

    • Read your blog.
      Are you suggesting you put the originals in this binder?
      Why not just put copies and keep the originals separate/ elsewhere? Obviously there are some problems with doing copies if you’re trying to access avenues that require the original (birthcertificates / SS card / passport come to mind).

      We keep our originals inside a locked fire/water box, inside of a protective safe. I do like the binder idea though. Perhaps a better (or alternative idea) is some sort of smaller version that is “bugoutable” (a grab and go).

    • Great job on the blog Melissa. I have started the binder a few times and never quite finished it. I keep the originals in my gun safe but I’m going to make copies for a bug out version. Thanks!

  3. Regarding homeowners’ insurance, remember to add a fungus/mold rider to it. The extra insurance is dirt cheap but fixing a problem is expensive!

    • Good suggestion Tammy. That’s one of the 99 things I thought of after the interview….it could have been 3 hours long and still not covered everything. Thanks for mentioning that.

  4. Here is one to give a lot of thought to, disability income insurance. Had I not had long term disability income insurance when I was diagnosed with cancer, and forced to retire 3 years earlier than planned, my wife and I would have been financially ruined by the time I qualified for my social security.

    Dealing with a major illness will drain even the fattest bank accounts in a hurry. Even if you have great health insurance.

  5. Jason, I really appreciate the information you supplied today. Insurance is one of those things that can put me into a coma – I don’t even try to understand the language in my policies. I’m lucky to have a great agent/neighbor (with the patience of a saint) and you just confirmed my trust in her as valid since she’s said much of the same to me over the years. Thanks!

    • My pleasure! A good agent is a must….and there are a lot of them out there that really do have their clients’ best interest at heart. I know a couple of them.

  6. How can I find out the solvency rating of an insurance company? While you’re at it, solvency rating for banks, too. Economic resiliency should be a factor in deciding with who to do business.

    Thanks

  7. Great topic today. I’m also a claims adjuster (residential and commercial property) and it never ceases to amaze me not only how unprepared people are when disaster strikes, not only from a lack of understanding of what coverages they have, but also their duties and responsibilities when it comes to making and assembling a claim.

    Jack touched on this toward the end of the episode and navigating the claims process for a property claim could be a whole show in and of itself. Few people you ask ever have a positive claims experience, and while many times it is because of the insurance company or the adjuster, but it is as many times due to the insureds inability to properly document their claim.

  8. Brent Dutcher

    Dont forget the better the credit scores gets you better rates on your auto insurance, at least in Michigan.

  9. Hello Jason,

    I often see people replacing a roof after hail storm in N. Texas even when there is no damage. If we have a very active tornado season, it is almost guaranteed that the following year everyone’s insurance premiums go up as a result of all the claims in the state. I have asked my insurance agent why my rates go up despite not having made any claims and his response is that others drove the price up.

    So what is the incentive not to claim a new roof if my premiums still go up? Or would they go up even higher if I filed a claim?

    Thank you.

    • Good point. Same around here with Hurricanes (as so I’ve been told). Kind of a vicious cycle. I think this same situation occurs in many other places in life and its one data point that I point to saying “nobody has trust of anybody.”

    • Jose,

      you have a valid question. Roofing companies (not all of them, but a lot of them) are professionals at working this system. I would say that if you do have roof damage then you should file the claim and get it repaired/ replaced. Just keep in mind that if the damage is iffy, or very minor, your company may penalize you for a claim even if they pay out little or nothing. The others filing claims may affect your rates indirectly, but not nearly as much as you filing multiple claims within a 2 or 3 year period, which is the real risk. Your premiums will always be affected by the overall volume / expense of claims in your region, but your own claims will be a much larger factor.

  10. My husband has great life insurance. He said it was so if I lost him, I wouldn’t feel compelled to marry just anyone who wasn’t right for me and the kids.

  11. This doesn’t really relate to today’s show, but I had to post it somewhere. WTF? I guess when you are right Jack, you are right. So it begins…

    http://finance.yahoo.com/news/obama-hopes-myra-first-step-081739707.html

    • I sent the same story to Jack from the washington post. Jack predicted it just almost verbatim.

      I have already warned and will continue to warn people away from this.

  12. louisiana suvivor

    My wife works for state farm and told me a nice tip to know. We live in south east louisiana and have earthquake insurance. It covers if we were to ever have a quake but more importantly it protects from any pile driving or vibrations that would affect the structural integrity of the house. We pay 40 a year.

  13. Great info and a subject too rarely discussed.
    I am an insurance agent and most customers want to treat the transaction like running by to grab a gallon of milk on the way home from work.
    Insurance is NOT hard to understand. Your agent should explain a few things at a time as many times as it takes to reach that understanding. That agent should appreciate your willingness to learn it NOW as opposed to claim time.
    Laws vary state to state. Uninsured Motorist covers different things in different states.
    I understand Life insurance cannot be tied up in probate so can be extremely helpful to cover expenses while trying to settle an estate, large or small, whether contested or not. Most people have some level of debt to be paid.
    Thanks again for another great interview.

    • Thanks Vickie. I meant to mention that life insurance funds are not subject to judgements – another great benefit. We could have easily talked for another hour and there was a lot more I wish I could have mentioned. It’s a complex subject. I realized too afterward I should have stated more times that the coverages and terminology will vary state to state. Thanks for your input.

  14. We bought flood insurance for maybe 100 bucks a year. While I live in Southern Louisiana where we live we’re well above the 100 year flood line. We’re I think 120 foot above the closest water source, and if water flooded up to where we are, dear god save us all.

    Some flood Flood Insurance policies around here are OUT OF THIS WORLD. Where my uncle used to live (down at the bottom of the delta) if you have a shitty trailer, you’re paying about 10k dollars a year. PFFFFFF. No point in getting any at that point. (I’m sure that was the point).

  15. Jack,
    Once again you’ve hit the nail on the head. Disability insurance is an important, if less than sexy, part of any Survivalists preps. It comes in handy as we get older. I’ve had a run of bad luck with injuries (getting older is a bitch) and have been unable to work 3 times in the past 5 years. I’ve broken my right hand, severely cut my left hand hitting a thumb tendon, and most recently ruptured a bicep tendon. Without my Met-Life I would have been up s**t creek without a paddle. This type of insurance protects what I’ve worked hard all my life to build. Is it a new AR or a pallet of freeze dried food? No but it is just as important.

  16. Thanks for the interview. It made me realize that I really need to get some disability insurance. :-)

  17. From experience I have to say that if you love your wife/husband/ children or whoever might depend on your income get life insurance in place. You never know when or how it could happen. Jokes like “What, do you want me to die?” aren’t funny. If I could go back and change anything I would smack my husband up side the head for saying that and get us both signed up with proper term coverage like we should have had. If I had then when his heart attack took him from us a year ago I could have paid off the house and everything else and now I could have breathing room instead of being trapped in a job I don’t like and that is slowly damaging my health. That said, long-term disability insurance is on my list and I will try not to put it off.

  18. I am very sorry to hear anyone promoting insurance of any kind. I have used insurance 3 times in my life so far, and each time, the insurance company did their best to weasel out of the claims. First time as for when we had a tornado blow through our city (a one in 100 year occurence here in Edmonton). Our roof was damaged and they only would repair 1/2 of the roof and then issued a letter to us in some very condescending tones that they had ‘forgiven our claim’, after having absolutely no claims, and we had been with them over 15 years. Second time someone hit me while I was waiting a red traffic light (front end of my car was badly damaged) and it took weeks to get the repairs even started (and it was not longer drivable). Third time was for dental coverage, when they tried to raise my deductible between premium renewal dates (they were unsuccessful) upon receiving the estimate from the dentist – straight forward procedure – cleaning/inspection/etc.
    If and when I can, I avoid insurance like the plague as, my personal experiences have been that Insurance Is Fraud and play upon the fears and emotions of people. They, like the banks, seldom loose in the long run, but they can and do fail and so they should. They have a string of claims and all of a sudden, everyone has their deductible and rates go up – what a bunch of scheisters. Sorry to be negative, but I am continually seeing and hearing about bad experiences with insurances. I try my best to provide for my family and to ensure they have sufficient flexibility to survive events in the future, including my demise. I do have insurance, but it is because it is government mandated – car insurance, health insurance through work, house insurance (when I had a house payments, and now because I love my wife and want to keep her happy). Insurance is a word that leaves a bad taste with me.

  19. Thanks to Jason Adkins for some great info! I just wanted to add a couple of things that were not mentioned. It’s important to protect your insurance policies in the event of a disaster at home. A fireproof box or cabinet or a safe deposit box if you don’t have electronic copies. Also, for those families where there is only one wage earner, remember that the “services” that the stay at home person provides also have value and will need to be provided in the event that you lose that person. Child care is a perfect example and it can put a huge dent in your budget.

    • Thank you Erin – great suggestions. It’s hard to put a price on the “services” of the stay at home spouse. Definitely tens of thousands of dollars per year to replace all that.

  20. Great show. 99% of this info has been taught for years by Dave Ramsey in his Financial Peace University class and I believe it is in his book “My Total Money Makeover”.

    The 1% that was new to me was regarding Permanent Life Insurance (Whole/Universal/Variable what ever you want to call it) for estate planning. Dave just says the only reason for permanent life insurance is for the agent to get premiums from you.

    Dave is a huge advocate of Term Life and for doing cost/benefit analysis of all your policies.

    Regardless of whether or not you agree with his investing or his faith he gives away for FREE this information on his radio show and website (his books can be found in libraries too). He has probably got more people to put money away for their retirement than any other financial person in the industry.

    • I have read all of Dave’s books and saw him live a few years ago. I agree with 99% of his teaching. I also agree that term life is the best choice for most people (it’s what I have!) and in most cases.

      There are some things like lump sum policies that can fill a need for estate planning. Also, you have to put your financial house in order so that you don’t need term insurance when you reach 60 years of age (like my parents) because it gets expensive at that age. I really like the approach of stacking term policies for that reason.

      • Modern Survival

        Dave on Debt = A+
        Dave on Insurance = A
        Dave on Investing = D

        Dave’s investing advice is exactly how to get a 100% hit in the face on every single market correction that will happen, loose money when you don’t have to and make yourself feel better by saying you will get what you lost back in the long haul.

        He also weights way too much of your investment into tax deferred status which locks your own money away into an vehicle that is constantly under the governments eye and further one they are taking moves to take over and change the rules on as I type this.

        Daves understanding of precious metals is about as good as my understanding of how to construct a thermal nuclear weapon from the ground up. His advice in 2008 to not worry (in June of that year) cost his listeners hundreds of millions of dollars. He said flatly in Sept. of the same year that “the market would not collapse and there was nothing to worry about” we all know what happened two weeks later.

        Dave Ramsey is one of the best voices on the planet for managing money in your daily life and eliminating and staying out of debt. But in my view once you move money from the active pile to the “investing” pile, DO NOT listen to his advice.

        If you want to know what it is this is the SUM TOTAL,

        “Buy good quality mutual funds and hold them long term.”

        That is it, there is nothign more, may be a few words about why and what have you but that is the one and only action item. Inside your 401s and IRAs, “Buy good quality mutual funds and hold them long term.” and when you max out your tax deferred accounts and still have money to invest “Buy good quality mutual funds and hold them long term.”

        Anyone that takes something as complex as investing and says there is a one sentence answer to it, should not be listened to as an investment adviser.

        I will also tell you this, I will bet you a dime on the dollar that if we could look at Daves finances this is ABSOLUTELY NOT WHAT HE DOES. I guarantee you that Dave has a top financial adviser the kind you don’t qualify to have and that he is 6 ways from Sunday hedged against losses.

      • I agree Jack. I agree with almost all of Dave’s insurance advise specifically, but he is overly simplistic in his investing advise. 6 years ago I was all about IRA’s, 401k’s, etc. Now, I’d rather invest in a paid for homestead and tangible goods. I have severely limited my exposure to the markets. With the volatility of the quantitative easing (money “printing”) inflated stock market bubble and the bond bubble, I have little faith in the market. The recent record breaking will be reckoned with soon! And then, of course, there is the “bail in” that is sure to come at some point where the government will start taking control of retirement accounts, bank accounts…probably just a little bit at a time……….

        I spoke with a friend yesterday who was “watching for signs of the decline” so he could pull his money out. Don’t be fooled….the hedge funds will have their money out in a split second and us regular guys and gals will be left holding the bag (if we are in the market). By the time you and I see “signs” of decline, it will be far too late! You and your online brokerage account don’t hold a candle to the algorithm wielding supercomputers that the big guys use to make sure they don’t lose.

  21. Thanks for being a SF customer ;)

  22. When I read the topic I originally was going to pass up on this episode. I thought I was doing well with my insurance decisions. As it turns out, I am very happy I chose to listen. Right away I was hooked and listened to the entire episode. 80% of what Jason and you discussed was what I am doing currently. However, the big take away for me was the part about deductibles – especially the percentage deductibles. Like Jack, I have been a state farm customer for 20+ years, so I will be contacting them for changes in my deductible.

  23. Great episode. Couple of comments; many insurance companies offer supplemental insurance for your computers and other devices. Also, Jason mentioned getting the additional protection for firearms but my company, USAA, wants a detailed list including serial numbers. Something to think about if you don’t want others to have a list of your weapons. Lastly, remember the rule of 3-2-1 for electronic backups of records – you need at least 3 copies, on at least two different drives, and at least one copy off site (in the cloud, safe deposit box, family or friend, etc.).

  24. My wife an I got a good laugh out of your handle. Awesome.

    I believe SF offers 1, 2, 5, and maybe 10% deductibles. If you are not in the habit of filing claims, it will save you money.

  25. Great info!

    Here some quick notes I took for myself and figured I may as well share. Please excuse typos and shorthand, just quick notes…

    Life-Whole/universal etc. Insurance usually only makes sense if you are protecting significant assets from taxes in the event of your death Term is good for your common guy w/o significant wealth Buy insurance when youre healthy before you become uninsurable You need life insurance if you have family who counts on your income

    Homeowners/renters-Ask about replacement cost vs. Actual value Homeowners or renters policies do not cover flood from rising water-must buy a separate policy to cover usually 2-300/yr Make sure you have enough coverage on personal possessions, i.e. Jewelry, guns, tools Make sure you are covered for sewage back up Check liability coverage If you have a lot of assets look into an umbrella policy

    Auto-Comprehensive, if you dont have the money to replace it or if you have a loan against it get comp Review policies at least every other year If you have a spare vehicle, dont need rental reimbursement Roadside is cheap Uninsured protects for more than damage to your car

    Disability insurance-If youre working you need to have disability insurance Long term, you can usually insure 60-70% of income if youre making 50-100k/yr for fairly cheap

    Identity theft Costs about 12 /mo Insuring for your time savings, in an event you had a problem, avg of 300hrs of letter writing etc to fix If your ins company offers it along with other policy, if it counts as a claim against your policy, get it elsewhere

    Discounts-If you have all policies through a company there may be a discount Good student Safe driver

    Photograph property-After you complete a spring cleaning walk around the house take pics/video Store copy of pics in a cloud storage, in a safe, in friend/family members safe

  26. Jason,

    What’s your take on term life with a return of premium rider? Seems like a good idea but there must be a catch. ….

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