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Do You Carry Enough insurance?

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By inparadise
June 22, 2004

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This winter my sister was in quite the car wreck. It was night, the roads were icy, she was on her way to work when a minivan slid on a patch of ice and slid into her lane, hitting her head on.

The air bag deployed, no doubt saving her life, but among other things her foot was hurt pretty badly. It still has not healed and she is facing surgery. Surgery without medical insurance. It is expected that she will be out of work, as a nurse, for a full year. Just how far do you think the $100,000 in liability insurance the other driver carried will go?

One could argue that my sister was being foolish not being insured, and in fact I had done so often. She was playing the odds that the per diem she received for employment without benefits would offset any coughs and sniffles she and her family of 4 would go through. The fact that our older brother had suddenly come down with a rare form of cancer at 35 swayed her not one bit. She was the primary breadwinner in the family and in order to put the two very bright children into private school and dance lessons, she needed to take that chance. There wasn't much I could say to that...I didn't need to make that kind of sacrifice to give my children what I felt they needed, and I really wasn't sure what I would do if I had to chose. Private school and dance lessons wouldn't be my priority, but given the local schools and my niece's talent, perhaps this was not misplaced.

She ate well, took care of herself, and went to work one snowy night. This accident was totally out of her control. Much of life is. No one wants to have to use their insurance, but it is there to help you when you can't avoid the unavoidable.

She's been out of work 6 months now. They won't receive a penny of the settlement until the claim is closed, so minus her paycheck, and the totaled second car, times have been tough. She hasn't wanted to sue the other driver. Yes, it was the other's fault, but really, what can one do when it comes to ice? It's hard to think of her as negligent. But $100,000 won't go far. I don't see anything else Sis can do.

We all [complain] about the high cost of insurance, and truth be told, we may be over insured. Because we have a $1,000,000 umbrella policy, we have to carry $300,000 liability on our cars as well. I don't think of that as excessive any more. We have health insurance, and long and short term disability with salary continuation.

My sister and the other driver may have saved some money on premiums over the years, but now they are paying the price. From what Sis says the other driver is not affluent, but after the dust settles from this brief winter moment, she may be ruined. The doctors will get their due, and hopefully Sis will at least be a bit wiser. She certainly won't be richer.

Don't be so quick to save every penny for retirement that you neglect to sufficiently insure.


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