Decluttering My Insurance Policies To Save Time And Money

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I’ve discussed many times how I’ve been trying to de-clutter my life and the main things that I’ve been working on are:

-Reducing paper
-Cleaning the garage
-Moving to the clouds

One other priority that I’m putting a lot of energy on is decluttering my finances. How? Reducing the number of bank accounts that I have, automating payments, making things as seemless as possible in order to avoid spending too much time or energy trying to make sure that everything is running ok. One challenge in that regard has been insurance. Today, hundreds of blogs are writing about the subject as part of the insurance movement organized by Jeff @ Good Financial Cents. I know that many consider insurance to be boring but I thought it would still be important to discuss it today.

Insurance Provides A True Challenge

Not only is insurance a bit boring to discuss or research but it’s very difficult to get decent objective information (objective being the key word!!). My partner and I recently launched InsuranceDoesMatter which will hopefully provide a better platform. I think that as minimalists, it’s even more of a challenge. It used to be simple. You’d call a company and get home insurance and car insurance and you’d be set up for life. Health insurance was generally very well covered at work and other types were not really useful.

How Things Have Changed

These days, it just feels like insurance has become a whole other animal. I mean just think about it:

-Life insurance: Should I get one? If so, whole or term insurance? For how much? Etc?
-Home insurance: What type of coverage do I need? Etc
-Travel insurance: After leaving towards Japan the day of the tsunami (my connecting flight to Tokyo was cancelled), I know better than ever that having cancellation policies should certainly be considered. We always think others will need it..
-Critical illness insurance: Now that I am married and have a baby boy, it’s certainly worth considering the possibility of what would happen if I ever become very ill.
-Health Insurance: It used to be so simple. You had coverage or you didn’t. With exploding costs, health insurance has been changing and it’s fair to say that shopping for health insurance (or supplemental one) can become a major headache.
-Auto insurance: thankfully, this one has remained fairly simple:)
-Annuities: I’m not a big believer but in this financial environment, many are making the choice to go for a certain cash flow rather than risk running out of it
-Disability insurance: If I became unable to work, would my family still be able to afford living in our house?

How I Minimize Money And Time Spent On Insurance

1-Figure out what I really NEED: Not what I’d like or what would be convenient. Not what my insurance broker or sales guy thinks I need.. But what I actually do need. I only go for that much.

2-Get A Broker: You probably don’t feel like trying 10 different insurance companies to compare quotes, coverage, etc. Neither do I. Get a broker that you trust who will look for the best deal out there.

3-Don’t Buy Insurance That I Don’t Understand: If it’s unclear how a coverage would actually help or how it works, don’t get it. Insurance should be simple and if it’s not, you can either ask more questions or pass.

4-Review My Insurance Every Year - Signing up for insurance is important. But even more so is reviewing your coverage every 2 or 3 years (or morre frequently if you’re up for it) to make sure it’s still relevant and that your quote is still a good one.

5-Ask My Insurance Company: If you have a deal with company X, it’s worth asking every couple of years if something can be done to reduce your cost. Sometimes, they will reduce it to insure they don’t lose you as a client. Or they might tell you a few tips that would reduce your bills, etc.

I’m telling you, insurance can quickly become not only a money drain but a time one as well.

How do you manage your insurance needs and requirements? Do you also feel like it has gotten much more complex?

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