Monday, May 26, 2014

Paying Too Much for What Ifs?

I'm a very conservative person by nature, meaning I like to "protect" myself from possible risks. What I'm realizing is that this means I pay a lot to cover myself in case of what ifs.  This hit home this month because I've spent $1K on these type of expenses:

-- Long term disability insurance: When I started at this job, we didn't get any coverage, so I purchased a private policy. I've lowered the coverage amount, but I still paid $784 this month for my annual coverage. Since I now have coverage through work, I wonder if I need this at all anymore.

-- Homeowner insurance: I increased the value of my house to keep up with the market, so my premium increased this year. I paid $680 for insurance this year. I think it's about $200 more than last year. In reality, I could cover most home emergencies myself, so maybe I should look at increasing my deductible and lowering my premium.

-- HVAC coverage: I have a service repair contract so if anything happens to my HVAC or hot water heater, someone will come repair it for free. I think I even can get a new hot water heater for free under this contract. This expense is $412.

So that's a total of $1196 in expenses I might not even need (disability and HVAC) and then I could probably save at least $200 on my homeowners insurance, so that's a savings of almost $1300 a year or $108. Since I just locked in these contracts for the year, I'll have 12 months to consider whether to cut, reduce or keep these expenses, but I think it's worth considering.

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