Auto

In most states, everyone is required to have auto insurance. At a minimum you must carry liability insurance. This is what will be paid to the other driver if you hit somebody else. If you would like to cover your vehicle you will need to purchase additional collision and comprehensive coverage. Prices for auto insurance vary greatly from company to company and are based on a variety of factors including past driving history, vehicle model history, your credit score as well as any applicable discounts you may qualify for such as an accident free discount.

Home

If you have a roof over your head, you need insurance over your head too. It doesn’t matter if you own or rent. For home insurance, you want to make sure your policy is up to date. Does it cover the current cost of rebuilding your home as well as all the contents? If you have done any major upgrades or purchased expensive antiques, art or jewelry your policy should be updated. Renters should have a renter’s policy to protect their belongings as well as liability coverage for any damage they may cause. My friend, Mina, accidentally set off the fire sprinklers in her apartment. That incident caused major water damage to her apartment unit as well as the apartment below her. She was responsible for thousands of dollars in damage.

Typically if you choose a single insurance carrier for your auto and home/renter’s insurance, you can get a noticeable discount on the policies. It’s also wise to shop for new prices every couple of years.

Health

Health insurance is the most expensive insurance for the majority of American families. It can also be the most important. The only thing more expensive than health insurance is health care costs. Medical bills can easily put a family into bankruptcy. If you are covered by an employer plan, that’s great. If not, buying individual health insurance can be quite expensive.

To keep your premiums low you can choose a high deductible plan with an HSA. While you will pay the majority of your health care costs out of pocket, at least you are getting the low negotiated health insurance rate as well as the assurance that you are covered in case of a major accident or illness. The HSA allows you to use pretax dollars so that means an additional savings of up to 35% depending on your tax bracket.

Life

If you have any dependents, life insurance becomes just as important as groceries. One day it could put food on the table. You can get a term life insurance policy relatively inexpensively. And you should get one sooner rather than later because your age can make a big difference in price. As far as how much, that depends on your current income and living standards and the amount it would take to maintain that. While that is easy to figure out for someone working with a paid salary, don’t forget about life insurance for unpaid work, for example stay at home moms. Frequently stay at home parents are underinsured or uninsured simply because they don’t have an income. Yet if you had to hire someone to take care of the kids, run the household and everything else, that would be a significant amount of money.

Disability

While most people think it won’t happen to them, statistics show three out of 10 people will be disabled for part of their life. And if you have pictures of old disabled people in your head get them out because older Americans are actually the least likely to suffer a disability. The younger you are, the more likely you will suffer a disability. Disability insurance prices are based on a variety of factors such as your age, health, job duties and environment or other risky activities such as sky diving. Disability policies are one on the most complicated policies with numerous exclusions, waivers and fine print. So while it may be more boring than watching paint dry, take the time to read and fully understand your policy. You typically have a seven day window to return the policy, so read it promptly and make any changes or cancellations prior to the grace period.

An important note about life and disability policies is that many times they are offered through employment, but you should have separate policies on your own. The vast majority of employer policies are company based so once you leave the company, you have to leave the policy. So then you’re left finding a new policy at an older age with higher premiums.

With Phase One, every year in April I have to  spend countless hours researching health care plans, options and costs. I work with an insurance broker, but thus far I haven’t found one that is truly knowledgeable about all the ins and outs of the various plans. I have to do my own research and let’s face it health care policies aren’t exactly easy reading.

Once I have chosen a health plan and filled out all the appropriate forms, applications and consent forms I can move on to Phase Two. Now I have to spend countless hours researching and planning the cost of doctors’ visits, lab fees and all the other endless costs. I have had to make sacrifices to make it all work. For example, I had to leave my beloved obstetrician when I found out I was pregnant with our second child. Why because she wasn’t affiliated with the lower cost hospital.

Finally, I have to reconcile all the bills, quotes and codes. Many of the bills I receive have either a clerical or billing error. So checking up on the billing and making sure everything is priced correctly is the final and most important part. I can now recite many billing codes from memory now.

I was shocked. I paid $3,000 for labor and delivery charges for the birth of our second daughter in November 2007. I stayed in the hospital for two days and was served salmon with hollandaise sauce. So a one hour procedure was going to cost $3,700?

Pregnant without maternity coverage had made me an excellent healthcare negotiator. So when my husband needed some dental work, I did some research and began calling local periodontists to see what I could negotiate. To my dismay, I found it to be much harder to get any kind of financial information over the phone. Everyone required a consult before they quoted anything. Now I wasn’t asking for a written quote, just a verbal ball park figure.

Finally, I made the appointment with the periodontist recommended by our dentist. He also had the most reasonable consult fee, so I figured his other fees should be reasonable too. So just before he is about to go under the knife, my husband calls me to inform me of the total. Obviously at this point, I have little bargaining room, but I still managed to cut the fee about 10% to $3,400.

Since we didn’t have that much in our HSA account, we paid it from our savings account. Now we have to come up with another $3,400 to fund the HSA account so that we can write a check to ourselves from that account. Complicated and confusing, but that’s the brave world of healthcare we live in today.

On the positive side, the doctor was very nice and did a great job. I actually would recommend him.