A root canal is not fun but we can schedule it and plan for it. Wouldn’t it be nice if we could schedule other painful incidents in our life, say a house fire? Statistics say it can happen to you. If it happens, will you be prepared? Are you prepared for a natural or personal disaster?
Obviously you can’t conveniently schedule an auto accident or major wind damage to your property, but you can plan for it with insurance. Here are the five essential types of insurance everyone should have.

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.

Being self-employed means being self-insured. We have no employer group coverage safety net. Becoming self-employed and then having two kids is the fastest way to learn all the ins and outs of health insurance. We now have a high deductible plan ($7000 to be exact) and an HSA. Managing our health care is a three phase process. Business Week magazine just featured part of my health care story in a special report: Health Savings Accounts: More Time, Less Money.

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.

My dear husband called me this morning at 8:30am and said it’ll be $3,700 and please come pick me up in an hour. That woke me up faster than five cups of coffee. No, my husband was not calling from jail. He was calling from the dentist’s office, the periodontist’s office to be exact.

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.

Wal-Mart got a lot of attention when it annouced its $4 generic drug program last year. Now Publix is doing it even better with its FREE program. Most generic antibiotics are Free for a 14 day supply. While the low prices are getting the attention these days, the fact is that prescription drugs and the pharmacy unit of grocery stores are big business. They have a higher profit margin than other areas. So watch your bottom line. To shop smart you might need to fill your prescriptions at more than one pharmacy. But with online ordering, it shouldn’t as much of a hassle.

Here is a run down of all the discount drug programs offered in stores:

1. Wal-Mart & Sams Club offer 300 generic drugs for $4 for a 30 day supply. For their complete list visit Wal-Mart’s discount drug list. According to their site: “The eligible drugs in this program represent over 27% of the prescriptions Wal–Mart pharmacies dispense each year.”

2. Costco has actually been the quiet leader in the discount prescription drug movement. They charge around $10 for a 90 day supply of most generics. Their prices are consistently lower than the corner drugstore. You can check all the prices on the Costco Pharmacy site.

Remember that you DO NOT need a membership to shop at the pharmacy at Sam’s Club or Costco.

3. Publix is offering a 14 day supply of the most common oral antibiotics for free. According to their site: “These antibiotics account for almost 50 percent of the generic, pediatric prescriptions filled at Publix.” You can find a complete list of the free drugs at the Publix Pharmacy site.

4. Meijer also offers free antibiotics for a 14 day supply. You can view their list at the Meijer Pharmacy site.

5. Kmart offers a 90 day supply of over 150 generic drugs for $15. Here is the complete list of KMart’s discount generics. They also have an On Time Guarantee program at their pharmacy. Your prescription is ready when promised or they will give you a $20 gift card.

6. Target’s program is similar to Wal-Mart. They offer 30 day generic supply for $4. They have a selection of over 300 drugs. Here is the Target discount drug list.

Well, we got the renewal notice for our insurance company and what renewal would be complete without a rate increase. Oh no, here we go again having to start back at step one and compare insurance companies, plans and prices.

President Bush wants Americans to become more involved in their own healthcare choices, but honestly the headaches (and wallet aches) that I have gone through in the past few years being self employed and dealing with our health insurance I wouldn’t wish on my worst enemy. The most difficult aspect of choosing health insurance companies is that you can’t compare apples to apples. Each has their own benefit definitions and limits. What is covered by one, is not covered by another. I have to do complex Excel charts to try and even everything out and that still doesn’t work 100%.

Many of you might ask, Why don’t you let an insurance agent help you? The funny thing is that most of the time, I am educating the agent instead of the other way around. Insurance agents are good at sales not at health plan details. I wish it weren’t so, but that’s been my experience.

One site that has been somewhat of a help is EhealthInsurance.com, but that is just a starting point. Many plans aren’t included, but it does have a good compare feature for the plans that are included. One thing that is helpful when making health insurance decisions is to know what your state regulations are too. For example in Georgia, all immunizations and preventative health screening for children have to be covered by insurance from day one and not subject to a deductible.

Luckily this year there are more flu shots to go around. Costco was giving flu shots on Friday, so we went as a family outing to get flu shots at Costco. I know, its very exciting. But hey, at $18 a shot, it was a good deal.