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David Zabriskie’s Enormous Homeowners Insurance Claim

February 27th, 2009 by Jeb Foster

david-zabriskiePro cyclist Dave Zabriskie has had a tough week.

First, he was edged out by his countryman Levi Leipheimer in the Tour of California.* Then he got a speeding ticket on his way home to Utah.

But the ticket paled in comparison to what happened next. On returning to his Salt Lake City home, he noticed that something wasn’t quite right. A few of his prized possessions seemed to be … missing.

Quickly it was clear: he’d been burgled. Badly burgled.

Zabriskie posted this message to his Twitter account the morning of Feb. 24:

My house was broken into while at [the Tour of California]. They took everything, a lot of bikes, cars, and you name it they got it.

Yes, that would be “cars.” Plural. They stole more than one.

But cars can be replaced. So too can the 52” flat-screen television that was stolen. And the $15,000 Bose sound system.

Harder to replace, however, are things like a Beijing Olympic ring and Giro d’Italia race medal. Each tally in the thousands in market value, but sentimental value is harder to put a price on.

Here’s the complete list of what burglars stole from Zabriskie’s home:

  • Black 2008 Subaru Outback, Utah plate A189NC
  • Black 2006 Toyota Scion, Utah plate 094VWM
  • Giro D Italia Race Medal (approx. 6″ circumference)
  • Olympic Seiko watch
  • Beijing Olympic ring (silver) with initials “DZ” engraved ($4,000)
  • Olympic Time Trial Bike, plus 12 other bikes (combined value of $100,000)
  • Cervelo (black/red) bike frame - team issued ($5000)
  • Tag Heuer watch ($6,000)
  • Bose Speaker/Receiver System ($15,000)
  • Sony 52″ flat screen TV ($4,000)
  • Two Mac Books and one Mac desktop, plus hard drive ($8,000)
  • A pair of Space legs, a recovery compression system for legs ($5,000)
  • 7 Marvel sideshow statues** ($11,000)

I can’t decide which is harder to fathom—owning $100,000 in bikes or having all 13 of them stolen.

Later on the 24th, Zabriskie posted this note to his 8,495 Twitter followers:

If anyone out there sees anything you think might be mine, let me know. Thanks…DZ

Let’s hope that Zabriskie’s got a robust homeowners insurance policy. Unless those items are recovered, that’s going to be one rather large claim.

* At least he can say he beat Lance.
** According to VeloNews, the journal of record for the cycling world, the stolen statues included: “Hellboy” pistol figurine, “Ash”Army of Darkness, “Tomb Raider” Lara Croft, “The Punisher,” “Alien,” “Ironman” Limited Edition, and a “Gears of War” character.

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The Health Insurance Gender Gap

February 27th, 2009 by Jeb Foster

Did you know that young women pay more for individual health insurance than young men? This despite young women being, on average, healthier and more responsible?

What gives?

In short, women pay more because they get more care. They schedule checkups. They follow up. And they also have babies, which, according to this report from the Kaiser Family Foundation, accounts for nearly 25 percent of all hospitalizations.

Even still, young also women pay more than men for policies that specifically exclude maternity coverage.

Alice Wolfson of United Policyholders, a San Francisco-based advocacy group, offered the following analysis to L.A. Times reporter David Lazarus.

“It doesn’t make any sense. The insurers aren’t assessing risk. They’re assessing how much healthcare is used, even when it’s preventive treatment.”

But according to Blue Shield spokesman Tom Epstein, also quoted in the L.A. Times article, gender-based underwriting is simply mathematics, not some nefarious scheme.

“Our egghead actuaries crunched the numbers based on all the data we have about healthcare. This is what they found.”

What’s more, insurers back the practice by saying it’s the same principle that has them charging young men more for auto insurance than young women. It’s not about gender, in other words, it’s about assessing risk. Women, because they typically get more care, are considered ‘riskier’ than men.

Needless to say, many critics are not swayed by this line of reasoning. Others understand the market-based calculation behind the practice, but think states should find a more socially desirable situation, such as community rating.

Community rating, in a general sense, is where everyone pays the same premium for the same policy, regardless of age or health status. Group health insurance essentially operates under a community rating system.

Other critics of the gender gap see a slippery slope. Where’s the line? Insurers look at gender now, will they look at race or ethnicity next? Political or religious affiliation?

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Maggots as Tiny Microsurgeons

February 25th, 2009 by Penny Hagerman

maggotsOnce used in times of war to treat wounded soldiers, medicinal maggots are making a comeback in modern medicine, healing wounds that might otherwise never heal—and saving a wad of cash on medical bills in the process.

If you’ve ever seen the movie Gladiator, you know medicinal maggot treatment originated in Rome, where the healing properties these miracle workers lend were discovered in ancient times.

When placed directly on an infected site, medicinal maggots, or tiny “microsurgeons” as some call them, do what surgeons can’t: go directly into infected tissue and secrete enzymes that dissolve dead tissue, kill bacteria and stimulate healing.

The creatures work quickly, clearing infection within 72 hours. And they cost much less than other, more traditional medical treatments, running around $100 per application.

Though maggot treatment stalled in the 1940s with the advent of modern antibiotics, its resurgence has caused some stir in the medical community—and some professional organizations, like the American Medical Association (AMA), now endorse their use as viable treatment, especially in cases where healing or open sores are a problem (as with diabetics and those with foreign masses, like brain tumors).

With successful results and recent medical endorsement, experts say it’s only a matter of time until health insurance companies begin covering this non-conventional treatment. In fact, in late 2008 the AMA outlined new guidelines for patient reimbursement following maggot treatment, paving the way for maggot therapy as a covered health insurance benefit.

For more information on medicinal maggot treatment, see our article, “Medicinal Maggots and Health Insurance.” Meanwhile, feel free to leave us your comments on this non-traditional therapy below.

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Video: Can You Afford to Die?

February 23rd, 2009 by Jeb Foster

In the spirit of the Oscars, we bring you our first video in many, many moons. (Watch our old videos.)

We picked a pretty dark subject for our return to filmmaking (if filmmaking is what you want to call it) but we tried to keep it as light as humanly possible. The subject: the high cost of funerals and the funeral industry’s shady past. We based the video on this post, which we posted last month: “The High Cost of … Dying.”

And it’s just over 2:14 minutes long, so if you get sick of hearing my voiceover, take comfort that it will be over quickly. And the pause button is there for your convenience. Our esteemed graphic designer did the editing, which is clearly the best part of the experience.

Grab your popcorn and enjoy! It’s not quite “Slumdog Millionaire,” but you might just learn something.

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The Rich and Famous—and Their Insurance Policies

February 19th, 2009 by Penny Hagerman

bags-of-moneyThe average Joe buys insurance to protect his house, car and any other items of value he happens to own.

But mostly, he buys insurance because the law requires it. He can’t buy a house without homeowners insurance and he can’t drive a car—at least lawfully—without auto insurance.

But when it comes to the wealthy, insurance is a whole different matter.

People with money have a lot more to lose than the population in general. For instance, investments like boats, furs and expensive art or antique collections are often irreplaceable—and one incident of damage could result in financial loss the likes of which most of us will never suffer.

Insurance policies of the rich and famous reflect these differences by protecting that valuable, insurable interest.

But the rich don’t just insure possessions; sometimes they insure strange, valuable items like body parts too.

What?? Did you say body parts?

Indeed! Because famous, well-to-do personalities often rely on distinctive physical features to support themselves in the lifestyles to which they become accustomed, multi-million dollar insurance policies fit the bill when it comes to protecting their investment in those famous, svelte legs or well-developed pitching arm.

To read about some of the wacky things the wealthy insure and find out how their insurance needs differ from everyone else’s, get the scoop here.

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Is Suze Orman Right about Life insurance?

February 17th, 2009 by Jeb Foster

Life insurance is an important  subject—too important for bad advice. And that’s why I’m going to take a couple minutes to unpack Suze Orman’s unwise counsel.

(For those of you without televisions, Suze Orman is an incredibly popular personal finance pundit and Oprah protégé.)

Too rigid
When answering the question, “How much life insurance should I get?” Orman resorts to a long-discredited formula of multiplying your salary by 20.

The Insurance Information Institute (III) calls this formula “simplistic” because it ignores inflation and other sources of income. The III outlines a scenario in which, at 3 percent annual inflation, Orman’s formula would leave a survivor with no money after 16 years.

Too arbitrary
Orman’s conclusion on the whole life vs. term life insurance debate matches our own, but her reasoning is suspect. She discourages consumers from buying whole life insurance merely because insurance agents make large commissions on such policies.

“While I agree with her that whole life insurance is a poor choice, her explanation for why kind of leaves a person wondering who in the world ever told her she could touch a microphone,” says Ed Hinerman, a life insurance  and blogger. “The reason whole life is a bad deal is that it mixes your family protection with investments … commission is not the issue!”

In other words, permanent life insurance is a bad investment strategy. While it will replace lost income in the event of the policyholder’s death, it will never be a cash cow while the insured is alive. We at InsureMe generally subscribe to this advice: ‘buy term and invest the difference.’

What’s more, Hinerman notes that you should buy a financial product because it’s the right product for you, not because it results in a large or small commission for the agent or broker. The commission is immaterial.

When it comes to life insurance, there’s no one-size-fits-all approach, despite what Orman would have you believe. The best way to find the right coverage is to talk to a licensed professional that you trust. He or she will look at your unique situation—your age, income, assets, number of dependents—and help you find the best policy.

Related:

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Car Insurance Quotes and Financial Freedom

February 11th, 2009 by Penny Hagerman

folded-dollar-billsIf you’ve ever listened to, or read up on, some of the leading financial gurus like Dave Ramsey, Suze Orman or Robert Kiyosaki, you know they promote principles like saving money, setting up a household budget and paying off personal debt as mainstays to financial freedom.

Good advice! But with our economy in recession (depression?), layoffs occurring by the thousands and most of us struggling just to maintain daily life, paying the bills without racking up credit card debt may be all we can manage.

Some may not even be able to accomplish that.

Consider the following facts:*

  • The average American carries more than $8,000 in credit card debt.
  • Fewer than four out of 10 American adults have an emergency fund to fall back on.
  • At least one in six homeowners owes more for their homes than it’s worth.
  • 11.6 million people are currently unemployed—a 25-year high.

With statistics like those—and all the doom and gloom in the air—anything we can do to free up finances, save money and improve the future just makes sense—including comparing insurance quotes.

We know how stressful and frustrating it can be trying to balance all the balls in the air during times like these. But take the experts’ advice, cut your insurance costs with free home, health, life, long-term care or car insurance quotes, and save some money today.

You’ll leave more resources for tomorrow—and that’s the basis of real financial freedom.

*Hat tips: Bankrate.com, WalletPop.com

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Extreme Athletes and Insurance

February 9th, 2009 by Jeb Foster

bmxerEver wonder how gravity-defying daredevils get insurance?

As you might imagine, many health and life insurers balk at offering individual coverage to these Evel Knievel types. Realizing this, a lot of extreme athletes resort to lying about their day jobs and, subsequently, about the cause of their injuries:

“A lot of them have fallen off curbs and hurt themselves,” skateboarder Biker Sherlock told the LA Times. (That, of course, is insurance fraud, which is a big no-no.)

The honest, when they can get covered, must pay incredibly steep rates. A BMX biker referenced in the same LA Times article pays $650 a month. (Multiply that times 12 and you can subtract your retirement.) Still, going without insurance in such a profession would be to tempt a much more expensive fate.

Travel insurance—for the thrill-seeking jet setter.
Rafting in Costa Rica. Skydiving in South Africa. Spelunking in Borneo. If you dabble in extreme sports during your vacations, it’s a good idea to make sure you’re covered in the event of an accident. There’s simply no such thing as a cheap medical evacuation—they run the gamut from ridiculously costly to ruinously expensive.

But check with your health insurance company before you purchase a travel insurance policy—you may or may not retain medical coverage when you leave the country.

The Consumers Union, which publishes Consumer Reports, offers some tips for buying travel insurance: “Reading the fine print is essential. For example, some policies will evacuate you to the ‘nearest appropriate hospital’ at the company’s discretion, while better ones provide evacuation to ‘hospital of choice’ at the policyholder’s discretion.”

The National Association of Insurance Commissioners wisely suggests getting a recommendation from a travel agent—they have the most experience with travel insurers and likely have the inside scoop on which ones are reliable.

Photo credit:  http://flickr.com/photos/djenan/

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Renters Insurance Neglected by Majority of Those Who Lease

February 5th, 2009 by Penny Hagerman

rental-home2With the housing market in a major slump and the foreclosure crisis still hovering, more and more Americans are opting to rent in lieu of buying a home.

In fact, as of about about six months ago, the Insurance Journal reports that the number of rental households in the U.S. jumped by about 1 million in 2007—before the foreclosure crisis hit its peak, forcing thousands of Americans out of their homes and into rental situations.

But as the number of renters in our country increases, the number of people purchasing renters insurance to protect their belongings is decreasing disproportionately—leaving many vulnerable to loss from theft or disaster.

The findings of a recent survey by Allstate magnifies the issue’s significance:

  • Over 50 million of the approximately 87 million people living in rental housing (nearly two-thirds) do not have renters insurance.
  • More than two-thirds of renters say they have not performed a home inventory checklist—and have no idea what it would cost to replace everything they own.
  • 49 percent (almost half) of renters estimate that the U.S. experiences about 100,000 burglaries a year. According to experts, the actual statistic is more than 2 million—twenty times that estimate.
  • Three out of ten survey respondents thought renters insurance cost at least three times as much as the actual price tag (an average of $15 per month). Another 20 percent had no idea how much it cost.

It’s obvious many renters don’t have a true handle on the facts—which might explain why they often bypass such important coverage altogether.

According to the Allstate survey, most renters cite common reasons like these for neglecting to protect themselves with such vital coverage:

  1. Lack of time
  2. Think the coverage is too expensive
  3. Say they don’t own enough valuables to justify the coverage
  4. Believe landlords are responsible for insuring personal possessions

The truth is, renters are responsible for insuring their own possessions. And, at a typical cost of less than $200 a year, most people can’t afford not to buy insurance for renters if they’re leasing a home.

Whether rental property contains a million dollars in valuable art or $500 worth of furniture, it’s now more important than ever that renters learn to think like homeowners—and protect what they still have left.

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Auto Insurance Quotes and Your Ride: What You Should Know

February 2nd, 2009 by Jeb Foster

what-you-drive-could-cost-youDid you know that what you drive could affect how much you pay in insurance?

In addition to looking at you, insurance companies take a long, cold look at your whip before issuing auto insurance quotes.

For example, if you drive a 1995 Honda Civic, the most commonly stolen vehicle according to National Insurance Crime Bureau (NICB), your insurer will likely charge you more, because the likelihood that they’ll have to replace your car is higher than for other models.

Insurers also look at how expensive your car is—because an expensive car means two things: it’s attractive to thieves and is more expensive to repair. On the positive side, expensive cars often come with enhanced safety features, which help lower premiums.

Trying to get coverage for your 300-horsepower Subaru WRX? Get ready for some insurance sticker shock: this car, which ranks as the fourth-most-expensive car to insure according to the Highway Data Loss Institute, sends this warning to insurers: here’s a driver that likes to drive fast—and rack up moving violations (and worse).

Essentially, insurers want to make sure that the risk they take on to insure you and your car correlates to amount you will pay in premiums. Which means:

  • If you’re a young male with a fast car, you are (statistically speaking) a risky bet, and they’ll want more of your money.
  • If you’ve never had a moving violation, have excellent credit and drive a Volvo, you’re a safe bet, and they’ll charge less to insure your car.

While it may seem like insurers simply pull auto insurance quotes out of a hat and tack on an extra $100 for good measure, they take their underwriting methods very seriously.

If they were to charge too much, they’d be undercut by other insurers. If they were to charge too little, they would soon be bankrupt after paying out more in claims than they collected in premiums.

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