Annual Review Of Our Homeowners Insurance Policy

I got our renewal information from our insurance company for our homeowners insurance policy. I realized that it is probably a good time to review our policy and make sure we’ve got the right coverage.
Here are some things I looked at in terms of our policy:
Cost
The cost of our policy with no changes rose roughly 10% from last year’s total. I actually went online to competing sites to get some rough quotes, and our costs are still significantly cheaper with Allstate. One of the reasons, I’m sure, is that we also have our automobiles covered through Allstate.
I may take some time to check with a couple of other companies on the ‘entire package’ at some point. I’ve heard that some people actually take a day off work dedicated to performing this task. That may be something to consider down the line. As it stands, my preliminary comparison shopping shows me that we’re still getting a reasonably good deal. Though I’m not thrilled about the 10% increase, I can live with it as long as it doesn’t become a repeating trend.
After all this isn’t college tuition where those types of increases are the norm.
Personal Property Protection
This isn’t so much looking at our coverage, but seeing this line did remind me that we need to do a better inventory of our stuff. My parents bought us a new video camera for Christmas, mainly because we want it so that we can film Baby Beagle when he/she arrives, but doing a walk through of our house to catalog inventory would be a good use for this camera as well.
Additional Living Expense
Currently, we have coverage for up to 12 months. This would cover us in the event that our house needed extensive renovations or re-construction. I don’t know if there are opportunities to make adjustments to this length, but I think one year is fair.
Family Liability Protection
This is currently set at the ‘base’ limit of $100,000. My understanding of this is that if we were to have an accident at our house and then get sued for damages, this would be the amount that the insurance company would pay up to. So, if someone tripped and fell and then came to sue us, we would be ‘covered’ up to $100,000 in damages plus associated costs.
It’s my feeling that we should raise this. My company will raise this for $39 per year to raise it to $300,000 up to $115 per year to raise it to $1,000,000. I am gathering advice to see what is recommended, but unfortunately in our ’sue first, ask questions later’, I feel the additional costs might be a small price to pay.
Any thoughts or recommendations?
Guest Medical Protection
This would be coverage that would cover out-of-pocket costs for anyone injured on our property that might require immediate medical attention. The example I saw that made the most sense was that if you have a child, and they have a friend over for a sleepover, and the friend gets hurt, you could take her to the emergency room and these costs would be covered.
One person commenting on this felt that having additional protection here often reduced the chances of getting sued for minor accidents, reducing the chances that the previous category would be needed.
Currently, our protection is the base $1,000. They offer $5,000 of protection for $9 more per year. To me, this might be worth it as well.

Any thoughts or advice that might help out?

If you’ve had any experience with this, please let me know. I’m always looking to make sure we have the right amount of coverage, so any thoughts would be greatly appreciated!

Unplanned Spending That I Hope Is Worth It

When it comes to what I call ‘bathroom supplies’, I usually try to find things on sale. I don’t mean anything gross by ‘bathroom supplies’ but it’s probably what a lot of people would call toiletries. Things like shaving cream, shampoo, body wash and toothpaste. Usually, between finding things on sale, using coupons, and stocking up, we can find some pretty good deals.
However, I spent quite a bit of money on these supplies over the weekend and unfortunately wasn’t able to put a lot of the work that I normally do into it.
Towards the end of 2008, a small rash developed on my face directly to the left of my mouth. I had thought it might go away, but it didn’t go. I went to my family doctor. He didn’t know exactly what it was, but gave me a prescription that normally clears up rashes.
It didn’t. When I followed up with him, he gave me a referral to a dermatologist.
This was January of this year by now, and when I went to see the dermatologist, he looked at it and indicated that I had ‘contact dermititis’ which I’ve since learned is a catch-all term for a skin irritation. He prescribed something different, which was a topical steroid, that he promised would “clear it right up.”
It did and it didn’t. What happened is that the cream knocked the rash down to where it was barely noticeable, but it never went fully away. If I stopped using the product the rash would be back in full force within a couple of days.
Clearly there was still a problem, so back to the dermatologist I went. The rash was itchy and I am very self-concious about it given that it’s right next to my mouth. I always feel that whenever someone is talking to me, they’re looking at the rash and not concentrating on a word I’m saying. I’ve asked multiple people if it’s very noticeable, and nobody has said that it is, but I have always thought that maybe they’re just being nice. In other words, this rash has to go.
At this point, the doctor now recommended that I go through ‘patch testing’ which is a type of allergy testing where they expose your skin (on the back) to various chemicals and compounds that can cause reactions. After several days, they see what spots developed any rashes, and determine that you should avoid those products.
There were a few products that came up. A couple are normally things that I wouldn’t have to worry about, but there were two that were noteworthy. The first was parabens, which are preservatives that are used in a wide variety of cosmetic and toiletry products. The second was topical steroids, which if you recall, is what I had been using to treat the rash. So, what this showed is that a large number of consumer goods as well as the very product by which I’d been using to treat myself were helping prolong the problem.
I was given a new prescription and also a 53-page list of ‘bathroom stuff’ products that were OK to use. I was advised to concentrate on any products that I used from the neck up, since the rash was localized to my face.
So, I went through product by product for the following areas:

  • Shampoo
  • Conditioner
  • Face soap
  • Body wash
  • Shaving cream
  • Lip Balm
  • Hair Gel
  • Moisturizer
  • Toothpaste

I found that the conditioner and body wash that I use were on the list, but none of the other products were. Because my goal was to get rid of the rash as quickly as possible and because we’re pressed for time with the baby coming, I decided to simply make one trip to one store and take care of the entire list. I did find one coupon.
Many of the products (most notably the toothpaste and moistuerizer) required higher end, expensive products. But, in the end, the cost was roughly $50 to get new shampoo, face soap, shaving cream, lip balm, hair gel, moisturizer, and toothpaste.
Had I been buying these products over time, looking at sales and/or buying with coupons, I probably could have gotten them for significantly cheaper, but given that this rash has been with me for six months and I just want it gone, I did not balk at the cost.
All I can hope now is that this unplanned spending turns out to be worth it. I’ll report back over the next few weeks how things go. As of now, the rash is still there but the redness and itchiness has subsided, so some combination of the new medicne and the new products is working, but time will tell if this will completely knock it out.
Wish me luck.

Are Rewards Credit Cards Worth It?

Earlier, I was reading the post ‘Thoughts on Going Cash Only- The Benefits and Drawbacks of Not Using Credit Cards‘ on Think Your Way To wealth. It’s a well written post that outlines some of the benefits and drawbacks of using cash versus credit.
One of the comments struck me as very interesting. In part, Get Out Of Debt wrote, “As for the earning rewards stuff – do people really earn that much from their credit card rewards? I’m pretty sure it’s trivial amounts, and you have to spend tons to make it worth it i.e. spend money you haven’t got.”
This got me thinking because my experience has been quite the contrary. Let me go through the points here:
Background
Both my wife and I have Citi Dividend Rewards credit cards. The card pays 1% cash back for regular purchases, and 2% for purchases made at grocery stores, drugstores, gas stations, utilities, and convenience stores. Back when we first signed up, they actually paid 5% for some of the special categories.
Point 1: Do people really earn that much from their credit card rewards?
We have been collecting our rewards into a savings account with the intention of eventually replacing some of the electronics in our home. It’s total luxury but our rationale is that the money we’ve earned through this credit card has been ‘extra’ so we agreed that we can save it for some fun stuff. Our goal is to replace our 32″ tube television with a flat screen TV once the TV dies. How long this could be is anyone’s guess. The TV is about 12 years old, so it could go tomorrow or it could be another few years.
In any case, here’s how much we’ve got set aside that has been paid exclusively from our Citi Rewards cards: Over $800.
My guess is that by the time we’re ready to replace the TV, we’ll be able to buy a new one without going outside the money in this account. At least that’s my plan.
My thought: Yes, it is possible to earn that much from a rewards card.
Point 2: You have to spend tons to make it worth it
We’ve been collecting the amount we have for three years or so, maybe a bit longer. Still, in that time we’ve used our credit cards mainly for the category spending that gives us the most rewards.
Let’s look at an example.
Say you use your credit card as follows every month:

  • Groceries – $350
  • Gas – $200
  • Utility Payments – $100
  • Drugstore Purchases and Prescriptions – $50
  • Gifts – $100
  • Travel – $100

The first five categories are the ‘bonus’ categories. These total $700, so at 2% back per month you would earn $14. The bottom two categories total $200 and at 1%, you would earn an additional $2, for a total of $16 per month.
Over twelve months that totals to $192.
This is pretty typical of an average month for us. Often the gifts and travel are something else, maybe clothes, maybe a day trip, but a couple hundred dollars of ‘other’ spending per month on our credit cards is fairly normal for us.
Now, we’ve done better than that, averaging about $267 per year. I’d account the differences to:

  • Additional money earned the first year before Citi cut the rewards from 5% to 2% on the special categories
  • Charges made of large purchases during our wedding and honeymoon planning strictly for the purpose of gaining cash back rewards. One example: our honeymoon. We splurged and went to Hawaii. This was not cheap. Still, we put it on our credit card and paid the credit card with the money we had saved for our honeymoon. Even though we were ‘only’ getting 1%, that was probably $50 that we wouldn’t have had otherwise. It adds up.

My thought: You don’t have to spend a lot to make it worth it. If you find a card that rewards you for the spending that you do anyways, you’re getting something for nothing, and even with the basic $192 per year, that can add up pretty quickly. However, keep in mind that this assumes you are not carrying a credit card balance.
Point 3: You spend money you haven’t got
My wife nor I have ever carried a balance, and we haven’t spent on our credit card just for the sake of spending. Both of us pay our balances in full every month, so we don’t send a penny of our ‘reward’ back to the card company in interest.
As I said above, we’ve charged things that go to our monthly expenses, or larger ticket items that we have the cash saved for already.
My thought: It boils down to responsible spending. If you can be responsible with a credit card, then it is possible to do really well with a rewards card. But, if you have had trouble with credit in the past, then it might not be worth the risk of getting in over your head.
So, I guess I’ll sum up by saying that my experience has proven opposite of what the comment shows. But, we’ve also been very lucky as to not have had credit problems. Each situation is unique and I think everybody should ask whether they can handle the availability of credit. If history has shown that you can, then by all means I suggest considering the right rewards card.