The Racine Journal-Times Sunday Bulletin from Racine, Wisconsin on January 7, 1962 · Page 51
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The Racine Journal-Times Sunday Bulletin from Racine, Wisconsin · Page 51

Racine, Wisconsin
Issue Date:
Sunday, January 7, 1962
Page 51
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How to Get ILIU^IKAIIUNS BT KUI UUIT the Most for Your Insurance Money The secret is to buy protection where your possible loss looms largest and assume the smaller risks yourself By PATRICIA and RON DEUTSCH M ISSED ANY insurance bargains lately? Studies show most of the best buys in insurance are passed up by a majority of families. How can you get the best insurance at the lowest price? The trick is to follow the rule insurance men use when choosing? their own policies; Insurance /.s intended for the catantroplie tjour pocket can't takr. AffNiime the little risks yourself. This may sound too simple. But let's see how it works with the insurance on your car. We'll say the car is worth $2,500, too much of a ]o.s.s to So you buy collision insurance. You must take a $50 deductible (meaning (/ OH pay the first $50 of a, and the policy costs $49. (All rates in this article are samples only.) Hut suppose you took $100 deductible. You'd take $50 more of the risk, but you'd save $24. This is a perfect example of how small risks are expensive to insure ajjainst. Here you pay $24 for $50 of insurance. But the remaining $2,400 risk can be insured for only $25. You also want "comprehensive" insurance, fur fire, theft, and malicious mischief. It ccsts $27. But assume a $50 deductible and the remaining $2,450 of insurance costs only $11. With some of that money, you'll want to buy the best bargain in car insurance, extra liability. This protects you against the biggest hazard of driving: hurting someone or his property. Personal injury claims of $25,000 and more are common. But most Americans in.sure against such claims with limits of $10,000 for each person and $20,000 for each accident, far too little. Such a policy costs $30. Yet you can raise the limits to $25,000 and $50,000 for only $4 more, a bargain indeed. The case is the same for property-damage insurance, which most families buy with limits of $5,000. Experts say you need twice as much. The bill for doubling that insurance? $1.60. You are still unprotected against injury to you or your family. This insurance—"medical pay- 6 Family Weekly, January T, 1962 ments"—is too cheap to pass up. But many motorists pay $6 for $500 worth, when $1,000 costs only $2 more. You are also unprotected against the driver who has no insurance. "Uninsured motorist" coverage will protect you up to the limits of youf own liability insurance, and at the bargain rate of $4. You can easily see we've added tens of thousands of dollars in badly needed insurance and paid only an extra $11.60 to do it. But on the other hand, we've saved $40 by assuming just $100 of extra risk ourselves. Compare the risks—the one, thousands of dollars in losses you couldn't hope to pay (your salary can be attached to meet them) ; the other, $100, which most families can manage in a pinch. Experts buy their own insurance this way. Can you get similar bargains in insuring your home? The fire insurance on many homes is less than 80 percent of the building's value. This means any loss will be paid less depreciation of the property. And this may mean you'll get less than half what it costs to repair in some cases. But if you buy more than 80 percent of the building's value in fire insurance, each dollar buys more. For then you're entitled to replacement-cost insurance. The company replaces the total loss. Another missing link is liability coverage. Again, this guards against huge loss. S TILL ANOTHER is insurance on your home's con ten t.s—from clothes to appliances. Many Americans have none, and most greatly undervalue what is in their homes, often by half. The theft-insurance case is much like that of contents insurance. And beyond this, freak, unspecified in policies, pop up every day. Many homeowners are not insured against damage they do to their homes themselves. And few are insured against the shelter costs they'd have if their homes became uninhabitable. So many and varied are the chances of serious loss to the home that a few years ago protection against all possible risks was built into "package" policies. When you buy the package, you get everything in it at sharply discounted rates, sometimes saving more than a third. The "Homeowner's 'B'" package gives best protection for most homes. But experts suggest adding three bargain extras to it. First, they add to the $10,000 of liability insurance, more than doubling it for about $2 a year. For a similar sum, they add a "voluntary damage" rider, which covers damage they may do to others' property. And for a couple of dollars they cover damage they do to their own homes. But most vital: the All Physical rider, to cover unspecified losses. A sample rate for the "Homeowner's 'B' " on a $16,000 home, with the extras we've considered above: $74 a year. O NLY A relatively small number of families have the kind of health insurance they need most—loss-of-income insurance should the breadwinner be disabled. A good hospitalization policy might be stretched into paying $1,200 and cost a man of 35 some $50 a year. But his loss-of-income policy might pay him up to $72,000 at a cost of $100. If the price seems dismayingly high, be assured it can be cut. If you wait even seven days before benefits begin, the cost drops. And this deductible can be 90 to 180 days for most employed people. Sick leave, unemployment compensation, savings, etc., help take up the slack. Second, you needn't have the policy all your life. At 65. Social Security steps in, so a cut-off at 65 saves you money. Third, you need less income after the children are grown. So you can buy one long-term and one short-term policy, and save again. Fourth, all health insurance is much cheaper when sold to a group—which can be as few as 10 persons. So discuss this with your employer and coworkers. The insurance is bought by the monthly amount of income it pays, and $200 to $300 a month is a good sum. There is a second badly needed health insurance: against the catastrophic illness demanding prolonged care. (Continued on page 14)

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