I thought I was the one with the bad news. My husband called me on while I was at the auto shop getting the screechy noise on the van checked out. He asked me about my morning and listened patiently as I explained that the van repairs would cost us close to $500.
I asked about his morning and he said his hearing at court went well. Then, cool as a cucumber, he told me that when he went out to his car afterward, he found the passenger window of his car broken and everything of value stolen.
The most painful was his briefcase which had his laptop, the files he was working on, and his notary seal and book. They also took all the other electronics in his car and other random things like his spare deodorant and toothbrush (although they left his toothpaste).
Now for the good news and the point of this post:
Even in the midst of serious debt repayment, having adequate insurance and an emergency fund is essential.
Car Insurance
California minimum coverage requirements for auto insurance are so low as to be almost laughable, if this was not such a serious subject. In California you must carry insurance to cover
- $15,000 for injury/death to one person.
- $30,000 for injury/death to more than one person.
- $5,000 for damage to property.
Our auto insurance policy limits are substantially higher and also include collision and comprehensive coverage, with a $250 deductible. Comprehensive coverage includes any damage to our cars or car-related property caused by anything other than a collision with another vehicle (e.g. collision with a deer, hail damage, or theft.) After our $250 deductible, the comprehensive coverage will pay for the cost of replacing the window and all the car-related items like the GPS and power inverter
Renters Insurance
If you have a home mortgage, you’ll be required to have home owner’s insurance. That decision is made for you by the lender. For those who rent instead of own, renters insurance is always available, but often overlooked. Renters insurance is generally very inexpensive, but can easily cover all your personal property, whether located in the home you rent, in storage, in your car, or anywhere else. This insurance not only covers loss of your personal property (possessions), but damage to the rental property.
To give you an idea about how affordable renters insurance is, our policy costs us $175 per year, and was substantially less when we lived outside of California. I would never have thought about renters insurance (I never had it when I was single), but my savvy and responsible husband has made sure that we have always had it. In our case, after a $250 deductible, our renters insurance policy will cover, the laptop, briefcase, bluetooth headset, notary seal and book, and other stolen property.
Emergency Fund
If we were living paycheck-to-paycheck, it would be hard to come up with $500 in insurance deductibles, pay $500 in car repairs (remember how I thought I was the one having the bad day), and purchase replacements for all the stolen items (we will have to wait for reimbursements from our insurance).
In my opinion, trying to tackle debt without an emergency fund is a recipe for failure. Without savings for unexpected expenses, the slightest out-of-budget emergency will send you right back to borrowing. Between living on last month’s income and having our emergency fund, we have money to cover the insurance deductibles, car repairs, and replacement purchases.
While it ended up being an expensive day, it wasn’t nearly as expensive and painful as it could have been. We all sat down to dinner together, safe and well, and just a little bit poorer for the events of the day. I’m just thankful that all we lost was stuff and money.
It’s Your Turn
- Do you have an emergency fund and insurance?
- How has your emergency fund or insurance saved your tail?
- Have you ever had stuff stolen from your car?
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Kirsten says
August 20, 2014 at 6:05 amOh my word, that stinks! So sorry you experienced that 🙁
I want to echo how affordable renter’s insurance is. I’ve had it a few times in my life it’s never very much at all! I’ve never had to file a claim on it, thankfully, but having insurance to protect everything of value is always the right call.
Stephanie says
August 20, 2014 at 8:34 amThanks Kristen. I’m glad you haven’t had to use your renters insurance, but I’m impressed that you have it! 🙂
Kady says
August 20, 2014 at 6:07 amThey took his files?! That is a lawyer’s nightmare. Wow. Extreme sympathy to your husband. Hopefully his assistant can recreate most of it from digital copies… That is a seriously bad day. When I practiced law I never left files in my car, for just that reason, and I often wondered if my paranoia was worth the back pain… Anyway, huge sympathy to your hubby. Losing his laptop too… Crappy.
Stephanie says
August 20, 2014 at 8:41 amIf only he had an assistant! 🙂 He’s got a catch 22 going on there. The firm says he needs to bring in more money before they’ll get him an assistant, but it’s really hard to bring in more money without an assistant. Hopefully there is an assistant in the near future. Doing the work of 2 people is pretty overwhelming.
He had 4 files in the car. He goes between a couple different offices, so he always has the current matters he’s working on with him. When he goes into court he tries to bring as few things as possible because of the pain of going through security. Sometimes he even leaves his phone in the car, butI’m so glad he had it with him this time! I guess he needs to start being more paranoid!
Beth @Goodness Gracious Living says
August 20, 2014 at 7:17 amWhat terrible news! I am so sorry that this happened to your family. I am so glad that you protected yourself ahead of time so that your husband’s work won’t have to suffer. Keep up the responsible work and thanks for always sharing.
Stephanie says
August 20, 2014 at 8:46 amThanks Beth. My husband is always calm and collected, never angry or in a rage, but this definitely has him super bummed. My kids have all sorts of questions about why a bad guy would break Daddy’s car and take his stuff. A definite lesson in “the real world” for our family.
nicola says
August 20, 2014 at 7:18 amyes when our neighbour reversed into our brand new car and because my son was in our car at the time and the insurance company decided it was one of those no fault cases it cost us £600 so we were glad we had some saved or that would have been a big problem
Stephanie says
August 20, 2014 at 8:48 amThat’s painful Nicola! I’m glad you had the savings!
CS says
August 20, 2014 at 7:51 amSo sorry that happened to you. There is something really creepy about being robbed like that (my apartment was robbed once). I have had my car broken into, but there was nothing in there to take, so I think it was more an act of vandalism. I may be a bit paranoid, but I never leave anything inside the car that is visible, even my coupon folder or any document that might have my name or address on it. Everything goes into the trunk or into the covered back area of my SUV. My fear is if they find my address on a piece of mail or something left, say on the back seat, that they may then go rob my home since they know I’m out. I did not have renters’ insurance at the time my apartment was robbed, but have it now. Still working on that emergency fund.
Stephanie says
August 20, 2014 at 9:09 amYes! It is creepy. I always try to cover anything that looks valuable. Usually my vehicle is strewn with kids stuff, so it’s not hard to find something to toss over a camera case and have it look totally natural. I think my husband will start putting everything in his trunk or out of sight, though they did go through his trunk too. Creepy!
Another thing… He also usually has a car seat in his backseat, which I’ve heard is a deterrent to thieves. Yesterday, the car seat was in his trunk, not strapped into the back seat. I don’t know if that’s a coincidence or if having a car seat strapped into his car 90% of the time has really prevented being robbed in the past.
Jackie says
August 20, 2014 at 8:58 amStory to share on my experience….my husbands work truck was broken into and lots of very expensive tools were stolen, we did make a claim on our home insurance and shortly after got dropped….finding a new insurance to cover us with just the one claim has been a nightmare and rates up the roof! My one word of advise after much crying over insurance is only make a claim if your house burns down or a tornado comes and takes it away…not worth the headache and increased rates. My 2 cents from past experiences.
Stephanie says
August 20, 2014 at 11:17 amThat is terrible Jackie! I’m sorry that insurance has been such a nightmare for you! I didn’t realize that companies dropped people so easily. Thanks for sharing your experience!
Retired by 40 says
August 20, 2014 at 10:02 amThese are awesome thoughts! We’ve never actually had to use our insurance, but our deductible is $1,000. Even though we have an emergency fund, that would definitely be a hard pill to swallow!
Stephanie says
August 20, 2014 at 11:19 amI know what you mean! Even though we have an emergency fund (so we’re no going further into debt), the emergency fund is still real, hard-earned cash, which is always hard to part with!
Kathryn K. says
August 20, 2014 at 10:18 amOh, no! I’m sorry this happened to you guys!
I didn’t have renters insurance when I had an apartment and luckily never had a situation where I needed it. But since then an emergency fund and car insurance have come in handy (we also have homeowners’ on our house obviously, but since we got dropped from our original carrier for making two wind damage claims within a year, in hindsight we should have just paid for the repairs out of pocket).
One November morning our furnace suddenly stopped working so it was definitely good to be able to pay for a new furnace and ac system (the old one wasn’t worth repairing) out of our emergency fund without any worries. And with totaling my car twice (once rear-ended a grain semi and once hitting a deer – gotta love country life!), car insurance definitely came in handy! Like a commenter above, we keep our deductibles high so self-insure for anything small out of pocket.
Stephanie says
August 20, 2014 at 11:26 amThat is frustrating that your insurance dropped you! I think your right that you have to be careful about what you claim and what things you just pay for out of pocket. We always had a high deductible health insurance plan (before Obamacare nixed that), so we would take care of most everything out of pocket, which was fine since we’re healthy. If you have the savings to self-insure, than that is a nice option. While paying off debt, it’s nice for us to have a lower deductible.
Liz S says
August 20, 2014 at 12:24 pmOh Stephanie, I am so sorry to hear this. Losing all that cash is very very hard. But I also can just imagine how much stress, time and effort this is also costing you both. So much time to purchase new stuff, get the new stuff ready to use (setting up and loading info on a new laptop), as well as tons and tons of time doing paperwork and being on numerous phone calls with insurance. Then waiting forever for the reimbursements to come. I’ll be praying that this process goes as smoothly and quickly as possibly for you all. Thanks for sharing. Hang in there! 🙂
Stephanie says
August 20, 2014 at 9:41 pmThank you Liz! That means a lot! 🙂
CeCee says
August 20, 2014 at 1:05 pmOh Stephanie that sounds like an awful day. I always try to put life events in perspective (much like yourself) and the fact that you realize that it could be SO. MUCH. WORSE. is a testament to your character.
I do currently have renter’s insurance and have had it since I started renting in 2007. The very first place that I rented required it per the lease if you had a pet, and it was sooooo cheap that I just carried my policy around with every move. Actually, when we moved across the country and had to set up new insurance policies having renter’s made it cheaper because we had “multiple policies” so we got a discount that was cheaper than the monthly rate for renters!
Unfortunately my husband’s car was broken into a few months ago and about $550 of damage/theft was done and our deductible was $400 so we decided not to claim it on insurance. We immediately fixed the car, and finally purchased his last replacement item at the beginning of August due to a successful pantry challenge in July.
Stephanie says
August 20, 2014 at 9:49 pmYes it definitely could have been worse! I’m sorry that it happened to you guys too! Great job on a successful pantry challenge so you could finish purchasing the replacements!
Leslie says
August 20, 2014 at 3:12 pmSo sorry to hear about your husband’s car. It’s truly an awful feeling to see that your car was broken into. I’m a big believer in having an emergency fund. We’re still building ours, but I’m probably overshooting with a goal of 6 months of income in the bank. It’s just such a comfort to know that you’re prepared for pretty much anything. We also had renter’s insurance before we owned, and I wouldn’t change that at all.
Stephanie says
August 20, 2014 at 9:50 pmWow a 6 month emergency fund should have you pretty well set for anything that comes along!
Judi says
August 20, 2014 at 6:05 pmI’m so sorry that your car was broken into and that you had an expensive car repair. I like your ability to focus on the positive! But it’s still one of those things that makes you question the integrity of some people in our society!
We have so much insurance it’s crazy to me: home owners, car, sewage (this is a neat program through the city that only costs $2 a month), liability insurance for lawyers, and even pet insurance. The car insurance saves us every winter for rock chips in our windshield, and the pet insurance saved us $2000 for an acl surgery on one of our dogs.
As far as the emergency fund goes, that is something I’ve been thinking about a lot now that we be shifted to fast debt repayment mode. We keep 10k in a savings account, this would cover all of our insurance deductibles for a year and 3months of bare bones living expenses (I like to plan for the worst case scenario). That being said we both have stable jobs and I’m wondering if we should scale this down and throw it at debt. I’ve read Dave Ramsey’s book and he suggests 1k which I think is too low for my comfort…however I agree with his logic that we’re loosing money every month on debt interest. How much is typical to keep in an emergency fund? Do people alter this fund if they have more assets they are responsible for like a house? Should you increase it with each child?
Sorry if you’ve written about this before or if the questions are ill informed. I’m new to this rapid debt repayment battle.
Judi says
August 20, 2014 at 7:47 pmSorry I should have read your post more thoroughly and I would have noticed you previous post on emergency funds highlighted! 6k is a good sized emergency fund, but I’m still hesitant to cut ours back from 10k since we have a house that is older.
Stephanie says
August 20, 2014 at 9:53 pmIt really is a personal choice Judi. I think $1,000 is really low, especially if you are going to be working on your debt for a while (and you have other responsibilities like house, family, etc). I say go ahead and keep it at $10K if that feels right for you! An older house can really surprise you with expenses!
Liz says
August 21, 2014 at 9:41 amStephanie- that sounds like a really bad day- I’m really sorry to hear about this. Like you’ve mentioned, it sounds like you were as prepared as you can be for these types of emergencies. You’re insured and have an emergency fund. Also, my husband is the same way.. nothing ever seems to phase him too much. Which is good bc I tend to be the opposite : )
Stephanie says
August 23, 2014 at 10:01 pmIt is nice to have a husband who is chill about everything, especially to even out one who tends to freak out a little more easily! 🙂
Erin @ Journey to Saving says
August 21, 2014 at 2:52 pmOh no, that’s so awful someone broke into his car! Even worse, if I’m reading correctly, that they broke in at the court house? That takes some nerve. I’m glad to hear renter’s insurance will cover it at least. Emergency funds are a must in my book. I wouldn’t be able to sleep without having a safety net. We also have renter’s insurance – it was required when we signed the lease. It’s not a bad idea to have, though.
Stephanie says
August 23, 2014 at 10:03 pmHe was parked across the street from the courthouse. It is crazy that it happened in broad daylight. That’s great that you’re prepared too. It definitely brings some peace of mind.
Miss Millennial says
August 21, 2014 at 3:15 pmOh my goodness! On the plus side, y’all are all ok!
I 100% agree with you on needing an adequate emergency fund while paying off debt (and much to many people’s chagrin, I don’t believe that $1,000 is enough), otherwise it’s so easy to find yourself right back where you started!
And this post today reminded me why even though my “insurance” line items always feel high, it’s definitely worth it for when you need it!
Stephanie says
August 23, 2014 at 10:05 pmWe definitely feel blessed that it was just stuff and that we are all safe and sound. I agree that more than $1,000 is needed for a real emergency fund!
Kate @ Money Propeller says
August 22, 2014 at 6:34 amOh, I’m so sorry to hear that very bad experienced Stephanie. 🙁 Our motorcycle “scooter” was stolen last 2012 and it was so bad that our insurance didn’t even cover it!
Stephanie says
August 23, 2014 at 10:07 pmThat’s terrible that your insurance didn’t cover it! That’s so frustrating!
NZ Muse says
August 24, 2014 at 9:09 pmInsurance is SO absolutely a must. We’ve had our car broken into multiple times and same with various houes.
Stephanie says
August 25, 2014 at 10:00 amI’m sorry to hear that it’s happened to you multiple times! I’m glad you’ve learned the importance of insurance!
Monica says
August 25, 2014 at 2:20 pmOh, that stinks! Our van was broken into last summer and we had over 2000 dollars worth stolen. Not to mention the hours of work James lost on his computer (he had backed it up on his external hard drive… Which was also stolen) and all my pictures from a month if traveling that were on my camera. The blessing came when we realized that it wasn’t out car insurance that paid for it, but the renters insurance. We had never purchased renters insurance before but did about six months before this happened so even though we were out the 500, we weren’t out more. The lame part was that they broke out our window even though the doors were unlocked
Stephanie says
August 27, 2014 at 7:09 pmStealing computers full of work and cameras full of pictures is beyond mean! I’m so glad that you had the renters insurance and that you got it just at the right time! So lame that they broke your window! I still hope you lock your door now though! 🙂
maia says
October 8, 2014 at 10:18 pmIf he has to leave valuables in the car, it’s worth it to fashion a special hiding place. I have a friend who has a special spot in the back, near the spare tire, behind the side panel. Thieves aren’t thorough…they’re in and out and won’t take the time to look in those areas in the back of the car. She has been broken into, twice, and they just took what was immediately available to grab. The hIdden stuff was safe and sound.
Stephanie says
October 10, 2014 at 12:23 pmThat’s a good idea, though it would be king of inconvenient to do regularly or with big items. Thanks for sharing!
Jill says
December 21, 2014 at 9:51 pmThe only theft claim I have ever had to file was personal property that was stolen when my husband was in the hospital. It’s a long story, but I missed walking in on the thief but about 10 minutes. They were CLEARLY running a scam out of that hospital.
On camera the thief came right into the hospital, right to my husbands room, and right back out…while my husband was in for a test. I wasn’t nearly as mad about the property as I was that they also stole his GREEN CARD. GRRRRRRRRR. It still irritates me!
Stephanie says
December 26, 2014 at 9:33 pmThat is terrible and frustrating Jill!! I’m so sorry that happened to you. I hope they were able to catch the bad guy.