Insurance is a topic we often avoid, which is why we decided today to have some fun talking about how making better insurance decisions can truly improve your life. You may find yourself skipping down your street because you’ve either 1) saved money or 2) found better coverages for your situation. We’ll chat about:
- Big picture about using the stuff you buy (ensuring that the purchase is actually “worth it”).
- How much insurance is “enough”
- When you can skip the insurance altogether
- Working with insurance brokers
- Adding riders to your policies
- Long term care…the mother of all insurance problems
- Pet insurance
- …and LOTS more.
FULL SHOW NOTES: https://stackingbenjamins.com/finding-better-insurance-1545
Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.StackingBenjamins.com/201
Enjoy!
Our Topic: Insurance
Nice EV You Got There—Can You Afford to Insure It? (Wall Street Journal)
During our conversation, you’ll hear us mention:
- Cost to maintain cars
- Carrying costs
- Impulse control
- Sparking joy
- Hidden costs of ownership
- Types of Insurance
- How to lower insurance costs
- Long-term care insurance
- How to compare insurance prices between providers
- Rising insurance prices
- Understanding risk control
- Insuring what’s necessary
- How to find the right insurer
- Homeowners Insurance
- Life Insurance
- High-magnitude insurable events
- Auto insurance
- Exotic insurance types
- Emergency fund to meet insurance deductibles
Our Contributors
A big thanks to our contributors! You can check out more links for our guests below.
Jesse Cramer
Another thanks to Jesse Cramer for joining our contributors this week! Hear more from Jesse on his show, The Best Interest – Complex Personal Finance Made Easy at The Best Interest – Complex Personal Finance Made Easy on Apple Podcasts.
Doc G
Another thanks to Doc G for joining our contributors this week! Hear more from Doc G on his show, Earn & Invest podcast at Earn & Invest on Apple Podcasts.
Check out his book Taking Stock: A Hospice Doctor’s Advice on Financial Independence, Building Wealth, and Living a Regret-Free Life.
Paula Pant
Check Out Paula’s site and amazing podcast: AffordAnything.com
Follow Paula on Twitter: @AffordAnything
Doug’s Game Show Trivia
- How many people in total were hanged in Salem for the charge of practicing witchcraft between 1692 and 1693?
DepositAccounts
Thanks to DepositAccounts.com for sponsoring Stacking Benjamins. DepositsAccounts.com is the #1 place to go when you’re looking to see if your rate is the BEST rate on savings, CDs, money markets, and even checking accounts! Check out ALL of the rates ranked from best to worst (and see the national averages) at DepositAccounts.com.
Mentioned in today’s show
Join Us on Monday!
Tune in on Monday when you’ll learn about the intersection of money and philosophy with author Darius Foroux.
Miss our last show? Check it out here: Fighting Insecurities, Building a Business, and Behind-The-Scenes of SB and Afford Anything (SB1544).
Written by: Kevin Bailey
Episode transcript
[00:00:00] Nervous. [00:00:01] Yes. [00:00:02] First time, no. I’ve been nervous lots of times. [00:00:10] Doug: Live from Joe’s mom’s basement. It’s the Stacking Benjamin Chair. [00:00:24] I am Joe’s mom’s neighbor, Doug. On today’s round table, we are discussing insurance. Wow. Pinch me. When should you buy it? And when should you take the risk? And with prices skyrocketing, how do you duct tape your insurance plans? We’ll dive in with the founder of the Best Interest Podcast. Wait, don’t we? We call this The Better Interest Podcast. [00:00:47] I think so. It’s Jesse Cramer. Plus the woman who wants to help you afford all the things you might wanna insure, pull a pants. And finally, a guy with plenty of firsthand experience dealing with insurance G But that’s not all. Halfway through the show, I’ll share a really dangling trivia question. Maybe I should have that checked out. [00:01:10] And now, a guy who uses his powers for good, it’s Joe Saul Sea [00:01:22] Joe: Hays Stackers. And today I’m using my powers for a good time because we’re gonna have a great time, hopefully cutting your insurance costs, getting the insurances in order on this Friday. You, you can tell it’s a money geek show when I get super excited that we’re gonna talk about insurance. Yes, fa, what a great way to start my weekend. [00:01:39] I can’t believe it, but I also get to spend my weekend with these people, including Doug [00:01:44] ?: Doug. How are you, man? I ain’t spending my weekend with you. What? No. Uh, what? [00:01:48] Joe: No. Yes. The whole [00:01:49] Doug: weekend. Now [00:01:51] Joe: let’s start off with a woman joining us all the way from over Manhattan. Uh, she is, uh, Laura, les’s pant today. [00:01:58] If you’re not watching us on video, it’s Paula Pant. How are you? [00:02:01] Paula: I am great. I am fantastic. And jazzed about talking about insurance. Nobody ever asked me about it enough. Right? I bet. Right. It’s just not a, not a conversation that comes up often. Like how come we don’t talk about that at happy hour, Paula? [00:02:13] Yeah, exactly. Exactly. Three beers in like, yeah. Let’s talk about insurance. [00:02:18] Joe: Yeah. So is there a rodeo coming soon? Is there a, are [00:02:21] Paula: you gonna tell us about the poofy Oh, oh, the big poofy sleeves. So for those of you not watching on YouTube. Okay, so I have this subscription to a clothing rental service called Rent the Runway from the 1870s. [00:02:32] Yes, exactly. And so among the various pieces I’ve rented, there’s, there’s this piece that makes me look a little like, imagine little bow peep combined with strawberry shortcake. That’s what this is giving. I [00:02:46] Doug: don’t know. I, I disagree. I mean, we’re giving you grief about it, but it’s pretty cool. It is cool. [00:02:51] Do they, they make them [00:02:51] Paula: in [00:02:52] Doug: men’s. Would you [00:02:52] Paula: like [00:02:52] Doug: to borrow it? Hell yes. I would like to borrow that. [00:02:55] Joe: That’s always the next question. The guy we borrowed from the Earn and Invest podcast is here. Huh? Ninja with the segue, [00:03:01] Doc G: doc G joins us. How are you man? I’m good. And I couldn’t have done it better myself. [00:03:06] You wanna waste a little time change insurance policies, especially like homeowners. I swear to God. I mean, yes, it’s a great way to save money, but be prepared for like an hour on the phone. I’ll file a claim doc. If you file [00:03:19] Joe: a claim, they’re gonna make you earn that, earn that money through the time that it takes to file the claim. [00:03:24] Speaking of that, by the way, you know, Doug announced that you spend time with insurances. I think as a physician just going through all the different, I feel bad not to even just for the physicians, but for everybody involved in the healthcare industry, just trying to figure out which way to bill the insurance companies to be a pain. [00:03:39] Doc G: And insurance companies through healthcare are built to deny you to request prior authorizations to retroactively deny things they’ve already prior authorized to change formularies. I mean, the number of things standing in your way actually is, is insane. [00:03:55] Joe: And, uh, speaking of insane guy, a guy who’s here. [00:03:59] That’s a great transition, another great transition joining us from the Best Interest podcast. I’m glad we got him back. He did not deny our claim. Jesse Kramer’s here. How are you man, [00:04:09] Jesse: Joe? I’m doing well. It’s funny. Speaking of health insurance, we, we just had a baby a few weeks ago and yeah, I tried to do my homework as far as like what the cost would be, what would be covered, what would be coming out of pocket. [00:04:19] It was a lot of homework. More, more homework than any individual should have to do, let alone someone who may or may not be. Talking about this kind of financial stuff on a regular basis, but when I saw that you were putting this topic today, I said, you know, it’s a risky topic. It’s a risky topic to bring, but here you put on this premium cast like you do every other week, Joe. [00:04:37] And, uh, I think you’re, you’re ensuring that we’re all gonna have a good time. [00:04:39] ?: We don’t every other week, dude. It’s every week, every, not every other week, but the premium best [00:04:44] Jesse: every, every other week, all of the other, every odd week, but like each other week. How about that? But yeah, you guys missed all the puns in the meantime. [00:04:53] You know, [00:04:54] Joe: I should have just taken the compliment too, involved in all the puns. [00:04:57] Jesse: I, I was trying to get deductible in there. That’s all I was trying to say. I just don’t know how to make a deductible. Pun. Take it away. Joe. [00:05:02] Joe: I got so many questions because big congratulations. In order I saw your pictures on social media. [00:05:07] So first of all, boy or girl and everybody, healthy [00:05:10] Jesse: girl, Maeve, Kathleen a nice Irish name and she’s healthy. My wife is, is recovering really well and everyone is happy and healthy. Yep. I. [00:05:18] Joe: Nice Irish name, but nobody in your family’s Irish, which is strange. [00:05:22] Jesse: You know, we, somewhere, somewhere back in the day, there were some Irish people somewhere. [00:05:26] No, my wife has a pretty good Irish side to her, and I’m, you know, I’m sure I have some Irish in me. I think we [00:05:31] Joe: all [00:05:31] Jesse: do, don’t we [00:05:31] Joe: all Exactly. Don’t we all at, yes. Around St. Patrick’s Day especially. I tell everybody that it’s all Irish all the time, man. We got a great show today. We’re gonna be talking about insurances, but you know what we’re gonna talk about first, Jesse. [00:05:42] Jesse: Mm. Insurance, [00:05:44] Joe: no, no. Before. Well, we are kind of, yes, we’re gonna talk about the fact that this episode is brought to you by State Farm. If you’re a small business owner, it isn’t just your business, it’s your life. Whatever your business might be, you want someone who understands. That’s where State Farm Small Business Insurance comes in. [00:06:01] State Farm agents or small business owners too, and know what it takes to help you personalize your policies for your small business needs. Like a good neighbor. State Farm is there. Talk to your local agent today. I thought it would be fun to, to, uh, characterize today’s show as all the things that you’re agency just don’t want you to know. [00:06:17] And number three will make you LOLI don’t know, maybe we’re gonna, we’re gonna have some fun talking insurance. State Farm people want you to save money on your insurance as well. We’re gonna get to that. We have some other great sponsors. First though. Here is one more, and then we’re gonna get into it. [00:06:32] Alright, Jesse Kramer’s here joining Doc G, Paula Pant and Doug. So let’s roll [00:06:42] our piece today. The inspiration, we’re not gonna talk a lot about this piece, but we’ll link to it in our show notes at stacky Benjamins dot com. It, uh, comes from the Wall Street Journal. It’s written by, uh, Telus Demos and Steven Wilmont. And it’s a nice electric vehicle you got there. Can you afford to insure it? [00:06:58] And the subtitle, EVs are fast and full of technology that makes them fun to drive, but tougher to insure. I think. Uh, doc, let’s go right to you. ’cause I think you own one of these creatures, don’t you? I own two of them actually. And, uh, do you agree it’s difficult to insure your [00:07:14] Doc G: ev Listen, you don’t get an EV to save money. [00:07:17] You get an EV because it’s a really fun ride ’cause they’re cool cars or you buy into this fact that electric is the future. But you’re gonna end up spending money. I mean, first and foremost there costs a huge amount to insure. I remember when I did go to insure it, our, our numbers just jumped up. If you, god forbid, get to an accident, they cost a lot to fix their maintenance costs more. [00:07:38] It is true. You might save money on charging. When I bought my car, I got free charging so I could go and charge it for free. But you end up losing money in so many other places that ultimately it’s a wash. You buy the car ’cause you like it or you like the idea, not ’cause you’re gonna save money. [00:07:53] Joe: So you bought two of them because you knew you were gonna lose money, but you’d make it up on volume. [00:07:57] That’s why I bought the [00:07:57] Doc G: second one. Yeah. Yeah. And I’m figuring by the time I get to my 20th I might, you know, kind of get close to even, this is [00:08:03] Doug: like OG telling me to buy more rivian because I’ve lost so much money. I might as well just dollar cost average down. [00:08:09] Joe: Dude. Did you see though. [00:08:11] Doug: Oh yeah. Rivian. [00:08:12] Rivian stock. What’s going on? Oh, well, VW decided to give them $5 billion. That’ll make a lot of investors optimistic. Big, big comeback. Yeah. I was like, no, [00:08:21] Joe: you can’t do that. We gotta keep teasing. Doug don’t have the stock comeback. Oh, I’m still [00:08:25] Doug: so far underwater. You guys have plenty of material. [00:08:28] Joe: But this idea, and I did not wanna start here, but I think that we should, you know, Jesse talk G really is talking about, this is a cool car, an electric vehicle, but all these carrying costs, I mean, not just the insurance, but all the other things he talks about. [00:08:41] I feel like often we buy the thing and we don’t think about the true cost of that thing. [00:08:46] Jesse: Yeah, what you pointed out there, it’s certainly true across so many things other than electric vehicles. I mean, real quick, I just looked at Rivian stock, by the way. I was on the six month chart and I was like, oh, that it did pop recently. [00:08:56] Then I went out to the five year chart. Whoa, whoa. Yeah, that why Axis changed. Welcome to Doug. I went back and I thought of this idea, I think that was, um, an idea from your money or your life or one of those kind of old school fire books, and it’s the idea, they call it the fulfillment curve. And the fulfillment curve, it measures the money you spend versus the actual joy that you get from it. [00:09:18] And at some point that curve kind of flattens out or even starts to take a negative slope. And one of the main reasons why research shows has to do with those carrying costs where, wow, you’ve got a garage full of 18 model cars because you’re a bajillionaire. Well, you have to upkeep those 18 model cars. [00:09:34] You have to build the space to, to store them and, and those carrying costs just multiply to the point where you’re not really happy with the money that you’re spending anymore. Granted, what we’re talking about today is maybe much more on a consumer level, but yeah, all the money that you spend up front, some items out there don’t really have carrying costs to them, but some do. [00:09:51] They’re almost hidden in a way. And as a consumer, it behooves us to try to do that research beforehand. [00:09:55] Joe: I think like a lot of self-respecting English majors, I find myself to be a hoarder of books, and I’ve had to convince myself over and over throughout my life that what good is this book doing on my shelf when it could spark joy in somebody else’s life? [00:10:09] I’m not reading it, I’m not doing anything with it. Why is it sitting on my shelf when I could either go buy it again in 10 years or, or take it out from the library in 10 years when I’m actually gonna read this again? Like once I’m done with it, why would I keep it around? I thought that same thing, Joe. [00:10:22] Doug: And then that little voice comes in the back of my head that says, mine, mine, mine. [00:10:25] Joe: I know I’m gonna need this tomorrow. Right? I’m, I’m just gonna get rid of it. It was amazing when we sold our house and almost all of our possessions, how few of those I regretted like literally a whole world full of stuff that built up my entire life. [00:10:40] I think there were maybe three things I regret parting with three out of like all this stuff. Paula, you like this idea Jesse’s talking about, about, uh, sparking joy? [00:10:50] Paula: I love the notion of sparking joy because it, the premise behind it is. Not what should I get rid of, but what is valuable enough to keep, and it’s funny, you talk about books, and I’m sitting for those of you watching on YouTube, literally shelves of books behind me. [00:11:04] ?: Maybe that’s why we’re friends, Paul right there. [00:11:07] Paula: But I do get a lot of joy out of books and plants. I, I get a ton of joy about being surrounded by books and plants and bonus, neither of those need to be insured. Mm-Hmm. [00:11:17] Joe: What [00:11:17] Paula: type of plant was [00:11:18] Joe: that? Paula? [00:11:18] Paula: Oh, this is a money tree. Money tree. Oh, I thought that was something, I thought that was something different. [00:11:24] Oh yeah. Jesse, you’ve got a money tree as well. Money tree right [00:11:26] ?: there. Yeah, yeah, yeah. Five leaves on a stem. Right? It brings in money all the time. That’s money. Neighbors always come over, get her some money. [00:11:37] Paula: But there’s not a lot I can say about car insurance. I, I haven’t owned a car in four years and it’s wonderfully freeing. [00:11:43] But then again, I, I recognize that that is not practical for, in the United States, in most parts of the United States. That’s not practical. But if you’re lucky enough to live somewhere where it is, it’s great. [00:11:53] Joe: Where do you see people most guilty of this stock? Like not, not looking over the carrying cost of things. [00:11:58] Like, I think a house number one, right? The first time I bought a house, I’m like, oh, that’s what it’s gonna cost. I can afford that. We went and got a mortgage. I could afford the mortgage, I could afford the monthly payment. Everything was fine. And then I went to Home Depot 17 times and I realized that the journey had just begun. [00:12:13] And then we start dreaming about what we really want in our living room versus the, you know, hand me down furniture that we had. Then I start thinking about redoing the backyard and all this stuff. So I think a house is one, but what are some other areas of our life where we don’t think enough about the carrying cost of this object or thing? [00:12:29] Doc G: So I, I think it runs the gamut. And so let me get a, a bit meta for a moment. I think when we start identifying Yeah, exactly. Me, you never expect it. I think when you start looking towards things to become part of your identity and you somehow feel like those things are gonna fulfill you, and then you get the thing. [00:12:47] It doesn’t. And so then you need all the accoutrements that go with it. And so I think that’s where you get the problem, is when you start looking at these things as, this is going to help me feel enough or help me feel more secure in my identity. And it doesn’t do that. You either, you know, become rational and say, aha, I can’t buy way my way into happiness. [00:13:07] But very few of us do that. Most of us say, this isn’t making me feel good, but that’s because I bought this nice new car. Now I don’t have the best package that goes with it, and I want the automatic driving and I want the cool leather, and I want the better color. And then you start adding on because you realize it wasn’t fulfilling you in a way you wanted to. [00:13:26] And so I think that really, again, can have to do with almost anything we buy when we’re trying to either keep up with the Joneses or trying to identify through buying things. [00:13:36] Joe: Well, and I think Doc, the companies are really good at that. To your point, if you don’t know what you want. Companies will tell you what they want. [00:13:42] And the four letters are MORE, right? You, you. Oh yeah. I mean, [00:13:47] Doc G: and influencers too. It’s, it’s not just marketing, it’s also influencers. Anyone who’s trying to sell you something, whether it’s them, their brand or their product, the idea is to pull you in. And once they get you in, that’s when you realize that through marketing and through social media, we realize that actually the thing we thought we were getting isn’t nearly as good as the next thing. [00:14:10] Joe: Well, and I didn’t mean to start there, but I’m glad that we did because I think that’s kind of an offshoot of this, is that you can afford the electric vehicle, but. Can you afford the stuff that comes with it? And I don’t think we think that enough when we purchase things, even the time involved with just keeping it up. [00:14:24] I want to transition over to the main topic here, which is this idea of insurance, right? Insurance costs through the roof for a lot of people. My mom, even today, uh, talking about how in the next few years they’ve already told her, they’ve warned her that the price of her homeowner’s insurance gonna go up 30%. [00:14:37] It’s gonna be a big, big, big number. Let’s get maybe not meta like Jordan did, Jesse, but let’s kind of widen this out. When you think about insurance, what are some of those base thoughts you have when you start deciding what your insurance package is gonna look like for the Kramer family? [00:14:53] Jesse: Yeah. The approach that I’ve learned over time and, and that I recommend to listeners or readers of my, of the best interest, that kind of thing, is to understand in your personal financial ecosystem what bad things could happen that you wouldn’t be able to cover or recover from using the assets that you already have on hand. [00:15:13] I. Okay, I’ll use myself as an example because we’ve had the life insurance question recently. We had a baby daughter recently. So the thought process is, well, if I get hit by a, a bus or, or neighbor, Doug and I were talking about plane crashes before recording. If a large antique plane, for some reason, the propellers die and it crashes into me on the way home. [00:15:32] That is a, a risk that my family would’ve a really hard time recovering from. The grief would be brief. Let’s, let’s be clear the, the grief they’d get over in a week or two. But the financial impact of that, I thought to myself, well, we have this baby girl. I wanna think about the time from, and this is personal to some extent, but from now until she’s say 22, she’s outta college. [00:15:52] And I want to think about replacing my income to the family over those 22 years. Yes, I discounted it because I’m a bit of a nerd, but that helped me understand the amount of, in that case, term life insurance that I would need because our asset base can’t replace my income for 20 years. So I think if we each apply that logic to our cars or to our pets or to our boats, uh, I mean, ne neighbor Doug was talking about his, uh, he’s got a rare poison arrow dart collection that he said if he lost it, he would just be distraught. [00:16:22] And so I thought, okay, well maybe he needs to consult an, an exotic insurer for that, but that’s the logic that I would approach it with. [00:16:28] Joe: He always threatens to show us the dark collection and we’re like, no, thank you, Paula. [00:16:33] Paula: Yeah. So my only comment is you were talking about plane crashes, but in your hypothetical scenario, you are standing on the ground and a plane crashes into you. [00:16:43] Jesse: I’m driving a car actually, and a plane trying to land on the highway because it’s going down. It, it takes me out. Paula. That’s, it’s been one of my fears since I was a small, small child. [00:16:54] Joe: Wow. What’s the probability? I think Paula, of this game’s all about probability, and I’m thinking Jesse’s prob the probability there might be a little outsized. [00:17:04] Paula: Well, I mean, insurance is best suited for low probability, high magnitude events. So if you’re driving a car and an old 1950s propeller plane tries to land on the highway, but crashes into you, that, that is a low probability, but high magnitude event, I knew it. I think [00:17:22] Joe: that means it’s your day. Like it’s or not your day, you know? [00:17:27] Yeah, yeah. Surprise. Uh, but let’s talk about this more about just broadly insurance doc. How do you begin your quest to get the right insurance package for your family? [00:17:38] Doc G: Some of that a a as Jesse was talking about, is what are the things that I need to make sure get insured, right? So health insurance, homeowners insurance, car insurance. [00:17:49] Et cetera, et cetera. Depending on where you are, I am actually in a place where I’m financially independent and I don’t work anymore. So things like disability are a little bit less important. Things like life insurance for me are a little bit less important, uh, because we’re self-insured. But so first and foremost, as Jesse was saying, you’re really looking for what needs to be insured. [00:18:06] Then I think the next thing you’re looking at is what companies, so for instance, I have access to USAA. I’ve always found in dealing with USA in the past that they’ve done a really good job. So I might look at which insurers I wanna look at. And then last but not least, unfortunately, you then have to decide whether you’re willing to change every few years. [00:18:23] ’cause no matter which insurer you go with, they are gonna hike up your rates. And the best way to bring them down is to switch insurers. And so the next thing you really wanna look at is, how long have I been with this insurer? Because they’re gonna continuously hike rates. That’s what they do. [00:18:36] Joe: Paula, I wanna ask you about what Doc said, the opposite side of that. [00:18:41] Where do you begin to draw the line? Well, like where do you go? Yeah. Okay. I know there’s insurance for that, but I don’t need this one. [00:18:47] Paula: Anytime that you start thinking of insurance as a substitute for saving money to pay a bill in some type of a reasonable manner, right? So if we’re talking about replacing your roof, a homeowner’s insurance with a low enough deductible, that you’re really hoping that it’s gonna cover the cost of your roof replacement, that’s not what homeowner’s insurance is for. [00:19:09] Like you as a homeowner are supposed to pay out of pocket to replace your roof every 25 to 30 years. But homeowner’s insurance with a high deductible such that if your house catches fire and burns to the ground and you’ve now you’ve got like a $300,000 bill to pay, alright? You can’t reasonably save $300,000, but you can reasonably save 10,000 or 15 or 20,000. [00:19:32] So that’s the delineating line. So you hear about insurances like jewelry insurance, unless you have some very, very, very exp, I mean, unless you’re like Queen of England, that’s something that you should be able to pay out of pocket to replace. [00:19:47] Joe: One of the few pop preferences you can reliably make. Paula, yes. [00:19:51] The royal family. Unless you’re Meghan Markle, you can’t. Uh, yeah. Uh, Jesse, I wanna ask about that because, you know, she mentions high deductibles. Here’s a problem that I always saw when I was a financial planner. I don’t know if you guys see this as well, and that is that people just beginning in life, they have no money. [00:20:08] They look at the cost of these insurances, right, going through the roof everywhere, as Doc G said. And so they jack up their deductibles, but they haven’t saved any money yet. How do you convince a young person just starting out that this is not maybe the place, or, or do you think it is the place to save money? [00:20:25] I dunno. [00:20:25] Jesse: Everybody starts at essentially square zero in some way, shape or form. I guess some people just get a natural leg up. But for the people that you’re describing there, Joe, I think there’s a reason why if you look at, some people call it the financial order of operations or, or whatever your term is for what’s the smartest thing I should be doing with my money next? [00:20:43] One of the first steps. In all the lists that I’ve seen is saving up enough of an emergency fund to cover your deductibles. That’s almost always one of the first ones because the risk that we’re talking about here today, and this really is a conversation about risk. And at some point I hope we come back ’cause I think it’s really interesting. [00:20:59] Insurance companies are amazing at assessing risk and, and it’s a fun point to talk about. But the whole idea is that as a young person, the, the, and we don’t have many assets, the biggest risk that we’re exposed to is something where in insurance might not kick in or, or we would really want to have an insurance policy to cover us against that risk so long as we can pay the full deductible first. [00:21:20] And so, yeah, I suppose some people, Joe probably are in a position where they don’t quite have enough of an emergency fund yet. To cover that high deductible. And that’s a tough place to be in. And I think that’s why it’s the best advice we can give them is to, to scrap and, and to save and, and to watch their expenses and eventually to build up that emergency fund so it can cover that deductible. [00:21:42] Joe: I love that. ’cause I just have to tell people, you know, just stop eating out at restaurants for six months. I mean, just do not raise the deductible on your insurances. ’cause the second you do that, you’re gonna get in an accident and then it all spirals outta control before you’ve even had a chance to start Doug. [00:21:56] Doug: Yeah. A question actually for you that maybe some of our listeners might have, which is, ’cause I hadn’t thought of that. When you’re factoring or figuring out your emergency fund, don’t forget to figure out what your deductibles are, but you don’t necessarily have to add up. Well, let me ask, do you have to add up all the deductibles across all of your insurance policies? [00:22:14] That’s a big number. And they’re not all gonna hit. Even though you might be out of a job, you’re not gonna have to make claims on every one of your, so do you just take the highest one? Whatever the worst one is. Jordan Jock. [00:22:25] Doc G: Yes. Yeah, I mean, I definitely would suggest doing the highest deductible. And I think that’s, that’s the beginning for your emergency fund is I think the first step in your emergency fund. [00:22:35] Your first goal is, is being able to cover your highest deductible, uh, because as you were saying, the odds are you’re not gonna get two or three of these at once. Fingers crossed. Uh, but you should at least be able to cover your highest. And some people would argue there’s always the argument. I mean, if we wanna get into real details, it’s, you know, the, the argument for young people is, do I put my money in my 401k up to the match or do I put my money into the emergency fund, which covers three to six months. [00:22:59] Now, some people would suggest don’t do whole three to six months. Maybe you start with an emergency fund up to your first deductible, then you start putting your money in your 401k up to the match, and once you hit your match, you then go up back and fill out that emergency fund to cover, you know, three to six months for getting technical. [00:23:17] Paula, you like that order? [00:23:18] Paula: Yeah, I, I hadn’t actually thought about neighbor dog’s question. I had previously thought about it in terms of this is the auto deductible, this is the home deductible, this is the health insurance deductible. But you’re right, it’s unlikely that all of them are gonna hit at once. [00:23:32] Like you get into a car accident, you, I guess, okay, I can see the car in the health. [00:23:36] ?: You run into your house. Yes, that’s it. Run into your house and end up in the hospital [00:23:41] Joe: and no guys, your house just burns down. Your house just burns down and you’re driving to work and you’re crying. You look in the rear view mirror and there’s a plane coming at you while you’re going down the highway. [00:23:50] Jesse: An antique plane. An antique plane. You guys gave me grief for my plane situation. And yet you’re talking about driving your own cars into your own houses, as if that’s more likely. [00:24:01] Doug: Ask og. [00:24:02] Joe: Yeah. Yeah. He’s got kids that have done that. Wait till your daughter gets older. Jesse. It won’t be so funny when she decides she’s, she’s pulling the car into the garage and maybe threw it. [00:24:11] Yeah. Her assigned parking [00:24:12] Doug: spaces in your living [00:24:13] Joe: room. [00:24:14] Doc G: Yeah. Here’s another thought to bring this full circle and totally throw us off. Talk about insurance going up when you are child. Then gets their driver’s license and you have to insure them on the electric car. ’cause then you have pretty much a, a young kid driving a sports car in this case. [00:24:31] And so, and that’s where your, you don’t expect [00:24:32] Joe: that either. That is where your hair went, right there. Yeah, exactly. Jesse, I wanna get back to you because you made a bunch of actuaries in our audience. Really excited when you said, I love the way insurance companies price the insurance man. I hope we get back to that. [00:24:44] So, so let’s give the actuaries their time in the sun. What did you mean by that? [00:24:50] Jesse: Yeah, I guess what I meant was from a math nerdy point of view, all I was trying to say is that, um, insurance companies are in the business of assessing risk and pricing that risk appropriately, and no pun intended, ensuring at the end of the day that they turn a profit despite any sort of payouts that they might have to make. [00:25:09] And so when we look around us and we say, well, car insurance is going up, homeowner’s insurance is going up. Why? Like, why are these insurance policies? Why, why are, why are they going up? Why are the premiums going up so much? Some of it might have to do with say just general inflation and you know, we read that article that we talked about the EV article. [00:25:25] It talked about the cost of certain parts is higher for EVs and Okay. That that’s certainly true. But a big thing that, this is a bit of more of a theory than a fact, but follow me here when it talks, when we talk about like homeowners insurance in Florida, well, there’s a lot of uncertainty about what future years weather cycles are gonna look like. [00:25:43] And if I were an insurance company right now, I’d be looking at hurricane barrel. Yeah. I think I’m pronouncing that right. You see that, you guys see that in the news, one of the biggest, strongest hurricanes Mm-Hmm. This early in the hurricane season ever. And you say to yourself, boy, I’m not really sure what future years hurricanes are gonna look like. [00:25:58] And when there’s that uncertainty, what’s a synonym for uncertainty? It’s risk. Uncertainty is risk, and therefore insurance companies have to price that into their policies, which I think is a big reason why certain types of insurance policies are inflating as quickly as they are. [00:26:13] Doc G: Doc, I wonder if there’s a little bit of a sucker factor though, because basically, if you have been in one insurance policy for a few years and you go to a new one, they’re gonna cut your rates. [00:26:24] They always do. Everyone. That’s how you save money on insurance. So the question is, actuarily, was the first insurance company wrong, or is the second insurance company right? Or is the second insurance company suckering you in and they’re pretty much paying for you through their more mature insured customers, and then they’re gonna eventually pull you up. [00:26:43] Joe: There’s actually another reason. I don’t know, uh, uh, Jesse, you’re nodding your head. You wanna take that? [00:26:47] Jesse: Oh, no, I, I was just nodding because I was like, Jordan’s making a really good point here, but I, I don’t have any sort of insights. [00:26:53] Joe: I will tell you, I will tell you what the reason is. You. You know, you gotta remember that these are all state regulated and maybe you can fool a regulator for a year or two or maybe three. [00:27:02] But because it’s state regulated, to make sure these insurance companies don’t gouge. The worst thing I like hearing when I go into online forums is this company’s ripping me off. They might be pricing it in a way that isn’t competitive. They might be doing some stuff. I think it’s possible for insurance agents to rip you off, but the way they do that is using a square peg to fill a round hole, right? [00:27:22] They’re using the wrong product to solve the thing because it gives ’em a higher commission. But when it comes to the product itself, different companies I’ve found cater to different types of people and cater to people with different life circumstances. And as an example, when it comes to auto insurance, I had, uh, two different Allstate agents tell me the reason why you price these policies on your birthday is because different companies are interested in different bands of people. [00:27:50] And at some time you’ll have a birthday and you will exit their band of where they wanna compete. They have all their advertising for one band of people. They, they can’t advertise to everybody and be everything to everybody. Now, they’re not gonna tell you that. They’re not gonna say, Hey Jesse, we’re gonna raise your rates because you’re not really interesting to us anymore. [00:28:09] They wanna keep getting as much money outta you as they possibly can. But when you no longer factor into this key group of people that they service anymore, that’s when the rate grows. So it’s less doc about the insurance company than it is about the changes you’ve experienced in your life, whether it’s age or income level, or the place you move to, whatever that circumstance may be. [00:28:31] You’re looking at me like you don’t [00:28:32] Doc G: believe it. Well, I’m just saying I believe that. But interestingly enough though. By changing policies, you’ll all of a sudden get some of that money back. ’cause you’re [00:28:39] Joe: interesting to [00:28:40] Doc G: another company, to a different inch. [00:28:41] Joe: You are entering their band. So you may exit, as an example, Allstate’s Band, and you may enter State Farms ban. [00:28:48] All of a sudden you’re interesting to State Farm and you weren’t interesting to Allstate anymore. And then 10 years later, you’re not interesting to State Farm anymore. Sorry, state Farm. And then you’re, you’re now interesting to Geico or whoever it might be. I found that rationale that I’ve, uh, had explained to me maybe 30 years ago. [00:29:05] I’ve never had anybody say anything different. I talked to, uh, doc, you’ve talked to Amy Finkelstein before, right? The insurance? Um, I don’t think so. You quoted her before. Have I? [00:29:13] Doc G: I don’t remember. Maybe I discussed an article in quoting her. [00:29:16] Joe: Yeah. Yeah. Yeah, we had her on the show and she agreed with that assessment. [00:29:20] Uh, Jesse. [00:29:21] Jesse: Yeah. What do you guys think? And when you’re talking about shopping around to different companies, comparing different companies, have you guys ever worked with an insurance broker? Am I getting that terminology right? Someone who can, who can get policies from, or compare policies on your behalf from a bunch of different companies all at once? [00:29:36] I mean, positive experiences, negative experiences, money saved, too expensive. And any thoughts [00:29:41] Paula: guys? Paula, what do you think about brokers? I’ve worked with mortgage brokers, many mortgage brokers. It’s been so long since I have shopped for insurance, and I can’t actually recall the last time that, to the best of my recollection, I think I just talked to an agent. [00:29:56] But I mean, we’re talking years and years ago at this point. [00:30:00] Doc G: I think where you see people do that a lot is with health insurance, right? So if you’re talking about homeowners or car insurance, you generally don’t necessarily need a broker, but I. When it comes to health insurance, a lot of people use health insurance brokers and my understanding is the way they get paid probably doesn’t come from you, but probably comes from the company that you buy the insurance from. [00:30:17] So I’ve heard that it’s very reasonable, especially if you’re having issues with health insurance, to use health insurance brokers. For the rest of them, I’m not sure you gain much. [00:30:26] Joe: We’ve got a great discussion going here. I wanna talk about, well, let me give you my take on that. By the way, before we, ’cause I was pivoting to the end of the first half here. [00:30:35] I like brokers that look at lots of different companies, but I also like the fact that then not only do they compare the companies, but they. I’ve noticed a lot of brokers that broker, a lot of different companies also have a better feel of the strengths and weaknesses of different companies and where the claims truly come in. [00:30:55] Like they see that, you know, this company handles claims well here, and another company doesn’t handle claims, where if it’s a agent working with a single company, um, they just know what their company does and doesn’t do really well. So, a bro, I love talking to brokers about just the business in general, you know what I mean? [00:31:11] Like what the landscape looks like. I wanna ask, because Doc, in the second half, I wanna open with this question that we’ll put out there now, but we’ll answer here in a few minutes, which is, you talked about comparing insurance companies, you mentioned USAA as a company. What do you guys do when you’re comparing insurance companies? [00:31:27] Like what are you serious to look at? What are you looking for? Why are you comparing? We talked about price and I think that’s the big one, but is there something else you look at? We’ll talk about that next, along with, we got a great question. We’re doing this live on YouTube. We’ve got a fantastic question about the big insurance that nobody wants to talk about. [00:31:43] Long-term care. I wanna ask you guys about that. I also wanna talk about things like pet insurance and ask about that. So. Lots more to come. But at the halfway point of every Friday episode, we have this incredible tooth and nail fight between our three frequent contributors, og. And we’re gonna keep the GS together today. [00:32:03] Doctor, you’re gonna play for OG and Paula Pant and, uh, my mom who never plays for herself so she doesn’t like doing the stairs. So, uh, Jessie, ’cause she’s not coming downstairs, you’re playing on behalf of Mom Jessie. That means good news and bad news for you. You want the good news or the bad news? [00:32:19] Jesse: I think I remember the bad news from the last time I was here, so gimme the good news this time. [00:32:23] Joe: Well, the good news, the good news is, is you are tied for last, which is fantastic. ’cause that means you don’t have to guess first. So you have six. Paula has six because mom beat Paula last year. That means that you’re gonna guess in the middle. OG has opened up a lead now he has 10 points. He’s four points ahead. [00:32:45] And now that’s why we put Doc G there. ’cause. God knows, doc G never wins anything. So [00:32:50] Doc G: I’m the great equalizer. There’ll be three points after this week, [00:32:53] Joe: and we said that I think the last two times you’ve been on, you’ve won, haven’t you? [00:32:56] Doc G: Not recently. I had a streak of like two or three way back. You did have a streak? [00:33:00] Yeah. Yeah. [00:33:00] Joe: Let’s see [00:33:01] Doc G: if you can get it, [00:33:02] Joe: see if you can get it back together. All right. Doc’s got 10. Jesse’s got six. Paula’s got six. Doug, uh, what do we got going on today? [00:33:15] Doug: Hey there, stackers. I’m Joe’s Mom’s neighbor, Doug. It was this month, 332 years ago in 1692 that the first five hangings of the Salem Witch trials occurred in Massachusetts Board to Tears. While they waited on the invention of television, the public decided to string up some entertainment. Oh, what? Too soon? [00:33:37] Too soon, and gathered around the gallows to watch the gruesome executions. Come on, kids. It’s gonna be awesome. Thank God we got better entertainment. Now, I’d hate for anything to happen to my psychic Irma. People tease me for going to ask Irma for help, but she’s correctly predicted everything in my life since I started seeing her two years ago. [00:33:57] She said I’d be successful at public speaking and voila. She told me I’d be admired for my intelligence. Duh. She predicted I’d get even more fit than I was when I first saw her and look at how I’m filling out these stretch pants. And she foresaw that. I’d only get more handsome with age. I mean, she’s a modern day Nostradamus, or should I say Nostradamus? [00:34:20] Huh? Huh? If only, if only I could get her to figure out where I’ll meet my next girlfriend. Today’s trivia question is how many people in total were hanged in Salem for the charge of practicing witchcraft between 1692 and 1693? I’ll be back right after I see if Irma has tomorrow’s Powerball numbers. [00:34:47] Joe: I, I love where you go from public hangings. Two Powerball numbers. Yeah. That’s what we do here. I’m skipping a jump doc. Have you been to Salem? [00:34:56] Doc G: Mm-Hmm. And I’ve never been to a witch [00:34:57] Joe: trial either, so. No, that’s good. You were just missed it slightly before your time. Right? What do you think? Two years of witches [00:35:07] Doc G: being hung? [00:35:07] So how many were hanged in two years in Salem? Mm-Hmm. I, I don’t know why I am, I’m remembering that they did other things besides hang them. I don’t know. Like, didn’t they like drown them or, I don’t, I don’t remember. I thought they did some other things, so I’m gonna guess it’s a, it’s a lower number than you’d expect. [00:35:23] Um. I’m gonna say five. [00:35:26] Joe: Five [00:35:27] Doc G: is [00:35:28] Joe: doc’s number. I think. I think it’s low, you know? Do you think any of them had insurance? We’re here talking about insurance and, [00:35:34] Doc G: and [00:35:34] Joe: did it [00:35:34] Doc G: cover hangings? That’s [00:35:36] Joe: right. They had a hanging exclusion. Uh, if they find you to be a witch, [00:35:40] Doc G: if you were Devil’s Spawn. [00:35:43] Joe: What drives me crazy about that time, that whole thing about them, you know, submerging people in water and if you died, you weren’t a witch. [00:35:50] And if you lived, you were, and then they killed you. Yeah. You’re like, I don’t, that’s a rough go man. That’s worse than driving down the highway. And you’re hit by it. Heads [00:36:00] Doug: I wind tails you lose. [00:36:02] Joe: Yes. Uh, Jesse, what do you think? Doc is the number at five, which is over two years. [00:36:07] Jesse: I’m gonna go higher, but I feel like if the number was outrageously high, then maybe it would, it would stick out in our, our minds a little bit more. [00:36:16] I. [00:36:18] Joe: Not something you think about all the time is the Salem Witch trials. [00:36:21] Jesse: Yeah. Yeah. It’s been a while since I thought about them. Um, and, and Steve, when you guys were talking about drownings, I, for some reason I thought of the Monty Python skit about, is she a witch burner? What else? Burns wood and, and wood floats. [00:36:33] And is she a duck? Is that, am I ringing any bells here? Anyway, anyway, some of the listeners out there are vaguely familiar what I’m talking about, but they’re probably saying I’m butchering it. I [00:36:43] Joe: just think it’s horrible, Jesse, how the Salem Witch Trials brings hours and hours of comedic entertainment except to these people, right? [00:36:52] Jesse: It’s not good. It was not good for them. It was not good for them. And in fact, I’m gonna say it was not good for. 19 of them is gonna be my best. [00:37:00] Joe: 19 of them. All right, Paula, you got five and you got 19. [00:37:05] Paula: Ouch. It. Yeah, that’s a hard over under man. Alright. I do recall hearing that in addition to hanging, one of the other ways that they would murder alleged witches is through drowning. [00:37:17] And I, I think the idea was if you float, then the water is rejecting you and therefore you are a witch. If you sink, then the water has accepted you and therefore you are not a witch. So you still get killed either way. But the reason they were reluctant to do a float test is because if a person sank and therefore was exonerated from being a witch, there would be this huge public outcry because then the public would know that they had accidentally killed an innocent person. [00:37:50] So in order to avert that, then you may as well hang them. [00:37:54] ?: Yeah. [00:37:55] Paula: And then there would be no public outcry because you would never, you wouldn’t run the risk of exonerating an innocent person. Are you saying [00:38:02] Joe: life is all about going into it with no [00:38:04] Paula: apologies. Well, it was basically, it’s like a PR calculation, right? [00:38:09] Right. If hanging, then no negative pr. If floating, right. If floating, then there is assuming a 50 50 probability of she drowns or she doesn’t, there would be a 50% chance of negative pr. [00:38:24] Joe: I could see the first, when the first person sank, they all turned to the guy and go, Earl, I don’t think you thought this out enough. [00:38:29] Hmm. Oh, my bad, my bad. I’m sorry. [00:38:33] Paula: So what’s your number, Paula? So I’m gonna guess that more people were hung than were, uh, floated in the water. So I’m gonna go with 20. I’m gonna take the over going even more. All right. [00:38:46] Joe: We’ve got five. We got 19, we got 20. We’ll see who’s right in just a second. Doc, you started off saying you thought the number’s a lot lower than people think clearly your number was a lot lower than what Jesse and Paula think. [00:38:59] You’ve got five way short of the number they had you thinking, uh, maybe this mythology’s a little outsized, or you think you’re maybe not gonna win this one. [00:39:10] Doc G: Well, I always think I’m not gonna win this one, so let’s, let’s please, let’s be honest with that first. Um, but I, you know, I don’t know. I just, I don’t remember it being a huge, huge number, but I don’t know, you know, maybe there were many nameless, you know, witches who died and. [00:39:25] We just don’t talk about it. [00:39:26] Joe: Jesse, you had 19, which sounded a lot different than Doc G’s until, uh, Paula joined you capping your upside. But do you still feel good? You think it’s less than 19? [00:39:35] Jesse: Yeah. No, you might accuse me of witchcraft here, but I had this gut feeling that Paula was gonna guess 20 and I kind of wanted the under. [00:39:42] So that’s why I went with 19. [00:39:47] Joe: That is, I think we might have to float Jesse, [00:39:50] ?: before I float, [00:39:53] Joe: I float. [00:39:54] ?: The water rejects me. [00:39:57] Joe: Well then we gotta do the second one, which I don’t, I don’t know. I don’t like this. A kind of kinder, gentler show. Pauly feeling good with the upside. [00:40:04] Paula: Yeah, I feel decent with the upside. [00:40:05] I was hoping that Jesse would guess 10 because I would feel really confident if like my guest could be 11 or something. But you know. You make two with what you have. We’re so [00:40:13] Joe: cynical. We think there’s lots of witches, tons of people. We’re gonna find out how many though. Who’s right here? Doug. Who’s taking home the win? [00:40:25] Doug: Well, hey there stackers. I’m soon to be lottery winner and guy who’s just hanging around. Texarkana. Oh God. Joe’s mom’s neighbor, Doug. Hey, speaking of hanging around Lee Lisa, that’s what you could come up with. The first person to be charged in the witch trials of July, 1692 was Bridget Bishop who wins the prize for being accused of the most counts of witchcraft of everyone. [00:40:49] Hank that year. Her offenses included having dubious moral character hanging around taverns, not literally that hanging part came later and dressing flamboyantly. Good thing those trials are over with. ’cause I wouldn’t last a week in that town. Today’s trivia question is how many people in total were hanged for the charge of practicing witchcraft between 1692 and 1693? [00:41:13] The answer, although burned alive at the stake, is a phrase that’s become synonymous with the Salem witch trials. No convicted witches were ever burned in the United States. Nearly all were hanged and one person, a man was slowly crushed to death with rocks like a weighted blanket. Experiment gone really wrong after the first batch of five were executed in July, 1692. [00:41:37] That part was in the question doc. People continued turning in their neighbors as witches, which probably just to have something to do. I’m glad we’re all living much more in harmony today. Doc G was under. By 14, and Paula was over by one because between 1692 and 1693, a total of 19 people were executed for the dubious crime of witchcraft, which means Jesse is our winner because of his stealthy Googling skills. [00:42:09] Jesse: I know how this looks. [00:42:11] Doug: It looks pretty damn bad, dude. [00:42:14] Joe: It ain’t good. I think we gotta haul him out back and see if he floats. I know how this looks. Can I share my screen with you guys? Can I share my Google [00:42:21] Doc G: history with you guys first? Has never been invited back? Just make sure you get all rid of all the porn [00:42:25] Jesse: first. [00:42:26] First. Yeah. First the terrible jokes, and then out of all questions, a witchcraft question gets it right. [00:42:33] Doc G: Well, let’s look at the positive side. We, we made sure that OG didn’t get it. That’s right. Yes. [00:42:38] Joe: Yes. Team effort there. Nice job, Jesse. Time for the second half of this discussion brought to you by deposit accounts.com. [00:42:44] Doc, you know what happens when you go to deposit accounts.com. What happens, Joe, I’m dying to know you. Find out that those brick and mortar banks might not have the best interest rate for savings accounts, checking accounts, or for cd. So if I go to deposit accounts.com, I’m going there right now as we’re recording this. [00:43:02] It says you could compare more than 275,000 deposit rates from over 11,000 banks of credit unions, all for free. The top 1% of all savings accounts in the United States this week. Down a little bit from when we’ve recorded this, uh, previously to 4.94. It was up, uh, right around 5%. So a little bit lower. [00:43:20] But here’s the big kicker. The national average savings account pays only half a percent 0.51. So you can actually earn some serious money just by looking at that emergency fund and where you’re keeping it by going to deposit accounts from lendingtree@depositaccounts.com. Alright, let’s, uh, dive into the second half of this. [00:43:39] I mentioned that I wanna open with this whole discussion about insurance companies. Doug, I’ll start with you ’cause you brought this up. You’re like, you know, USAA. And I like USAA, so I might co What do you really look for an insurance company besides that cheapest rate? I mean, it’s always claims management. [00:43:55] Doc G: So we’ve, my family’s used USAA for years and almost every time whenever we had a claim, they were easy, they paid in full, you didn’t have to argue with them, et cetera. I’ve also had other companies, Allstate, to name one that I used. And actually we had our house. Our house got robbed and we had to fight with them on everything. [00:44:14] And it was a painful, painful process. So not only are you dealing with the issues of the trauma of having someone break into your house, but then you’ve gotta argue and we ended up arguing for six to 12 months. Oh, same thing happened with another insurance company where my in-Laws house flooded and they were consistently giving us lower estimates than we could find people to do the work for. [00:44:36] And it was just, you know, it’s painful. It’s so, it’s about the claims and some would argue even paying maybe a premium if you have a company that really pays the claims well. [00:44:44] Joe: Paula, this is why whenever somebody tells me, well, I just go with the cheapest rate, like I roll my eyes. Mm. [00:44:49] Paula: Yeah. It’s unfortunate that getting the insurance companies to do the thing that they say they’ll do like to, to fulfill their end of the bargain is as difficult as it is. [00:45:00] But story after story that I’ve heard is like that. [00:45:04] Joe: This is a, this is a hundred percent Jesse. The first thing I look for. In fact, the reason why. I said that, uh, having State Farm be our sponsor of the Friday show is because of the claims experience, bar none. And State Farm probably doesn’t want me to say this out loud, but I’ll say State Farm doesn’t have the cheapest insurances. [00:45:21] State Farm is beatable when it comes to rates. I know they’re not gonna like that, but I’ll tell you what. The reason I said yes is because their claims coverage is incredible and their reputation is Jake from State Farm is there. Right? I mean, the reason they do that in their advertisements is because you need these people and bam, everything gets taken care. [00:45:38] And obviously every company has, I’m, I’m sure I’m gonna get letters. People tell me how much they hated State Farm and they had a problem. You’re gonna have problems with any company that big. But generally when you look at the big numbers, claims experience, what else do you look for, Jesse, when it comes to your insurance company? [00:45:51] Anything? [00:45:52] Jesse: Well, I, I was thinking, I mean, my first answer when you asked this question before the. The witchcraft break was, uh, just like service in general. Mm-Hmm. But I, I think claims management is just a big part of the service model. The idea of when I call, am I gonna be on five minutes of hold or is there a human I can talk to? [00:46:09] And, and how do they treat me? And is the process easy? I think Doc G and Paula were right on the, the biggest part of the process is will I get the money that I expect to get? But I just think it’s interesting how the insurance model in general is, is a business where, and there might be other businesses like it. [00:46:26] I’m curious if anything comes to your guys’ minds where the company that you’re hiring still is kind of incentivized to work against you in some pretty big ways. And so therefore, some companies out there have realized that probably the better long-term play is to take the high road like Warren Buffett would say, and actually cooperate with their customers and make them long-term customers. [00:46:47] Other companies out there are probably taking the, the low road as it were, and saying, well, if we can not pay out on this claim, at at least it’s more money in our pocket today. [00:46:56] Doc G: I think you guys are, are missing the most important factor when it comes to insurance and that is the quality of their TV commercials. [00:47:02] I mean, basically that’s what’s, do they have an emu? Yes, exactly. If they have an emu, a gecko, I [00:47:08] Jesse: dunno. And Doug, there was a cool episode of Freakonomics recently about mascots getting in trouble or, uh, not mascots necessarily, but spokespeople and specifically they mentioned Subway and, and Jared and that whole, whole saga, Jared. [00:47:21] But one thing they talked about was like, there’s a reason why Geico has an animated lizard and the idea is the lizard will never, ever get in trouble. So I just thought that was kind of cool. That is [00:47:29] Joe: interesting. They’re like, they’re liabilities. Less insurance companies. Like taking care of their, taking care of their insurance like, like they got the Geico as insurance or the gecko is insurance. [00:47:39] I guess not the Geico. Uh, Geico as the gecko boy, that’s tough. There’s another thing though, Jesse, that you brought up even with your question with run brokers, if I’ve got an insurance agent that will teach me which insurances to cut, which insurances to have and does a really good job of just explaining the landscape, I will pay more for that too. [00:47:56] I’m definitely, if somebody will, will instruct me about how this actually works. I’m all for having those people on my team, which is sad ’cause I feel like that doesn’t happen a ton. I feel like with a lot of insurance agents I’ve had that education has been lacking. I remember when my house got robbed. [00:48:13] I had an insurance broker at that time that I thought was pretty good, but I remember calling them and you know, Cheryl and I are both just distraught. We’re in Chicago and our house in Texarkana has been broken into and the police are at our house and our neighbors at our house. I called the insurance agent. [00:48:28] The insurance agent just goes, yeah, you don’t call me for that. You call this one 800 number. I was like, dude, this is not the time to tell me to call a one 800 number. At least get on a joint phone call with me and talk to, even if that’s what I do, and I drop them immediately. I was like, Nope, nope. It, so it wasn’t even the claims experience as much as the fact that I wanted somebody to walk me through it. [00:48:51] I wanna talk about some of these insurances that we find either have really big fans or really big detractors against, and that one I brought up earlier, pet insurance. Paula, what do you think about something like, uh, pet insurance? [00:49:04] Paula: It depends on how much money you have and how much big your savings account is and how much leeway you have within your budget. [00:49:11] If you have enough money that you, so Ima imagine you walk into the veterinarian’s office with your pet. The vet says you’re gonna need this $10,000 procedure if you’re like, I’m not even thinking about it. Yes, yes. A thousand percent, yes. Cool. You don’t need pet insurance, but if you’re like, oh, you can keep it, then yeah, get the pet insurance. [00:49:36] Basically. That’s a long way of saying do you have enough money to pay out of pocket without it creating a huge upset in your financial life or not? [00:49:46] Jesse: I wanna piggyback on what Paula said there only ’cause I think there are some people out there, and I, I’ve approached, I’ve answered this question before for people and I’ve approached it from the avenue of, for lack of a better term, how in love with your pet are you? [00:50:00] And because I think there are some people out there, like I, we, we fostered a dog and we adopted her herself and she is a part of our family and we love her. That said, I do think there’s a price point for certain surgeries above which we have to have a really hard conversation, like a really, really hard conversation. [00:50:16] And I wouldn’t want anyone to have to have that conversation. But there does come a point where we say, I. Are we gonna spend $10,000 to keep this animal alive? And for some people it’s an easy yes. Like automatic, they won’t think twice about it. It’s like their child that they would spend any amount of money. [00:50:31] And I think that person would benefit from pet insurance. Like if you can pay $40 a month for the rest of the pet’s life in order to prevent having to pay $20,000 out of pocket for cancer procedures later in the pet’s life. I think the math works in your favor. On the other hand, if you’re the kind of person who say, Hey, we’ve got eight kids at home and we’re trying to put food on the table, and if Roscoe needs a $3,000 surgery, he’s 10 years old, he’s lived a good life. [00:50:56] I think in that case, maybe pet insurance, maybe you don’t need it. It’s a very hard thing. It might get controversial. I might get some hate mail for this, but I think from the numbers, that kind of makes sense. [00:51:06] Joe: Every time we talk pet insurance, we get negativity. ’cause people are definitely on one side or the other of this one. [00:51:12] And it totally, to your point, depends on the person. Doc, you’re. Looking like you’re about to say something. Oh, [00:51:18] Doc G: I was, I was just saying that it, you know, pet insurance’s, not even the question. It’s more, um, you know, the pet life insurance, long-term care, PET insurance. Disability, pet insurance. I mean, this is plane, you know, plane, pet insurance, [00:51:30] Paula: pet driving insurance. [00:51:31] If they ever steal your car, your cat’s walking down the road looks [00:51:33] Joe: behind them. There’s an antique plane coming at me. My [00:51:35] Doc G: broker told me I needed all those [00:51:37] Joe: things. So, you know, you know I mentioned Amy Finkelstein earlier. She is not only an insurance industry analyst, she also is an MIT professor. I’m gonna link to her episode because she walks through a lot of these different insurances, and what she says really goes to both the Jesse, what you and Paula mentioned, but it also with pet insurance in particular. [00:51:57] Pet insurance is one of the few types that the people that buy it are the people who are more likely to use it. Like if you purchase automobile insurance, you’re likely to not want to use it. You purchase homeowners, you don’t wanna use it. You purchase pet insurance. You are clearly a pet lover. You have so much of your life invested in this pet. [00:52:18] You see it as a complete member of the family, not a partial member like Jesse does. Like, uh, I don’t know if it was grandma, we’d do it, but for Fido, nope. You’re, you’re gone. For those people, they’re gonna spend the money, which is why her analysis has been. It isn’t a math problem anymore because you will not quote, come out ahead with pet insurance. [00:52:40] You will have peace of mind because of, of pet insurance. She also talked about dental insurance being very, very close to that as well. Paying out of pocket versus having insurance for most people about the same, but the dental insurance gives you a lot of peace of mind. And once again, I’ll link to that in our show notes. [00:52:57] Let’s talk about this big issue on the other side. Well, before we get there, what do you guys do with the rental car company? Jesse, let’s stick with you for a second. You know, they got all these insurances for your rental car. What do you do with the rental car counter? Do you take those insurances? [00:53:08] Jesse: Uh, April, 2023 Raleigh Durham Airport. [00:53:12] I land hours after my wife and it’s my job to pick up the rental car and the Hertz person was very smooth and, and just, yep. You, this, this, this? Yeah. I, I assume you want to say yes to these things. I go, yeah, yeah. My, my wife set it up. Yep, yep, yep. Turns out I said yes to all the insurances that were covered by my wife’s Chase Sapphire credit card Anyway. [00:53:32] So then I had to call Hertz after the fact and say, I know I said yes to all those things a week ago. I really meant to say no. And thankfully, the very nice Hertz person retracted all those fees. Wow. So what I would say is a lot of people, if you have a credit card with some oomph, which if you’re a member of this personal finance space, maybe you do, because you’ve heard about people talking about points and hacks and this and that. [00:53:51] There’s a good chance that you might have really good rental coverage anyway through as a credit card benefit. And that way you can say no to everything at the rental counter. [00:53:59] Joe: Paula, when [00:54:00] Paula: you have a car, it’s a rental car. Are you on that train? So my credit card covers everything, but I have never heard of a rental car company that will bill you and then retract the payments. [00:54:12] That’s, that’s incredible. That makes me wanna rent from Hertz. [00:54:16] ?: It [00:54:16] Paula: was witchcraft. Wow. Wow. That, yeah. That’s absolute witchcraft. I, I reject all of the insurances because my credit card covers everything. So it would be redundant to have anymore. Jesse waved [00:54:29] Joe: his hand and went, I am not the premium you’re looking for. [00:54:32] Wow. It was over for anybody. Paula doesn’t even get that reference. Has no idea what the hell we’re talking about. [00:54:36] Paula: Uh, I’m not the, wait, what’s the original? I’m not, these are not the droids you’re looking for. Oh wow. Paula, I’ve never seen the movie. I don’t even know which movie it is. I see one. She’s not which droids. [00:54:48] But I’ve heard the reference in pop culture enough. That’s from sleepless in Seattle. [00:54:56] Joe: Let’s go the other direction. Uh, let’s talk end of life and uh, this idea of long-term care, catastrophic illness. Doc. You know, this is a big problem in financial planning. Where do you come down on this idea of long-term care? I think a lot of people can’t afford it, [00:55:10] Doc G: and so we all know the story. [00:55:11] Historically, it was reasonable. Everyone went out and bought it. The insurance companies found they were paying out way more than they had budgeted for and increased. I. Cost of long-term care and often the long-term care costs can go up after you have the policy. So you don’t know what the costs are gonna be from year to year. [00:55:30] There are some interesting ways around it. There are some life insurance policies that have a long-term care insurance rider, and people don’t actually have an interest in the insurance policy, but buy them for the rider. I think the grand majority of people, whether they like it or not, are going to end up self-insuring. [00:55:46] This is one of those places where it’d be nice if there was a legislative change and some states have looked at doing that because the grand majority of people just can’t afford it. It’s just too high of a premium for them. [00:55:57] Joe: Paula, even though I agree with everything that doc’s saying, there’s that phrase, hope is not a strategy. [00:56:03] So just because you say no to long-term care doesn’t mean the risk still isn’t there. And to Jesse’s point earlier, this is all about risk management. When you look at the numbers, the chance that you may have an assisted living situation is still pretty big. So in the absence of insurance, what do you do? [00:56:19] Paula: Yeah, you know, this is one of those low probability, high magnitude events, except I’ll put an asterisk there. I’m not even sure it’s that low of a probability. It’s kind of like a medium probability and high magnitude event. In a perfect world, it would be great to have a long-term care insurance, but given the cost of that, a lot of people, I mean, I’ll tell you, my parents have told me, they’ve said, if, if we ever get to the point where we need people around the clock to take care of us, we can’t take care of ourselves. [00:56:49] They said, take us to Cat Mandu. I. Hm. You know, that’s their plan. Take us to Cat Mandu and we will spend the end of our lives there. [00:56:56] Doc G: And if you are a United States citizen, there is a plan for you. It’s called spend down all your money and then get taken care of by Medicaid. Medicaid, yeah. So you can go to a nursing home. [00:57:04] A lot of these nursing homes are very similar to the people who have insurance go to or pay out of pocket, go to and their Medicaid beds. It might not be the ideal outcome, but it is an outcome that’s not catastrophic in the sense that you’ll be destitute on the streets. [00:57:17] Joe: Mm-Hmm. Lisa Curry, the comedian that helps us write our shows. [00:57:20] When she made her appearance, we asked her about long-term care. And if you remember Doug, she said that if she got to the point where her parents needed it, they lived on a lake, she’d take ’em to the end of the dock and just push ’em off. [00:57:29] Doug: Just, it’s so humane. I love the way it’s so serene. Just a peaceful evening. [00:57:34] Just, and just a little glove globe noise. That’s a witchcraft thing if they [00:57:37] Paula: float or they sink. And what if they float? [00:57:40] Doug: And if they don’t float, well then, yeah, that’s what the cinder blocks are for on the wheel. [00:57:45] Joe: Oh. Oh, no, no, no, no. Uh, Jesse Long-term care. [00:57:50] Jesse: Yeah. My understanding of the long-term care universe is, is exactly what Jordan had said, which is that in recent years, not only have the prices gone up, but as insurance companies were realizing that they had signed up for liabilities, that they couldn’t necessarily match that people who had pre-existing long-term care policies weren’t necessarily getting the benefits paid out that they were expecting. [00:58:10] So it was just like a not ideal scenario all the way around. Medicaid planning is a thing. It’s semi non-controversial, I’ll tell you that much from a moral or ethical point of view. ’cause the Medicaid planning, when you hear that term in financial planning, usually what someone is talking about is ways to hide and or obfuscate assets from the IRS, usually through some sort of trust in order to make someone’s net worth appear less than it is because the assets are no longer theirs, they’re in trust, or they’ve been gifted away or something like that. [00:58:39] So then the person could qualify for Medicaid benefits even though they still have some sort of tat control over those assets that they recently hid. But it is something that a lot of people do take advantage of or, or they think ahead on it. It’s not a great scenario anyway. You cut the cake because these long-term care facilities are so unbelievably expensive. [00:59:00] I, I don’t know if you guys have gotten the details before, but it’s not, they’re horrible to see. Yeah. You know, five, yeah. 15 to $20,000 a month. A month in our area. Right. That’s what I was gonna say. Five figures a month easily. So, uh, it’s tough. It is a tough situation. [00:59:14] Joe: I know for a while, I don’t know if there still is. [00:59:16] I haven’t been that closely related to it, but I do know that for financial professionals for a while, if you help somebody, I. With, uh, Medicaid planning, you were culpable and the government could go after you as well if, if you, you know, help people hide assets. So [00:59:29] Jesse: yeah. All I know is that the situations where I’ve heard of it, there’s always a trust and estate attorney involved. [00:59:35] ?: Yeah. [00:59:36] Jesse: Right. Which I don’t know if that’s because it is such a legally tenuous situation that you definitely want a lawyer in there. Yeah. But it’s, it’s just the fact that we have to go, that some people go to those extremes, for lack of a better term in this situation, just kind of shows you what we’re dealing with here. [00:59:51] Joe: It does, and that’s a great point. That shows you how expensive it is and how, just thinking, what am I gonna do? Am I gonna go to Catman? Do. Am I gonna have somebody push me off the dock? Like what am I, what am I gonna do? I’d rather handle that when I’m younger and, uh, not worry about it later on, [01:00:06] Paula: I, I will make a plug for Katmandu. [01:00:07] You can, uh, you, I mean, you can hire with US dollars in Katmandu. You can live really well. You can hire a huge team of people who can help you. I mean, it’s, it’s actually, if you’ve got us dollars, it’s a great life. [01:00:21] Joe: That’s, uh, our cat Mandu real estate or a real estate professional and travel agent Paula Pant right there. [01:00:28] Paula: Yeah, exactly. Yeah, exactly. I, I do think that there’s a geo arbitrage could be a, a more popular solution. [01:00:35] Joe: Well, this is a fantastic, uh, discussion and obviously there’s still a lot more for people to do, but I hope that everybody who’s hung out with us that you were able to take some things from this to get your journey started, talk to some of the right professionals, make some good decisions, and hopefully come away with better insurance coverages. [01:00:52] I think it’s, you know, and in one hand we wanna have cheaper insurances, but definitely when, when that plane’s coming down the highway at you, Jesse, you wanna make sure that you’re covered. At the very least, let’s talk about what’s going on, where all you are. We’ll have our guest of honor go last Doc, what’s going on at Earn and Invest this week, man, [01:01:10] Doc G: earn and invest. [01:01:11] Interviewing John Hope Bryant from Operation Hope, and we are talking about his book, financial Literacy for All Fastening Conversations. I love this man [01:01:19] Joe: so much. I love this man so much. [01:01:21] Doc G: He is a history buff and so he takes everything that’s going on today and just helps you see it through the lens of history and it’s, it’s just, he’s an incredible guy. [01:01:31] A fun conversation. [01:01:32] Joe: Yeah, if you want to come out, fired up listening to a great interviewer, doc g interview, John Hope Bryant. Holy cow, that’s a powerhouse. Speaking of powerhouse, what’s going on? Ford, anything? Paula [01:01:42] Paula: on [01:01:43] Joe: a for you? You got Laura Ingles Wilder coming on. [01:01:46] Paula: I, no, that’s, uh, that’s just, I’m just cosplaying. [01:01:48] Laura Ingles Wilder. Really? I’m cosplaying little bo peep mixed with Strawberry Shortcake. Perfect. Fantastic. But, uh, let’s see on the Afford Anything podcast, so Jim, quick, he is an expert in accelerating your learning, improving mental cognition, memory focus. So if you wanna learn how to improve your memory, improve your focus, learn faster, read faster, any of that, that’s one of my favorite interviews that we’ve done. [01:02:11] It’s always when I hear somebody, Paula, that has a name like Jim Quick. [01:02:15] Joe: Right. And he’s an expert at going faster. [01:02:17] Paula: Faster, [01:02:18] Joe: yeah. If he changed his name or if he really just said, I gotta take advantage of this. [01:02:23] Paula: Right, right. Yeah. Jimmy Slow, right? Um, no, I think I remember reading somewhere that people are more likely to have careers that reflect their last name. [01:02:34] Like, you know, if your last name is Nail, then you’re more likely to be either a carpenter or a, a manicurist [01:02:40] Jesse: or a Gigolo [01:02:44] Doc G: Respect. Your last name is PornHub, you know? [01:02:50] Joe: Yeah. Most people don’t know that’s a family name doc. It was Bill PornHub. He’s like, what are we gonna call this? Well, yeah, they call it Walmart, so we might as well call it PornHub. Um, Paula, we, we met somebody like that. Uh, I didn’t actually go up and meet her, but there was somebody who like helps influencers Who was in the audience when you and I were at the conference together in Boise recently, and her last name was Prophet. [01:03:16] Remember that. That’s [01:03:16] Paula: right. Yes. Yes. Profit. She, she helps online entrepreneurs. And her last name was Profit. Yeah, [01:03:22] Joe: yeah, yeah. And then I’m like, come on. No. Yeah. And the dancer’s name is really candy. [01:03:31] Anyway, so Jim, quick, that, that does sound really interesting, Paula. And anytime we can, Jim, quick speed, make, make decisions faster, I think is, is an issue. I, I remember Tony Robbins talking about that, that the thing about successful people is they just make decisions quicker, [01:03:45] Paula: right? Yes, exactly. You have to make a lot of decisions, so make ’em fast, move on. [01:03:49] But in order to do that well, you have to read a lot. You have to take in a lot. You have to, you know, and your cognition has to be sharp. So he teaches how to sharpen your cognition. [01:03:58] Joe: Jesse, thanks again for hanging out with us, especially with all the stuff going on in your life. Congratulations on the expanding family. [01:04:06] New dad. That’s so exciting. It’s just a great, great time. I remember those times, but I will still say better you than me Pal. But, but, but what’s happening at that, uh, better Interest podcast of yours. [01:04:18] Jesse: Yeah. Well, thank you for having me on again. Uh, the Best Interest podcast. Oh, oh, we’ve recently, we recently released an episode with Andy Hill to talk all about the pros or cons, the good things, the bad things that you can do with your money as a new parent. [01:04:32] You know, ways to save some money as a new parent, ways to hopefully not spend too much or maybe to prepare for the expenses of being a new parent. So that’s a fun one. And then, uh, before that, talk about, by the way, nice guy. Is there a nicer guy on Earth than Andy Hill? I think one of my first interactions with Andy Hill was seeing him and Paula pant on stage at FinCon together. [01:04:52] Paula: Oh yeah. Austin 2021. Yeah. Yeah, yeah. That was a lot of fun. [01:04:56] Jesse: It’s great. But yeah, Andy was a wealth of knowledge. We’re very happy. He, he stopped by and shared his wisdom with us. [01:05:02] Joe: Awesome. And that’s on the Best Interest podcast. I was kidding about Better Interest, which I will continue to do. But the Best Interest podcast wherever finer podcasts are listened to. [01:05:11] Take a second, everybody right now and just pause this and subscribe or follow best interest, earn and invest and afford anything. Coming up with us next week, a full slate of shows. Again, everybody have a great weekend, Doug. Take it from here, man. What should we have learned today? [01:05:27] Doug: Well, Joe, here’s what’s stacked up on our to-do list after today’s episode. [01:05:31] First, take some advice from Jesse when you’re figuring out how much you need in your emergency fund. Make sure you factor in the highest deductible you have amongst your various insurance policies. Second, take a note from Paula before you commit to a big purchase. Be sure to consider the long-term total cost of ownership. [01:05:48] And if you can’t hack it, geo arbitrage your butt to catman do. But the biggest to-do geo arbitrage. My new favorite phrase now, I love that the biggest to-Do never ever tell Joe’s mom that your psychic said she should cook for you more often. She will not take it as a compliment no matter how much you tell her. [01:06:08] You like her fried bologna flaps. Thanks to Jesse Kramer for joining us today. You’ll find Jesse’s best interest podcast wherever you are listening to us. Now, Jesse’s other show, the Better Interest Podcast only lives in Joe’s head, and you don’t want in there, let me tell you. We’ll also include correct links in our show notes at Stacking Benjamins dot com. [01:06:30] Thanks to Paula Pant for hanging out with us today. You’ll find her fabulous podcast, afford anything wherever you listen to finer podcasts. Also, thanks to Doc G for joining us today. You’ll find the incredible Earn and invest podcast wherever you go, to listen to podcasts, to invest in yourself, like Spotify, apple, overcast, and wherever that place is. [01:06:50] You’re listening to me right now. This show is the property of SB Podcasts, LLC, copyright 2024, and is created by Joe Saul Sea High. Joe gets help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots. [01:07:13] Come say hello. Oh yeah, and before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s Mom’s Neighbor, Duggan. We’ll see you next time back here at the Stacking Benjamin Show.
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