I am so mad right now. It has always been pretty obvious that insurance is just a scam to take your money, but I never had incontrovertible proof until today.
A few weeks back, just before we left Somerville for California, four bicycles were stolen from our garage. Only one was ours, and as we pay renter's insurance every month to "protect" our possessions, we filed a claim to replace the bicycle lost. The insurance company (MetLife) asked for the standard paperwork (police report, receipts, etc.) and a description of the bike. We had paid about $400 a few years ago for this bike and were pleased when the valuation came back at $429! Sweet!
But here's the multi-segmented catch: deductible, depreciation, and actual replacement costs.
I'm no accountant, but here's the financial breakdown:
Monthly premiums paid (total): | -$346.47 |
Value of property lost: | -$400.00 |
Amount spent to replace bicycle: | -$165.00 |
Amount out of pocket | -$911.47 |
Insurance company valuation: | $429.42 |
Depreciation: | -$128.83 |
Deductible: | -$250.00 |
Amount received from insurance company: | +$50.59 |
Net cost of this debacle: | $860.88 |
Net cost if I didn't have insurance: | $565.00 |
Needless to say it didn't pay for me to have insurance. Please comment on this to straighten me out because I need some perspective on the whole thing. I imagine that equating the value of the bike lost and the price paid is not valid because in one case I don't have anything and in the other I have a bike, but I don't know. Any accountants out there? Dammit!
1 comment:
You should sit down with a spreadsheet program and find the 'break even' point in your renters insurance. IE: how big of a claim will it take for your insurance to work for you.
I'm thinking, depending on how much your premiums are and potential depreciation on EVERYTHING, that it's probably only good in catastrophic situations.
Bike stolen= pointless insurance claim
home and all possessions destroyed in a fire= maybe useful if receipts kept elsewhere.
Post a Comment