Last month, a wild thunderstorm swept into the neighborhood. It delivered fierce, howling winds, which caused me to run to the front door to see if the badminton net would survive.
Miraculously, it did, but not the neighbor’s 60′ pine. That came crashing through our back patio and onto the roof. It snapped off – as easy as a piece of raw spaghetti – the 4″x4″ post that supported our cute bistro lights that we hung last summer.
And it demolished the brick ‘buffet’ that we use for staging food during patio meals.
Counting Our Blessings
Fortunately, it was a pine tree, so its branches were as pliant as a Simone Biles joint, causing very little damage to the roof.
I texted the next-door neighbor with the offending tree: “You have someone who can come look at the tree, to remove it?” Silly me – I thought: his tree, his problem.
He texted back:
So I called GEICO. Their Travelers division confirmed that the claim would go through us, and that it would be ‘no fault,’ so hopefully no negative influence on the premium. She said to contract with whoever we wanted to to remove the tree and fix things, and that she would send a property claim pro out to assess the damage. In other words: we’ll cut you a check based on what our tables say the damage is worth, and you’re on your own from there.
In twenty years living here, we’ve never filed a claim on the house. We’ve been fortunate not to have any major issues, and the minor things we handled out-of-pocket. That approach has saved us money in the long run, by avoiding any claims-triggering premium hikes.
Chasing Down Estimates
We had three companies submit a tree removal estimate:
- Express Tree Service surveyed the fallen tree, but didn’t knock, then lobbed over a $2,500 quote
- Baltimore Tree Experts seemed very competent, discussed waddling a huge ‘all terrain crane’ into position, and wanted $8,000 (!) for the job
- The Tree People walked us through how they would use a nearby healthy tree to belay the downed tree (no crane required), and that it would cost $3,850
The decision was easy. We didn’t want the damage and expense of a crane operation. I never talked to the low bidder (Note to shy estimators: don’t waste your time), so he was out. The Tree People had a Goldilocks middle-of-the-road ‘just right’ quality to them. And they had recently competently removed a big ailing tree on our block.
Within a couple days, the tree was gone:
The Travelers claim guy was out the following day, and seemed to take a three wise monkeys approach to damage review.
He wasn’t gone within 60 seconds, but it couldn’t have been more than 5 minutes. His feet never touched a ladder.
He called me later from the office to say that he’d run the numbers and that Travelers would send a $4,263 check in the mail. With our $2,500 deductible, they figured our full loss was $6,763. That was better than I feared, so I didn’t complain.
Resisting the Standard Deductible
The average home insurance deductible is $500, says Motley Fool. That small out-of-pocket expense would seem ameliorating in a crisis, but according to this site, you save 10% on your annual premium if you double the deductible to $1,000. Even more so for $2,500. Forbes says it’s not unusual for expensive luxury homes to have $100,000 deductibles.
Let’s be super conservative and imagine the premium savings of a $2,500 deductible is 10%. We pay $1,361 per year for homeowners insurance, plus $50 for a $1M liability umbrella. (You can read why we added the umbrella here). Ten percent more is $141.
Multiply that 10% by 20 years, which was how long it took us to experience a sizable loss, and probably not too far off the average. The accumulated total of our 20-year savings is $2,820 in today’s dollars. That’s cash in the wallet that easily outweighs the “I’ve been cheated!” feeling you get when the insurer’s damage check has $2,500 automatically deducted from it.
Not Using Insurance Like a Balm
Insurance is for protecting against catastrophic loss. It shouldn’t be like a house-favoring slot machine that spits out cash to salve small wounds in life.
Same is true of some major injuries. We received this mailer this week:
Yes, it’s devastating to lose a child, and I pray it never happens. But it’s not financially catastrophic. You gotta love ’em, but kids are money pits. Even if, in your emotionally-compromised state, you commit to the deluxe solid mahogany coffin with satin-lined interior, it still pales in comparison to the expense of college tuition + orthodontics + summer camp + more milk and cereal than you ever thought possible.
Think of Junior’s funeral expense as a $15,000 deductible. Hopefully, you have that much saved in a rainy day fund. If not, that’s what GoFundMe is for. No friend or relative can resist donating to a child’s funeral. I know I can’t.
Here’s the final cost accounting of the storm damage:
- $3,850 to remove fallen tree from the house
- $1,750 to rebuild patio brick buffet
- $400 to replace one broken slate shingle and repair mangled gutter
- $100 to replace busted bistro lights
Total is $6,100. That’s $700 less than Travelers’ loss estimate, or about $1,800 out-of-pocket. Not bad, considering.
Of course, that doesn’t include about 12 hours of my time cleaning up, wrangling contractors, and rehanging the patio lights, which I hope will look as good as they once did:
I call my time ‘free labor,’ because I’m not taking any personal leave from work to do it. And I’d probably waste those hours mindlessly scrolling Twitter or watching American Ninja Warrior anyway.