Planning for Other People’s Stupidity

Yesterday I had a refreshing reminder on why I carry car insurance.  I was pulling into a parking spot and was about half way in when the car that was partly in front of my vehicle started to pack up.  I slammed on the horn and luckily the driver stopped.  My car had no damage, but it was a close call since I had less than six inches of room to spare.

I consider myself a fairly good driver given my age.  By virtue of several of my jobs over the years I’ve logged more time behind the wheel of a vehicle than I care to admit.  Yet at the same time I’m aware I’m not perfect I can screw up.  So if I can screw up then the average driver is much more likely to screw up, hence I better have some insurance to protect myself from other people’s stupidity.  The same goes for life insurance and house insurance.  I’m not so worried about my wife or me setting fire to the house, but I am concerned enough about my two curious boys to not leave out matches near them.

I think insurance is highly underestimated how critical it is to your overall financial well being until you are making a claim.  At that point you are likely damn happy to have it and glad you have been paying premiums for years.  Now some people would question isn’t that a waste of money to pay premiums?  No, in my mind I’m not wasting the money.  I’m paying someone else to take on the risk in my place.  I’m getting a service for my money and I’m happy to send them a cheque for it.  If they can make a profit on it, so be it.

On the other hand I firmly believe insurance should be used reasonably.  Insurance in my mind is for those high cost items that could wipe me out financially speaking, not for every little thing I buy at the electronics store.  It is very possible to have too much insurance and then be wasting money. One way to reduce your insurance costs is to keep your deductibles on the large side and self-insure for those minor items in life.

For whatever reason life insurance tends to be a common one people go over kill on.  In my family’s case both my wife and I carry $500,000 policies at the moment.  That number was chosen for both of use to have enough money to finish raising the kids and pay off the mortgage.   It’s also income replacement for me and childcare replacement for my wife.  Now that I’m on a campaign to kill off the mortgage that value will likely come down by $100,000 in the next two years.  Then as my saving increase and we are less dependent on my future income we will continue to drop the insurance value down.  There really isn’t a reason to have life insurance once you are financially independent since your income comes from your savings and not you.

So when planning for other people’s stupidity make sure you don’t start going stupid yourself.   Use insurance wisely to cover those huge “Oh my GOD!” events and suck up the “Oh, shit” minor events.  And of course, be prepared to use your horn to stop stupid people from hitting your car.

5 thoughts on “Planning for Other People’s Stupidity”

  1. I would like to start by saying i find your blog well written and very informative. I have the same dream as you. I would like to follow your journey to learn and hopefully follow it for myself.

    I find it interesting how you admit that you, like any driver, can make mistakes while behind the wheel. Then you say another human being made a mistake behind the wheel and almost hit you. Later in the post you say, and I quote “be prepared to use your horn to stop stupid people from hitting your car.” Let’s follow the logic, all people can make mistakes behind the wheel, including you. A person who makes a mistake behind the wheel is a stupid person. Therefore all drivers are stupid. You make mistakes as a driver, you are stupid. Clearly you are not stupid, and that other human being isn’t either. On the other hand, it is clear that your comments and implications about the other person are disrespectful.

    I advise you to be more careful in how you describe the simple mistakes people can make. More often than not, you have been a culprit of those mistakes in the past and therefore what you say about them could be said about you. Do onto others as you would done unto you.

    Finally, I was offended by how you passed judgement on someone’s intelligence based on a incident that resulted in a ‘honk’. It is more than likely others were too. That being said it is not wise to lose readers of your blog by way of comments that really have nothing to do with the pertinent content of the blog, which was very good. Keep up the excellent content, and lose the judgement. We all know you are a much better person than that.

    Fantastic Post!

    – Stephen Wallace

  2. Well CD, unlike the first person’s comment and am in no way offended by your post and will keep reading.

    Not sure why this person you refer to in your post would be backing up from their parking spot into the one behind, but hey I do wonder about many drivers actions.

    I have no issue with you calling other drivers stupid for their mistakes, I have made mistakes driving (thankfully no accidents) and I look back on those mistakes and call myself stupid for doing them.

    Being a motorcycle driver around Toronto you have to stay very sharp and always watch out for the other drivers, I still get surprised by all of the idiot drivers out there, I wouldn’t be surprised if my bike horn wears out soon from waking these people up.

  3. Stephen,

    Ah, but you seem to not understand. Yes I can and have done some stupid things, so I’m comfortable using the word to myself as easy as others.

    I understand that when we get stressed our blood flood shifts out of our brains to legs/arms in response to the flight/fight instinct. As such at the moment we really are stupid since most of our higher brain functions are being over ridden by our instinctive response.

    So when I use the word stupid, I mean stupid in that moment, not the person’s overall intelligence. I completely forgiven people for doing it all the time since I also do it. So if my choice of language offends you that was not my intent.

    I think the difference is you use the word ‘mistake’ as I used the word ‘stupid.’ Both are correct in my mind since I’m referring to that moment of being dumb. I chose ‘stupid’ for this post because that reflects my own experience in these moments. I make mistakes when I’m stressed a lot more than not.

    So again I didn’t intend to offend you. So I apologizes for that.

    Dave,

    A motorcycle in Toronto?!?! Wow! I don’t think I could do that myself. Good for you if you can keep mostly calm while driving.

    Tim

  4. “Use insurance wisely to cover those huge “Oh my GOD!” events and suck up the “Oh, shit” minor events.”

    Love it – the essential ‘Insurance 101’ in a single sentence.

    (But I enjoyed all the rest of the post, too 🙂 )

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