Wednesday, July 9, 2008

Planning for Accidents

Jim over at My Debt Blog is having a rough July too. His wife was also in an accident and is suffering from the financial after effects that can occur. 

One of the worst feelings about all of this, is that I could have avoided some of the financial predicaments that I am in, as well as a few other key issues that came up from nearly dying. Having learned things the hard way, I plan to prepare for the future better by planning for another accident. 

1. Self-Insure Your Vehicle

Check out the Blue Book Value of your vehicle and put enough money in a savings account to cover the value of it if it were totaled. This is especially important if you have Liability Only insurance. In the event of an accident that is your fault, you need to be able to repair your vehicle or get a new one as soon as possible. 

2. Set Aside Your Deductible

In another account, set aside your Health Insurance Deductible and Emergency Room Copay. For me, this is about $600 and it does vary from company to company and plan to plan. This will lead to less financial stress in a time when you would already have a huge amount of emotional stress.

3. Create an Emergency Fund

 I cannot stress enough how important an Emergency Fund is. In this situation, if you are injured and cannot work, when your sick leave runs out you would need a back up plan. My accident put me out of work for seven days and I didn't even have any broken bones. Healing from things takes time and you need to give yourself that time, instead of worrying about how to pay the bills.

4. Keep Emergency Contact Information On You

If you have a purse or a waller, keep a little card with your drivers license that lists your emergency contact person, include a phone number and an address. When I got taken into hospital I was unconscious and they couldn't contact my husband until I woke up and gave them the details. They had found my ID in my wallet, so they knew who I was, but they had no idea who to call for me. Remember to update this information if your emergency person moves. 

5. Make a Will or Living Trust

Having your legal ducks in a row is important to the future of your loved ones. If you have specific wishes, make them known. It is also important to have a firm idea about whether you would or would not like to be left in a vegetative state, whether you want to be buried or cremated, who gets the family jewels and who benefits from your estate. It seems morbid to a degree, but it's not just about taking stress of you in these situations... it's about taking it off your loved ones too.

For the Financial steps, I would recommend using ING Savings Accounts (click here for a referral and a sign up bonus) as they have a good interest rate and the ability to create separately labelled accounts. You can then take this interest and put it towards something else like paying down debt or saving for a vacation. 

If I had done even two of these steps, the last two weeks would have been much less of a nightmare. Learn from my mistakes and prepare for life to throw curve-balls at you!


Family Man said...

All great tips. I totally understand how Jim is feeling I am ther myself. As are so many anymore. Love your blog. Added it to my blogroll, and my google reader!

Take care

livingalmostlarge said...

I insure our cars mostly for other people, we only carry liability for $150/month for 2 cars and 2 drivers.

But the thing is that if one of our cars was totalled again I think we'd just survive with one car. I don't really use mine but since it's paid for, reliable, and we might need it in the future we keep it.

It's not worth the hassle of buying a car when I need one.