This past Monday, I was returning from an early morning doctor appointment. No problems there. Less than a mile from home, I attempted to make a right turn from the right lane. A coach bus in the left lane forcibly detached my car’s left rear bumper. To make matters worse, the bus continued straight as if nothing happened.
Theatrics of a slow speed, two-block chase aside; I came face-to-face with insurance deductibles and emergency funds after discovering that our auto policy deductible was $1000. Yes, the coach bus was at fault. I called my insurance company seeking assistance with the claim against the other provider. I could file a claim, pay my deductible and pray they recovered it from the bus’ insurance provider. I think I’ll call the other company myself. Thanks.
The Debt Free Divas suggest that while eliminating debt you maintain a starter emergency fund, or stash, equal to the sum of your insurance deductibles. It’s probably best to know what your deductibles are (To date, no one has admitted to increasing the deductible). If your deductibles are too high, compare the monthly payment increase with a lower deductible value. In our case, $5/month drops the deductible to $500. Do you have a homeowners, renters, or automobile policy? Stash at least the sum of those deductibles away in a harder-to-reach account. We use an online bank for our stash (soon to be emergency fund). The next time an unexpected mega-bus driver side swipes you and actually gets away (it could happen); your frustration won’t be compounded with a trip down credit card debt lane.
Once your stash is established, continue to eliminate debt with a little peace of mind.