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Posts Tagged ‘Emergency Insurance’

Prepping as Insurance

While most of my family and friends are supportive of my preparedness lifestyle (and all the supplies and mindset that goes with it), I still get some quizzical looks now and again, and I fairly often hear the question, ‘why are you doing this again’?

My new standard answer is that being prepared is simply another form of insurance. It is insurance that protects my family and I from crises ranging from losing our jobs to a massive interruption of the electrical grid to many emergencies in between.

If you live in the mid-south, you know what it is like when the forecast calls for as little as a half-inch of snow (or in the north-east when a hurricane is approaching). Every store is emptied of milk and bread in a 50-mile radius. Having sufficient supplies on hand at all times means never being that person who has to rush anywhere because we’ve taken care of our needs long before the snowstorm or other weather event was even on the horizon. This allows us to actually plan what we would do if there really is a problem, instead of following the herd to the local Kroger.

For example, we make plans for what will happen if we can’t get to our place of work, such as having the phone numbers of our supervisors readily available. We know what we will do if our sidewalks become icy, or if the power goes out due to ice on the lines. We make sure we have sufficient food and water if we’re stranded, even for a length period of time, and the ability to cook with it.

Yes, all this really is important.

Put another way, I buy car insurance to protect my vehicle, home insurance to protect my house, and health insurance to protect myself. But even in those cases, insurance is like the police…they show up after the problem has already occurred. I want the skills and supplies to actually help me in my times of need until I actually get to the point I can call Farm Bureau or Geico to come cut me a check.

I call this ’emergency insurance’, and I assign resources to it (time and cash), just like I do for any of my other insurances. Take car insurance; I pay about $500, or 5% of the value of my vehicle annually in comprehensive insurance. That indicates that the insurance company thinks I have less than a 5% chance of being in an accident or filing a claim, which seems about right.

My homeowner’s policy costs me .2% of my home value annually (coincidentally, that also comes to $500 a year). The insurance company must think that I have less than a 1 in 500 chance of having my house burn down. Again, that’s probably right.

Somewhere between those two numbers I estimate is the chance to have a major emergency; perhaps 1-3% per year. Of course, there are lots of ‘minor’ emergencies that being prepared for assists in as well, such as the broken tooth that happened yesterday, car breakdowns, job losses or downgrades, electrical outages and the like.

Looking at it like insurance, spending between $500-$1000 a year on preparedness doesn’t seem so out of line, does it?  And the difference between ’emergency insurance’ and regular insurance is that even if nothing happens, I still have something to show for it.  I’ll likely have my emergency radio for 10 years (and I actually use that in my home business area to listen to music; it sounds good enough for me!) and our food storage we actually eat out of, so I more consider that ‘pre-buying’ food as opposed to a preparedness cost.  My water storage containers are solidly built and will likely provide the same usefulness 20 years from now.

If you’re still on the fence about this stuff, being prepared isn’t different than any of the other multitude of ways we provde for our families.

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05 2010