Category Archives: Pensions/Insurance

Raising the Age of Insured Drivers

As I mentioned in an earlier post, I switched car insurance providers back in October, and was able to get more coverage for a considerably less amount of money. I’ve done something similar – getting more bang for my buck – but only because I updated my policy.

Up until now I’ve had to insure my car for drivers over 26 years of age because my wife was still under 30. She turned the big three-oh this week (don’t tell her I told you) so I called to change my coverage to drivers over 30, the next level for Japanese insurance providers.

I was expecting to get a decent amount of money back, but it actually only worked out to 590 yen, or about $6.50 Canadian – an amount that seemed somewhat pointless to receive a check for.

Since the insurance is already budgeted, and in fact, paid for (I paid for the entire year in advance to take advantage of a 12% discount) I asked if it could be used toward additional coverage.

The call rep gave me a few options of how the $6.50 could be used, but what seemed best was to add about $225,000 to my personal liability coverage (there is no no-fault insurance here, so you are on the hook for any injuries, medical bills etc. if you are deemed to have been at fault).

Were I back in Canada I probably would have taken the $6.50, but being that insurance is cheap here, and being at fault is expensive, increasing my coverage seemed like a better use of funds.

And that’s the point that applies no matter where you live. Looking at your insurance policy to see if you are paying for something you don’t need can reduce your premiums, or can be used for something more effective.

Switching Insurance

I’m sure you’ve heard it time and time again, but it can be extremely beneficial to shop around for your insurance. It can also be extremely easy to put off. 

Last year I went into a fee-only financial planner that had just opened up in my neighbourhood. After a couple days she had contacted some companies,  printed off a  few potential policies, and also had a few recommendation for me.

I went with her recommendations: apply online, pay the full year in advance, and go with Zurich. The policy she had worked out for me gave me greater coverage, and saved me 20% over my previous insurer.

(edit: It seems that Zurich doesn’t offer auto insurance in Canada. Sorry. I’ve changed the link to the Japanese site.)

So the question then, is: what to do with the savings. I decided to set up a sink fund, in a sense, by putting that 20% saved into a separate account which is for any auto costs that pop up (oil changes, burnt-out headlights etc). This account will get an added infusion this year when my wife turns 30 and our premiums go down.  Unused cash is just rolled over to the next year, when the new savings difference would be added.

We’ll still be allocating the same amount to transportation, it’s just that now, we’re getting a lot more for our money.

Oh, and in case you’re wondering how much a fee-only planner costs in Japan…  it cost me one box of Canadian smoked salmon.  I doubt I’ll ever be able to duplicate that value.