Out of Sight, Out of Policy! 8/27/22

Hello NFC Clients and Friends,

A week ago Friday, we moved our first born, Mackenzie, into her college dorm room— an emotional experience to be sure! As the academic calendar kicks into gear for a Covid-free (?) 2022-23, the Normans new normal leaves only 4 of us in our home. We are still adjusting to having an empty room, and one less plate at the dinner table. Having said that, my financial planning mind snapped back into form pretty quickly after stroking a digital check for 5 figures for the fall semester of an engineering school education. Specifically, I wondered why I should continue paying elevated auto insurance premiums (87% higher!) in large part due to one of my TWO licensed teenagers. While I am glad we do not live 50 miles further north in the great Commonwealth of Virginia where average premiums for adding a teenage drive jump 138%, we try not to live our lives through comparison, which C.S. Lewis, Teddy Roosevelt, Mark Twain and many others characterize as the “thief of joy,” So while the Joneses of Jamestown are not a concern, the Normans of North Carolina figure they shouldn’t pay for auto insurance on their child who will not be driving a vehicle for 40+ weeks of the year. Turns out, we don’t have to!

The “student away at school discount” is one option. Dropping your child from your insurance policy is another. We went with the latter as 1) our child is less than 100 miles away, which is a precondition for some “student away” discounts and 2) USAA is our carrier, and it turns out that there are only two states in our great country that do not have this option: Hawaii and North Carolina! I can guess why the Aloha State would opt out of this discount, but will be forever mystified how that Tarheel state earned this notorious exemption. So, we just dropped our kid like a hot potato from our policy, and I will add her back the night before she comes home on breaks over the next 4 years. I can do this online, from my recliner, so it is not hard. But is it worth it? We’ll re-evaluate after a year or so, but according to our newly posted semi-annual premium, we will save $311.54 this year.* That money would buy a semester’s worth of pizza when I was in college! Today, I hear the kids prefer avocado toast. Either way, this is not a bad savings for a few minutes of work.

*Apparently, you can save as much as $1000-$2500 annually! Feel free to post your results in The Discussion @ normanfinancialcoaching.com