In a few days, Jay Gatsby gets another chance to charm his way into our hearts. It wasn’t enough that he was the title character of the fantastic F. Scott Fitzgerald novel, The Great Gatsby. Gatsby also has been in the movies, played most notably by Robert Redford in 1974 and by Leonardo DiCaprio in the version that’s coming out.
Whether on the screen or the page, Gatsby stands as one of the most enduring characters of American fiction. He had money, looks and a mansion. But, as it turned out, he had terrible taste in women and a bit of bad luck, and he would have been a terrible risk for something most of us take for granted — home insurance.
Location, location, location
The first thing an agent would ask him is where he lived. The West Egg, Long Island, location of the mansion would have been a problem right off the bat. It is too close to the ocean, which means it has a higher risk of severe weather, even flooding. At the very least, his provider would have required Gatsby to have a separate flood insurance policy, because flooding isn’t covered under a standard home insurance policy.
The house itself would have been insurable. But local construction costs in West Egg mean the replacement cost would be pretty high. And considering all the expensive shirts he showed Daisy, Gatsby probably would have had other valuables – jewelry, furs, art objects to fit in better with the Old Money families on Long Island. These valuables might not have been fully covered by the personal property and contents portion of a standard policy. An agent would have recommended that Gatsby schedule an endorsement or purchase a rider to cover these expensive items against damage from fire or another covered peril.
Party down? Pay up
Gatsby also would have a problem because of all the entertaining at the mansion. Those parties, designed to attract Daisy from across the bay, would have caught the attention of an insurance carrier. Gatsby would be asked, at the least, to increase his liability coverage limit because of the risk of a party guest having an accident on the way home. Standard policies start with a personal liability limit of $100,000. Gatsby could expand that to a $500,000 limit by spending a few more dollars. It wouldn’t take many accidents for even that larger limit to be exhausted. His carrier probably would want him to buy an umbrella policy and increase that limit to $1 million.
His problems wouldn’t stop there, though. Gatsby also has a swimming pool, with no fence or locked gate — not to spoil the ending, but it turns out he could have used both. This would have been a huge deal breaker for many companies. Fences and locked gates keep people out, lessening the chance of an accident on the property and a big payout.
Of course, Gatsby also would have troubles on his insurance score because of the phony name, not to mention the illegal bootlegging he was involved in and the illegal gambling by his friends. Even with all his money and a likely sparkling credit score, Gatsby would have had trouble getting a quote for coverage.
Drives him crazy
He might have had better luck getting auto insurance on his yellow Rolls-Royce because there are fewer red flags there. If he had a clean driving record, there would have been no reason to deny him coverage.
Think how it might have worked out better for Gatsby with a really good auto insurance policy. Had George Wilson known he could collect from Gatsby’s liability coverage for the wreck, he might not have come after him. And while Gatsby wasn’t actually driving at the time of the accident, most auto insurance carriers have a provision known as permissive use. That means Wilson still could have benefited from Gatsby’s auto insurance policy for his wife’s death.
Of course, with an alternate ending like that, The Great Gatsby might not have been so great.
With summer approaching, many families are finalizing vacation plans. Those plans should include at least considering travel insurance to make sure you don’t lose out financially in case something derails your getaway.
First, think about the scope of your trip. If you’re just spending a weekend at the beach or staying a few days with your sister and brother-in-law in a neighboring state, you’re probably OK without buying insurance. But if you’ve got bigger plans – maybe that trip to London or Rio you’ve always dreamed about – you should definitely consider insuring your trip.
Here are a few reasons why:
- What happens if you get sick or injured? This is especially relevant if you’re leaving the country, whether it’s for that trip to London or Rio or whether you’re taking a cruise to Jamaica and the Caymans. You probably didn’t know that a medical evacuation back to the U.S. can cost as much as $100,000. And that’s only part of the problem. Some health insurance policies in the U.S. do not cover you once you leave the country. Many hospitals in foreign countries make you pay up front for treatment.
- You arrive at your destination only to discover that the guy who jostled you at the airport took your wallet and passport.
- Your spouse injures her knee the weekend before you leave and has to have surgery.
- You booked a condo in Orlando, Fla., for a week and the threat of a hurricane causes you to leave early.
Travelers insurance can help in each of these scenarios, whether it’s getting the health care you need in a foreign location, replacing your passport and providing some emergency cash or being reimbursed for nonrefundable expenses.
What to look for
Here are some of the factors you should consider as you look for a policy:
- Single trip insurance vs. annual insurance. Most vacationers should opt for single trip insurance. It provides coverage for one single trip. The cost is determined by the cost of the trip, the age of the traveler and how long you’ll be staying. It can include trip cancellation and interruption coverage. Annual plans are best for business travelers who make several trips during the year. They mainly provide medical and medical evacuation service.
- A Cancel for Any Reason benefit. Face it, the most likely reason you’ll use travel insurance is because you’ve had to cancel your trip. Many policies limit the reasons you’ll cancel; if you take one of those, you’re still gambling.
- Personal liability coverage. You might not think of this one, but suppose you rent a car in your destination and cause an accident. Your auto insurance policy likely won’t be in effect, so you could be on the hook for major expenses.
How much will it cost?
The short answer is less than you might think. Policies generally range from between 4% and 8% of the total cost of your trip, depending on how much coverage you want.
No one wants to spend part of the vacation budget on insurance. But consider the high costs you could incur on the trip and the money you’ll lose if you have to cancel. You might decide that it’s a smart investment to buy some peace of mind.
One of the great benefits of owning a home comes when you file your income taxes. And if you haven’t done it yet, remember that April 15 is just around the corner.
You’ll have to itemize your deductions, of course. But if your mortgage is for less than $1 million, you can deduct the interest you pay each year – which makes up the largest part of your monthly mortgage payment. You also can deduct the cost of private mortgage insurance and any real estate taxes you pay on the home.
So what about home insurance? Sorry, for most homeowners, the cost of their premiums is not deductible. The exception is for those homeowners who operate home-based businesses. In that case, you can deduct part of your premium – essentially the amount that would pay to cover the portion of your home used exclusively for business. If this sounds complicated, it is – you probably should consult with a tax professional to make sure you’ve got this deduction right.
The other thing you must keep in mind if you have a home-based business is that it affects your home insurance. The liability coverage typically included in a standard home insurance policy might not be in affect should a customer be injured during a visit to your house. Be sure to let your home insurance agent know about any business ventures you operate – you could need business liability or other commercial coverage.
The bottom line is that homeownership likely means you’ll get a tax refund. Many people, of course, will consider the refund “found” money and blow it on a big screen television or a beach trip or something else in the luxury category.
Instead, why not invest your refund in something for your house? Maybe you need a new refrigerator, for example. Use the “found” money to purchase an Energy Saver™ model and you’ll save on electricity costs the rest of the year. Or you could start a roof replacement fund or install new countertops or blinds. One warning: If you do something that will increase the value of your home, be sure to let your home insurance agent know about it. Otherwise, you might not be fully covered by your policy.
One other suggestion: Use your refund to pay off your home insurance premium this year in a lump sum. You’ll likely get a discount for paying in full.
In this economic climate it is difficult for many homeowners to adjust to lower incomes and higher costs of living. It makes me think of how frugal my grandfather was, and yet his life also seemed so full. If your grandfather was anything like MY grandfather, you know what I’m talking about. Back then in the good old days people lived on less, because they saved what they had and didn’t waste a penny.
My grandfather’s garage was a prime example of this. His tools were kept clean and well maintained. Why? Because they were expected to last a life time back then. He had small reused baby food jars that organized and stored every spare screw, wing nut and other piece of hardware. Why? So he wouldn’t have to buy one when he needed it.
Nowadays, our possessions have become more disposable. We get a new cell phone every two years, a new car every five. Question is- how much money are we wasting by living this way? My guess is- a lot.
5 Tips for Living Frugal like your Grandfather Did:
1- Maintain your Stuff: When your car is due for a tune-up, take it in. When your furnace is due for a cleaning, get it done. So often the money we spend on repairing and replacing our “stuff” is due to the fact that it wasn’t properly maintained in the first place.
2- Buy only what you need: If you regularly toss out food that was purchased at the grocery store and never eaten, you may need to listen to this one. Think about what you can live on, make a list, and stick to it. Watch out for deals at the grocery store that urge you to buy two (instead of one) because you’ll save $.50. Unless you need that second item, you’ve just spent money you didn’t need to.
3- Don’t get caught up in technology: Don’t get me wrong on this one. New gadgets like smart phones and PDAs can come in very handy. However, do you need to upgrade to the latest version every time one is released? Definitely not. Do your research before you buy something like this so you get a product that suits your needs and will last for awhile.
4- Do it yourself: This one is for all your homeowners out there. Learn how to fix the washing machine, wallpaper the bathroom and change the oil in your car. Being a jack-of-all-trades will let you avoid paying hired help and give you a sense of accomplishment.
5- Don’t spoil your kids: Love them? Yes. Shower them with love and affection? Of course. However, spoiling your children with too much not only affects the way they value their things, but makes you spend money you could be saving for your retirement, or whatever else you’re saving for. Opt for family “experiences” over buying material objects and let your kids grow up more the way that we did.