Insurance: the unsexy money move to protect your family assets

* Transcript created by AI – may contain errors or omissions from original podcast audio

Today we’re talking about something that might sound boring, but it has the power to save you thousands and protect everything you’ve worked so hard for. Insurance isn’t sexy, but neither is stressing about risk or finding out too late that you are not covered or undercovered. Today I have a special guest on the show, Sarah Megginson, and we are chatting about why insurance actually matters, the common mistakes that households make and how you can save money on your insurance if you want peace of mind and more money in your back pocket.

This is one episode you don’t want to skip.

 Just a quick note before we dive in. Everything I share on this podcast is general in nature and does not take your personal circumstances into account. I’m not a licensed financial advisor, and nothing you hear on this podcast should be taken as personalized, financial, business, taxation or investment advice.

Before you make any financial decisions, please seek guidance from your accountant or a qualified licensed financial advisor who understands your specific situation.

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Sarah Megginson money extraordinaire and a dear friend of mine. I’m really excited to have you on the Intentional Money Show. Welcome.

Thank you for having me. I feel like we should warn everyone that we are gonna gas bag and go on lots of tangents.

Yeah. Yeah. We kind of we’re like an octopus. We go in lots of ways, but it’ll be hopefully really informative for people.

I just had this moment where I realized I don’t have your official bio, but you, you absolutely are a money expert. You are on the news. You are very prolific when it comes to having lots of different conversations about money. So can I get you to introduce yourself officially to the listeners?

Absolutely. So my day job is working for a financial comparison site called Finder. And we’re the place that you go to compare all your bills and save money. So absolutely my jam. I love helping people save money and spend less on things that you need. Like if you’re gonna spend money on electricity, you might as well spend the least money you can get away.

So I’m one of our media spokespeople, so I do a lot of media interviews. Just before this I was with Channel seven and I’m doing radio this afternoon, so that is like one of the best parts of my job. I love getting to talk about that stuff because side note, tangent only 25% of money conversations in the media are with women.

Three outta four of them are men. So I love being able to put a little female face on it and help women connect with this stuff. So that’s, yeah, largely what I do. I talk about money a lot. My goal is to help people figure out how to make money fun. And it’s such a source of stress for so many people, and I don’t say that in a way that’s trying.

What do you call it? Like undermine or trivialize how stressful it is? I grew up in a family where we didn’t have money and I just know how much stress it brings to the family. So I love helping people start to figure out how to connect the dots and make it less stressful. I think it can be really life changing.

So that’s me.

And also you are an author. I’m of multiple books.

Oh yeah. I forgot, I forgot. I got a new book coming out, which is very exciting. I got a book called, I’ve written called How to Raise Rich Kids, which is all about setting your kids up for financial success. Even when you’re not rich yourself, which I think is really important.

Like you don’t have to be wealthy for your kids to have financial, solid financial foundations. And it’s not about like giving them a silver spoon or taking away challenges. For them, it’s just helping give them a foundation of financial security so that they can go on to have a really curious and adventurous life.

Yes, and I’m gonna get you back on the podcast when this book comes out so that we can have a, a bigger conversation about kids and money. And the reason that you and I met actually is because you were the ghost writer on my book, Intentional Profit, which means that we, you were the perfect person to be doing that because I had no idea what I was doing when it came to writing my book.

And a lot of people don’t understand what a ghost writer is. So it was all still my word, my story, my message, and you helped to pull it into a beautiful, succinct format that flowed from end to end. So.

Absolutely. I, I consider myself as I provide the scaffolding for, bring all of your ideas together and remember how we spent the first like nine months working on a book, and then we were like, this is not going in the right direction, scraped it. We started again.

I imagine that happens a lot when people are writing books.

Absolutely. Yeah. And also there’s a, actually, yours was a perfect example of, a lot of people have an idea of the type of book they want to write, what they want to tell people. When actually, as you go through the process, you realize that’s not necessarily what they wanna hear.

And yeah, the scaffolding that you thought was gonna be really impactful sometimes doesn’t quite land. So you’ve gotta really. Put yourself in the reader’s shoes. And I think that’s something that is really useful, having a ghost writer for, because they can, they’re separate from it. So they don’t have that, you know, that emotional connection to what it is.

They’re just like, what’s the reading gonna get out of it? And in fact, every person I’ve ever worked with, I say, imagine where 18 months from now you’re holding your book. Who is that reader? And what are they thinking and feeling? That’s a really good way to clarify what your message is.

Yeah. And you’re so very good at it.

So the reason I brought you on the podcast today, it doesn’t sound super sexy, but it is super important because I wanted to talk about insurances, and I know that you’re a bit of a guru in this space. So I wanted to be able to share with the listeners what insurance is, how to find the best insurance, do you even need insurance?

And I thought you were the perfect person. So I think a great place to start is like maybe like what are the different kind of insurances that are out there?

Yes. And for anyone who has just picked up your phone to start scrolling because they’re like, this is so boring and you’re interested in this podcast, but you’re not interested in this topic and you’re just switch off. I really, really hope you come back because insurance sounds boring, but it is actually so important. And I thought I’ll start with an example of someone I know, I don’t know them personally, but I know them through a friend and she had life insurance through her superannuation fund and she had a really terrible, tragic accident and she became a quadriplegic.

And because she had life insurance and she had total and permanent disability cover as well. So she had two different types of insurance. When that horrible accident happened, her husband had to quit his job and become her full-time carer and they had a very big payout that helped them not just upgrade their home to accommodate her new wheelchair and her new lifestyle, but also to cover basically living costs because he was no longer able to work.

So that’s obviously the most drastic and devastating end of the scale. But when we talk about insurance, those are the types of situations we’re talking about. And a lot of us kind of will put those thoughts at the back of our head and think, it’s not gonna happen to me and it probably won’t. And that’s what an insurance discussion is, is risk.

What is the risk of this happening? And am I that concerned about it? So when with that particular person, I remember. When I was in the conversation with a group of people talking about it, there was another friend there and he was in his twenties, and after that conversation I was, you know, talking to another woman there and I was like, thank God I, I have that insurance.

Like, what a horrible experience. But that’s such a good reminder of why I need that. And then he  said, yeah, it, it’s, it’s kind of made me realize why I don’t need it. Like I’m only in my twenties. I don’t have a mortgage, I don’t have a partner. Like if something like that happened, I don’t really know what would happen next.

I’d probably move home with my parents or something. But it’s, to me, it’s not. It’s not a risk that I’m looking to protect or he that those were certainly not his words, but that’s how he was talking about it of like, it just doesn’t seem like something I need to worry about. Whereas for me married with three kids thinking, how much would that impact our lives?

How would I keep our home running? How would I keep our kids at school and all of that stuff. I would definitely need financial support. So it’s insurance is a form of risk protection and the way I look at it is you’re buying peace of mind. No matter what kind of insurance you take out, you’re trying to buy a bit of backup for if the worst happens, will you be able to recover?

And will insurance be able to help take some of that pressure off at that really terrible time? I grew up in a family that was very insurance averse. My family hated insurance. My parents thought that insurance was a big ripoff and that insurance was designed to make insurers very rich. And I mean, they’re not that wrong.

Like insurers are very, very wealthy, but they also pay out billions in claims each year. So it’s, it’s a decision you make about what kind of risk you’re comfortable with and what kind of, financial position you would wanna be in if that risk eventuated. And there’s, I mean, I could, I could bang on about that side of things for ages, but it’s probably more helpful if we dig into some of the different insurance types.

But you tell me.

Oh, there’s a lot we can cover here. And it’s interesting ’cause I heard that story and the number one thing I thought is insurance isn’t just about protecting you either, it’s also about the people around you. I thought it’s. I don’t know. I think that that’s a pretty selfish attitude to think someone else will take care of me, or,

yeah, my parents like aging parents.

I, I don’t know. I’m thinking,

well, I think it also speaks to his age too. He was in his twenties and he was kind of like not yet responsible for anything in life, I think. So he was like. Still in that head space of if something terrible like that happened, mom and dad had help. Yeah. Yeah. I even have another friend who, when I was sharing this story with her, she’s also, I think she’s maybe like late twenties, married with a baby and just took out her first mortgage and I said to her, have you got life insurance?

Because if something happens to you or your husband, like getting a mortgage is a really good time to consider life insurance. And she was like, nah. And I said, well, if like the reason why, she’s like, why would I need to? And I said, the reason why you would consider it is if something happens and there’s a terrible accident and one of you dies.

The other one is gonna be taking over the whole mortgage. And if you can’t afford the whole mortgage, like the bank is gonna reassess you just because the person has died. So you could then be at risk of losing your home after you’ve just lost your partner. Like that’s a horrible situation. And she was very like open and she’s like, oh, my parents have money. They’d step in. Yeah. And I was like, well, you’ve got your own form of insurance. That’s great. Yeah. You don’t need to pay an insurer for it because you know your parents will help you out. So that’s a really, like, I think that’s an example of the risk mitigation that you have to think about.

And in a best case scenario, whenever you’re paying for insurance, it should make you feel better. Yeah. It should make you feel like. I’ve just done something really adulty and good, that gives me peace of mind. And for her to take out life insurance would’ve felt like throwing money down the drain because it’s probably not gonna happen.

And if it does happen, my parents will will save me anyway. So didn’t need it.

So let’s dive into all the different kinds of insurances. You know, if you’re a long time listener of the podcast, I’m sure you would’ve heard me talk about business insurance before. So let’s focus in on the personal space. Can you name off the top of your head some of the different types of insurances that households might choose to have?

Yeah, I insurance is my second biggest cost base for my home. So our mortgage is first and insurance is a second. So for us personally, and you know, people will pick and choose which ones that they feel they need. We have home and contents insurance, car insurance for both. We’ve got two cars, so we’ve got two sets of car insurance, health insurance, pet insurance for our dog.

I have life insurance outside of super and another policy inside of super, and I have income protection in super as well. I think that’s all of them.

Well, I’ve got trauma insurance as well, which is different to income protection and TPD. So maybe if you could explain what the difference is between.

Yeah.

And, and trauma insurance. I actually only took out last year because I didn’t quite think it was enough of a risk before that. But then I knew so many people who claimed on it that I went, this is actually a pretty good idea. So trauma insurance, it’s also known as critical injury insurance, and that is a payout you get if you have a major accident or diagnosis of an illness. And so I know three people in the last few years who have had a cancer diagnosis. But they’ve been fine. And what I mean by that is, you know, I’ve lost two, I’ve lost my dad and my father-in-law to cancer, and both of them had a really awful run of it where they got diagnosed, they had treatment, and they passed away.

That is, you know, an awful experience of it. These three people had a much more palatable version where they kind of got a diagnosis, had surgery, didn’t need any chemo or radiation. And the problem was solved and they got payouts. I think one was 90,000, one was 130,000, and one was 150,000. So you get that payout as a lump sum of cash to help you deal with the situation.

And it’s designed so that you can take time off work and pay for surgery and pay for medical care, but it’s just cash that lands in your account. So you know if you’ve got health insurance and you don’t have big health out-of-pocket costs, and if you can return to work pretty quickly, you can end up with a decent like financial windfall from that type of situation.

Yeah, I had the same experience. A friend of mine got diagnosed with cancer and he did have to go through chemo, but getting that cash was just. Just so necessary during that period of time because you never know. Like that’s the thing is you don’t know if this is gonna turn into this enormous battle where you are unable to work or your partner’s unable to work.

Unfortunately it’s such an, it can be such an unknown thing with with cancer. And same after that experience, I went and got trauma insurance as well. It’s not cheap, but again, you know, when the unthinkable happens, it’s there. Another kind of insurance that a friend of mine has, so she’s a single mom and she has insurances for her children.

So if her children were to die or to get some sort of major illness, she would then have the capacity to be able to grieve. Or to be there to support her children through their illness and wouldn’t have to be, well, I’m a single mom. I’ve still gotta get up and go to work. Yeah. And yeah. Even though I didn’t personally get up, I thought that was a really interesting insurance Yeah.

That I hadn’t heard of as well.

I, and I think what that perfectly highlights is the, the need and the kind of intention behind insurance. Like if I was a single mom, that would give me so much peace of mind. Hoping that I will never in a million years have to claim on it, but if I do, I have a financial backstop.

That means I can be off work while I’m caring for a child. Or off what? While I’m supporting my other kids and dealing with whatever that situation throws at you. And when we go back to the trauma insurance before, as you said, it’s not cheap. I actually got it for myself, but I didn’t get it for my husband.

Reason being I’m the primary income earner in our family. So financially, if he was sick or got a diagnosis if I could keep working, which, you know, hopefully I would be able to, ’cause my work life is quite flexible. Losing his income wouldn’t impact us as much. Losing my income means our whole family would be impacted.

So that’s where you really, I think, look at insurances and decide what the risk, what, what your risk tolerance is. It doesn’t mean that you have to get everything. And it should be ideally something that is quite I wouldn’t say a positive experience, but you should leave it feeling, and when I say leave it, I mean you should arrange.

Insurance and feel like I’ve kind of, it’s like going to the dentist. I’ve had my checkup, my teeth are good. I don’t need to go back for six months or 12 months. That’s the feeling. I would love for people to have around insurance, like I’ve got my house insurance sorted for the next 12 months. Don’t just let it set and forget because you will end up paying way more than you need to.

And I’ll talk about home insurance specifically in a moment there, but every 12 months, I mean, in a perfect world, I’ve been meaning to do this for years of just getting all of my insurances to renew at the same time so that I just have this one weekend a year where I just renew them all and compare them all.

At the moment, it’s like every month or two, there’s another one due that I need to compare, but I’m the type of person that compares every year. Because it’s very rare that I don’t get a better deal. And home insurance is a really good example. In the last five or six years since COVID construction prices have gone bonkers and the cost of rebuilding your house after an accident has gone through the roof.

So the house that I live in, I bought it 14 years ago, we used to have it insured for 400,000 to rebuild. It’s now insured for 1.25 million to rebuild. Nothing about the house has changed, it’s just the cost of, you know, that’s tripled. The cost of trying to replace it has tripled. So our insurance premium has gone up a ton in that time too, and every year when I get the renewal, I would say there’s only been once in the last five years that I haven’t moved.

There was one time I got the renewal and it went up about. Just under 10%. And when I shopped around, that was still competitive. Every other year it has gone up between one and $2,000 a year and I’ve shopped around and I’ve gotten it cheaper. And for me, with home insurance, it’s something that I’m hoping I never have to claim on, but I would not sleep comfortably if I didn’t have a really comprehensive policy.

Our policy covers. Flood, even though where we live is very unlikely to get a flood. But you know, it covers all the things. Live on the Gold Coast. So the cyclone we had recently has unfortunately changed our risk profile for everyone, which means all of our insurances went up after that. But you know, it, it, that’s the power of shopping around and comparing, because every month or every year, sorry, not every month, thank goodness, but every year your policy will get repriced by your insurer.

So even though you’re an existing customer, it’s almost like they look at you brand new again, because they go, all right, it’s been 12 months, it’s now gonna cost, it was gonna be 1.25 million. It’s now gonna be 1.3 million. If we had to rebuild and. You know, you live in an area where there was a cyclone, so now your risk rating has changed and you are a year older, so your risk, you know, has changed.

And all of these different things get priced into it. So your, the price that you pay will change every year. You should always expect it to increase. Something slightly sneaky that insurers often do is increase your excess every year. Without you asking them to. They just nudge it up a little bit.

And the reason they do that is because the higher excess, the cheaper the policy. So that’s a sneaky way of them not showing you exactly how much higher the policy is. So, for example, my home insurance normally has an excess of a thousand dollars. Last year when the policy renewal came through, it had nudged up to $1,200.

And the cost of insurance had gone up two grand. So if that actually kept that excess at a thousand, the increase would’ve been even higher. So they nudged the excess up a little bit just to, you know, soften that increase a little bit, which I find a bit misleading.

And what is an excess for people listening up for me?

Yeah, good question. The excess is how much you’ll pay if you make a claim. So for me, I used to, when I was younger, I used to try and get the lowest excess I could, because if something happened. I wanted to minimize my out-of-pocket costs, so I was happier to pay a higher premium and I was worried about the risk.

As I’ve gotten older, I’m happier to pay a higher premium, sorry, a higher excess because I’ve probably lived longer now. I’ve lived through owning homes for 25 years. I haven’t had to claim, so I now would prefer to pay a 12 or $1,500 excess. If I’m having a $30,000 claim, then pay more each month for something that probably I won’t need to pay for.

I’ve just been, I reversed my car. I’ve done it twice now in two years into a parked car. So totally my responsibility. But after we got hit with the second $1,200 excess, my husband was questioning our decision to have a high, have a high excess and low premiums, which is what I’ve always opted for, because again, you know, we do have the money

if something does happen. But the second time it happened, he’s like, what are you doing there? And speaking of insurance and risk, like you are now a high risk candidate. Well, something else interesting that I learned. So after I was in I, Sarah will remember because we were working together at the time, but I was in a, a, a car accident a few years ago, quite a severe car accident, and I suffered a really severe whiplash injury and

I was completely deemed to be not at fault, so zero percentage of the blame got assigned to me, a hundred percent got assigned to the truck driver, but my insurance premiums went up. And I contacted my insurer and I said, oh, sorry, there’s been a mistake you’ve said that my no claim bonus has gone. And they said, but you were in an accident.

I said, but it wasn’t my fault. And they said, regardless, your risk profile has now increased. And I said, how? Because it wasn’t my fault. And they said, statistically, you are at a higher risk of being in another car accident again. And I was so confused and angry and frustrated. I thought, I’m already suffering this injury.

Mm.

And I got in another car accident three months later. Again, a hundred percent not my fault. I literally got rear ended again, and I thought, what, what are the chances? And they’re like, it doesn’t even, it doesn’t matter that it’s not your fault. We just look at the statistics. Mm-hmm. And so our premiums had gone up even though

I personally hadn’t made a claim the other party had, but it still affected my risk profile. Isn’t that crazy?

Yeah. And it seems really unfair. A couple of things there too. Like I have taken out insurance for our home with myself as the primary policy holder, and then David, my husband, is a listed policy holder and vice versa, and sometimes the difference in the premium is significant depending on whether I put my name and age and his name and age as the main policy holder. And I thought that was very interesting that, that the house insurance took the risk of our, our actual, like gender and age.

For, was it the man or the, it was cheaper.

The man was cheaper in that instance. But there’s also been a little bit of you know, controversy. In the last few months because some insurers have introduced non-binary as an option and it’s quite a lot cheaper than either male or female. And the reason for that is there’s not enough data yet.

It’s, you know, it’s only a relatively new option. So where you talk about your accident and they have decades of data to pull from to say, Hey, if you’ve been in one accident, you’re likely to be in another. They don’t have that breadth of data when it comes to someone who’s non-binary. So obviously it kind of went a bit viral and then people were saying, well, I’m just gonna claim I’m non-binary so I can get cheaper insurance.

The thing is that’s actually fraud. And if you then were in an accident, they would probably deny your claim because you are not actually non-binary. So you gotta do the right thing on your, on your forms because they don’t, it’s not like they’re trying to get out of paying you, but they’re gonna legally do everything they can to make sure they’re only paying the claims that they have to.

Well, I was just about to go onto that as the next topic of conversation. Why are people like, why do people have this love hate relationship with insurance?

It’s a great question, and I think part of it is just our natural distrust of big, big business, and which I can completely relate to. You know, we, we don’t have a huge.

Well, well, we do have a, a long standing track record of big businesses, not putting customers first and putting customers’ health at risk. And, you know, not doing the right thing by us. So I think it’s healthy and it’s good to have a little bit of distrust and suspicion, but not in a way that you take it so far that it impacts you negatively.

So I think some people have had terrible experiences with insurers, so that’s gonna color their, their view of it. My, my view has changed over time. So I grew up in a family where we never had insurance, like we couldn’t afford it. It was a luxury. But, you know, I’ll give an example of, I’ve got a relative, she was young, she was a teenager, and she bought her first car and spent $9,000 on it and didn’t get insurance.

And it had a car loan, so she was paying, I think it was $55 a week for it, and three weeks after buying it, she was like your accident, someone hit her. It was, they, they were turning and not looking and they hit her. They didn’t have insurance either, so the car was written off. The other car said, you know, you, you can kind of come after me, but I don’t have the money.

So that’s just gone. So she’s now paying $55 a week for however many years.

Oh my gosh.

On a car that she doesn’t have. And at the time when I was, it is a relative of mine. I was talking to, you know, her mom and the family, and I was like, why didn’t you guys have insurance? And they’re like, oh, we couldn’t afford it.

And I was like, you’re a perfect example of you couldn’t afford not to. Instead of a $9,000 car, you should have an $8,000 car with a thousand dollars for insurance. Like it that, that is a no brainer. And it was a kind of a learning moment for my kids. ’cause I said, oh, what do you think I’d do in this situation?

And my eldest daughter, who’s closest to getting a car, she’s like, I don’t think you would let me get a car without insurance. And I said ding you got it right? Because I’m not paying for it. Like you’ve gotta start looking after your own stuff from a young age. So that was quite long-winded, but a bit of an example of where your mindset around it can really color your real life experience with it.

Insurers are not paying out claims from the goodness of their heart. They’re not like trying to make you happy. You know, they, they have, they actually have a legal financial responsibility to make sure that they’re following the right process with their claims. If you’re a shareholder and you own shares in a major insurer, you want to then to be running that business correctly.

So we actually all want that because if they were fast and loose with the rules and if they were paying out claims where they weren’t technically meant to, then all of our premiums would go up because their claims payouts would increase and, and the prices would go up. So we don’t really want that. But I think it’s all about looking at your risks and asking questions.

So a lot of people get caught out with things when they thought they were insured for something and they weren’t. So one example, I remember my mom many years ago, this would be probably 20, 25 years ago, for the first time she bought an investment property. And the tenants were, were starting to fall behind on rent, and they were getting concerned.

So the property manager said, I think you should take out landlord’s insurance so that if they do a runner or something, you’re covered. What they didn’t know at the time is because the tenant was already behind on the rent. They were not able to claim, it was almost like a preexisting condition, right?

So they, when the tenant did leave, they were not able to make a claim for lost rent and repairs. So my mom’s experience of that then was insurance is a total ripoff. They’ll do anything they can to get out of it. Really, the problem was she got poor advice. The, the property manager didn’t know the situation properly, and a good property manager should know that it’s not gonna apply in that situation. Again, this was 25 years ago, so I don’t think it was, it was much more much smaller industry like property insurance and landlords insurance was nowhere near as evolved as it is now. But you know, so you have an experience like that and then you think insurance is tricky and difficult, and they do everything they can to get out of it. And they’re trying to, you know, they’re trying to avoid paying you and, and that’s not the reality.

 They can and will and do pay out claims where you’ve met the conditions. And like on a positive side, I had a friend who had a very minor leak in her house. It was like a small leak in her kitchen, was covered by insurance. And when they came to look at it, they said, all right, well we’re gonna have to redo your flooring in this area, but it flows into your kitchen, so we’ll redo your kitchen as well. But it actually flows down the stairs to the front door. So we’ll redo all of that flooring and we’re gonna have to do that bit of carpet. So we’ll do that whole room of carpet. And in the end it was a $26,000 claim.

Oh, wow.

That also included, part of that was a week in a home that was, I think, $500 a night while they did all the repair works. So she had an incredible experience with it. She was like very well looked after for something that she was expecting, you know, a, a very small repair. So when you meet the right terms and conditions, you will get the right result.

It’s just a matter of knowing it. And I think if you’re getting insurance, I mean, no one is reading those ridiculous 3000 page terms and conditions, so I’m not suggesting you read through that, but perhaps asking them. And these days you can even just ask chatGPT, you know, what does my insurance cover?

What does it specifically not cover? And make sure that you are a bit informed about what you’re paying for, so you know that those big risks are taken care of.

Yeah, for sure. I’ve been definitely bitten by that.

Yeah.

I had a camera, this is many years ago when I was traveling and when I then went to claim it, they said we need to have a police report within 48 hours of the camera being missing.

Which of course I was in a different. Yeah, town by this stage. I hadn’t been to the police. And I’m like, but it’s clearly missing. And yeah, I haven’t met their criteria. So.

And then like, I sound like a total shill for insurers. I promise I’m not, but I, I can understand why they have those jurors too, because otherwise everyone is saying, yeah, I lost my phone, I lost my camera, like.

Most people are pretty legit and they’re not gonna go and file a police report in another country for a phone that they didn’t actually lose.

Yeah. Yeah.

So they’re just trying to put those safeguards in place. And I say this as someone who’s had the same experiences, I’ve had travel insurance, knocked back for ridiculous things.

Or I remember my son once got in Fiji and I had the, the cost of all the treatment and I tried to claim it, but the excess was like almost as much as the claim and it just wasn’t even worth it. So I’m absolutely not saying it’s a perfect system, but for me, I look at the things and again, like I look at travel, I always would want travel insurance for health related things.

I don’t really care about travel insurance for stuff because I don’t have anything that’s that expensive or important. Whereas younger people, like the research shows that younger people, much more in interested in travel insurance that covers their phone and their laptop and their computer and their baggage.

And they’re way less concerned about their health. So it is like, just about you know, ’cause they’re probably, you know, you are in your, your twenties, you feel invincible. But for me, in my forties with children, I’d like wanna know that wherever I go, I can be airlifted back to Australia if I need to.

And if it’s a million bucks, it’s covered. So it’s always, insurance is just a big $10 fancy word for risk management. So it’s like, what is the risk to me of something happening and how much am I prepared to pay for peace of mind so that I’m not worried about that risk anymore?

Absolutely. And I think something that we forget as a country, you know, if you were born and raised in Australia, we are, our health system is beyond privilege.

I first realized it, I was in America and I got tonsillitis. And I used to regularly get tonsillitis popped to, I was trying to find a doctor and I couldn’t go to a doctor. I had to go to a hospital and it ended up being $550 American dollars for a doctor to see me and write me a script for antibiotics and for context

at the time I was in my twenties. That was like, well over a thousand Australian dollars. And I’m like, that was not even a. I think like, I wasn’t hospitalized, I didn’t need surgery. Mm-hmm. I do know that my a, a family member of mine was hospitalized with asthma and her bill was over a hundred thousand American dollars for being in hospital with asthma.

Thankfully she had insurance, but you know, if you think things can’t happen, it can happen. And overseas the cost can be a lot, lot more than they are here.

Oh yeah. The health system in America is so very broken, and I know the Australian health system is not perfect, but we have, we’ve been very lucky with, you know, critical care.

I’ve, I’ve had a miscarriage that I dealt with through the public system and I got everything dealt with completely for free, like surgeries and appointments. And my dad’s entire cancer treatment was through the public system for free, and it was four years worth of chemo and oncologists, and I remember at one point he needed a specific type of chemo and the oncologist said, I’m just gonna have to go to the board and ask for approval because this particular chemo is, I think it was $9,000 a month.

And he said your dad was over because he was 75. He said he is over the age range. Like they, they also look at it as, as callous as it sounds, but they look at it and go are we gonna get the best return on investment giving $9,000 chemo to a 75-year-old or should we be saving it for an 18-year-old?

Mm-hmm.

But they got approval and he had, I think it was seven months of that, it was tens of thousands of dollars worth of chemo treatment he got for free. And then I’ve had some other really good experiences in the, in the private system too. But health insurance is something we probably need to do a whole other discussion about it.

It’s actually very different in Australia, in a good way. It’s called community rated, which means it’s not based on your specific risk profile the way that all other insurances are. So I would pay the same for my health insurance as a healthy 44-year-old in Queensland. The only thing that changes it is your state, but I would pay the same as a 85-year-old full-time smoker with kidney disease, and you’d pay the same as a 21-year-old.

You know, it no matter what your situation, we all pay the same, which is brilliant. ’cause it means that the older people, so people who are in their seventies and eighties and have health insurance, are not having to pay thousands of dollars a month for cover. They’re still paying, you know, $200 the same as us or depending on your income.

It’s so complicated though. Health insurance in, in Australia needs a massive overhaul, but the basis of it is really it’s, it’s really quite good. I, from my perspective too, I really like living in a community where we look after each other in that way. So the younger Australians are, we, we are, what do you, what do you call that?

Where we are like bankrolling it, subsidizing.

Yeah.

Younger Australians are certainly subsidizing the care for the older Australians, but I’m perfectly happy to do that so that it means that people, myself and people I love as we get older are not gonna be priced out of health insurance if we want it.

Yeah. Unlike trauma. Yeah. Because if you, I know like my experience having a family history of cancer, my  profile was significantly higher and therefore my premiums are significantly higher than other people because that’s a bit different to the, the mainstream private healthcare.

Yeah.

Every other insurance in Australia is very much risk. And you know, the more data we have now, it’s kind of insane how, how much data they can put together on you to price your risk.

Absolutely. It’s and it’s it that, I mean there’s a whole lot of conversation about the, the privacy implications, but I do know that overseas it, that companies were providing people’s driving data to insurance companies against their knowledge or will. And so yeah, there was a my understanding there was a, a legal case around the, the implications of that. But obviously insurers would pay anything for that kind of money because data gives them, you know, it, it’s all data, it’s all statistics. And when I was younger, I actually did a defensive driving course.

My insurer at the time sent us on this defensive driving course for free, which was really cool ’cause we were on like skid pans and, yeah, it was a fun day. But they found that statistically if they put young people into these programs, that their risk of having a car accident was lowered. And I remember at the time hearing that the average male in Australia had three car accidents by the age of 25.

Woah.

And I thought that was insane. And then I’ve chatted to a few many in my world. I found out, I found out that that seems to ring pretty true.

Yeah.

Fascinating, isn’t it? And there’s actually an, an insurer in Australia who, when you sign up with them. They send you out sensors. I was with them for a couple of years.

They send you out sensors that you put in your kitchen, your bathroom, and the front door, and the sensors look for damp and mold. And there’s another risk they try to find too because they found that the biggest claims they get in health, in in home insurance are related to hidden floods and hidden leaks.

So they try to find evidence of them really early so that it’s an early quick repair rather than, like my friend, a small repair that ends up being a huge repair job. And so if you install these sensors, they give you a discount off your insurance because it minimizes their risk of a payout. So there’s some clever things happening with the data and things, but you know, I’m sure there’s people listening now who are still like, no, it’s a rip off. I don’t want it. And that’s totally fine. If that brings you peace of mind and you are not concerned about the risks, then good for you.

Yeah. I know that my dad, my dad had a negative experience. He, he lost his house in the 2011 floods and his insurance didn’t cover it. And so since then he hasn’t had insurance. But his risk mitigation strategy is, well, firstly, he now lives in a very high apartment. But also what happened at the time was that people chipped in and gave him, so he never actually replaced, he just had got secondhand things.

Yeah.

And he’s like, I actually realized I don’t care about stuff. Yeah. And he’s like, so if I lost everything. I’d already lost all his photo albums and all of that sort of stuff anyway. And he said, if it’s just stuff, well I don’t care about it. And again, he has the money that he could just replace or buy really cheap or be gifted.

Yeah. So everyone’s got their own decisions that they need to make about this, and it’s gotta be aligned with your money values. And look, I know that people are listening to all of this and they’re like, well, we haven’t really answered the how I am actually having sarah as one of the guest speakers in the Intentional Money membership.

And when Sarah comes and speaks inside, we’re actually gonna go into the How. ’cause we haven’t really had the opportunity. The time has just flown to go to go deep into, well, how do you actually go and get the best deal on insurance? Where are the places that you go? How do you actually go about doing it?

So we will be covering that inside the Intentional Money membership. So. If you do want some help to save money, Sarah, I know in your content I’ve seen before, people can save hundreds, thousands of dollars on their insurance by finding the best deal. She’ll be sharing more about that inside the membership.

So, to wrap up today, Sarah, if people wanna come and connect with you, what is the best way to do so?

Best way is to find me on Instagram. I have a profile called Money Margarita because I’m here to help you shake up your finances one sip at a time. So you can find me there. And if, yeah, if you want to start comparing your insurance, making sure you’re getting the best deal, head to finder.com.Au.

We have all sorts of offers there and sometimes we give away gift cards too. So when you, when you get a product with us, you get like a Visa gift card worth a few hundred bucks. So some good savings to be had.

I love it. I’ll put the links for Finder and for your Instagram account, and obviously I’ll get you back on board when your book is ready to launch.

Yay. Can’t wait.

Thanks so much for coming on the podcast, Sarah.

Thank you.

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* Transcript created by AI – may contain errors or omissions from original podcast