Debt-Free, and the Ripple Effect


Insurance (Photo credit: Christopher S. Penn)

Most of the time I’m just carrying on in my frugal way, meal-planning and clipping some coupons when I can.  Every now and then something pops up that makes me aware of the far-reaching benefits of what we’re doing by living debt-free.

Recently we got a letter from our car/home insurance company (one of the large US insurance companies) saying that the Personal Umbrella insurance was being discontinued.  This is insurance that covers you beyond the limits of your usual insurance coverage and protects your assets should there be a large claim against you.  For example, the mailman trips over the Barbie doll pool party set up on your front steps and he suffers serious injury and can’t work anymore.  We found it odd that they weren’t going to carry this insurance any more.  After all, insurance companies love to sell insurance!!

Well, it turns out that they have a new policy, and the rates in the new product are partially tied to… credit scores!  When my husband talked with our agent he said we were fortunate that the cost of our new coverage was actually going to go down $50.  Of course, other factors also come into play with rates, such as prior insurance claims.   Since paying off all debt, our insurance rates have dropped across the board.

Small “wins” like this give me a little spring in my step, and encouragement to stay the course.


4 thoughts on “Debt-Free, and the Ripple Effect

    1. healthfulsave Post author

      Oh, I’m glad Kelly! It’s kind of interesting how many places credit scores are used, and yet you can’t turn around without someone encouraging you to borrow more. I’m always irritated at the bank when they are trying to tout some home equity credit line. They’re supposed to make me money, not cost me money!

  1. chialih

    Nice article. Insurance is compulsory as it protects your current wealth so that you do not need to start all over suddenly when you are too old to start over. cheers.


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