QUESTION
How do you know when you should file an insurance claim on a homeowner’s issue, versus just dealing with it and paying cash?
ANSWER
Basically, it’s when you begin to feel the pain financially. Let’s say you have a $1,000 deductible on your homeowner’s policy. If you have an $1,100 issue, just pay the $100 out of pocket and don’t mess with it. But let’s say you have the same deductible and a $2,000 problem. Depending on things like your overall financial situation, the value of the house, and the cost of the insurance policy, that might just get you to file a claim.
If you turn in the claim, you’re going to experience a rate increase or cancellation somewhere—at some point—that offsets it. I only turn in substantial claims, meaning claims that are far above the deductible.
QUESTION
My in-laws have inherited some money, and they want to invest in real estate. They have offered to help my husband and me buy a home, but they want ownership of some kind as part of the deal. Is this a good idea?
ANSWER
I’d pass on this offer. It’s not a good deal.
I’m glad they got some money. I mean, that’s great for them. If they want to do some real estate investing, that’s awesome, too. If they want to give their kids a gift out of the inheritance money, that would be a very nice, generous thing to do. But no, we’re not going for a deal where they have ownership in your home.
If you take a deep look into this, you’ll begin to understand there are some things involved that will change the nature of your relationship with your in-laws.
Protect your relationships and your family, Cynthia. Please don’t do it.