A Different Kind of Insurance

This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.

I have tons of insurance.  I have house and liability insurance, car insurance, CAA (accident/roadside assistance), health insurance through work and life insurance.  Additionally, I have a fairly sizable amount of cash in savings, which would allow my household expenses to be paid for almost 8 months if anything changed employment-wise.  Essentially, just about anything that would substantially affect my financial goals is insured against (probably too much).

I am generally not one to sit around worrying about worst-case scenarios, I don’t freak out thinking about possible future happenings, but one thing that I have been thinking about in the past little while (perhaps due to reading or listening to too many post-apocalyptic stories) is what would happen if money couldn’t fix the problem?  One instance of this is the power outage experienced in Ontario in 2003.

For those outside of the Southern part of the province, the power went out for over 3 days in this period.  For me, and most people involved,  this turned into a pretty good time.  I went to a friend’s place with the meat in my freezer and we had an enormous barbeque and drank warm beer.  Eventually, the power came back and everything was fine.  When I look back though, I’m wondering what would have happened if the power had remained off for longer, say a week to 10 days….

I would have run out of food, in fact I was basically out of food at around the time the power came on.  At some point, I’m guessing city water would stop running and that would result in some problems as well.  I could have left the city and headed north but there weren’t any gas stations available to fill up my car, which had only 1/4 of a tank of fuel in it.  I would have had some troubles if the issue had continued and I don’t think I was the only one.

Think of your own family – do you have people who have food allergies and can’t just eat any food?  Is anyone dependent on refrigerated medication, or something like that?   What about pets – how much food and water do you have available for them?

The government of Ontario has a website listing items that should be included in an emergency kit that probably nobody has ever looked at or thought about (I know I hadn’t until a few weeks ago).  Some of the stuff that should be included in the kit is obvious, but the amounts needed should be kept in mind (for example 4 liters of water per person per day), along with just ensuring that you have at least some of the stuff that is on the list.

We in the developed world are heavily reliant on each other, even though we don’t even talk to our neighbours anymore.  We need the transport trucks full of food (which I swear at when trying to get somewhere on highways) and grocery stores because we don’t grow our own anymore.  Most of us depend on taps of water to deliver our cooking, cleaning and drinking water because we don’t have wells in our backyard and the water in our rivers and lakes is not safe to drink.  In essence, we don’t really look after ourselves all that well.

While I have no vision of some catastrophe that would require any such emergency kit – isn’t that the point of insurance?  I also don’t think my house will ever burn down or I will be in a car accident, by I pay quite a bit of money per year to cover these eventualities.  At some point maybe all these different kinds of insurance are overkill, but then again I’m reminded of  newscasts showing people after a fire who didn’t have house insurance and don’t want to feel like that.

Do you have any sort of Emergency Preparedness plan?  Do you ever foresee a situation that you would need one?

8 thoughts on “A Different Kind of Insurance”

  1. This is something that a lot of people who think about financial independence eventually think about. When thinking about elementary risk management, this is one of those risks that has extremely low probability of occurence, but potentially extremely high impact, so it’s worth some preparation. But, you can get carried away, and wind up thinking that the Michigan Militia is worth emulating.

    During Emergency Preparedness Week last month (another initiative of the government’s that probably gets scarce attention), this year’s theme was “72 hours,” and trying to encourage people to be prepared to survive on their own for the first 72 hours following an emergency (which is not a trivial amount of time if you consider some of the things written about here, that water infrastructure and food transportation may not be operative). Anyway, I guess the thinking is that the state will by and large be able to repair infrastructure and return things to normalcy after three days- which happened back in 2003- and that, if people can only manage to bridge that gap, we can avoid civil unrest.

    I happen to have an emergency kit which includes enough food and water for the household for a few days, along with some fuel. It is an affordable way to prepare for an unlikely risk that has by definition to be retained. However, I think that, if it comes down to it, you should be as concerned about whether your neighbours are prepared as you are about being prepared yourself- so I certainly hope other readers have considered it!

  2. This is something that we have often talked about and have actually taken some action on.
    I always have 4 cases of water on hand (24 bottles in each), a very large bag of rice and quinoa (I am an allergy girl…no wheat for me), tins of tuna, canned beans, always an extra tank of propane for the bbq, a camping kit that contains making for fire and much more, and we always have at least 2 very large containers of protein powder in the storeroom. We also plan on getting a rainwater catcher soon….a little bleach in that will make it ok if we really had to drink it without boiling it first.
    I was lucky enough to also take a survival training course…so I can make an igloo and snare a rabbit if needed…lol

    As I have to take thyroid meds I really need to remember to keep a few months worth of meds on hand at any given time and not wait until my last pill to reorder…..

  3. Living in a condo in Montreal, I worry mostly about heating if there is a long power outage in the winter – I have only electricity to my condo. So we got a propane generator, and we keep plenty of canned foods, rice, pasta and water in the pantry. We also keep cash in small bills stashed in the house since a crisis means probably no bank/ATM access.

  4. If the **** really hits the fan, I would bolt across the Strait of Georgia to my 10 acres on one of the BC Gulf Islands… lots of fish, crabs, clams, fruit trees, wild berries, a drilled fresh water well, great gardening potential, endless supply of wood for heating… and tons of deer roaming the forest if I could ever bring myself to “harvest” one.

    Everything I need for subsistence living is at hand… though learning exactly how to do this would likely involve some growing pains. Once I ER (42? 43?) I can’t wait to explore this method of living. In order to help preseve my portfolio, it would really help to become proficient in “living off the land”. Can’t wait for the challenge.

  5. We had no power for ten days during the blackout. Lesson learned. Our house is now fully wired to a backup generator.

  6. @ Tara – I live in a condo townhouse, and heating is a concern for me as well (I’m not allowed to install a woodstove, for some reason…)

    @ Jon_snow I wish I had a 10 acre Island, sounds amazing.

    @ et – thanks for the link correction. A month of supplies is impressive. I might have enough home-brewed beer to last that long, but other than that I’d be out of luck

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