"What does it sound like when two cars smash together?""It sounds like someone's going to spend a whole lot of money!"
The Importance of Health Insurance All F-1 international students are required to purchase hospital and health insurance. That is an insurance policy that will pay your hospital and doctor bills if you are injured or if you fall ill. As you know, there is no universal free medical care in the U.S. Most people living in the U.S. have a hospital and health insurance policy to cover large unexpected medical and hospital bills.
Such an insurance policy can cost as little as $550 per year if you are very young (ages 18 through 23) and have no dependents, but the cost can climb to as much as $2,500 per year or even more if you are older and have dependents here in the U.S.
Here is a little story that illustrates the importance of having health insurance:
One winter morning Johnny Wu slipped on a icy sidewalk and fell on his left wrist. Johnny's American friends put him in a car and took him to the emergency room of a nearby hospital. The emergency room told him there would be an emergency room charge of $150 and that there would be additional charges for any special supplies or tests. Also he was told that there would be additional charges for any doctors who treated him. So there was a $100 charge for an X-ray, a $50 charge for a temporary splint, a $25 charge for pain-relieving drugs, and a $75 charge for the orthopedic doctor who came in to look at Johnny's wrist. Before Johnny ever left the hospital that morning he already owed $400.
But there was more. The next day he went to an orthopedic surgeon who charged $1,000 to set the wrist and place it in a plaster cast. That charge included three more visits to the orthopedist over the next six weeks. Then the doctor prescribed another $75 worth of pain-relievers. On the third of those three visits there was also another charge of $200 for changing the cast.
About nine weeks later Johnny's wrist was as good as new, but Johnny now had medical bills of $1,675 dollars.
Fortunately, Johnny had purchased the required hospital and health insurance. Johnny paid the first $100 and then his insurance company paid the remaining $1,575. Without the insurance, Johnny would have been in a lot of trouble. Most hospitals in the U.S. will employ a lawyer to collect unpaid hospital bills. Sometimes these hospital bills can be staggering. A one-week stay in an ordinary hospital for a case of appendicitis, for example, could easily leave you owing over $6,000. In a recent case in Massachusetts, a young man who was injured rather badly in an automobile accident ended up with over $21,000 in medical expenses.
The moral to this story is that when he needed the money to pay for his medical expenses, his insurance company paid bills that amounted to three times what Johnny had paid for the insurance. So make sure that you talk to your international student advisor about how to enroll in a health insurance plan.
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The Importance of Liability Insurance In many of the U.S. states, persons who drive automobiles are required by law to have liability insurance. Liability insurance is a policy that will pay for any damages or harm you do to another car and its occupants in the event of wreck which is your fault. In other words, if you cause an automobile accident to happen, you are "liable" or "responsible" for paying for the damage that is done. In such cases, you are also responsible for the medical expenses for any physical injuries to the occupants of the other car.
Here is a typical case of what can happen when there is a car accident involving an international student driver:
Juan was driving to school one rainy morning when the car in front of him stopped suddenly. Juan tried to stop, but the street was wet and he slid into the rear of the other car, a brand new Cadillac Sedan deVille worth about $40,000. On impact, the driver of the Cadillac suffered an injury to his neck and a passenger in the Cadillac suffered a broken arm when he lurched against the dashboard.When all the damages were calculated, the amounts looked very large to Juan. ($11,000 to repair the Cadillac, $6,000 in medical bills related to the driver's neck injury, and $2,100 in medical bills related to the passenger's broken arm.) In one fraction of a second, Juan had caused almost $20,000 worth of damage and injuries. But, unhappily, Juan has no liability insurance. He will have to pay the whole amount out of his own pockets.
Obviously you do not want to end up in a financial mess like Juan's. But that is what often happens to international students who do not have liability insurance. Please remember that you can get liability insurance policies for about $1,700 per year if you are a male driver under 25 years old. Female drivers are charged somewhat less. After you are 25, your insurance cost will decrease if you have a record of driving safely. If you cannot afford to pay for liability insurance, you cannot afford to drive a car.
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The Desirability of Comprehensive Auto Coverage
The best kind of insurance to have if you are driving a car is called comprehensive auto insurance. As its name implies, comprehensive coverage takes care of almost anything that can go wrong. If your car is stolen, comprehensive pays. If a driver who hits you has no liability insurance, comprehensive pays. Any time that your car is damaged in any way, you simply call the company who sold you the comprehensive policy and you will be given information about how to proceed.
Usually comprehensive policies require you to pay the first $200 to $500 of the costs. This amount is called the deductible amount. What this means is that, if you have a $250 deductible policy, the insurance company will pay $1,750 on a $2,000 claim or $19,750 on a $20,000 claim.
Elsewhere on this page we mentioned Juan, who was responsible for $19,100 in damages. If Juan had a comprehensive auto policy with a $250 deductible, his insurance company would pay the entire $19,100 and then would give Juan the fair value of his own car (less the $250 deductible). But poor Juan had no insurance, and he ended up owing $19,100 and having no money to replace or repair his own car.
If you have a good driving record and you own a reasonably priced automobile, you can usually purchase full comprehensive auto coverage for about $2,750 per year. And as your age goes up and your driving record shows you are a careful driver, the annual cost of your insurance will decrease.
DO NOT DRIVE A CAR IN THE U.S. UNLESS YOU HAVE ADEQUATE INSURANCE COVERAGE ! ! !
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The Desirability of Renter's Insurance Most international students live in rented apartments. Of course, the owner of the building has insurance that would protect him from financial loss if the building burned down or was destroyed in a storm or an earthquake. However, the owner of your apartment building is not responsible for replacing your property that is lost when the building is destroyed.
For about $200 to $300 per year, you can purchase renter's insurance. Most renter's policies cover losses due to fire, storm damage, earthquakes, and so forth. These policies also usually cover the costs of replacing items that have been stolen from your apartment. To find out more about renter's insurance, simply call one or two of the insurance agencies listed in the "Yellow Pages" phone book.
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