I Dream of FIRE

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The Dude abides: The Big Lebowski’s hidden lessons about homeowners insurance

A way out west there was a fella, fella I want to tell you about. Fella by the name of Jeff Lebowski. At least, that was the handle on his insurance forms, but he never had much use for it himself. This Lebowski, he called himself the Dude.

Sometimes there’s a man who, well, he’s the man for his time and place. He fits right in there — and that’s the Dude, in Los Angeles. … And even if he’s a lazy man, and the Dude was certainly that — quite possibly the laziest in Los Angeles County, which would place him high in the runnin’ for laziest worldwide — but sometimes there’s a man. … sometimes there’s a man.

If you haven’t seen “The Big Lebowski,” well, you should really do that. I’ll wait.

OK, fine, watch it later. Grab a Caucasian, man, while I hit the high points and explain how the movie and homeowners insurance are eerily linked.

‘The Big Lebowski’ in a nutshell

It’s a rambling movie, but the plot points of importance to this article read like this.

The Dude shares a name with another man, a millionaire whose uncontrollable trophy wife has racked up debts that two dimwitted goons have been sent to collect on. The goons seize upon the unemployed hippie Jeff Lebowski, mistaking him for the millionaire and roughing him up for payment. When the Dude explains that he’s not even married and they’ve got the wrong guy, they blame him for the mix-up and piss on his living room area rug as punishment.

Later, the Dude relays the situation to his friend and bowling partner Walter, lamenting that the miterated upon rug “really tied the room together.” Walter suggests the Dude seek recompense from the millionaire Jeff Lebowski, whose rug should have been peed on instead. In a roundabout way, the Dude not only gets a new rug, but also a side hustle as a courier to handoff a briefcase with $1 million to kidnappers who claim to have taken Lebowski’s wife.

After botching a meeting with the kidnappers, the Dude and Walter go bowling, leaving the briefcase with the money in the Dude’s car, which gets stolen. Shortly thereafter, the Dude is back home lying on his new rug when he’s punched unconscious by a new set of thugs and wakes up to find the rug stolen. He calls the police, which leads us to this scene:

You got any leads?

Now you might be thinking, Dude … easy Dude, just pick up the phone and call your insurance company.

Ah, but which insurance company?

Even though the Dude’s briefcase and Creedence tapes were stolen along with his car, his auto insurance would only cover the vehicle and the occupants. The contents are going to be insured by homeowners insurance — or, in the Dude’s case, renters insurance. This is where it pays to read all that legal mumbo jumbo before you sign up for insurance.

I have my homeowners insurance through SafeCo, a Liberty Mutual company. In my policy, there’s a section titled “Personal property we cover,” which states: “1. Personal property owned or used by any insured is covered while it is anywhere in the world.”

That means if my car is stolen and my briefcase with my “business papers” is inside and my favorite Creedence tape (Chronicle Vol. 1, natch) is in the tape deck, those things are covered by SafeCo. However, only up to the special property limit indicated on my policy. Here’s where it would be important for Dude to know the ins and outs of the case and be privy to all the new shit. Because tucked into my SafeCo policy is a little section I call “The Lebowski Clause.” (This is from my actual policy. I’m not making this up.)

Good news, bad news, Dude. Because you didn’t want to tell the cops you had a million bucks in the briefcase and opted instead to call all those Benjamins “business papers,” the most the insurance is going to pay out is $1,000 because the theft occurred “while located off the residence premises.”

While the cops wouldn’t hold out much hope for the Creedence, Dude can rest assured that the tape is covered — despite being in a motor vehicle away from the residence premises.

Even though the police closed the book on the stolen rug, Dude would have been covered there, as well, separate incident or not. Hopefully his thinking about the insurance wasn’t too uptight when he bought it and he made sure to get coverage for the replacement value of his stuff.

Most insurance by default will pay you the value of your item minus depreciation in the event of a claimed loss. That perfect rug that really tied the room together may have been $750 new, but after years of spilling a few White Russians on it, plus having it soiled by a marmot and a goon who isn’t housebroken, an insurance adjuster is more likely to accommodate you to the tune of 10 percent.

Replacement value is a surprisingly inexpensive add-on feature. It requires the insurer to give you enough money to purchase a new version of the same item or an equivalent if the item is no longer available. Multiply that by the cost of everything in your home and you can see how much value this one simple add-on provides.

And proud we are of all of them

If your Little Lebowski Urban Achiever has graduated high school and now spends most of his or her time occupying various college administration buildings, you may be surprised to learn that the contents of his or her college dwelling also may be covered by your policy at no extra charge.

My policy reads: “Property of a student who is an insured is covered while at a residence away from home.”

Thankfully we haven’t had to use this provision, but it’s definitely something to look for in your policy the year before sending that future Time Person of the Year off to school. They may be taking thousands of dollars in electronics and other household items to a dorm or off-campus housing. You want that stuff covered somehow.

Language problem, Dude

The police eventually find the Dude’s car, which is in rough shape after being used for joyriding. The briefcase is gone, but stuffed into the crack of the car seat is a sheet of looseleaf paper with a delinquent’s homework and his name at the top.

Walter and the Dude pay a visit to Larry Sellers, a quiet loser with a Hollywood lineage who sits stone faced as Walter and the Dude get increasingly agitated trying to pry information out of him. (If you’re a fan of the movie, here’s some really interesting backstory on the inspiration for this scene.)

[WARNING: There’s some serious language in this clip. You don’t need to watch it to understand this post.]

Larry’s brilliance is that he says nothing, thereby limiting his responsibility and leaving the Dude to deal with the messy aftermath. Larry would make a great insurance agent.

Any time you purchase insurance you should be running multiple quotes through several companies. Each company is different, and each policy has variations in what is covered and how. There are two important parts to this process. The first is to examine each policy to see what inclusions or exclusions are listed by each company. The second is to decide which ones you want as part of your eventually policy and to get comparable quotes for that coverage from each provider.

You would be surprised by what is and isn’t covered by homeowners insurance. For instance, in many cases you may be covered if a water line bursts and floods your basement. But you might not be covered if the sewer backs up and does the same. You’re also unlikely to be able to make a claim if the main water line into your house springs a leak somewhere in the middle of your yard. Plumbing outside the home is typically excluded. However, you can often add these coverages for a few dollars a year.

The trick is not to let your insurance agent sit quietly by. Ask the agent to provide you a list of every possible add-on to the policy. There may be a dozen or more different options. Each one represents a risk you are accepting yourself unless you pay to transfer that risk to the insurer.

The last thing you want to do is have hundreds of gallons of sewage filling your basement and a small crew of people standing there looking at you saying, “We want the money, Lebowski,” before they get to work. Very few reliable contractors are going to cut you a deal for whatever you have in your pockets and call it even. More likely, the quote is going to give you a heart attack.

“What do you mean you don’t have the money? We want our million dollars!”

This affects us all, man

Hopefully you’ve seen the importance of asking the right questions about your homeowners or renters insurance. Life does not stop and start at your convenience, so it pays to know what you’re getting yourself into when the worst happens. It could be the difference between getting an envelope with a check already made out or losing an arm and a leg (or at the very least a toe).

Take your time, make a White Russian, and read through how you will and won’t be covered in the event of catastrophe. After all, just because you’re bereaved doesn’t mean you’re saps!

10 Comments

  1. Yes! I used to work for insurance companies, and the worst possible position to be in is a denial of coverage after a catastrophe has happened. Like you say, the thing with insurance is that you have to carefully read the policy to find out what is and is not covered.

    I’m a big fan of umbrella insurance, which can cost just a few hundred dollars for millions of coverage. That way you are protected if you accidentally harm someone.

  2. That was FUN! Love that movie… In and Out!

    I never would have realized that a student’s dorm room is covered by the ‘rents home policy. I guess the insurance companies figure there’s nothing really of value in a student’s possession. Course nowadays tablets and smart phones are standard, when back in my day the most valuable possession was a Sega Genesis.

    • Haha, yeah a $200 Super Nintendo and a CD tower with 20 discs were about the most portable high-ticket items back in the day. Weren’t too many people wandering off with Gateway towers and monitors (remember Gateway!) in their arms.

      Heck, now I carry over $3K in electronics in my laptop bag and pocket.

      The nice thing is the policy doesn’t specify on-campus housing. It just says temporary housing where the student is living. So the stuff in my son’s off-campus house he shares with roommates is covered.

  3. Say what you will about the tennants of national insurance dude, at least it’s an ethos.

    Very nicely done! One Lebowski reference is enough to make a post great, and you’ve went above and beyond, I enjoyed it thoroughly!

  4. Men and movie lines. Memorization of them must be in the male DNA.

    Thanks for making an otherwise boring subject interesting. And yes, check into an umbrella policy!

  5. What fun read this is – I certainly need to dig into this topic for my own good. Any thoughts on all the different kinds of disability insurance, life insurance and the likes.

    I haven’t seen The Big Lebowski, and I haven’t seen Pulp Fiction and the Fight club either.

    • Thanks! Insurance is a very personalized deal. It’s a decision about risk. Specifically, how much of it do you want to shoulder yourself, and how much are you willing to pay to transfer it to someone else?
      That will be different for everyone depending on their financial, family and personal health situations. For instance, if your family has a history of debilitating health issues that strike at a relatively young age, you’re more likely to need a really good disability policy that will help you if that happens. That’s not an area where the “standard” coverage will be enough for you.
      For life insurance, the amount of coverage should take into account what that money is supposed to accomplish. Is it just to cover your burial expenses, or is it meant to set up your spouse and children with financial security if you’re no longer around to provide for them?
      Your insurance agent(s) should be aligning your policies with your goals, not with their commissions.
      With homeowners, just remember that cheaper isn’t necessarily better or worse. Understand the risk you’re taking on with each company and policy and weigh that against the cost of coverage to find the right mix. I buy earthquake insurance because my house is near a major fault line that hasn’t had a major quake in a long time — we’re overdue. I don’t want to suffer a catastrophic loss in an earthquake and be left holding a mortgage for an uninhabitable pile of rubble, so I pay to transfer that risk.
      It’s totally worth your time to look into each insurance you have and make sure it matches your goals and risk tolerance. It’s not as complicated as it first seems!

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