The 10% are on costs that exceed the franchise (art. 64 KVG), meaning that the maximum amount of cost share you could have to pay also depends on the franchise.
Ex. annual health costs : 5000
Max cost share for franchise = 300 is at 7300 CHF of total health costs, for franchise = 2500 it is at 9500 CHF. After that, it eventually falls down to 0%.
Well, I wouldn’t rely too much on probabilistic calculations. They are good if you are dealing with a very large number of events, i.e. running an insurance business, but for you as an individual it doesn’t matter what is the mathematical expectation of costs needed to buy all new furniture after it was burned if it actually happened to you. There are insurances for this, which are not only bad, but also good 
. Like that example of basic medical insurance that caps your expenses to a reasonable level and has theoretically unlimited coverage. So, very rare and very expensive events should be covered by an insurance, I think it goes without saying.
After that, I would still count potential largish expenses, like medical franchise + own contribution, to be reserved as 100% because if it happens to you, you need the full amount. But then, after estimating potential expenses in mid-low probability events, I would take the amount for two or three (if you are cautious) most expensive ones and consider it to be an amount that should be available short term. Could be via a margin loan also.
It is easier said than done, but that’s my opinion.
Thx both @Cortana @Baron51 explanation.
Was always thinking how lower income people could afford seriously expensive operations.
I had the same thought recently and made the decision to accumulate 10K CHF per decade (30 years = 30K; 40 years = 40K, etc).
By putting 1K aside each month, I can in 10 months cover my need until the next decade. If I draw on my EF, I would load it up until I reach my limit per decade.
This decision takes into account my current age, the fact that I own a home, that I currently have no children, and that I am banking on my income level increasing steadily. This way I can largely contribute to my ETF investments while keeping some cash at my disposal.
My emergency fund is -10k chf right now. Yolo.
Stable income from salary and high credit card/lombar limits available tho.
My emergency fund is 6 months of expenses. The reasons are the following:
Employer lives from the hand in the mouth, salary arrives sometimes after the bills (startup).
Certain probably of bancrupty of employer, which might lead to waiting time for the insurances to kick in.
1 child
I like my job, and I’d love to see my company thrive. But to have a cushion in case it doesn’t, I’ll keep a good emergency fund.
I couldn’t sleep well without having 3 months’ comfortable expenses at hand. I know I could stretch that to at least 4 months, probably more, by which time I am confident I’d manage to find a job, and if not benefits will have kicked in.
I get it. But you can still sell some ETFs if absolutely needed?
Of course, that’s always an option, but an undesirable one. My goal is to not find myself in a situation where I have touch the investments without wanting to.
As long as you sleep well with it, it should be fine.
I’m the kind of people which is risk averse and I have 12 months of spending half in IBKR, half on a saving account + a crecit card.
Same. And I just used it all down to 1000 CHF setting myself back up after my divorce (which went amazingly well all things considered). So definitely going to reconstitute this 3 months again as soon as reasonably possible
Note: i use YNAB so the 3 months equivalent was spread across vacation funds, health care reserve, house repairs reserve, car replacement fund etc. When you really need to prioritise, all these things can do with less (especially less expensive vacations)
I guess this whole debate depends on the individual circumstances. Do you have RE or do you rent an apartment? Do you have a car or use public transport? Do you have kids or not? Any other relevant questions.
I moved out of my parents apartment in February 2017, so 7 years ago. Did I ever have an emergency? No. I can‘t even imagine what kind of scenario would result in depleting my 10k savings account (my emergency fund).
Just a two examples:
You can summarize it: do you want to have cash in advance or pay back debt later. It‘s just this. (And are you able to get credit cheap and fast)
Come on, that’s just stupid and your own fault, I wouldn’t classify this as an emergency at all…
Another scenario: some drunk driver crashes into you and you end up in hospital for 3 months and are unable to work for another 3 months after that, you lose your job as a result and are also permanently partially disabled making living and working in the future a challenge.
That’s what all the insurances are for? (Health, IV etc.)
That’s what all the insurances are for?
Agree! Though critical illness and partial disability is somewhat expensive and hard to cover. just reading through the policies and all the exceptions, exclusions and calculations make me wonder who would have the endurance to claim successfully.
An emergency fund (whether it is 3 or 12 months expenses) would not cover this situation either, no?
Some things in life are just very difficult to protect against, and money may become secondary anyway if they hit you…
A more recent example was: covid hits, you have to pay your mortgages, but your tenants get to live there rent-free and you can’t kick them out.