8 things you should pay for - no matter what

Hard times make for hard choices -- especially when it comes to prioritizing which bills get paid, when what you have is not enough to cover all your expenses. But there are some bills it behooves you to keep high on the priority list. A Tennessee homeowner found out the hard way this month when his house caught fire and the firefighters arrived. All he could do was just stand there and watch as his home burned to the ground -- with his pets inside. The homeowner lived outside the city limits and had "forgotten" to pay a $75 annual fire service fee, which would have earned him the fire department's services, in what has since been dubbed a 'pay for spray' arrangement.

This situation presents a bizarre extreme, but it also serves as a grave reminder of the disastrous results that can arise from non-payment of several critical expenses. We're not talking about a ding on your credit report here -- these are eight items which, if not paid, can snowball into a world of hurt for you and your family.

1. Home and auto hazard insurance. As the gentleman in Tennessee discovered, the consequences of not paying for fire protection can be grievous. Most Americans live in areas where firefighters will do their best to put out a fire at their home, if called, no matter what. But what happens if you have a fire, but your hazard insurance has lapsed? The costs of rebuilding a home or even repairing smoke and water damage from a relatively minor fire can be astronomical and, frankly, prohibitive, without insurance coverage.

If you have a mortgage, letting your insurance lapse will simply cause your mortgage company to buy a policy for you that covers them, not you, and costs several times as much as your original policy. (Rest assured, the mortgage company will bill you for it.) Your lender can also impose an "impound account" where you'll be forced to pay taxes and insurance fees to them, monthly, rather than on the more lenient payment terms you can get from the County tax assessor and homeowners' insurance companies.

Car insurance covers you for a variety of things you can't foresee, from accidents to your car being stolen entirely. And what's more, it also protects you from your fellow citizens who cause accidents when their insurance has lapsed.

2. Life insurance (if you have dependents). If you are a breadwinner for your family, it behooves you to maintain life insurance so those who depend on you are not left in poverty in the event you pass away. If you can no longer afford whole life, consider a term policy until your income recovers from the recession. If even that is a struggle, check into whether your employer or credit union offers a policy at a discounted, group rate.

3. Utilities. Lest you scoff that this one is a no-brainer, hear this: utility shut-offs for non-payment have skyrocketed during this not-so-Great Recession. While there's no good national number, state and regional utilities reported annual increases as high as 68% from 2008 to 2009 in the number of households that lost power and gas because they couldn't pay the bill!

"Energy poverty," as it's called, can be deadly in areas with cold winters. When families can't heat their homes with power and gas, they get desperate and turn to gas and kerosene heaters, and fires for heat -- they may also be lighting their homes simultaneously with candles. Carbon monoxide poisoning and house fires from unsafe heating practices in homes without utilities killed eight people in Detroit -- just from January to March of this year!

And even if you live in a more temperate climate, if paycheck-to-paycheck (or unemployment check-to-unemployment check) living causes you to have utilities shut off repeatedly, the companies may begin to impose large reconnection deposits, which make it more difficult for you to restore service. If times are that tough, know that most American utilities do offer programs that reduce or eliminate utility costs for those who can document an income hardship.

4. Medications, medical tests and exams and urgent care. Out-of-pocket insurance can be prohibitively expensive, especially if you're unemployed (or underemployed, for that matter). However, getting a mammogram if you have a family history of breast cancer or taking your eye drops if you have glaucoma should be considered non-negotiable. Ditto for birth control -- I assure you that children are more expensive than contraception.

A popular social media figure in the real estate industry passed away this year after days of posting on Facebook about how ill she was; her friends later acknowledged that that she had been trying to avoid a doctor's visit because she had no health insurance. Even without insurance, many urgent care and even public health clinics will see you if you are ill on a sliding scale or, sometimes, for free or on a payment arrangement. Don't take chances with your health -- or your life.

5. Bald tires and bad brakes. Many of these "must-pays" are items which can snowball into astronomical expenses or cause serious health hazards if they aren't paid. Bald tires and bad brakes fall into both of these categories; both cause auto accidents, with all the potential for injury, property damage and liability they cause. The National Highway Traffic Safety Administration (NHTSA) offers tips for determining whether your tires are unsafe in its pamphlet Tire Safety: Everything Rides On It; you can find brake safety standards in these Brake Safety Awareness materials, here.

6. Roadside assistance service. Depending on where you live, the annual dues for services like the Automobile Association of America run right around the same as the cost of having your car towed 10 miles, in some places, or much less than a single tow, in others. But a roadside assistance service will cover you all year, though they often impose "tow limits" on the miles they will cover and the number of tows they will cover per year. Be aware that some auto manufacturers, auto insurers and credit card programs also offer a roadside assistance feature, so if you're looking to cut costs and still cover yourself, investigate whether you might already be covered.

Being stranded on the side of the road is unsafe and unwise -- especially if you get caught without the cash or credit card room to have your car towed. "Abandoned" cars end up in the public tow yards, where you can rack up hundreds of dollars in storage charges per day.

7. Homeowners' Association (HOA) dues. An epidemic increase in HOA dues delinquencies has been another side-effect of the recession, and it has a dramatic impact on all of a condominium developments' owners' quality of life and net worth. When more than 15% of the units in a building or complex are behind on their dues, mortgage lenders stop lending to new buyers who want to purchase units. That quickly blocks out all but cash buyers from buying units and can rapidly cause values to plummet and trapped unit owners to lose their homes to foreclosure.

If that's not enough to make you want to pay your HOA dues, here's an even more compelling reason: HOAs have the power to foreclose on your home and sell it at auction if your dues fall seriously behind.

8. Property taxes. County tax assessors also have the right to foreclose on homes that fall severely delinquent on their property taxes, although it takes as long as five years of non-payment in many states.