Archive for December 2011

Auto Insurance Quotes For Holiday

Posted on Dec 26, 2011 by Admin

There's never reliable information on driving habits. Everything changes as the price of gas rises and falls, and as family budgets come under more pressure. All we can say with any certainty is, regardless of the state of the economy, people do try to get together to celebrate the holidays as a family. This can mean traveling significant distances and it's where the budgets come in. When people have the money, they tend to drive to the nearest airport and board a plane. Even though the new security measures can threaten the privacy of your junk, most people find flying better than sitting in a car for long periods of time. Yet, when you add up the cost of the tickets plus the need to rent a vehicle at the other end, you can save so much money if you all get into a car and share the driving to where you are going.
So let's say you decide to make the long drive, here are a few basic precautions before you set off. First, the farther you are proposing to drive at a busy time of the year, the higher the risk of an accident. Sadly, the holidays bring out a lot of weekend drivers who suddenly switch from short runs to a long journey. They tend to lose concentration. Some even fall asleep at the wheel. So now is the time to think carefully about collision and comprehensive cover (assuming you don't already have them), and check your health insurance to ensure there will be enough money to cover any visits to the ER out-of-state should you have an accident. That way, you can avoid unpleasant surprises if your journey is interrupted.
Now spend a little money on some routine maintenance. You trust your vehicle when it's just running around locally. A long run is a whole different ballgame so check the tires and have the engine serviced. The last thing you want is a breakdown in the middle of nowhere when no local garages want to come out and rescue you. Remember to pack emergency supplies should you be stuck by the road in bad weather.
Now suppose you decide to rent a big comfortable people mover for the journey or you fly and rent at the airport. You need to think carefully about insuring the rental. The rental company must give you the basic minimum liability insurance for the state(s) in which you will be driving. Remember, most of these policies do not cover you if you drive into Canada or Mexico. Now the big decision. Even if you have a collision and comprehensive policy on your own vehicle that covers you when you drive a rental, you can find your premium rates climb if you make a claim. It therefore makes sense to buy the Loss Damage Waiver. This pays all the bills if the rental is damaged or stolen. Finally, check your homeowners insurance to see whether all your possessions will be covered in a rental vehicle. It's probably better to deal with this before you confirm the rental agreement. Get auto insurance quotes for the different possible types of cover. If you are paying for the rental by credit card, there may be some auto insurance thrown in but check the terms and conditions carefully.

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Long-Term Care And Annuities

Posted on Dec 22, 2011 by Admin

If a family unexpectedly loses one of the incomes, the effect can be devastating. If we look around, there are tens of thousands of two-income families struggling to make ends meet. If unemployment cuts off one income you always hope this is just a temporary blip. But if the worst has happened, there's no recovery. This means every family should aim to carry some level of financial protection. Sadly, the statistics show less than 45% of families have an insurance policy. That's millions of household with children who will have no money to replace the lost income. So we should all make insurance a priority, particularly when economic times are uncertain.

One of the factors that should focus our attention is the decision by the Obama administration not to go forward with the Community Living Assistance Supports and Services Act (CLASS). This was intended to help people in need of long-term health care, but the costs of a public-supported approach are too high. This will leave it for the private insurers to continue to offer products to the market. So, if you suffer an injury or disease that leaves you in need of long-term nursing care, it's possible you can use the insurance policy on your life to help pay for that care. Assuming there's a cash value to the policy with a reasonable amount already accumulated, you can borrow this money or use the policy as security for a loan. Alternatively, you can either surrender the policy or sell it on the secondary market. With a conventional policy, this gives you a lump sum with which to pay for long-term nursing care. Except this is an inefficient approach.

If you borrow money, you have to pay it back or you end up with serious debt problems. The surrender or sale of the policy gives you a cash sum without strings attached. You can use the money until it has gone. The best option is to have a policy with an annuity built in. This way, you can trigger the annuity should the need arise or leave the investment to accumulate for the benefit of your descendants. Why provide for the possibility of long-term care? Medical science has been increasing life expectancy. As we live longer, the risk of needing long-term care also increases. So far, medical costs have been rising faster than inflation. The federal government has seen the problem and has helped with the Pension Protection Act of 2010 which allows accumulating cash value to be used to pay long-term care expenses without being caught by income tax.

When you consider how many boomers will retire over the next twenty years and who will need nursing care as they grow more frail, the urgency of getting life insurance quotes to explore the options should be obvious. If you do not already have a permanent life policy with an annuity option built in, look very carefully at the likely cash value in the current policy. When you know how much might be available should you borrow or sell the policy, get life insurance quotes to buy an annuity. That will give you guide prices for the purchase if the need should arise suddenly. Leaving it to the last minute to do your research can lead to mistakes.

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Buying Term Life Cover

Posted on Dec 14, 2011 by Admin

As a young person, life insurance is one of these "do I really have to?" things to think about. No one wants to consider the possibility of dying. At a time when we are optimistic about all the good outcomes coming out way if we work hard, it's unreasonably pessimistic to start worrying about when it might all end. Yet, if you don't invest a little time considering the options, circumstances can overtake you and make it difficult to insure your life later on. Let's take a simple possibility. Right now, you are reasonably fit and quite thin. Suppose you stop exercising when you leave high school or college. If you get a job, it's sitting at a desk. If you join the ranks of the unemployed, the couch may beckon. Are you still going to eat big portions of unhealthy food? Most people do. That means you could be overweight in a few years time. This seriously increases the risks of diabetes and heart disease. It also makes it tougher to get through the medical examination to get your life insured. Indeed, it's not unknown for the insurance company to make it a condition you lose weight before the policy is confirmed.
Yet we mentioned the possibility you might not get a job. Sadly, youth unemployment is at an all-time high and even graduates are finding it difficult to find paying work - let's ignore the unpaid internships that are nothing more than slave labor without the benefits of free housing and food. Without a paying job, finding the money to pay the premiums is almost impossible unless your parents help out. This is always going to encourage you to think about term insurance. This is the cheap option, giving you some cover for not that much money. So, as a twentysomething, you buy a term policy expiring when you are fortysomething. At this point you can discover you made a mistake when buying.
If all you bought was a fixed term of years, the policy ends and you are left without any cover. You have to start again when your health is going to be less good. Indeed, many discover they are uninsurable because they have developed health problems that will likely shorten their lives. So here comes the pitch. When you buy the term insurance, ensure it's convertible into a permanent life policy. That way, assuming you pay your premiums on time, renewal as a term policy or conversion into a permanent policy is guaranteed regardless whether your health has declined. This way, as your personal circumstances and financial needs change, you can upgrade without penalty. Starting off with a term policy is not a bad decision. It satisfies a simple needs and gives adequate protection in the short-term. So build in flexibility by buying a convertible policy. Upgrading to whole life is usually the best option, offering the smallest premium increase with some cash value. If your financial situation is strong, converting to a life insurance policy with a better investment option may give you better returns. Remember these benefits can be personal because, once you have a cash value, you can borrow that money or use the policy as security for a loan. Alternatively you can sell it on the secondary market.

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Bundling Auto And Home Policies

Posted on Dec 13, 2011 by Admin

In these difficult economic times, everyone is playing the game of looking for savings on the must-haves. When the job may be lost because of cuts in state or federal budgets - for example, if the defense cuts follow on from the failure of the Supercommittee to agree a deficit reduction package, thousands of jobs will be lost - no one wants big regular commitments. That means discounts is the name of the game when it comes to shopping for insurance. Putting the question of the deductible to one side, the most common saving comes from bundling an auto with a homeowners policy. Insurers usually offer not less than 10% in premium rates which, in these difficult times, can be a good deal. Of course, before you sign up, you complete the shopping around, getting quotes for the policies separately and bundled together from several different companies. Never assume you cannot do better separately if you change insurers.
So far, all this is completely straightforward. In a free market, you can make savings and the insurer gets more business. This should be a win/win situation. Except, in some states like North Carolina, the free market is being twisted by some insurers. The strategy adopted by some of the larger companies like Allstate is aggressive, writing to existing homeowners policyholders to refuse renewal unless they switch their vehicle insurance to a bundle. In some states like New York, this forced bundling is illegal, breaching provisions on anti-rebating and anti-discrimination. In states where this is legal, the insurers justify this mandate on the basis of their business economics.
It's a fact of the business that insuring people's vehicles is highly profitable, but insuring homes is break-even or potentially loss-making. When you look at the last two years, the majority of companies have made a loss because of the increasingly bad weather. Indeed, 2010 was a record-breaking year for claims and this year has already passed the 2010 total. In the past, the insurers would simply have raised their premium rates to cover the losses, but most states now cap rate increases. Insurance Commissioners have become more protective of consumer rights. This means insurers are trying to get back into profitability on homeowners policies by forcing people to transfer insurance for their vehicles. It doesn't work the other way round. Because vehicle insurance is profitable, there's no requirement to bundle a homeowners policy. Indeed, given the choice, many insurers would no doubt like to terminate all homeowners policies.
So when you start shopping around and ask for auto insurance quotes from all the top companies in your state, remember to look carefully at their bundling rules. It's entirely possible there will be nothing but good news with discounts you can enjoy without penalty. But be very careful to read the small print. You should also consider what your reaction will be if, as in North Carolina, you suddenly get a letter from one insurer requiring you to cancel policies with another insurer and consolidate all policies with the one insurer. First get auto insurance quotes with a view to changing insurer and then make a formal complaint to your Insurance Commissioner. The more people who complain and move their business, the better.

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Homeowners Insurance And Trees

Posted on Dec 10, 2011 by Admin

Look out your car window and, sometimes, between the billboards, you can see a tree. In the good old days before we started covering the land with concrete, there used to be whole forests. Now the trees are gone and the ground is covered up, all we get are floods - the water can no longer soak into the ground and disappear. Of course, some of us keep trees as pets in our yards. We miss the old times and enjoy watching something big and green growing up into the sky. And yet. . . Have you ever wondered what holds the trees upright? Yes, these wonders of nature do grow up into the sky but, to ensure they don't just fall over every time the wind blows, they develop big root systems. Many of these roots spread underneath our homes and can cause problems with the foundations. Some roots go the other way and produce that delightfully uneven sidewalk our old folk like to trip over when their eyesight's not so good.
If the roots from one of your trees produces cracks in your neighbor's home, or a stranger passing by falls over a cracked sidewalk, you can face a claim. This will usually be covered under the liability section of the policy. You can also face enforcement action from your local council. Local laws usually entitle the council to order you to remove "dangerous" trees and make good the sidewalk. If you refuse, the council can come on to your land, remove the tree and send you the bill. Whoever's responsible for maintaining the road outside your home is likely to have similar powers. Completely removing a large tree can be an expensive business. Unfortunately, your insurance policy only covers you when your trees cause loss or damage to others. It does not pay out for preventive work to cut back the branches or roots. You get to pay the tree surgeon to do that out of your own savings.
When the snow and ice builds up on the branches, the additional weight can bring them down. This is where your study of the policy terms can pay off. Most policies pay for the repair of your own home or garage if a tree blows over or heavy branches fall through the roof. The unknown is whether the policy will also cover the cost of removing the tree or branch. Hiring men with chainsaws and a truck to remove the pieces does not come cheap. If the tree simply falls to the ground without damaging any structure, the chances of a successful claim for removal are small. Remember if your tree falls on your car, only comprehensive cover will get you back on the road. There are standard terms covering storm damage and, damage caused by falling branches or lumps of ice from trees is usually included.
The fact the northeast has just experienced record snow for October should convince you of the need to review your homeowners insurance policy. In 2010, the Insurance Information Institute reports total claims of $2.6 billion for winter storm damage alone. The weather is causing an increasing amount of damage and, unless you have good cover from your homeowners insurance policy, you might find it difficult to repair your home.

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What Is Guaranteed Or Extended Replacement Cost Cover?

Posted on Dec 7, 2011 by Admin

The problem with insurance is nothing in life is ever completely certain. One day the housing market can be rolling along, everyone certain prices can only ever go up. The next day, we're pitched into a recession, major banks are in trouble and the housing market has collapsed. Because insurance is based on the concept of good faith, there's supposed to be give and take on both sides of the relationship. An insurer cannot physically inspect every property it agrees to cover. To some extent, it must always rely on the honesty of the home owner to get proper estimates for the cost of rebuilding. After all, if the owner innocently underinsures, he or she will have to pay the additional costs out of savings. The insurer will not be at risk. If there was fraud, the insurer has the right to cancel the policy and avoid any payment. This protection for the insurer is fairly comprehensive. Hence, to offer better balance, most insurers offer guaranteed or extended replacement cover cover.
The point of this cover is simple. No matter how hard you try, no pre-estimate of the cost of rebuilding is ever absolute. It's only when you get on the ground and start work you find out what all the problems are going to be. Costs have an unfortunate habit of rising and it's relatively common for owners to have to sacrifice features of their old home to get the building work finished within budget. But, if you're prepared to pay about 10% more on the premium rate, you can buy guaranteed cover, i.e. the insurer will pay the actual cost.
Let's go back to the beginning again. Many insurance policies have a cap, i.e. the insurer places an upper limit on the amount you can claim. This may be a limit for all standard policyholders, or the cap may vary depending on the amount of premium you pay. The only way you can avoid the cap is by buying the extended cover. Why might costs go up significantly more than you expect? Suppose you bought an older home. It was picturesque with a wooden frame and shingles. If you now come to rebuild it, you can find reproducing the traditional building methods are expensive when you face compliance with the current building code. Everything may need to be redesigned including the electrical and plumbing systems. Once you are talking in hundreds of thousands for rebuilding, paying an extra 10% in premium can be very good value to get guaranteed completion.
Stepping outside the scope of the home insurance policy, some insurers are now offering Home Value Protection policies to safeguard against a fall in the resale value of your property. In reality, this is slightly closer to a bet than most insurance policies and you need to read the terms carefully. Most have a high deductible if you claim during the first two years. Since most experts believe the housing market will begin to pick up again within the next two years, you may conclude such policies are not good value for money. Nevertheless, the next time you're reviewing your insurance portfolio, it may be interesting to get additional quotes for Home Value Protection when you get your home insurance quotes.

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Homeowners Insurance Quotes And Those Discounts

Posted on Dec 4, 2011 by Admin

There's a reason why most sites like this talk about discounts as the best way of saving money. It happens to be true but, to take advantage of the discounts safely, you need to think carefully. Let's start with the most commonly mentioned. All you have to do to make big savings is to increase your deductible. Indeed, the theory is often proved correct that an increase from $500 to $1000 can save you up to 25% of the annual premium. But there are two issues to think about.
Many insurance companies are already increasing the deductible whether you asked for it or not. The reason for this is the rise in the number of claims from bad weather. No matter what your view on global warming or climate change, the last two years have seen record-breaking claims for damage caused by snow, flooding, tornadoes and hurricanes. This year is ending on another unusual note with unexpected snowfall disrupting the northeast in late October, early November. The amount of snow and disruption to more than 2 million homes has broken new records for October for West Virginia through to Maine. All these additional claims mean premium rates will be going up again next year, and the deductibles are being adjusted on a take-it-or-leave-it basis. Don't be caught out. Before you raise the deductible yourself, find out what your insurer has done. Second, if you do increase the deductible, can you afford to self-insure all the small accidental losses around the home? If not, resist rises in the deductible.
Now on to the other discounts. In the good old days before the internet, people used to rely on the agent to claim all the discounts. These people knew you and your home. They understood the inner working of the insurers. They used to protect you (well, they were supposed to protect you). Now you have moved online, you are the only one who can look out for your own interests. There are a range of monitors and sensors you can fit to your home that will save you money. The details will vary from company to company so, before you spend any money, get a list of the approved devices and cost their installation. Never fit anything unless you can recover the cost in savings within a reasonable period of time. These include central station alarm systems for both unauthorized entry and temperature rises, smoke, water and gas leaks, and so on. Whenever you renovate, ensure your rebuilding cover is increased and that you gain access to the discounts.
Finally, revisit the question of bundling policies together with the same insurer. Almost all companies will give you a discount if you give them more business. So if you have one or two family cars, giving the same company both the auto and home insurance policies can represent at least 10% in savings. This needs quite careful research to confirm. Get as many quotes as possible for individual cover with different companies, and then look at what savings you will get if you bundle with any one of them. Never assume one of your existing companies will give you the best deal. Always shop around and get as many car and home insurance quotes as possible.

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Things Left Undone

Posted on Dec 1, 2011 by Admin

According to the Book of Common Prayer we often leave undone the things we ought to have done. It's a fact of life. In many ways, we are our own worst enemies. Yet, for most everyday purposes, there are no penalties. We do the things we left undone when we have the time. We might never actually catch up with the backlog, but we keep moving forward. Except there are times when the failure produces instant consequences and, no matter how hard we try, it's impossible to go back and put it right. Let's be clear about this. The majority of traffic accidents could be avoided if everyone followed the rules of the road and kept a proper lookout. But we are easily distracted, multitasking when we should focus on the driving. This leaves the insurance companies with a bill and a problem.
In a no-fault state, it does not matter whether the insured driver or the others involved were negligent. The insurance company pays out regardless. But this only applies in twelve states. The remainder rely on the law of tort which order the party at fault to pay compensation to the other. So, if you were not at fault, your insurance company collects the compensation from the other driver and, in theory, suffers no loss. But if the other driver was not insured or underinsured, or you were at fault, your insurer now faces a loss. If this was just down to the math, the insurer would calculate a "fair" premium rate increase and slowly recover the loss. But if the insurer put up the rate every time one of its drivers was at fault, many of those drivers would move to a competing company. So the math has to bend to match social considerations. Sometimes, the insurers have to accept the loss.
In this, we need to distinguish really serious errors of judgement from more everyday inattention. A driver who has an accident because of excess alcohol or drugs will be classified as high risk and the rates will automatically rise. Few people will argue against this. But suppose you open your car door and another vehicle crashes into it. We start with the general rule you should always look before opening your door. Even if you are not on the road, there's still a risk you might hit someone walking past. So if a vehicle hits the door as you are opening it, that looks like your fault. But if the door has been open for a reasonable period of time, other drivers should see the problem and take evasive action. This is always a 50/50 decision for the insurer, but if you hit the other family car as you are leaving your driveway, this is always going to cause more problems. The first factor is that you cannot claim on the liability policy. This only cover liabilities to third parties. Your only hope lies in having collision cover on both vehicles. This form of car insurance pays out for the repair of your own vehicle if damaged in a collision. If it's the same insurer, try negotiating for only one deductible payment, but don't hold out much hope on the premium rate. The next car insurance quote is likely to be higher.

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