Money: Insurances

Knowledge Is Power When You Buy Insurance

The one mistake you do not want to make when you buy insurance for your car or your home or anything else is to presume that insurance companies are on your side. They are interested in one thing and that certainly has nothing to do with you or your financial health.

Insurance companies are not charities and they will do everything the can to make sure their profits are as high as possible, including withholding valuable information. So what are some of the things insurance companies would prefer you not to be aware of?

Read on to find out.

A Good Insurance Policy

The question you should ask yourself when an agent tells you that the policy they are offering you is a good one is whom it is actually good for: you or the agent. You need to remember that agents sell insurance for a profit and they often get additional commissions from insurers to focus on selling their insurance policies over other competing ones.

Additionally, they are offered higher commissions for signing on customers that are low risk, meaning that the premiums they pay out are larger than their claims. As long as you are aware that the agent will put their own interests before yours, then you will find it easier to buy insurance that is good for you rather than the agent.

How Premiums Are Calculated

Even though all insurers use the basic risk factors when they calculate your premiums, such as where you live, your age, driving record, credit history and home ownership, there are many other variables added into the mix which are not revealed. Additionally, every insurer uses different formulas to calculate these risks and you are left in the dark. A report from the National Association of Insurance Commissioners shows that insurance rates can vary from $600 to $1,300 for the same policy, depending on the State you live in.

Diminished Value

Once you have been involved in an accident, the value of your car drops significantly, even if it has been repaired and runs like new, irrespective of the quality of parts used. However, what most insurers don’t tell you is that you can actually collect the difference, which is referred to as the diminished value, an important factor you need to remember when you buy insurance.

Remember though that not all insurers will allow you to collect this amount, especially if they covered the cost of repairs. However, you can still benefit by writing it off against your taxes which is why it is a good idea to employ an inspector to verify whether or not the work was done properly and to evaluate the loss.

Your Mechanic?

If you are under the impression that the repair service is working for you then you may be laboring under a serious misconception that can cost you a pretty penny and maybe even your safety. An increasing number of insurance companies have established partnerships with repair centers which are on their list of “approved” mechanics. As this is quite a lucrative deal for the repair center they are quite willing to cut corners to keep the repair costs down to keep the insurer happy. There is no clear cut evidence that this does happen but the risk is too great to ignore.

These are only a few of the things that insurers keep from you which can affect the carrier you decide to buy insurance from.

Unfortunately, there is little you can do about some of them but since knowledge is power you can at least ask the right questions and not follow what the agent tells you blindly.


Best Auto Insurance Rates – Is Cheaper Better

When shopping around to find the best auto insurance rates you will probably be looking to compare premiums from one insurer to another. However, rates are not the only variable that will keep your insurance costs down, you also need to look at the policy itself and the coverage you will be getting. Some of the provisions are vital while some are merely a nice addition and many more can be simply an unnecessary cost depending on your situation.

Personal Assets and Family Come First

The best auto insurance policy will provide adequate coverage for both your family and your assets. Even though most laws require insurance policies that cover medical expenses, rehabilitation and burial costs for your passengers and other people involved in the accident, including pedestrians, the amounts are quite low and inadequate. Depending on your income and level of your assets, you should be looking at buying at least $100,000 coverage per person and $300,000 per accident.

The same holds true for insuring your car as most legal limits are for $15,000 and considering that a new car averages around $25,000. So you need to consider getting coverage for at least $30,000.

You also need to consider other issues such as being involved in an accident with an underinsured motorist. The additional coverage will save you a lot of pain as it will cover the same costs the other driver would have been responsible for, costs you would otherwise have to pay for out of your own pocket.

Nice Perks but Not Mandatory

As stated above, the best auto insurance rates will not necessarily lie solely in the premiums but also the additional coverage you get that may or may not be necessary. For example, with collision and comprehensive coverage the higher the deductible you carry the less you have to pay to the insurer in premiums. The deductible is the amount of money you will pay to the repair shop before your insurer has to step in.

If your car is worth less than $5,000, you probably don’t need to include these because over time the premiums will add up to much more than the insurer will have to pay out even if your car is completely destroyed. Additionally, remember that if an accident isn’t your fault the other driver’s insurance will be covering the repair costs.

Getting the Best Auto Insurance Rates

There are many discounts available but insurers prefer not to publicize them so you have to ask. Often you will find that if you take certain actions or meet certain criteria you will be able to get a hefty discount on your premiums. The same holds true for certain categories of people, from senior citizens to teachers.

You can also get substantial discounts on your auto insurance if you buy more than one type of coverage from the same insurer. Think of it as volume discount. So, if you buy homeowner’s insurance as well as car insurance from the same company you can get anywhere up to 15 percent discount on your rates.

Another way you can make sure to get the best auto insurance rates is by analyzing whether or not filing a small claim is worth it in the long run. The more claims you file the higher your premiums will go, so if the repairs you need are under $1,000 you should consider covering them yourself rather than filing for it with your insurer.


Teachers Insurance Liability Coverage – 4 Tips

Most teachers do not think of taking out professional liability insurance because the public school system usually covers all these issues. However, teachers insurance is vital if you are transioning to the private sector and it is also a good idea to check exactly what you are covered for if you are working in the public sector.

Teaching Risks

As a teacher, you expose yourself to risks on a daily basis since you are dealing with toehr people’s children. When it comes to children, people sue first and ask questions much later when it is already pointless. Just the hint of a law suit is enough to ruin you financially as well as destroy your reputation.

Teachers insurance in the form of a professional liability insurance policy is quite inexpensive given the benefits you obtain, such as peace of mind for one. Second, your legal expenses will also be covered in the event of a law suit, which can range anywhere from $5,000 to $50,000.

Teaching in Private Schools

The main disadvantage of teaching in private schools is that there is no teachers insurance available. When you work in the public sector you are covered by the teachers’ unions which make sure that things like liability insurance are part of your compensation package. However, it is still important that you check what coverage you have and don’t assume that you are covered for everything.

If you are teaching in a private school you can try to either negotiate teachers’ insurance as part of your compensations plan, but again make sure you know what you are covered for, or you may find it more cost effective to take out a professional liability insurance policy on you own. Don’t think that just because you are working for a school, they will be looking out for your interests. Institutions, both private and public, look out for their own interests and that means dropping you like hot coals if something goes wrong.

Teachers’ Insurance and Tutoring

An increasing number of teachers are turning to tutoring to increase their income but since they don’t like dealing with mundane issues like insurance they overlook the importance of insurance coverage. You need to remember that if you are tutoring your professional liability insurance from the school will not cover you in private situations, like tutoring. On the other hand, taking out professional liability insurance will cover you in both situations.

Finding the Right Policy

You will find that many insurance companies offer discounts to teachers for a variety of insurance policies, from your auto insurance to professional liability insurance. For this reason you need to do a bit of research. You can start out by asking your colleagues to see if anyone has any teachers’ insurance and what their premiums are.

Even though you may not see the value of the additional cost of taking out teachers’ insurance, all it takes is one perceived mistake or slight and you can end up in financial ruin with your reputation in tatters. With a bit of research, you may even find that your teachers’ insurance is not quite as expensive as you first thought.


Property And Casualty Insurance

Insurance is an excellent form of risk management to protect your assets either by covering the costs of damage or replacement or by covering you for any liability as a result of unforeseen events. However, most people are unaware of the different types of insurance policies available and they end up paying significantly more than they should.

Looking at property and casualty insurance, it can be difficult to understand the difference between the two because they often overlap.

Property Insurance

Property insurance is not solely made up of home insurance policies as you may believe. This type of insurance covers damages to all forms of property that are the result of theft, fire or weather damage. Fire insurance, flood insurance and earthquake insurance are some of the different types of policies that fall under general property insurance.

Even though property and casualty insurance both offer coverage for damages as a result of theft, casualty insurance will also cover damages that result from the theft. In other words, while property insurance will cover the cost of replacing the stolen item, casualty insurance will cover the cost of replacing the broken window as well, for example.

Types of Property Insurance

There are three main categories of property insurance. The first offers full replacement costs of the property, with no concern for appreciation or depreciation. So, if you paid $250,000 for your house but the property’s value dropped to $210,000 due to the recession, you will still receive the full $250,000.

Other property insurance policies offer extended replacement, which means that you will receive a certain amount over the coverage value to cover any increase in construction costs. In this case, the maximum extended coverage is usually around 25% more than the initial amount.

You can also receive only the cash value of the property meaning that you will receive replacement costs after deducting depreciation.

Casualty Insurance

Casualty insurance is often considered the same thing as liability insurance. However, it is not quite the same thing because the former will cover damages both to property and people. It does not offer coverage for fires or weather related damages, but is designed more for unforeseen events such as burglary, fraud and terrorist attacks.

Casualty insurance acts as liability insurance when someone is injured on your property in that it will cover the person’s medical costs. It is also very useful for business owners because it will cover them for any liability when someone gets injured at their place of business.

Property and casualty insurance are essentially complementary policies because while property insurance can be bought on its own, casualty insurance should be considered a supplemental policy. Essentially, a casualty insurance policy will do nothing to help you if your property has burned down but it will be quite useful if someone was injured in the fire. So, you won’t be able to rebuild your home but you won’t be liable for medical costs and damages either. Therefore, the best option is to get both property and casualty insurance tailored to your specific needs.


Budget Insurance – Saving On Your Homeowners Insurance Policy

Even though there isn’t much you can do to change where your home is or how it is built, the main factors that affect your insurance rates, there are still quite a few ways you can save some cash on your policy. Rather than simply digging around for budget insurance, which can often be misleading as the rates are not necessarily lower, you just get less coverage, you are better off searching for discounts on policies from more reputable companies.

There are quite a few situations in which an insurer will offer some nice discounts so that you get all the benefits of great coverage while the premiums will rival those of any budget insurance policy.

Right Place, Right Person

You would be surprised that the location of your home could net you a fair discount on your homeowner’s insurance policy, but that is because most insurers do not openly disclose the discounts they offer and you need to ask. If your home is located in an area where statistically there are low payout rates, in other words what would be considered a low risk zone, you would be considered a desirable prospect for an insurer. So make sure you ask your insurer about discounts for low risk areas.

Similarly, by belonging to certain groups you may find you are eligible for substantial discounts. For example, senior citizens will often receive discounts because they are considered low risk as they are home much more than someone who is still working, thus reducing the risks of something happening because they were not home. Also belonging to associations such as the American Automobile Association can net you significant discounts. All you need to do is enquire with the association you are part of if you are eligible for any discounts and you may find you don’t need to shop around for budget insurance.

Secure Your Home

The more secure and protected your home is, the less risk you present for an insurance company. In fact, by installing a central alarm system you can get discounts ranging from 15 – 20 percent on your annual premiums. You will be making a long term investment that also raises the value of your property and increases the protection of your assets, which you will be able to amortize from the savings on your insurance policy.

Look at Your Deductible

The level of your deductible can also net you some nice discounts so that your current premiums may end up lower than anything a budget insurance policy can offer. The advantage is that you don’t need to make substantial changes to the deductible because simply raising it from $250 to $500 can lower your annual insurance costs by 10% and if you go to $1,000 you can save a further 10 percent.

Combine and Save

Some insurers will also offer a significant discount if you buy all of your insurance from the same company. You can get a discount ranging from 5 – 10 percent just by purchasing your auto insurance policy and your homeowner’s insurance from the same insurer.

You may find that your premiums will be much lower than anything you could get from a budget insurance policy while you still benefit from great coverage. Remember, though, that insurers prefer not to publicize all of these facts and that you will have to ask outright.


Property Casualty Insurance – 5 Types

Property casualty insurance provides coverage for homes, cars and businesses, where property insurance protects against the loss of physical property or the income derived from it, while casualty insurance protects from liability for loss caused by damage or injury to another person or their property. Property casualty insurance can be either for commercial purposes or for personal purposes.

Commercial Property Casualty Insurance

Commercial property casualty insurance refers to insurance that businesses can use to manage their risks. It is essential for any business owner or corporation because it covers everything from the loss of equipment to liability and even loss of income due to unforeseen events.

Property casualty insurance is available for essentially any type of risk that a business may face. There are a wide range of insurance policies available but the fall under a number of general categories.

1. General Liability Insurance will cover any costs related to accidents, injury and negligence. In other words, the business will be protected against having to make payments that result from damage to property, medical expenses, slander, libel and many more.

2. Product liability insurance is designed for companies that deal with goods from manufacturing to retailing, where they may be liable for the safety of the product. It is meant to protect against any liabilities where a defective product can cause injury. The coverage required depends greatly on the products the company is manufacturing.

3. Commercial property insurance protects against the loss or damage of any type of company property, from buildings and equipment to loss of income. Any damage caused by unforeseen events such as natural disasters, theft or vandalism is covered under this type of property casualty insurance.

4. Professional liability insurance is mainly for businesses offering services and protects the company against errors, negligence and malpractice, among other things.

5. Home business insurance covers losses for businesses that are run out of the home. A general homeowners’ insurance policy doesn’t protect against business losses, especially loss of income.

Personal Property Casualty Insurance

Personal property casualty insurance refers to any type of insurance that protects the assets of a private individual, as well as protecting against liability for damage caused to other people’s property or injury. Auto insurance and homeowners insurance are considered to be personal property casualty insurance.

Most auto insurance policies cover for both liability and personal loss and will provide coverage for any licensed drivers that have been given permission to drive the car, including but not limited to the spouse and relatives living under the same roof. Most policies cover damage to the vehicle caused by collision as well as other situation such as vandalism, floods, fires and hail.

Homeowners’ insurance is a little more complicated because there are a number of supplementary policies one can take out as most of these property casualty insurance policies do not cover all unforeseen events. For example, flood or earthquake protection would have to be taken out under a different policy. Most homeowners’ insurance policies cover the structure itself, the contents and some personal liability.

As with any type of insurance policy, extensive research is mandatory to determine the most suitable type of property casualty insurance, whether for commercial or personal purposes.


Benefits Of Small Business Insurance – 3 Major Benefits

As a small business owner, insurance is probably one of the last things on your priority list. However, this is a big mistake and can end up costing you your business in the worst case scenario or eating up your profits in the best case scenario. There are many benefits to taking out small business insurance and you will find that the costs offset themselves quite quickly.

1. Liability:

Probably the most important benefit in taking out small business insurance is that you are covered for liability. Businesses make easy targets in case of on site accidents. If someone is injured at your place of business and you don’t have any form of liability insurance you will end up paying for the rest of your life to cover medical expenses and any other damages the courts see fit to grant the person who was injured.

You may think that since you run a small office that there are no accidents your business can be found at fault for. However, even if someone just trips over a wire and twists an ankle in your office they can sue you for damages and medical expenses. It really doesn’t matter if it was their fault. The accident took place in your office so you are liable and since you are a business you will probably end up paying more than you could have imagined for a sprained ankle.

Small business insurance will cover you in all these situations, whether the person is a visitor, client or employee.

2. Theft:

Small business insurance will also cover you for the cost of equipment or goods that have been stolen. So, if you have a warehouse and goods are stolen as a result of a break-in your insurance policy will cover the cost of replacing the stolen property. This holds true for office equipment and any other property that you have insured.

The compensation you receive can save your business because having most of your inventory stolen can cause a serious dent in your turnover and profitability if you don’t have coverage. Small business insurance will cover the costs and you can quickly replace your lost inventory.

3. Natural disasters:

By taking out small business insurance against natural disasters you will be protecting your assets and inventory in case they are destroyed by natural disasters, such as a flood or earthquake. If your place of business is destroyed by an earthquake, the costs of replacing everything can be staggering. A good insurance policy will cover the replacement costs so you can be up and running again in no time at all.

However, if you didn’t have any small business insurance you will have to cover everything out of your own pocket. As most small business owners don’t have massive financial backing and usually don’t have such a large emergency reserve of funds it usually means that they end up filing for bankruptcy.

Taking out small business insurance can mean the difference between having a successful business and losing it all in a moment.


5 Things To Consider Before You Buy Insurance

If you’ve been putting off your plans to buy insurance, it’s important to think about a few things before you sign your policy. While insurance can be an important way to protect you and your family against unforeseen circumstances, it matters that the policies you choose are right for your specific needs.

Budget

Looking for policies based on price alone might sound as though it’s a good idea for your financial budget, but you should always check that the insurance policy you’re paying for will give you the inclusions you think you’re getting.

Some insurance companies may reduce the amount of cover you’ll receive in order to keep the prices down. You may find there are exclusions on your coverage. While the price you pay is important, always be sure you’re covered for the things you really want.

Inclusions and Exclusions

Many insurance companies write their policies in difficult-to-understand language that can be hard for some people to follow. If you’re not sure what’s included in your policy, ask a representative to clarify this for you. Ask plenty of questions and understand exactly what you’re getting – and what you’re not.

If you’re not happy with the answers you receive, continue to ask questions until you can work out whether your policy is offering you the right amount of cover for what you need. You may just learn that you need to fine-tune your insurance to either add or remove some aspects that could suit you better.

Right Amount of Insurance

A surprisingly large number of people are under-insured for what they really need to protect themselves. Look closely at the level of coverage you need before you buy insurance and make sure it will be adequate for what you really need.

Unfortunately, there are also people who are over-insured, which means they could be paying far more on their premium amounts than they really need to.

Premiums

Some insurance companies will raise the premiums you pay simply based on your medical history and physical health. You will need to be honest on your application form when you buy insurance, or you risk having your insurance voided, so be sure to disclose your medical history and answer any questions about your lifestyle truthfully.

For example, smokers may pay more in health insurance premiums than non-smokers. You might also find that overweight people could be charged slightly higher premiums too, as will people in jobs considered to be high risk.

For auto insurance, your choice of car can affect the amount you pay on premiums, while income protection insurance premiums can be affected by your choice of employment.

Consider Carefully

Before you buy insurance, always take the time to understand what you’re paying for and how various aspects of the policy can affect your premiums and coverage levels. There’s no point paying for more insurance cover than you really need, but likewise, you need to be sure you have enough cover to protect you in the event of something happening.