It makes no difference what the activity, when you’re learning something, you make mistakes. On the football field, it makes no difference if you crash into other players. You’re all players together and no innocent members of the public are at risk. But if you apply the same approach to driving, there can be a lot of innocent victims. So insurance companies group all inexperienced drivers together. The younger the driver, the higher the premium. But, as time passes, and you build up a track record of safe driving, the rate comes down. There’s a general policy to review your safety record on a regular basis between 17 and 29. In general, all drivers under the age of 25 pay the highest rates but, assuming no accidents, the rates will slowly scale down. Single males are judged the most dangerous. The statistics show young female drivers are significantly safer.

The rates come down faster if you marry and have children. Now as the owners of vehicles likely to be carrying your family, you are assumed to have a safer approach to driving. Even if you don’t marry, you still earn a lower rate if you’re the owner of the vehicle. It’s assumed you’ll drive your own vehicle more carefully. This leads to a more general point. If parents insure their children, they pay the penalty if there are accidents or convictions. Premium rates are likely to triple or cover may be refused if underage children are caught driving while intoxicated. The same can apply if they are caught for underage drinking even while not driving. The parents are likely to face nonstandard rates or surcharges. Perhaps curiously, DWI/DUI convictions can also affect other home-based policies like those covering a jetboat or snowmobile. These higher rates will stay in place until the child leaves the home and will no longer be a driver of the family cars. This makes it better to encourage younger drivers to take out a policy in their own names. The sooner they learn the cause and effect of financial responsibility the better. (more…)

There’s an increasing disconnect between what the TV ads are saying about the rates for insuring your vehicle and the quotes floating into your inbox. The marketers would have you believe there’s no problem in finding really cheap insurance (but only with their company, of course). Yet the insurance industry itself funds the Insurance Information Institute as a research body. It regularly publishes studies. Mostly, they are uncontroversial. So it came as a surprise when it revealed a steady rise of some 10% in the premium rates between 2008 and 2010. The latest straws in the wind are also suggesting a further rise of some 4% this year. When you consider the rate of inflation has been zero – there has been a recession, after all, and many prices actually fell – it’s a disgrace the insurance industry has been pushing up its prices.

Yet, when a talking head does appear above the parapet to talk for the industry, the message is always the same. The rates are going up because the repair and medical costs have been rising faster than inflation. Indeed, when you look at all the evidence on medical costs, you can believe what these insurance apologists are saying. Then you have to ask yourself about the value of the US dollar. It’s been falling steadily over the last three years. So the cost of all those imported spare parts from foreign manufacturers has also been rising. If these same insurance companies were not announcing increased profits to their stockholders, you would almost feel sorry for them. (more…)

As you already know there are many things that will affect your insurance rates. Insurance companies use different factors when determining their rates and each factor has a certain weight in the final quote you receive when shopping around for a policy. While most of the factors you have to indicate in the quote form are quite clear in what concerns their connection with vehicle insurance others may seem like being out of place and cause a lot of questions to be asked by inexperienced insurance buyers. One of such factors is the driver’s credit rating. A lot of people find that it’s wrong for the insurance company to use their credit rating when calculating rates as it doesn’t have any connection to insurance. But if you take the time to learn the details the link becomes very obvious.

Let’s first talk about car insurance from the provider’s point of view. The most important aspect of providing insurance of any kind is assessing the risk of insuring every new client. All the people are different and if one client may never need the coverage another car owner may file several claims in a single year. Each claim filed means that the coverage will be paid out by the provider and that’s usually a lot of money. That’s why it is very important for the insurance provider to be able to determine the risk associated with insuring each client separately. There are different factors being used when doing so, which were observed to be statistically linked to the probability of a person to file a claim. And at a certain point specialists have made an observation that the likelihood of filing a car insurance claim is strongly linked to the person’s credit rating. (more…)

It would be a wonderful world for everyone if we could all get past this cult of selfishness. As an aside, we can note with ironic detachment that the first film in the planned trilogy of Atlas Shrugged is struggling to cover its costs. Indeed, so poor is the box office, we may never see the second and third parts made. It seems the Tea Party and Libertarians resist the idea of paying for admission to see their favorite story on the big screen. Ah well, such are the priorities of the Right when asked to pay for anything. Which brings us to the progress of Assembly Bill 299 in Nevada. If you ask the Republicans, this is the worst piece of redistribution since Karl Marx first thought up the idea of communism. First, let’s consider the problem.

When you drive around our great nation, there’s a one in five chance the driver of the vehicle crashing into yours is uninsured. This woeful state of affairs persists despite there being a mandate requiring all drivers to carry a minimum of liability cover. The practical reality is a lack of enthusiasm to enforce the laws. Since most uninsured drivers feel they stand a good chance of avoiding prosecution, they save the money and leave the rest with the risk. Yes, that’s right. Unless you paid for collision cover and, possible uninsured/underinsured cover, you pay for all losses arising from the crash out of your own pocket. So you have what the Brits call Hobson’s Choice. You either pay more in premiums or you pick up the bill for all losses. Either way you pay more. If the law on mandates was actively enforced, we would all pay less – assuming, of course, the insurance companies would pass on their savings to us. But if you ask politicians to fund active enforcement on budgets in deficit, they back away (usually on foot), claiming it’s more important to use the little money available to keep schools open and pay someone to keep the streets clear of rubbish.

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Most people have the good sense to make sure that they are financially protected with home insurance cover in place. The right home insurance plan provides us with peace of mind as well as financial protection in the event of a range of unexpected events that can affect our homes or our possessions within the home.

However, some people make the mistake of taking out a home insurance plan that is suited to their needs and then simply renewing it year after year without actually working out whether their needs are still the same as they were when they first took the plan out. A lot can change over the course of a few years and you may find that your insurance requirements have altered, but if you are still taking out the same cover year in year out your insurance will not reflect your changing needs.

Some people may find that due to changes in their lives and their homes they require a higher level of financial protection or a more comprehensive home insurance policy than they originally took out. For example, when you first took out home insurance you may have been living alone with little by way of valuable possessions in the home. However, since taking out the plan you may have moved a partner in who has valuable jewellery or electrical gadgets in the home, which may not be covered by your plan.

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In the wake of damage caused by hurricane/tropical storm Irene, many are left wondering how they will pay their deductible and what their claims will be like. For those lucky enough to escape the storm, many are rightly concerned with the possibility that the next one might strike their home. What will happen? If you have hurricane coverage, your insurer will take care of you, but you might have to pay a special deductible.

Hurricane Deductibles Versus Normal Deductibles

In places where hurricanes hit regularly, such as Florida, Georgia, and pretty much the entire Atlantic coastline, Gulf coastline, and New England, insurance companies do not charge a normal deductible. Instead, they charge a hurricane deductible.

The difference is that, rather than the flat amount you pay with a standard deductible, you pay a percentage of the market value of your home. So, if your home is worth $300 thousand and your hurricane deductible is 2 percent, you pay $6 thousand. This is almost always more than a standard deductible, such as $750.

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The year 2011 has been one for record natural disasters. The Texas wildfires currently raging are already causing never-before-seen damage in the state to forests, animal habitats, and human homes. This damage continues hurting even after the fires are done. The only thing protecting homeowners in the 25 thousand scorched acres is insurance.
Big disasters can be huge tests of the viability of an insurance company. Make sure your insurer is up to the test.

Damage from Wildfires

Wildfires have always been a problem in the Southwest and always will be, if climate change doesn’t turn it into a tropical zone. The problem will likely only get worse as more of the precious few water resources are tapped out in Texas and other border states.
Wildfires can start from almost anything, whether it be spontaneous combustion from the sun or a cigarette tossed into the woods. The key is parched woodland from lack of rain, intense sunlight, and heat. Once a fire gets going, it’s very hard to stop. Part of the reason is the incredible amount of fuel available – so many trees – and another part is the inability to predict which way it goes. Fires spread by wind to anywhere where a flame or even an ember can blow.
In this Texas wildfire, 500 homes are already been destroyed in the conflagration, with no end in sight. The 25 thousand acres of land affected could double or triple before this is over, the fire department says. (more…)

Insuring a vehicle is probably one of the least pleasant aspects of owning a car. And because it’s required by law you just can’t do anything about it. Most people choose going with the flow when it comes to car insurance and simply take the first policy they come across. Others, however, take the time to learn what can be done to lower the costs and still get sufficient coverage. If you are one of those inquisitive people there’s good news for you – this way you have a much higher chance of getting inexpensive car insurance. But before you will be able to shop around effectively you should first learn what actually affects car insurance rates and why they tend to differ between various customers.

First of all you have to understand that the insurance company sets individual rates for each customer based on a set of different factors. These factors help the company determine the actual risk of a particular person to file an insurance claim. And the combination of these variables is what determines the final auto insurance quotes you get when simply trying to learn how much the policy would cost you. Moreover, each company uses the same factors in different formulas when calculating the customer’s premiums so there’s usually a fluctuation in rates even if you’re trying to get the very same policy from two different providers. (more…)

Even if you read your policy very careful, you might still be surprised these 10 things are not covered.

#1: Currency

Some people think keeping money under their mattress is safer than keeping it in a bank. At least money in banks are insured! If you have cash lying around, under the mattress, or even in a safe or lock box, it will probably not be reimbursed under the terms of your homeowners or renters insurance.

#2: Water Damage from Backups and Floods

Unless you have flood insurance, nowadays insurance companies won’t cover water damage caused by flooding or storms.

What most policies do cover burst pipes and damage from accidents or non-flood disasters.
Don’t expect sewage backups or other pipe backups to be covered standard though. What you need is “sewer backup coverage”.

#3: Trampolines

Depending on your state, you might not get coverage for your trampoline. Obviously, no trampoline repairs, but the bigger concern is your liability from injuries incurred during trampoline use. Over 100 thousand injuries happen each year due to trampolines.

In some places and with some companies, you might be disqualified from getting any property liability coverage at all if you put in a trampoline. And don’t think about not telling your insurer, because they can void your whole contract if they learn about it.

You should also be concerned about the damage to your home or others that a trampoline can cause if it is blown away in a storm. At the very least, bolt it down. (more…)

You always hope for the best whatever you do. Let’s face it, setting off expecting the worst often becomes a self-fulfilling prophesy. So when you learn to drive, you first hope you will never have an accident. Then you hope you will only have a small accident. The idea of a total loss is not something you want to think about. Yet it’s surprising how often you find the insurer wants to total your vehicle; and then there are the times when your pride and joy disappears off the face of the Earth. That’s a really sad moment. So what are the rules when the unthinkable happens? In this, don’t forget the minimum liability policy is no help. For repair of your own vehicle, you need a collision policy. To recover value should your vehicle be stolen, you need a comprehensive policy.

Let’s start with an accident in which your vehicle is damaged. Your first instinct is to repair. The insurer gets estimates. If it’s going to cost more than the market value of your vehicle, the insurer will offer you a check. Now comes the really sad part. The check is for less than you expect. This is not the price you paid. This is not the price you think the vehicle would command if you advertised it for sale. This is the price the insurer thinks you will have to pay to buy a similar replacement. So you may have showered love on this vehicle. Its paint may gleam in the morning sun and it has been perfectly maintained. You look at the check and see it will only buy an unloved wreck. But there’s worse to come. Suppose your vehicle was bought using an auto loan and the amount of the check will only pay off a part of the money outstanding on the loan. To cover this gap, there’s a separate insurance policy you can buy. That way, there will always be enough to pay off whatever is owing to the bank or finance company. (more…)