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Considerations When Buying Personal Insurance Coverage

All families will need a financial plan which includes personal insurance coverage in order to cope in the event of accidents, death, illness and disability. As you are planning insurance coverage you will need to consider your economic situation, age and number of dependents. There are a confusing range of insurance plans and which ones are best for you will depend on numerous things. Life insurance for instance is vital if you have a spouse or dependent children but is obviously less crucial for people who do not have dependents. Everyone should purchase disability insurance as all of us need to be covered if we are unable to go to work. Below are short descriptions of some of the different kinds of personal insurance coverage available.

Auto Insurance
* Needed by everyone who drives a car
* Minimum liability coverage essential

Liability insurance is needed before you can register a car and many states require a medical cover of at least $100,000, a minimum accident coverage of $300,000 and $50,000 for property damage. Unfortunately these minimum values may not be adequate and we would recommend you have above the minimum required cover. Other coverage recommended also includes collision, theft and fire coverage. Cost of the insurance can often be reduced by going for a higher deductible.

Prices vary a a great deal between companies and you should obtain a range of quotes before choosing. There can often be discounts available which may depend on on your driving record, age, where you live etc.

Homeowner’s Insurance
* Considered necessary for all who own a house

Home personal insurance coverage must be sufficient to cover rebuilding costs and replacing furniture and fixtures in the event of fire or other damage and to be covered in the event of injury happening on your property. To decide the amount of insurance you will need for rebuilding, subtract the cost of the land and foundations from the house value and ensure that you have cover for at least 80% of the resulting cost. Liability insurance coverage for most householder’s policies is typically around $250 ,000.

Life Insurance
* Essential for anyone with a dependent spouse, children or others

Life insurance is a kind of personal insurance coverage that pays out to your dependants when you die. The amount of coverage necessary of course, will depend on your financial situation and circumstances and the amount those that survive you will need to continue to enjoy the same standard of living. You need to take into account costs of education and outstanding debts when deciding on the level of insurance cover that you need.

Disability Income Insurance
* Essential by everybody who supports themselves

Personal disability insurance coverage is indispensable for all of us for times when we cannot work. Many companies provide a broad insurance coverage for employees but this is frequently short term or low coverage and often not really adequate. The cover is often up to 65% of your salary and is frequently for a restricted period. If you can, try to find coverage that lasts until you retire. If your employer offers cover take care that it is enough and that it will last long enough.

Health Insurance
Medical insurance is generally offered by employers as private medical insurance coverage is frequently much more expensive. Check out the conditions of your employer’s medical insurance for any constraints.

Auto Insurance Coverages and Discounts Explained

Auto Insurance Coverage

Liability Coverage: Protects you in the event that you unintentionally cause injuries to other drivers or damage to other vehicles or property. This coverage normally comes into play when you are the at-fault party in an accident. Coverage in many states in generally “split limits”, meaning per person coverage, per accident coverage, and property damage coverage are separated with limits defined individually. For example; 50/100/50 means; up to $50,000 of coverage is available if one person claims injury damages, $100,000 is the maximum provided for all injury damages no matter how many people sue, and $50,000 is provided to fix cars or other property damaged by you. In addition, many auto policies provide attorneys fees and court expenses on top of the listed coverages.

Uninsured and Underinsured Motorist Coverage (UM): UM can provide coverage for medical costs, pain and suffering for bodily injury to you and others in your vehicle, if injury is caused by a driver with no coverage or not enough coverage. For example if you are in an accident where the at-fault party has no coverage, very little coverage, or flees the scene and is not found, and your injuries are deemed deserving of compensation in addition to the medical coverage provided by your policy UM coverage may be made available.

Personal Injury Protection (No Fault): Required coverage under Florida’s No-Fault Law. Provides a percentage of first dollar medical expenses to you regardless of fault in the accident. May people make the mistake of thinking that because of this coverage there is “no-fault” in an accident. This is incorrect and only refers to first dollar medical expenses sustained in an accident to a certain limit. The purpose of this coverage is to prevent minor lawsuits for medical bills from tying up the court system.

Medical Expense Coverage: May pay certain medical expenses for injuries sustained while occupying your car, regardless of who is at fault. This coverage is optional and simply provides for additional medical coverage beyond the standard personal injury protection coverage provided required by the law.

Comprehensive Coverage: May pay for damage to your car, less any deductible, caused by things other than collision or upset (fire, theft, glass breakage, for example).

Collision Coverage: May pay for damage to your car, less any deductible, caused by a collision with another object.

Towing & Labor: This coverage may provide a limited amount of reimbursement for expenses such as towing or car repairs made at the site of vehicle disablement.

Rental Reimbursement: This type of coverage provides limited reimbursement for a rental car used while your car is being repaired for a covered claim.

Auto Insurance Discounts:

Discounts may vary depending on the state and company but many are fairly standard across the industry.

Good Driving Record: Generally determined by the insured drivers previous three years driving record. In most cases if the insured driver has been been ticket and accident free there will be a discount available.

Driving a Safe Car: A vehicle safety discount will provide credit for cars that have tested and shown a history of limiting and preventing injuries to the vehicles occupants.

Low annual miles: The price you pay is determined by your risk and one major factor affecting risk is the amount you drive the car. If your annual mileage is below a predetermined number you may be eligible for a discount.

Student away at school without vehicle: If the primary driver of a vehicle is a student that is away at college and does not take the car to college with them a lower premium may be provided. The assumption is that the student will only be driving and have regular access to the vehicle on a limited basis such as holidays and for this reason the risk and price are lower.

Student with drivers education course: One of the most often considered discounts for young drivers. Either provided through a school or the insurance company young driver education can provide a reduction in premium.

Carpools: The reasoning behind this coverage is similar to the low mileage discount. Less driving equals less risk.

Seasonal Driver: Many drivers have vacation homes and keep a car there permanently. Many companies will reduce the premium or suspend coverages during the time when the car is parked and not driven.

Multiple cars insured with a company: A very common discount provided to customers who insure more than one owned vehicle with the same company.

Have additional lines of business insured with a company: Called a multi-line discount, provides a policy price reduction when an insured has vehicles and one other type of coverage such as homeowners insurance.

Longevity with a company: Many companies will allow for a lower premium based on the time a person has been with a company. The discount is intended to provide incentive to stay with that company.

Good Student: Studies has shown that good grades in school correlate to less accidents on the road and therefore insurance companies are willing to provide a lower premium to students with above average grades.

Anti-theft devices: Car alarms can deter theft, and reduce vandalism resulting in less insurance claims and a reason for reducing the premium.

Factors Effecting Car Insurance Premiums

The cost of car insurance premiums varies significantly from vehicle to vehicle and person to person. In fact, many factors affect the premium that you pay for your auto insurance.

As such, the risk associated with an accident affects the insurance premium largely. The higher the risk, the more you have to pay for the insurance coverage.

Factors:

1. Age: Statistics show that younger people are at a greater risk of confronting an accident as compared to older people. Generally, drivers between the age of 50 and 65 are considered as safe drivers.

2. Gender: Women are supposed to make fewer claims than men and considered to be safe drivers.

3. Driving History: Usually, people with a clean driving record attract lower car insurance premiums.

4. Driver Geography: Your residing address also makes a difference in car insurance premium. People residing in areas that have less traffic are expected to spend less on auto insurance as compared to people living in urban areas that have massive traffic. Car insurance premiums differ from zip code to zip code, depending on the rate of vehicle thefts in the local area. If you reside in a high-risk area, your insurance premiums are expected to be higher.

5. Car Type: Luxurious and powerful cars are usually expensive and are likely to be stolen. Hence, may cost more to insure. On the contrary, a cheap car will cost less to insure.

6. Driving Violations: If you have an accident record, then you are at a higher risk and thus, your car insurance premium will be comparatively higher. You may be penalized by the auto insurance company for as many as five years from the date of the accident. However, your premium will get lower with the improvement in your driving records.

7. Credit Rating: If you have a poor credit history, then the car insurance company will charge you a higher amount of premium. You can work on your credit rating to get a better score. This will help you to save on your premiums.

8. Car Parking: Your car insurance premium will be greatly affected by the place where you park your car. If your car is secured against theft and damage, the premium will be low. So, make sure to park the car in your garage and have a car alarm or a tracking device to pay less on premium.

9. Annual Mileage: The car insurance company will also estimate the annual mileage of your vehicle. This is because the annual mileage of the vehicle gives the insurer an idea of the level of risk associated with an accident. This can affect your auto premium to some extent.

To sum up, before finalizing auto insurance, make sure that you compare the rates offered by various local auto insurance providers to get the best deal in car insurance. You may take optimum advantage of these factors and work on to lower your auto insurance rates.