An Insurance Pothole?

Potholes. The nemesis of drivers everywhere. They appear when you least expect them and they can do some real damage to your tires, your wheels, and even the frame of your vehicle. Potholes need to be filled quickly, before they get larger and damage more vehicles.

Insurance potholes act in the same way. They pop up when you least expect them and certainly when you don’t need them. When they rear their ugly heads they can do some real damage to your assets – especially your cash assets. Insurance potholes need to be filled too. And just like potholes in the road, it’s easy to put off fixing them. But procrastination with insurance potholes is a REALLY bad idea.

One of the biggest insurance potholes is a “gap” in coverage.

What is a “gap” in coverage? Other than a time gap, where you allow a non-payment of insurance premiums to cause your policy to lapse or go dormant, a gap in coverage occurs when what you want to insure is valued at more than the insurance you’ve purchased.

Car Insurance.

State law minimum requirements for car insurance vary from state to state but usually they’re very, very low. Many states only require you to purchase as little as $10,000 in property damage coverage per accident. So, if you have a car accident and it is deemed to be your fault, make sure the other vehicle isn’t worth more than $10,000. That means don’t hit an car less than one or two years old, no upscale European or Japanese models, no Cadillacs, Lincolns, or Corvettes. Think you can pull that off? If you have any doubts, you have a gap in coverage.

Life Insurance.

Far too many people believe that the younger crowd doesn’t need any life insurance but I disagree. Even if you don’t have dependents, the chances are very good you’ll have some final expenses associated with your untimely death .. should it occur. Do you really want your mother or father or other family members to have to face telling the hospital or your creditors that there isn’t enough money to pay them off? Do you really want your parents or family to have to shoulder the entire bill associated with your funeral? I know I didn’t. That’s why I bought a minimal policy, even before I had children, just so my wife wouldn’t face that ordeal.

Homeowner’s Insurance.

Wait a minute! Isn’t your home insured for it’s replacement value? Where could there be a gap in that insurance? My answer: how much is your jewelry insured for? How ‘bout your electronics? What about any antiques, guns, furs, or other of those items typically capped at a ridiculously low amount on homeowners insurance policies? If you have those items included in your homeowners insurance policy as an additional rider, you don’t have that gap in coverage.

Has your home increased in value since you bought your policy? If it has, you may be underinsured. If your home has actually decreased in value, you may be over insured and need to decrease it.

Click HERE to get started evaluating the gaps in your insurance coverage with InsureMe.com

Renter’s Insurance.

You rent your apartment or house? You need renter’s insurance. Without it, if anything happens to the dwelling and you lose your personal belongings, you’re out of luck. Renter’s insurance is cheap.

Medical Insurance.

I know the Federal government is supposed to swoop down sometime in the near future and save us from the evil health care industry, but personally, I’m not holding my breath. Your gap in coverage with your health insurance may come in the form of a higher than standard deductible ($2,000 per person and up). If it is, a supplemental health insurance plan can close that gap and provide you with the necessary coverage so you’re not left holding a bill that’s much larger than you realized.

What do you do if you find a gap in coverage?

I’d recommend checking out InsureMe. When you fill out their simple form, you can get quotes from insurance agents without the hassle. InsureMe’s research shows that consumers save 20-40% by receiving multiple quotes and over 60% of consumers would recommend InsureMe to a friend!

Even if you don’t want to try InsureMe, give your regular insurance agent a call and schedule a time you can both examine your gaps in coverage and make sure they’re filled as soon as possible.

Photo by Heneghan

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The NTSB (National Transportation Safety Board) estimates your lifetime chances of being in an automobile accident at one in four – 25 percent. Car insurance isn’t something you want to “cheap out” but with other items skyrocketing in price, your auto insurance should be a prime candidate for re-evaluation.

Auto insurance isn’t an option. It’s the law, so what are the factors that affect your premium amount and how can you and I get the coverage we need at a better price?

Get FREE car insurance quotes from multiple providers like Travelers, Allstate, State Farm, Nationwide, Farmers, the Hartford & Liberty Mutual

Factors affecting your car insurance premium

1. Your coverage amounts

Depending on your driving habits, you will need different coverage amounts. Someone who logs a lot of miles on a new car will require different coverage than someone who drives an old beater to town every 14 days.

2. Your deductible

The higher your deductible (industry talk for the amount you have to pay before they kick in anything) the lower your premium. Get a higher deductible and save for it in your emergency fund.

3. Your age

Old people rule! Sorry. Those with a few gray hairs around the edges generally take fewer risks, drive a bit slower, and have better developed reflexes to deal with changing road conditions.

4. Your gender

Old women rule even more. Same reasons, just more intense.

5. Your marital status

Make that married old women rule! The actuaries who calculate all these things have discovered that married people are better drivers.

6. Your driving record

Safety pays when it comes to your car insurance premium. This is a no-brainer … or should be.

7. Other members of your household who might drive your vehicle

If your son has had 5 wrecks before the age of 17, he will cause your car insurance premium to jump. You’ll have to specifically exclude him on your auto insurance and not allow him to drive your vehicle until his exclusion is waived.

8. Where you live, drive, and work

Some places are better than others … like it or not, your new Honda is more likely to be stolen or damaged in certain zip codes than others.

9. The type of vehicle you drive

A Mercedes, BMW, or Porsche will always command a higher premium since they’re more expensive to repair. Also, look out for vehicles that are tops on auto thieves’ lists.

10. Your credit history

There’s a legitimate fear that you people with a low credit score may crash a vehicle to get the insurance money.

Click here and get access to all 3 credit scores at GoFreeCredit.com.

Get great coverage at a great price

Always, always, always ask for discounts. Car insurance agents may not point them out and even those that will may not know that you’re eligible for a specific discount unless you mention things like:

• “I have an anti-theft device on my vehicle.” Point out any safety features on your car as well. Anything that makes your car safer on the road and less attractive to thieves will make your premium go down.
• “I’m willing to insure my (home, RV, boat, etc.) with you as well.” Ask about bundled package deals, but evaluate each on it’s own merit.
• “I haven’t had any tickets or accidents in X years.” Good, safe drivers are cash cows for insurers. Just make sure the “X” is at least 10.
• “My child IS on my policy, but she makes good grades and has taken a driving course.” Good student discounts are a parent’s friend!
• “I don’t drive very much and I take the bus to work.” Low annual mileage can pay off in another discount.
• “I have multiple vehicles to insure.” More than one opportunity to collect premiums usually means yet another discount.

You CAN save a bunch of money on your car insurance but it will take a little work.

If you’re curious about whether you’re paying too much for your auto insurance coverage, head over to GoInsuranceRates.com and get a free quote from highly reputable companies like State Farm, Travelers, the Hartford, AllState, Farmers, Liberty Mutual, Nationwide and American Family. It’s free to check whether your current agent is ripping you off!

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

Steve Jobs was an extraordinary visionary and although he surely didn’t need traditional life insurance, he provided it for his company. How? Reports are coming out that Mr. Jobs provided life insurance with his own twist in the form of up to four years of ideas to help his company, his family, his “baby”, survive and thrive. That’s basically what life insurance does … it provides for those left behind. Most of the time it provides cash but in the case of Apple, ideas are much more valuable than cash (the last time I checked, Apple had over $26 billion in cash).

Four years worth of ideas may not seem like a great deal but when it comes to technology companies, this is a fantastic resource from the company’s founder and chief idea generator. Although it would have been awesome if Steve Jobs could’ve provided 25 years worth of ideas, Apple has been left on a more solid footing than many companies under similar circumstances.

Does your family have resources available to them if you or your spouse were no longer able to provide an income? Have you made provisions, like Steve Jobs did, to keep them viable for years after you’re gone? Is it enough?

The easiest way to provide for your family is with a level premium term life insurance policy. Your premiums will remain the same throughout the entire term (10, 20 or even 30 years) and level premiums mean you’ll be better able to budget to pay those premiums. How long a term you should purchase depends on how long you’re going to need the insurance.

Click HERE to get a personalized life insurance quote from a top rated company.

Some people just want to replace income until the kids get out of school while others want to make certain to provide an inheritance for their children and grandchildren. Other people (including me) want to make sure their family is able to continue with their current lifestyle, pay for college educations, and leave a legacy for the kids. I bought a term policy that would last until my youngest son turns 25 at which time I’ll look into either renewing it or converting it to permanent insurance.

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A few weeks back, I was at my parent’s home, helping them declutter their office when I ran across an old copy of Wealth Without Risk (1988) by Charles Givens. Givens was the financial guru of his day and one of the ways he advocated cutting expenses was by thoroughly examining your car insurance — the amount and type of coverage anyone carried. I’m sure as Mr Givens wrote his book back in the late 80′s, he never realized how easy it would eventually become 25 years later to get multiple car insurance quotes simply by typing in some information into a computer. I’m also pretty certain he never thought that car insurance would become so inexpensive or that the proliferation of knowledge about car insurance would also perpetuate some incredible myths.

Top Car Insurance Myths

How many of these myths have you fallen for?

1. My credit score has no bearing on my car insurance rates.

Wrong! All insurance companies use credit scoring to determine if you will qualify for auto insurance and what your premium rate will be. Rates can differ by up to 50% between someone with excellent credit and someone with poor credit. Know your credit score before you apply and if your score isn’t that good, take steps to fix your credit using a company like GoLookOnline.com. Companies consider a good credit sore to be a way to see if you are responsible with the timeliness of paying your bills … including your auto insurance bills.

Click HERE to find out your credit score … all three of them for FREE!

2. Driving a red car will raise my auto insurance rates.

Wrong! Car insurance companies are interested in the year, make, model, body type, and engine size of your vehicle. The color may be highly important to you, but your car insurance company doesn’t care if your car is red, blue, black, silver, gold, green, or sunshine yellow.

3. I just backed over my 2,000lb brick mailbox. My homeowners insurance will cover that, right?

Wrong! Your homeowner’s coverage has nothing to do with your auto insurance. In this scenario the only way your car will be covered is if you maintain comprehensive insurance coverage on your car. Even then, it only pays AFTER you pay your deductible.

4. My car insurance will pay if my $1,500 Macbook Air gets stolen from my car.

Wrong! Generally speaking, your car insurance will only pay for items that are attached to the vehicle. It doesn’t cover your personal belongings you leave inside the car. You’ll probably have to file a claim on your homeowners insurance or renters insurance policy to be compensated for personal belongings.

5. If I have a wreck and total my car, my auto insurance will pay off my car loan (or lease).

Wrong! If your car is totaled, your car insurance will pay the actual cash value of your car. The company adjuster will try to find a similar car to yours via Craigslist or the classifieds and THAT will be what you are compensated AFTER your deductible is paid. If your car is worth (in the classifieds) only $5,000 yet you owe $6,000 on it, the insurance company will subtract your deductible from the $5,000 and pay your lender the rest. You have to make up the balance. The only way to avoid this situation is to maintain GAP insurance to pay for this GAP in coverage.

Where to buy car insurance online?

There are a myriad of companies that can provide you with the car insurance you need. Most of them simply need you to fill out a few fields in a simple form to initiate the quote process. And remember, it’s just a quote! You can’t start saving money until you take that first step.

The Hartford (through AARP) has great rates for ANYONE but especially the over 50 crowd. If you’re not that old, don’t worry about it, they can insure you with a great rate even if you’re less than 50 years old and the Hartford is a well respected name in the insurance industry.

Insureme works a lot like LendingTree, shopping your information to a select group of insurers who then give you a quote.

Geico, who doesn’t love the little green lizard … I mean, Gecko?

USInsuranceOnline.com has been coming on strong for the past few years as a significant leader in the online car insurance world.

GoInsuranceRates (has the best rates from companies such as State Farm, Liberty Mutual, Progressive, AllState and Nationwide). You just can’t beat these guys.

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.

Car insurance rates have risen dramatically in the past few decades and there are several reasons why:

• Society is “sue happy” and insurers feel the brunt of it
• People are ditching their car insurance for financial reasons (a scary trend)
• Cars are more expensive to repair and replace
• Insurers have experienced high levels of losses in recent years

The reasons your car insurance is higher really don’t matter. What DOES matter is learning ways to reduce your car insurance premiums. Here’s how to do that:

1. Don’t drive

That’s right, one of the best ways to reduce your auto insurance premium is to use more mass transit. If it’s available, make certain your insurance agent knows that you drive less and that you want your premium rate to reflect that.

2. Shop around

If you’ve recently renewed your policy and the annual premium went gone up dramatically, shop around for a new insurer. The best first step is to use a company like GoInsuranceRates.com and possibly save a significant amount of money. Use that site every year or two since they shop your rate with top companies like Liberty Mutual, Nationwide, Progressive, Allstate, and esurance (among others). One company is always cheaper than another from year to year.

Click HERE to find out what your new car insurance rate could be!

3. Take a defensive driving course

Sometimes insurance companies will provide a discount customers who complete an approved defensive driving course.

4. Ask for discounts

Another aspect of shopping around is to ask for discounts. Sometimes simply asking can score you some big-time savings! Ask about discounts for :

• Your occupation
• Multiple vehicles insured with the same company
• Multiple insurance lines with the same company
• New vehicle safety features
• Senior citizens
• New parents
• Those who have been accident free for multiple years
• Alternative fuel vehicles
• Anti-theft devices installed on the vehicle (including On-Star)
• Taking defensive driving courses
• Low annual mileage driven
• Not driving after midnight
• Having no traffic citations
• Good students

5. Choose a policy with a high deductible ($1,500 and up).

I’ve seen a statistic that the average car accident is minor and costs less than $1,200. Insurers are willing to charge a much smaller premium to avoid the hassle of a $1,000 fender-bender. If you’ve built your emergency fund properly, a $1,500 deductible won’t ruin your bank account!

6. Maintain a clean driving record.

Lay off the lead foot! Use your cruise control when on the highway (set for the speed limit) and pay attention to traffic signs and signals. I tell my 16 year old — “Do what you know is right” and you won’t have to worry with getting pulled over.

7. Improve your credit score

A driver’s record is obviously a big factor in determining auto insurance costs. After all, it makes sense that a driver who has been in lots of accidents could cost the insurance company lots of money. However, folks are sometimes surprised to find that insurance companies may also consider their credit score  when determining insurance premiums.

Get your free triple credit score from GoFreeCredit.com. Click HERE!

8. Lower your coverage on older cars.

Drop collision and/or comprehensive coverage on older cars that are worth less than ten times the premium –  these cars aren’t worth the cost of that type of coverage.

9. Buy a used vehicle with safety features, such as airbags or anti-lock brakes.

Remember that not only is your likelihood of filing a claim an important consideration, but also how large your claim might be. Buying a car with safety features no only protects you and your loved ones in case of an accident, but also protects the insurance company from higher claims.

10. Insure more than one car or driver

If you obtain a quote from a car insurance company to insure a single vehicle, you might end up getting a higher quote per vehicle than if you asked about insuring several drivers and/or vehicles with that company. Insurance companies will offer a bulk rate for more of your business because they want (and need) your insurance premium, and under some circumstances, they are willing to give you a deal if it means you’ll bring in more of it. You may be able to bundle your life insurance or homeowners insurance as well.

Cutting your premiums is easy

As long as you’re willing to put in a little effort you can easily reduce your car insurance premiums … so get to it!

Links to products or services may be affiliate links. See my disclosure policy on the site or on my About page.