Wednesday, February 25, 2015

Insurance Thru the Ages

Most people think of insurance as a fairly recent invention. The truth is, however, that insurance has actually been around for quite some time and has a long and rich history. Sure, the insurance of days past might not look quite like the insurance of today, but it has existed, in various forms, throughout the ages.

Ancient Insurance

Believe it or not, there is an account of what is considered the world’s “first written insurance policy.” It’s known, by history buffs, as part of the Hammurabi Code, a set of ancient laws. The
insurance law of the time basically specified that if a person was struck by a disaster, such as a flood, a loss of property, or serious illness, he was exempt from paying back his debts. Wouldn't it be nice if things still worked that way?


Underwriting has been around for a while too. It’s believed to have gotten its start in London in the late 1600s. Back then, the shipping industry was just beginning, and people involved in the industry needed a gathering place to get their footing, make connections, and find specialty insurance to protect them in their new ventures. London cafes, in particular one owned by Edward Lloyd, became “hot spots” for securing insurance policies and doing other related business, all while sipping coffee.

A Protective Guild

Another popular type of ancient insurance is known as “guild coverage.” This type of coverage was popular during the dark and middle ages when most tradesmen belonged to guilds. Guilds were essentially like modern day workers’ unions and also provided apprentices and training for those apprentices all in an effort to keep trades going strong and business booming. The guilds also offered a “safety net” of sorts by collecting money known as coffers. Those coffers would then be distributed to guild members who found themselves in trouble. So, if an office caught fire or a tradesman was injured, the guild would typically take care of most if not all of the related expenses and losses. 

As you can see, insurance is nothing new. It’s a little more regimented and legalized these days, but it’s just as important now as it was in the past. So, make sure you have all of the different types of coverage you need in adequate amounts!

Friday, February 20, 2015

Insurance Tips for First Time Homeowners

So, you’ve bought your first home! Congratulations are definitely in order. However, aside from the fun and excitement of being in your new home, there are also responsibilities to think about, such as homeowner’s insurance. This very necessary type of insurance can get quite pricey, but it’s something you have to have. Therefore, the best thing you can do is to educate yourself on the many ways to cut costs, without sacrificing coverage. To get you started, here are some super helpful, money-saving tips to try.

Protect Your Home

Obviously, you’ll want to protect your brand new investment, your family, and all of your  
belongings. The good news is that it’s easier to do that today than ever before. Invest in a good security system, one that is tied to a central station that can alert police for you if your home’s security is breached. Also, make it a point to have a reliable smoke alarm installed in your home. Not only will these extras keep your home safer, but most insurers will give you a hefty discount for having these protective features in your home.

Double Your Deductible

If the original price quote for a particular policy is too high, don’t panic. There are always ways to lower your premium, and one of the simplest ways is to increase your deductible amount. Do bear in mind, however, that with a higher deductible, you will likely be responsible for smaller, less costly repairs. However, you’ll typically spend a lot less taking care of these smaller issues when they happen to crop up than you would paying a high premium regularly.

Take Advantage of Other Offerings

Most home insurance providers also offer other types of insurance, such as car insurance or health insurance. And, because these providers like to say “thanks” to their loyal customers, they’ll often provide a nice discount to those who hold more than one type of policy with the company. Thus, not only will you save money if you open multiple policies with the same insurer, but you’ll also enjoy the convenience of having just one insurance company to deal with.

As you can see, there are many easy ways to save money on your home insurance costs. Talk to your insurance provider about other money saving options. You never want to sacrifice necessary coverage just to get a good cost, however, so only cut corners in ways that still leave your home fully protected.

Monday, February 16, 2015

Common Car Insurance Misconceptions

Ah auto insurance. It’s something everyone has to have- in most states at least- yet it’s also something most people know very little about. There are many misunderstandings and even myths surrounding the car insurance industry, and it’s important that you’re not duped by these myths. Many people make important decisions, some of which can be costly, based on these types of misconceptions, so it’s smart to educate yourself on the truth now to avoid making mistakes later.

Are Red Cars the Most Expensive Cars to Insure?

This myth sounds pretty crazy, but a lot of people out there willingly believe it. No one is quite sure how this myth got started, but it basically states that red cars are more likely to be pulled over for speeding and, thus, they cost more to insure than cars of other colors. If you think that sounds silly, good for you, because it is. The color of a vehicle has absolutely no bearing on the associated
insurance rate.

Can an Insurer Cancel a Policy As Punishment for a Bad Accident?

A lot of people live in fear of causing a serious vehicle accident, one that results in death or severe injury to others. Some people have even more fear than normal, however, because they have bought into the lie that their insurers can drop them “just like that” as punishment for causing a major accident. Rest assured that unless you don’t pay your premium or you are found to have lied on some important insurance document, your provider can’t drop you as punishment. The provider can choose not to renew your policy once it’s expired, but you won’t just be left in the lurch before your policy runs out.

Does a Smaller Car Cost Less to Insure?

It’s smart to consider the cost of insuring a particular vehicle when you go shopping for a car. It’s not so smart, though, if you base your purchasing decision off of misinformation. One common lie that gets passed around is that smaller cars cost less to insure, but that’s not necessarily true. Small, trendy sports cars, with high price tags and with typically high risk drivers, are actually some of the most expensive cars to insure. However, smaller or middle size SUVs are usually some of the cheaper vehicles to insure, but that has more to do with their safety ratings and what the average SUV driver is like than it does with the size of the vehicle.

As you can see, there’s a lot of just plain wrong information about car insurance floating around out there. To avoid buying into a fallacy, always do your research and talk to your insurance provider before you make any decisions based on something you’ve simply heard is true because it may not be.

Wednesday, February 11, 2015

Is Your Life Insurance Policy Emergency Cash Stash?

Where would you turn if you needed money fast and suddenly? Believe it or not, a viable answer to that question is your permanent life insurance policy. Notice that we said permanent. While permanent policies, whether they’re whole life or universal life policies, are good for getting money in a hurry, term life insurance usually is not.

Your permanent policy, however,will accumulate cash value as time goes on. In the early stages of the policy, the cash value grows slowly since most of that value is being used to build up the indemnity benefit. Once that’s taken care of, though, the policy can start to grow in terms of its cash value, making it a nice little “emergency nest egg” for you for those unexpected things that happen in life.   

Do bear in mind, however, that when you take money from your life insurance policy, it’s not without its drawbacks. You will, for starters, have to eventually pay the money back; it’s considered a loan to yourself.

The good news, though, is that the loan can be deposited directly into your bank account. And, what’s even better is that you will not be required to pay taxes on the borrowed money.

If all of that sounds good to you, you may be ready and more than willing to start borrowing. Don’t move too fast though! Different insurance companies tend to have different requirements related to how old your policy must be and how much value it must have before you can take out a loan. And, even then, there are typically rules about how much you can borrow. So, before you get too excited about having a money source, check the rules put in place by your insurance provider. It’s even better if you know these rules from the start. That way, you won’t be disappointed or waste your time trying to get cash where there isn’t any just yet.

While every insurance provider is different, most won’t let policyholders borrow money off their policies until the policy is at least ten years old or so. That rule doesn’t exist simply to be harsh either; it’s just that most policies won’t really have sufficient funds for borrowing until that point.

If everything does work out in your favor and you end up borrowing against your insurance policy, it’s really up to you if you pay it back or how much you’ll pay back. You aren’t borrowing more than you have, so if you don’t pay back the loan, that amount would just be permanently deducted from your policy and would become the property of the insurance provider. Obviously, you don’t want to lose the money you’ve spent years saving and that your family will one day need, so even if it’s tough, you’ll want to work out some arrangement with your insurance provider to get the loan paid back.

Most insurance providers will give you plenty of options for paying back the loan, so it can be done, even if it takes a while. Just remember that you should never borrow against your life insurance policy frivolously. Think long and hard about why you need the money, and if it’s not for a very good reason, either go without or find another way to borrow it. A good financial advisor can help sort you out about whether or not a loan is a good idea, thus allowing you to make smart choices that will benefit you both now and in the future.

Friday, February 6, 2015

North Carolina Couple Faces Insurance Fraud Penalties

A married couple living in Wilmington, North Carolina was recently arrested for attempting to collect over $60,000 on a faulty insurance claim.

The couple claimed to have had some very bad luck, filing insurance claims for a car fire, two car accidents, and a break-in all in the span of just three years. Apparently, once they realized just how much money one insurance claim could bring in, they couldn’t get enough and just kept on filing. When that many claims are being filed by the same people in such a short time span, however, it’s only a matter of time before someone gets suspicious.   

After being covertly investigated, the male half of the couple was charged with insurance fraud and attempting to obtain property under false pretenses. His other half is also facing charges, though they are undisclosed at this time.

The story may be shocking to some, but unfortunately, people attempt to commit harebrained crimes like these on an almost daily basis...and they rarely get away with them. Insurance fraud is a pretty hard crime to pull off.

Most people don’t attempt to commit these types of crimes on such a large scale, but plenty of people are dishonest in little ways with their insurance companies. They might, for example, exaggerate injuries from an accident in order to up the amount of their claims. More often than not, however, thieves, cheaters, and even the mere exaggerators get caught, and they have a high price to pay. Learn from this couple’s story and always be honest when dealing with your insurance company.

Monday, February 2, 2015

The Importance of Business Interruption Insurance Coverage

Sony Pictures Entertainment recently found itself in the news for being hacked. The story goes to show that, if a major, multi-million dollar industry like Sony Pictures can be hacked, all businesses are vulnerable. To protect against that vulnerability, businesses are urged to have “cyber insurance,” which protects them in the event that they are unable to do business due to being unable to access their online systems, even if it’s just for a brief period of time.

In Sony’s case, the major industry had to shut down its systems in over 50 countries. Sony executives sat and waited in fear as the hackers threatened to release their secrets, with all employees worldwide shutting down any and all devices connected to Sony networks. The downtime would last for an unprecedented amount of two entire days, and the full problem (and peace of mind) probably won’t
be completely remedied for a few more weeks. 

The hackers did score some small “victories” against Sony. They released many of its movies, the majority of which haven’t even hit theatres yet, to download websites, which could cost the company big bucks in terms of ticket sales. Sony was reportedly devastated by the shocking turn of events, as any company would be. Losing access to technological systems, or, even worse, having the business secrets stored in these systems in front of the eyes of those who wish to do harm spells big trouble for any business.

Sadly, these types of “hackings” are a lot more common than you might think. In fact, Sony had its video game networked hacked just three short years ago, resulting in stolen data and outage time.

Obviously, there is a serious need for large companies like Sony and even smaller companies to have specialty “cyber” insurance that protects them in these kinds of circumstances. Fortunately, insurance companies worldwide have responded to this need and now offer unique policies to meet the cyber-security needs of individual businesses.