Monday, March 30, 2015

Should You Say No to Insurance Coverage?

Collision coverage is an important type of insurance for car owners to have. This coverage can help to repair or replace a vehicle that’s been damaged by negligence on your part. It can also help you when you get into an accident with an uninsured or under-insured driver. Unfortunately, though, collision coverage is expensive, which is why many people opt out of it. Opting out is most common among people who’ve had their car for several years and who are willing to just cut their losses if something happens to it.

Ultimately, you’re the only one who can decide if and when you should drop collision coverage. However, there are definitely smart ways to go about making that decision.     

Not Worth It...

When deciding whether or not you should drop collision coverage, you’ll want to consider the value of the vehicle versus how much you’re paying to hold the coverage. The general rule of thumb is that if you’re paying 10% of the car’s value or more in coverage per year, it’s probably not worth it. You’d be better off saving up that money to put toward a new car when the time comes.

You Can Afford to Replace the Vehicle

Collision coverage is expensive; there’s no doubt about that. What makes it even more frustrating is that you’re paying for something you may never use. If you can honestly afford to replace the car without too much trouble, why bother paying all those fees for collision coverage? Instead, you could just put the money you would have spent into a savings account to help you in the event of an emergency.

You’re Running Low on Cash

 Conversely, you may need to drop your coverage if you find yourself in a financial jam. If you need to save money for a while, it’s okay to let this coverage fall by the wayside. Is it risky? Yes. However, sometimes in life you do have to take your chances. Just make sure that, as soon as you’re able, you get your coverage back because, if you’re short on cash, that’s a pretty good indicator you wouldn’t be able to replace the car out of pocket.


As you can see, there are a lot of factors to think about when considering dropping collision coverage. Make sure you think long and hard about what’s truly best for you before you make any big decisions.

Wednesday, March 25, 2015

Understanding Insurance Jargon

When you sign up for an insurance policy, you’re given an insurance contract to look over and sign. Unfortunately, if you’re like most people, you simply glance over it and then sign on the dotted line. Really, though, it’s important to know and understand what you’re signing and what it means. After all, you don’t want to find out too late that you don’t have adequate coverage or that you have more responsibilities than you realized. A contract is an agreement, and you should know what you’re agreeing to! Sometimes, sifting through all of that insurance jargon can be difficult, which is why it’s important to educate yourself on commonly used lingo and what it means.   

Consideration

One term you’ll probably hear tossed around a bit is “consideration.” This term simply means the amount of money that you will receive when you file a specific type of insurance claim. You will likely have different “considerations” for different circumstances, and it’s important that you know, understand, and agree with each consideration set forth by your policy.

Indemnity

Most valid insurance contracts, outside of life insurance contracts, will have a “statement of indemnity” somewhere. This statement simply makes clear that your insurer will never pay you any more than the financial loss you actually suffered. In other words, a claim won’t make you richer; it will just restore you to the financial status you had before the loss. This statement is very standard, so don’t be alarmed or surprised if you come across it.

Subrogation

Some insurance contracts contain a “statement of subrogation.” When this statement is included, it means that the insurance provider has the right to sue the person or entity that has caused you, the insured party, to suffer a loss. This is a way for insurance companies to earn back some or all of the money they pay out in claims and should not affect you negatively.

There are many, many other terms that you may come across in your search for insurance and when you sign up for a new policy. If you don’t understand what something means, step up and ask! Remember, you are entitled to know what your policy states and what you are agreeing to when you sign up for it.


Asking questions is also a good opportunity to really see if you’re dealing with a good, honest insurer. Good insurers will have no problem fully and honestly answering your questions. Unscrupulous insurers will tell you half-truths or dodge your questions, which is why it’s important to do your own research. There are a lot of good, trustworthy insurance providers out there, but there are also a lot of bad ones, and you deserve to know that you’re working with the good guys!

Friday, March 20, 2015

The Importance of Gap Insurance

You might think that your auto insurance policy has you completely covered. After all, as long as you maintain both collision and comprehensive coverage, protecting you is its job, right? Unfortunately, though, many policies actually leave the policy holder vulnerable in the event that the vehicle is totaled or stolen.

This is especially true if you’re leasing or buying a newer car. New cars are expensive, but they very quickly lose value. In fact, they start losing value the moment you drive them off the lot.
Unfortunately, though, you’re still on the hook for the full value of the car. In other words, you owe more on the vehicle than it’s actually worth at a given time, so if you end up totaling it or have it stolen, you could owe quite a bit of money. And, since your insurer will typically only reimburse you for the current value of the car, you could find yourself on the line for the difference, and that difference can be pretty large.

The good news is that there is a way to protect yourself, and that way is through guaranteed auto protection or Gap insurance. Gap insurance covers you for that “difference” mentioned above, so that, if the worst happens, you won’t be responsible for paying it.

Anyone who is leasing a new car or who has paid less than 20% of a car’s value should definitely consider Gap insurance; some car dealers will even require it. Gap insurance is also smart for anyone who drives a lot, thereby causing their car’s value to go down more quickly, and for anyone who has taken out a long term loan, which can make building equity more difficult.


If you fall into any of these groups or if you just want the added protection and peace of mind that Gap insurance offers, there is no better time than the present to secure it. Just make sure you shop around and compare rates so that you can get the best deal and coverage possible.

Monday, March 16, 2015

The Latest Threat: Auto and Identity Theft

You’ve probably heard all the warnings about stolen identity. In fact, you probably even know to shred your credit card bills and other important, identifying documents that you no longer need. Did you know, however, that there’s a new threat- a threat that goes beyond just stealing your identity and going on a spending spree until you alert the credit card companies. That new threat is thieves stealing your identity and using it to buy or lease a shiny, new vehicle.   


According to the National Insurance Crime Bureau, this crime has been on the rise in recent years. These criminals will get a car in your good name, never make a payment on it beyond the first- if they even have to make that- and then drive off, ruining your credit  in the process. These types of criminals are especially hard to catch too since they usually export the cars outside of the United States for a nice profit.

To make matters worse, it can be hard to prove your innocence in this circumstance. One of the big reasons why is that the crime often isn’t realized until well after it’s committed. Usually, it’s not noticed until that first vehicle payment comes due. Sometimes, the first time victims find out they’re in trouble is when they get a “failure to insure” notice stating that they should have insurance on the vehicle they supposedly own.

To make matters worse, it’s up to you to prove that you didn’t purchase the vehicle. Of course, it’s better to avoid the circumstance in the first place. One thing you can do to help mitigate the risk is to check your credit report regularly and to handle any untrue allegations on that report immediately. Car thieves will often make other purchases using your name first or, at the very least, will make inquiries into your credit to determine how likely you are to qualify for a car. If you can figure out what’s going on in those early stages, you might just stand a chance of stopping the car theft from happening in the first place.

If worst comes to worst and you do find yourself a victim of this heinous crime, the first step is to file a police report. Then, contact the department of motor vehicles, the dealership from which the vehicle was bought, and your insurance company. You can expect to deal with hassle from all of these agencies, but unfortunately, that’s just part of clearing your name. Having the police report on file will help with the process. In fact, in most cases, these organizations won’t even deal with or assist you unless you have one.

Again, the sooner you become privy to the crime, the better. Stop it from happening if you can, and, if you can’t, work hard to clean up the mess. It’s unfortunate to be a victim, but as long as you are willing to fight for yourself and prove your innocence, things should turn out all right in the end....just maybe not as quickly as you’d like.

Wednesday, March 11, 2015

The Benefits of Using Permanent Life Insurance as an Investment

Most people understand that their life insurance can be used as an investment. In most cases, however, people who use life insurance as an investment are doing so with term life insurance. They simply buy the term policy and then invest any leftover funds. And, while there’s nothing really “wrong” with this strategy, there is a sometimes better and often overlooked option. That option is to invest in permanent life insurance. With this option, individuals can gain cash value via their policy, which can’t be said for term policies. Yes, there are some management and agent fees involved, but in many cases, it can be a smart choice- even the smartest choice. Read on to learn
about some of the benefits of investing via permanent policies and to see if this option could work for you.

Tax Deferred Growth
Perhaps one of the best investment features of permanent policies is that, as the policyholder, you are not responsible for paying taxes on interest, dividends, or even capital gains. The only time you actually have to pay these taxes is if and when you make a withdrawal.
However, do bear in mind that there are other ways to receive this tax free benefit, including IRAs, 401(k)s, IRAs, and other employer-offered plans. If you plan to contribute more than your plan allows, however, permanent life insurance may be a better investment option for you.

High Age Limit
You can keep a permanent life insurance plan for a very long time! In fact, most plans specify that the policy can be held until the policyholder is 100. Some don’t even have a limit! Term life insurance policies, of course, aren’t nearly as long lasting. They simply end when the term of the agreement ends, so if you’re looking for longer-time coverage and a longer-time investment, a permanent policy is the way to go.

Borrowing Options
As mentioned, permanent life insurance policies actually accrue a cash value, and you can do whatever you want with that money. That includes putting it in a savings account, and best of all, if you do that, you won’t have to pay taxes on the money. You can borrow the money your policy collects to do...well...whatever you want. Whether that’s paying for a child to go to college or paying off your mortgage, that’s up to you. You don’t get that benefit risk-free with other types of plans, which often charge penalty fees for taking out money early.

Care When You’re Ill
No one likes to think about getting old and sick. Unfortunately, however, illness does happen. The good news is that, if you have a permanent life insurance policy, and you develop a covered health condition or serious illness, you could receive some or even all of your policy’s death benefit while you’re still alive. Known as accelerated benefits, this bonus could allow you to pay for your care, thereby keeping the burden of it off of your family’s shoulders. This benefit can sometimes be found with term policies, but it’s easier to get and more straightforward with a permanent policy.

As you can see, there are many benefits to investing via a permanent life insurance policy. However, term policies and other investment options offer their own benefits as well. The bottom line is that there are pros and cons to any choice you make. You simply have to weigh your options and carefully consider whether or not investing through a permanent policy is the right choice for you.

Friday, March 6, 2015

More Major Car Insurance Myths

There are oh-so-many myths and outright lies floating around about car insurance these days that it’s hard to know what’s true and what’s a fabrication. Fortunately, we’re here to set the record straight! Read on to learn about some of the biggest and most widely believed myths about car insurance so that you can avoid being taken for a ride.

Comprehensive Insurance is All You Need

Many people are under the impression that, if they have comprehensive coverage, they are completely in the clear. It’s common for people to think that anything not covered by their basic insurance policy is covered by their comprehensive policy. And, while that would certainly be nice, it’s just not true. Comprehensive coverage is only for specific, unexpected, and unavoidable damages or losses like a stolen or vandalized vehicle or a car that gets hit by a falling tree. Policies do vary
somewhat from one provider to the next, so it’s always smart to see what all is covered by a particular policy. However, you can pretty much guarantee it won’t be anything and everything.

It’s Okay to Let Your Friends Drive

Be honest. Have you ever handed your keys over to a friend or family member? Whether you let someone use your car for a week or a month, you probably believed that it was okay because that person’s insurance would cover any damages that occurred. In truth, though, it’s you and your insurance, not your friend’s, that take the blame. When someone drives your vehicle, your insurance is the one that takes the hit. Any claims filed go on your policy and can affect your insurance rate and driving history.

Don’t Worry About Out-of-State Tickets and Traffic Violations

Maybe it’s just wishful thinking, but a lot of people believe that out of state tickets and other traffic violations don’t count once they’re safely back in their home state. Unfortunately, however, they do. They are still kept on record and can still affect your car insurance rates, so slow down!

If you believed any of these common insurance myths, at least now you’ve been set straight! Remember, never just believe something you hear without asking your insurance provider for the “true scoop.”



Monday, March 2, 2015

How to Keep Your Small Business Safe from Litigation

For many small businesses, being sued in court, regardless of the outcome, would be the end of them. Sometimes, even when a business is in the right, it just can’t survive with all the associated court and lawyer fees weighing on its shoulders. Thus, it’s always better to just avoid litigation in the first place. While there’s no guaranteed way to keep your business out of the courtroom, there are some pretty good strategies that work the vast majority of the time.

Keep Your Mouth Shut!

Many businesses believe strongly in that old saying, “there’s no such thing as bad publicity.” And, while it is true that you want your business to be known, you don’t want it to be known for the wrong reasons. You can talk to the general public about what your business does, but don’t make any big promises or claims. If they don’t come true, you might find yourself in legal hot water. Also, when it comes to making statements of a political or religious nature or about other businesses or persons, just don’t do it. Keep your opinions to yourself, and you’re not very likely to end up in court. Say everything you’re thinking, however, and you’ll likely find yourself in a courtroom before you know it.

Have Go-To Legal Help

Even if you never have to go to court (knock on wood), you still need the right legal counsel and advice. In fact, a good business attorney’s advice could be the very thing that keeps you out of court! You might have to pay a small retainer to get legal counsel and defense as-needed, but it’s well worth it. That way, if you have any questions about whether or not a particular practice is legal or if you should go through with a big move or decision, you’ll be able to instantly get professional advice that’s guaranteed to keep you out of trouble.

Maintain Liability Insurance

Liability insurance is the absolute most important type of insurance a business can have. It protects the business in the event that an accident or injury occurs on the business property. This kind of thing happens, with legal consequences, more often than you might think. Remember the woman who sued McDonald’s because its coffee was too hot? The average small business doesn’t have millions to spare, so protect it with adequate amounts of liability coverage. A knowledgeable insurance provider can help you to select a policy that meets your coverage needs and works with your budget.


In many ways, owning a business is scary. It’s filled with lots of uncertainties and plenty of ups and downs. Fortunately, though, you do have some control. Make use of it and do everything within your power to protect your business and your livelihood.