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Q: Should I carry insurance with my car?

A: Almost all states make it mandatory for the car owner to carry insurance with his vehicle as a proof of financial liability in case there’s damage or injury delivered to third parties while being on the road. Not having sufficient insurance coverage (lower than the state minimum) is illegal and may result in a substantial fine, license suspension and even time in custody. This only applies to the liability portion of your insurance policy, as other types of coverage are strictly optional.

Q: Should I purchase insurance prior buying a new car?

A: In case you’re purchasing your first car, you should definitely buy insurance first, otherwise you won’t be able to drive it from the dealer’s shop. Moreover, if you’re using a car loan to finance the purchase, your loan provider will make it a strict condition to purchase specific insurance in order to get the money you need.

In case you already have a car and want to replace it with a new one, you should inform your insurance provider about that and get new rates for the car make and model you want to purchase. You usually have between 2 to 4 weeks to contact your provider regarding the purchase, depending on the company.

In case you’re purchasing an additional vehicle and want to include it in your current policy, the regulations vary from company to company. Usually, companies require notification within a period of 30 days, after which they will inform you about approval (or non approval).

Q: How to get cheap auto insurance rates?

A: First of all, shop around to see what different providers on the market have to offer. You will notice that different companies set different rates for the same car and amount of insurance. This is because of competition, different claims history, and classification of vehicles and drivers. So make sure to get as much quotes as you can in the first place and choose the most competitive policy from what you are offered with.

You can also buy an insurance-friendly car, if you’re looking for a new vehicle at the moment. Ask the dealer or the insurance agent, which cars tend to get lower rates. Sports cars, performance vehicles, SUVs, convertibles and luxury cars are usually more expensive to insure. Stay with the middle class cars that have high safety and security rating.

You can also increase your deductible, however it’s a risky technique. By increasing your deductible you increase the amount of money you’ll have to pay before the policy coverage kicks in. For example, if you have a deductible of $1,000 then you’ll have to pay for any damage below this amount out of own pocket. So make sure to choose a deductible you can afford.

Q: How can I get cheap auto insurance for my teen?

A: First of all, don’t haste to get insurance for your teen while he or she is still going through the learning process of driving a car. Wait until your teen driver gets a permanent license and then you can look for auto insurance coverage.

Second, see if your teen qualifies for the good grades discount, which applies to students with an average of B and higher. Most insurance providers offer such a discount.

Third, think of purchasing a less costly, old car for your teen that will assure lower insurance rates at the initial stage.

And don’t forget that your teen has to maintain a clean driver’s record in order to keep those rates low.

No distractions, please. I’m driving!

There are many ways in which you can describe some of Big Government’s departments and their campaigns. Feeling polite and well-balanced, you can say some are worth every cent. Then you get others where you cannot help feeling a little insulted. Like this site: National Highway Traffic Safety Administration. Hey, come on, guys. We are all drivers here and we know how to drive safely. Except, perhaps, we “kinda” forget some basic rules when we get behind the wheel and back out of the driveway. So just how bad is it?

Well, the police are supposed to report the circumstances of all the traffic accidents they attend. This does not always produce a reliable record but, in 2008, the police recorded driver distraction as the main cause in almost 6,000 deaths (that’s about 15% of all the fatal accidents in the US) and more than 500,000 injuries. So just what is distraction for these purposes. The list is what you would expect:

• using a cell phone, PDA, etc. to chat or text;
• reading (usually a map but some people are more adventurous);
• talking to passengers;
• using the navigation system;
• watching a video;
• changing the station on the radio, or the CD in the player or fiddling with your MP3 player;
• eating and drinking; or
• personal grooming from combing your hair to applying make-up.

What it comes down to is taking your eyes off the road, or taking your hands off the wheel, or thinking about something else. That makes texting the worst offender because it involves all three levels of distraction. Perhaps not surprisingly, the worst group of offenders are drivers aged 20 or less, i.e. they are young and inexperienced and more likely to get into an accident than any other group of drivers on the road.

The distraction website is run by the National Highway Traffic Safety Administration. It hopes both to educate drivers and to work with motor manufacturers to produce safer vehicles to drive. Except that neither camp seem inclined to cooperate. The culture of the younger members of society, i.e. up to 29 years old, is now addicted to 24/7 communication technology. They have to keep in touch with their friends through texting, tweets and other messaging systems. Pandering to this, manufacturers are building ever more electronic systems into vehicles as information services and entertainment. Fifty years ago, you only had to worry about changing channel on the radio. Now there can be a display of buttons and levers that would challenge someone with the skills of the Borg (pick your favorite television or film series characters for this).

Any traffic accident is like a lead weight attached to the premium for your auto insurance policy. That means keeping your driving record clean. With more states now banning the use of technology in the car, being seen with any handheld device in one hand while holding the wheel with the other is a potential ticket or citation. To keep your cheap car insurance, turn off your devices to avoid being distracted or fined if a police officer sees you. If you are getting into an argument with someone in the vehicle, pull over, stop and finish it before driving on. If you are running late, do not eat or do other catch-up jobs while trying to drive. If you keep yourself safe, you avoid accidents and keep your auto insurance affordable.

The great temptation whenever you start shopping around is to assume you can afford to buy whatever you are looking for. It comes from those long-lost days when credit card companies would write you every month with good news about your borrowing limits. You were tempted into more debt, but it meant never really having to worry about whether you could afford to buy. The additional money would simply be added on to your overall debts.

Now the credit crunch has settled in as your permanent house guest, it’s a good idea to start doing a real set of accounts to keep track of your family’s spending. Why bother, you ask? The number of foreclosed property up and down your streets, the number of business shuttered on Main Street, should give you a clue. People who hope for the best when trying to live beyond their means usually come unstuck. Now’s the time to count the dollars and cents. When you are employed, you know exactly how much money you have coming in every month. When you are self-employed, your income is likely to go up and down, making it more difficult to budget. The best you can do is average the monthly income over the last twelve months. Now let’s list the main headings.

Go through all your check stubs and bank statements. Make a list of all the regular payments on utilities, mortgage, insurance premiums, credit and store cards, and so on. If there are regular payments you could cut, make a separate list. For example, everyone has to eat, but do you really want to eat out once a week? It’s often surprising to see how much you could save if you cut down on discretionary payments and leave only the necessary payments. These are lifestyle choices. When the times were good, you could afford all these “luxuries”. Now times are hard, you have decisions to make. When you have finished, you should have a number showing how much you can afford to spend on a health plan and leave a little over in case of emergencies. Never plan to spend more than you earn and hope you can juggle the numbers every month. Live within your means. Now pause for a moment. Are you going to accept a policy with a deductible? Can you estimate how much the co-payments might be if you have to get treatment. The deductible must be available as a cash sum to cover the claim. Co-payments must be made out of your pocket as you go along. What can you afford out of your budget? Do you have savings or a margin unused on your credit cards to fill in the gap?

Now get the health insurance quotes through this site. Look not just at the monthly amount you pay, but at how much you have to pay before the plan starts to pay out. If the health insurance quotes are unclear, get on the telephone and talk to a human being for clarification. Do not accept a plan unless you know you can afford to pay the deductible and co-payments on visits with your doctor, needed drugs, and so on. Even more important, check whether there is an upper limit on the amount the plan will pay out in a year. If there is a limit, do you want to take the risk? If you have an existing condition, how long must you wait before cover kicks in? Can you afford treatment while you wait? These are hard questions but, to protect yourself, you should ask them.

Insurance coverage for the house is quite often one of the most important investments that you will undertake after actually buying your home. Most insurance policies will cover the home itself, your belongings contained in it and liability due to accidents on your property. And when you start looking for the right policy it may be a bit difficult at first, taking into account the large diversity in policies and the large number of providers that offer their products. There are different types of coverage each policy carries to a different extent, and in each case the amounts of it have to be adequate in order to meet your exact needs. Yes, it’s a bit overwhelming at first, that’s why you would want to spend some time learning the basics before doing any comparison shopping.

Types of coverage

Each policy carries three types of insurance coverage that when combined provide a wide spectrum of coverage against many types of insurance situations your home may be subjected to. These thee coverage types include property damage, liability coverage, and home business.

• Property damage – this type of coverage deals with any type of damage to your home and your belongings contained within the house due to circumstances like fire, storm, hail, flood, lightning, theft, vandalism, terrorist attack, etc. Make sue to analyze your policy thoroughly in order to learn all situations and all the items which will be covered or not.
• Liability coverage – this type of coverage will pay for the medical costs and trauma a third party has sustained while being on your property. You and your family members are not included. This coverage is applied to guests, workers, neighbors, visitors, etc.
• Home business – this type of coverage will be particularly useful if you run a small business at your home. However not all home insurance policies have the business part with their coverage, so make sure to learn about that first, if you are really interested in this type of coverage.

Some helpful tips to take note of

When you start looking for home insurance the following tips will definitely be of a help to you in case you want to find a good and cheap policy:

• Shop around to get the best home insurance quotes. You can use numerous online sites, ask your agent or contact the companies directly. The more options you have the better. Don’t forget to ask your friends about any particular company they have already purchased insurance from and check the financial credibility of each provider you are interested in.
• Purchase home coverage from the same provider you get your auto insurance from. That way you can receive a substantial discount with most insurance providers.
• Pull up your deductible. As with all types of insurance, the higher is your deductible the lower premiums you’ll have to pay. But make sure that you have the required amount of money to pay out of pocket if something happens to your home.
• Make everything possible to improve the security of your home. The best way to do this is to install video systems, security features such as fire and smoke detectors, alarm, security locks, and other features you can use to protect your house against different perils. Document all the changes and inform your insurance provider about them. You will likely receive a good discount for that.
• Always make sure that your credit rating is good before purchasing a new policy (applies to all types of insurance).

How can you tell that you really need home insurance? Well, if you’re not planning any illegal things like insurance scam (which is definitely not a good idea, especially these days), it will be really hard to predict any situation when you will actually need some insurance coverage for protecting your house. Until, of course something bad happens and you will need the money to pay for the damage. However, there’s a range of circumstances that make an insurance policy for your house a really welcome if not necessary addition to your paperwork portfolio.

The following are the most typical events that will make having home insurance a necessity unless you have a lot of money and can rebuild your home from scratch without worrying about finances.

Fire

Fire is definitely one of the most hazardous of perils that can happen to a house. It has the potential to completely destroy an entire building within minutes and there’s a very little chance that any of your personal belongings will survive it. Fire is very hard to control and it can happen any time, with most cases of fire being reported when the home owner is actually away. It can be a spark from a malfunctioning home appliance or a cigarette butt that lights up a pile of dry leaves that you’ve left in your front yard. And the moment you arrive home you find nothing but a pile of ashes instead of all of your belongings. A standard homeowners insurance policy provides protection against any forms of fire.

Flood

Living in an area with no large bodies of water nearby doesn’t mean that you don’t have the risk of having flood damage in your house. Things like heavy showers, bad water pipes and even a broken washing machine can flood your house and damage a large part of your belongings beyond repair and restore. Sometimes, the damage from flood can be much worse that that caused by fire. Standard homeowners insurance policies do not carry coverage against flood damage and you will have to purchase such a policy as a weaver to your current one or buy it separately.

Earthquake

Earthquakes are certainly the hardest to predict and hardest to protect against of all natural disasters. An earthquake can destroy an entire town or city within just a few minutes, turning even the most durable of constructions into a pile of dust. And the best thing you can do during an earthquake is to stay away from your house that can collapse over you. Standard insurance policies include coverage against earthquakes, too. However, in order to make sure you will also be paid for the lost belongings you should have an inventory of all the items (especially valuables and electronics) with detailed information on every piece that can further be used for reimbursing the cost of all the lost belongings.

There are other circumstances that can also be a threat to your house and you want to have coverage against them. Having tornado insurance in an area where they are common is definitely a must. However, keep in mind that no one is imposing you to have home insurance, It’s a decision choice that can save you a lot of money and time in case something bad happens to your house.