How To Read an Insurance Policy

If the word insurance makes people’s eyes glaze over, the thought of reading an insurance policy puts them into a catatonic state. Just as understanding the basics of insurance is not difficult, neither is reading an insurance policy.

First of all, insurance policies nationwide bid to be complied of standard boilerplate language – this is to keep apples with apples and oranges with oranges through all insurance companies and all types of insurance. This boilerplate language also pretty much steers away from typical “legalese” so all words within the policies is plain and simple. Boilerplate forms does not mean that all policies are the same – they are not – but like coverages, etc., are explained in the same way so if you can read one policy, you can reasonably read another.

The first place you should start is with the Declaration Page , commonly referred to as the ” Dec Page “. In fact, if you do not get any further than this, this part of your policy is very important for you to be familiar with for all the reasons. What is the “Dec” page? The Dec Page is a summary of what your policy is providing for you and includes your policy number, the specific named insured, the effective and expiration date of the policy, what is being covered, how much it is being covered for, what it is costing you in total and per individual coverage, your agent’s name and contact information and will show any loss payee (lien-holder) if applicable. If this is an automobile policy, the Dec page will also list the vehicles and drivers being covered. In short, the Declarations Page is a wealth of information that you should give some study to until you feel comfortable with it. This accomplishment alone will make you feel more enlightened in regards to what your insurance policy is all about.

The next step is to look at every heading in the policy, one by one. You will see things like Agreement, Definitions, specified Coverages, Insuring Agreement on the specified Coverage, Exclusions, Limit of Liability, Out of State Coverage, Other Insurance, etc. These are not scary words, right? Two very important sections are Definitions and Exclusions – found in various places in the policy – and if you do not go over any others, you need to read these. Definitions will tell you who is considered an insured, etc., and the information listed will remove assumptions from your thinking and clarify what is what. Exclusions are assumption busters, as well. It is not written in Greek and you really need to know what exclusions apply to your policy. Ignorance is not bliss when you have a claim!

Too often, too many of us buy insurance for the lowest premium. Let’s use an auto policy as an example. People buy what is mandatory by the state (and by the bank, if the vehicle is financed) and look only at the premium. With the cost as the only focus, these people have no clue what their policy does cover. Then they have a loss that is not covered because they did not elect to take the particular coverage that would apply and they are angry.

The solution to this frustration is to READ YOUR POLICY. Know what covers you have elected and what they are for; know the exclusions under your policy; know your responsibilities to the company in the event of a loss. Failure to know these things will most assuredly result in disappointment and unnecessary frustration in the event of a claim.

Car Insurance Rates – Can You Lower Them?

Car insurance rates are prohibitive nowadays. Many families really struggle to pay the car insurance bill each month. And car insurance rates vary all the time. So if car insurance cost is an issue for you, what can you do about it?

The car insurance industry is a massive industry. It is also a highly competitive one, and car insurance rates vary over time as car insurance companies compete for business. Car insurance rates are often highly fluid.

It is entirely possible to lower the cost of your auto insurance rates by altering your behaviour, and you can do this by having a better understanding of how the rates are assessed.

Car insurance rates are based on an assessment of risk. Whilst insurance companies vary their rates to compete with other insurance companies, they also vary their rates based on their assessment of the risk posed by a particular driver driving a particular car. They do this because there is no point in buying business with low car insurance rates and then insuring high risk drivers at these rates. This is a recipe for losing money.

So, if you lower your risk, you lower your car insurance. How do you lower your risk? Well there’s a number of ways that your own driving and car behaviour can affect your car insurance rates.

Have a look at the car you drive. Is it suitable for your current needs? If not then would it be worthwhile to consider a change?

Different cars attract different auto insurance rates. Sports cars, high powered cars and cars at greater risk of theft attract higher rates. How long have you had your car and would it be wise to think about another one that would be cheaper to insure and more useful to you?

Are you a safe driver? Do you stick to the speed limit? Are you at risk of other driving offences? Many people do not think about some of the consequences of speeding tickets and driving offences until after they have seen their subsequent car insurance bill.

Your risk profile is a direct result of your driving record. A clean driving record and you will be rewarded by cheaper rates. A poor driving record and you will be penalised, usually for quite a while.

Are you willing to attend driver training courses? Many car insurance companies offer specific discounts for drivers who have attended a course. Why? Lower risk.

Are you willing to drive less? Could you car pool or use public transport to get to work? Car insurance companies look at the amount of driving their clients do when assessing their car insurance rates. Why? Lower risk. Less miles driven equals less risk. And you’ll save on other car costs too.

So if auto insurance costs are an issue for you and your family there are things you can do. These are just a few of those things, there are many more. Car insurance rates are not set in stone.

How Your Finances During the Pandemic Are like Science Fiction

When your credit cards and student loans are deferred, it’s like being frozen in time. But, there’s also a monster hiding behind you…

Fortunately, there are powerful tools to prevent financial ruin from continuing, both in the public and private sectors: forgiveness of payments and postponement.

What do those two terms mean?

Before discussing the differences between the two terms, let’s talk about their great similarity. Both allow you to temporarily stop paying what you owe for your debts. Whether it’s your mortgage, your student loans or even your credit cards, payment forgiveness and deferment mean you’re exempt from making payments due to an extreme situation.

These terms existed before COVID-19, but obviously it has been shown to be the most extreme situation of our lives. So not only does the federal government offer these debt relief programs, but also many private lenders. Sounds great! What could go wrong?

This is the problem

You should think of forgiveness of payments and deferment of payments as a time of detention. As in sci-fi movies, when time freezes and everyone stops in your way, so do your lenders.

Time stops. But like in those sci-fi movies, it doesn’t stop for everyone. Some characters escape the freezing of time. They walk through the frozen landscape, keep doing things and advancing in the plot.

The same is true when you are in pardon or deferment of payments. But what keeps moving is not the plot, but the interest rates. In most cases, you have obtained a deferment to pay off your debt, but not for interest that accrues in your debt.

Suppose you have been terminated or fired because of COVID-19, and you have a balance of $1,000 on your credit card, which has an interest rate of 20%. You call the number on the back of your card and ask for help. Almost all credit card issuers offer some kind of program that decreases or eliminates penalties or even allows payments not to be made.

Here’s the thing: as long as your payments are frozen, your interest rate isn’t. Keep running, adding up more fees you’ll have to pay once they thaw.

Deferral vs pardon of payments

So you’ll wonder, does this interest rate situation apply to both deferral and forgiveness of payments? And, in any case, what’s the difference between them?

As Business Insider has so eloquently said, “these two relief options are very similar, and many people use them interchangeably – yes, even loan and finance professionals.”

Most of the time they work the same, however, they differ in:

Deferral usually means that interest doesn’t accrue while you’re not making payments. Forgiveness of payments usually means that interest does accrue.

However, you can’t trust those words, you have to look closely at the fine print of any agreement you make with your lenders. You may find that you’re signing a strange combination of these two terms. For example, there may be a freeze in interest rates for several months, but if you continue to freeze payments, interest rates will come back into effect.

There’s a big problem with both terms

Let’s say you’re already 30 days behind in paying a debt when the forgiveness or deferment period began. Unfortunately, your lenders don’t forget that fact. You won’t be charged late fees and fines during the deferment or forgiveness period, but it won’t change your circumstances in the previous days.

That’s why I’m so concerned about these pandemic-related programs. Don’t get me wrong, I think they’re powerful tools to keep those living in America from sinking into a deep debt they’ll never get out of. However, they have a history of not thinking long-term when it comes to debt.

Delaying debts doesn’t eliminate them

This should be a daily mantra for anyone who is using deferment or forgiveness of payments during this pandemic. Although you can delay payments without accruing interest, you still have a big problem: you still owe the money.

Going back to the sci-fi analogy, just because your mortgage is frozen in time doesn’t mean your house is frozen. Just because your car loan has been deferred doesn’t mean the wear and tear of the vehicle is frozen.

Functions of Different Automobile Parts

Automobiles are commonly can be seen in our daily life. With the development of the economy and the improvement of people’s quality of life, more and more people choose to buy cars for their own usage. Therefore, automobile plays a more and more important role in our society.

There is no doubt that automobiles consist of complex subsystems that work together to provide efficient and reliable transportation. Many different parts have different functions and performance. Some of them are quite familiar to us.

Among all the auto parts, engine is the most important. Its right performance leads to the good condition of the automobiles. It can run on wide variety of fuels such as gasoline, diesel fuel, and ethanol and so on. But do you know how does it work? It takes air from the intake tract and fuel from the carburetor or fuel injectors and compresses it inside the cylinder. Then the spark plugs fire, igniting the air/fuel mixture and forcing the piston down in the cylinder, which turns the crankshaft.

In addition to the engine, the drive axle is also a necessary part as to the whole car. It cooperates well with the transmission to achieve the effects. Generally, the drive axle takes the power from the transmission and channels it to the tires, which in turn propel the vehicle. And the transmission can take the power generated by the engine at the crankshaft and relays it to the drive axle. These parts work together to drive cars.

As to the transmission, it can be further divided into manual or automatic models. The former type is one in which the driver selects gears through the use of a shift lever and clutch pedal in the passenger compartment. While the latter one can shift through forward gears by itself, and the driver only needs to select between drive (forward) and reverse. Obviously, it is more convenient when compared to the former one. Thus, the automatic models are more and more popular among people in recent years.

The parts mentioned above are mainly used to push the automobile forward. However, what part do you need if you want to stop it? The answer is the brake system. It uses the power of hydraulic fluid to transfer the force the driver applies to the brake pedal to a clamping force that slows the vehicle. Then the brake pedal is attached to a master cylinder that pumps brake fluid through steel and rubber lines to each wheel. At each wheel, the caliper forces brake pads to clamp down on the rotor, a large steel disc that is attached to the wheel. This causes the vehicle to slow down.

Reviews on Auto Insurance

Having vehicle insurance for some people is still considered less important. They think there’s no point in insuring their beloved car. Anyway, if the car is driven in a careful manner, then the possibility of an accident will not happen. The myth is that the way car insurance claims are difficult, the procedure is convoluted until the funds needed are liquid.

But all those assumptions are not true, because you have to understand if the car insurance has many benefits that are profitable. Car insurance is not only limited to compensation in the event of an accident, but also as a maintenance investment. Just imagine if you get redress for any risk that happens to the car. Of course, don’t worry about spending a lot of money to just fix it. For example, your car accidentally hits the fence of the house so that it makes the front of the car blister, then you don’t have to spend money to fix it because it will be financed by the insurance company.

By having vehicle insurance, all of these risks can be minimized because there are many expansions of attractive protections that are offered by insurance companies. How to buy car insurance is also easier in the online age as it is today, of course, you can already buy car insurance through the online system.

How to Buy Car Insurance Online

The main convenience that can be directly felt from buying insurance online is practical. It doesn’t take much time because all the processes ranging from transactions, application processes, status updates and checks are done online. Of course this will not interfere with your other activities as purchases can be made anywhere and anytime (real time).

In addition, you also do not have to bother submit the necessary documents to register such as ID card, driver’s license, registration and others. This is because all documents can be uploaded over the internet. Filling out the insurance application form is also done online. Check out the following careful review tips on buying car insurance online:

1. Compare Insurance Products

Everyone wants the best insurance product for their car. If you can all the risks that may occur covered all by insurance. Therefore, make a comparison between one insurance product and another similar product before purchasing. This way you can do this online through a comparison site that offers car insurance.

Take a look at the great deals provided by insurers to protect your car later. Not all insurers offer the same protection. In terms of insurance policies and interest alone each company is different.

But keep in mind, not that offering the lowest insurance premiums means the cheapest, just look at the cheap insurance policies offered if they provide coverage that’s already to your liking. It means whether the insurance provides comprehensive coverage or just for certain things only.

In addition, you can also read the testimonials of people who have submitted certain insurance products for reference. From there it can also be considered whether the insurance product is the one you are looking for.

2. Choose the Appropriate Car Insurance Type

Basically there are two types of insurance coverage offered namely All Risk and Total Loss Only (TLO). The difference lies in the type of protection provided. For All Risk insurance, the insurance company will cover all the risks and damage to your car. This means that any minor, severe to loss damage can be covered by All Risk insurance.

Unlike All Risk insurance, Total Loss insurance will only cover losses that cause more than 75% damage to the car or the vehicle to be stolen. For minor damages, this type of insurance cannot cover it. However, when it comes to premiums, this type of insurance is cheaper. This should be understood, and determine the type of car insurance that suits your needs.

3. Add Protection Expansion

For those of you who have considered insurance only for protection when the car is damaged by accident or lost due to theft only, means not yet understand properly about the benefits of insurance. Currently, insurers have expanded their type of protection against possible risks known as extended coverage

When purchasing insurance, you will be given the option of expanding the desired protection. Later the selected expansion will be added to the car insurance policy and will be included in the insurance premium. The expansion of coverage offered by insurance companies includes, rioting, natural disasters, terrorism, sabotage, body injury or death to passengers, passenger liability and third party liability.

Of interest is the responsibility of third parties. By choosing the extension, the losses suffered by third parties are also the responsibility of the insurer. For example, if your car is involved in an accident involving another car, so you should not worry about paying compensation because with this protection the insurer will cover it.

4. Take a Look at the Insurance Claim Process

Sometimes the thing that makes people want to buy insurance is the process of claiming that is considered complicated, when it is just a thumbs up. As long as you know and do not violate the procedure, your insurance claim process is easy to process. The insurer will also be happy to assist you in managing your claim. Don’t be afraid to ask them.

Understand all the information about your car insurance claim online. Each car insurance product has a clear and informed claims procedure. In case something happens to the car, you can immediately report it to the insurer. Do not delay to report due to the deadline to report in general 3 X 24 hours. After that prepare the required documents, this is not as complicated as expected because you only need to prepare your driver’s license, registration, insurance policy, as well as a certificate from the local police. Don’t forget to also attach a claim form that must be filled out and signed.

After that just wait for the process from the insurer until giving the green light to take your car to the nearest partner workshop. The car will soon be repaired by the mechanic and the vehicle will also be ready for reuse.

How to Cut the Cost of Car Insurance

When I was 17 I wanted to own a Ferrari and live life in the fast lane. Even if I could have afforded the car, then I could not afford the insurance to cover it. At 17 you are brand new to the world of driving and statistically you are more likely to make an insurance claim. Mixing high-powered cars with inexperienced drivers is not something car insurance companies are super-keen about, the chance of a claim shots through the roof with the price of the premium following it. When you are young and inexpensive, buy a low-powered, low value car to try and keep your car insurance premium to a minimum. If it is worth less then it will cost less to fix / replace when in your youthful exuberance you crash it. The same logic actually applies to everyone, the lower the value of the vehicle and the lower the car insurance policy will be in most cases. Sports and premium cars will always cost more to repair in an accident so the insurance will reflect this. New cars now feature myriads of anti-theft and driver aids that in many cases will help to reduce the cost of insurance so keep an eye on the spec sheet when looking at a new car. A good rule of thumb is that less desirable and low value cars are cheaper to insure.

Age is a concern

I mentioned it above and it bears repeating. Typically the younger you are the higher your car insurance premium. This is down to inexperience and the youthful belief that bad things will never happen to you. The statistics say otherwise, which is often a shock to an unsuspecting young driver who ends up in a crash wondering how it happened to him … Driving experience and age are usually linked and that leads to a method of reducing your insurance premium – whatever age you are you will benefit from advanced driving courses and many car insurers offer discounts for these qualifications. It may only be a five – 10 per cent saving for the course but on a premium of £ 1000 it’s worth having the saving and it will stay with you for years, so it should be a good investment, not to mention make you a better driver.

Keep adding to the no-claims bonus

The more years you can accumulate without making a claim the better as most car insurers will offer a discount on your insurance for this. Effectively you are proving you are good business to have and because you have not made any claims then you are a good risk for them to underwrite. There’s nothing you can do here but keep your nose clean and do not make a claim. If you own a low value vehicle and dent it parking, you’d be advised not to make a claim on comprehensive insurance because it would reduce your no-claims bonus, likely to be for a small amount of money and you may even end up paying for most of it depending on excess. In that case, provided you have not caused damage to any other vehicles or property, keep quiet, fix it yourself and your saving on no-claims bonus will be sweet the following year – in time, when you have built up three or more years no-claims bonus, you can actually protect your bonus, meaning even if you make a consequent claim you will not lose your bonus.

Convictions are not cool

If you are an inner-city teenager then an ASBO may be a badge of honor. Insurers are less impressed by convictions though, so it is best to avoid them if you can. Minor speeding offences are certainly not in the same category as serial killer though, so if you have a couple of points it will not be the end of the world or have a major influence on your premium depending on the insurer.

If you’ve got a garage, use it

What are garages for? If you ask the average person they’ll probably say for storing all the kids’ toys, the home gym, bikes, the freezer and tumble-dryer. I have news for you all; the garage is designed to house your vehicle when you are not using it. The fact that it puts a physical barrier between any opportunist thieves and your car is a real good thing and car insurance companies will recognize this and reduce your premium if you park in a garage overnight. Using your garage will save you money; it does not get any easier than that.

Anti-theft devices

Most modern cars come with immobilizer and alerts factory fitted and if you notify your insurer it will check to make sure they are to approved standards and will apply discounts if applicable. You can get other devices that slosh around in the passenger footwell until you park and then fix to generally your steering wheel or gear-stick. These are mechanical devices and some do attract further discounts if used, just do your homework before buying. Thatcham is the organization which grades security devices and generally a decent mechanical security device will feature its Thatcham approval very prominently along with any premium discounts you may expect, so choose carefully.

Use a reputable broker

Car insurance is very big business with around 30million + vehicles on the UK roads, so there is a wealth of car insurance companies to choose from. Ironically, the big names you are familiar with are probably in your head because of massive marketing campaigns on television, on-line etc. Regardless of the message, those marketing campaigns need to be paid for and that means they may not actually have the best rates, although the sheer scale of some of these businesses means prices will be due due to buying or underwriting power. The best advice is to compare a couple of different prices from different companies. Call the insurer and then call a comparable competitor and then possibly a small car insurance broker. Each one will ask you if you have a price already and you should tell them what it is. Usually if they want the business they know what to beat. The moment you get a broker saying they can not match the price then you are probably close to the best market price or else speaking with a broker that is not a specialist in the area.

A word of caution on price comparison sites

There are plenty of price comparison sites around which promise to drive the cost of your insurance policy down – Money Supermarket, Go Compare, Confused etc. They certainly do help reduce the cost of insurance as most of the major players are fighting for business on the same platform. Where these price comparison sites do not perform so well is actually advising you on the sort of policy that’s best for you or your car. Would comprehensive be cheaper and more suitable than third party fire and theft? The point is you can not ask the price comparison site for any advice, that’s where car specialist brokers have the edge. Compare it to buying a new house, would you buy one without a survey? You might and then when it subsides into the sea you’ll be praying your insurance will cover it … the point is you should not buy insurance without talking with an expert either.

Pick up the phone

The internet is a great shopping and selling tool, you know my feelings on that from previous articles … but I suggest if you speak to a real person at a brokerage then you have a much better chance of getting cheaper car insurance . They can ask more questions, clarify your requirements and if needed they can even delegate the rate (set the price themselves) if they really want the business. There is no substitute for human contact, just make sure you speak to at least three different brokers to get a true comparison.

Got a nice postcode?

If you live in a postcode where there are few thefts and claims then your insurance premium will be lower than living somewhere that is a known crime hotspot. If you can afford it, move to a posh area and you’ll benefit from lower insurance premiums. Not the easiest way to save on the cost of insurance for sure …

Mileage and use

The more miles you drive the more chance you have of being involved in a claim. It’s simple statistics. The fewer shares covered, the less your insurance premium should cost. Do not tell lies though, if you exceeded the stated mileage by a distance then it could invalidate your insurance.

Married with kids?

Insurers like selling car insurance to married couples mortgaged and with kids and jobs. You are very easy to credit check and generally display responsible behavior which hints at a lower risk for the insurer. That can reduce your car insurance quote.

Do not modify your car

We all see the bling bling cars that haunt Supermarket car-parks late at night and if you like the tacky neon colors and loud exhausts is here here nor there – the fact is that any sort of modification is likely to hike your car insurance premium. Modifications can draw attention, invalidate warranties and in the case of loud exhausts, can also be illegal (if above the noise limit). If illegal, then it could invalidate your insurance as well. The fact is that car manufacturers spend a lot of time developing their products so they work well and if you modify them then it’s all out the window and your insurer will be scratching his head wondering what he should charge – and it will almost always be more than a standard vehicle.