PT Money » Insurance

Save Money on Health Care: Health Savings Account vs Flexible Spending Account

Philip Taylor — Wed, 02 Nov 2011 18:15:50 +0000

In light of past health care discussions on my blog and the fact that it’s soon to be benefit re-enrollment period at your work, I thought I’d address a couple of tax-advantaged medical savings accounts: the Health Savings Account and the Flexible Spending Account.

I used a Flexible Spending Account for some time when I was employed and had a nice group health insurance plan. Over the past couple of years, since becoming self-employed, I’ve learned a great deal about Health Savings Accounts. Let’s look at what they are and how they can help you.

Health Savings Account (HSA)

The Health Savings Account is like an IRA. You get to fund it with pre-tax dollars and it’s typically administered by a financial institution. But unlike an IRA, you get to use the funds when you need them (not just in retirement) towards qualifying medical costs.

You also get to decide where the funds are invested. You get a lot of control with this account. Tax savings and growth.

Only certain people qualify. You must be enrolled in an HSA-eligible high-deductible health insurance plan.

You’re annual contributions are limited. 2011 limits are $3,050 for individuals and $6,150 for families. 2012 limits are going to be $3,100 for individuals and $6,250 for families.

Flexible Spending Account (FSA)

The Flexible Spending Account is a pre-tax dollars savings account your company administers where you’re allowed to save up a year’s worth of health care costs. Most people use it to pay for deductibles, co-pays, and household health care items. It works like this:

At the beginning of the year (or during your benefit open enrollment) you must elect to open the account and save a specific dollar amount.

This account is funded automatically from your earnings at work. Your company will deduct the funds before taxes are calculated (pre-tax).

Throughout the year you’re allowed to spend the dollars you’ve accumulated in the account. The spending must be for qualifying health care costs.

Important: it’s a use-it-or-lose-it type plan. You must spend all the funds in the account or you lose them. Thus, people are normally very conservative with the amount they elect to fund the account.

The effect of using the account is big tax savings. If you normally spend $1,000 on “above coverage” health care costs in a year, you could save around $250 a year by using one of these accounts.

Things you might not have known were qualifying health care expenses (every plan is different, but these oddities are likely qualifying): Hand sanitizer, cold remedies (and other over the counter meds), sunscreen (like Coppertone®), and band aids.

What We Use: FSA vs HSA

Like I said above, we used to use an FSA, which we heavily funded each year for things like baby medical costs and prescription drugs. But we no longer qualify for an FSA because I’m now self-employed, Mrs PT is a stay at home Mom, and we can’t get on a low-deductible group health insurance plan. So now we have an HSA through a local credit union.

Do you use these accounts? How have they worked out for you?

Save Money on Health Care: Health Savings Account vs Flexible Spending Account is a post from: PT Money: Personal Finance by PT.
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Safe Driver Discount: What’s the Catch?

Emily Guy Birken — Mon, 20 Jun 2011 11:30:38 +0000

What's the catch?

We’ve all seen the commercials.

According to the distinguished, gravel-voiced man who assures you that you’re in good hands, and the perky lady who wants you to compare prices with her company, being a good driver means that you can save a lot of money on your car insurance bill.

See: 20 Tips for Affordable Auto Insurance

I tend to be somewhat skeptical about any advertised “bargains,” so I’ve often wondered what the fine print would be on a safe driver discount.

Luckily, I know a friendly neighborhood insurance agent who was able to answer several of my questions. Here are some of the safe driver “catches” that the commercials don’t tell you about:

All Insured Need to be a Safe Driver

Many companies will require that every single driver on the policy have a clean record in order for the safe driver discount to apply. Though this changes from insurer to insurer, it’s possible that your teen driver or your live-in mother-in-law might keep you from being able to take advantage of the discount.

Some companies will provide a discount on an individual basis within a family policy, but it depends on the insurer and the policy. Even with individual discounts, you can see a lot less savings than you might anticipate since it’s only affecting one driver in the policy.

Only Premium Policies Eligible

Some companies will only offer the safe driver discount to those individuals who sign up for the highest level of coverage. If you’ve paid off your car note, you may not need full coverage auto insurance.

So for several companies, be aware that you have to pay for the top of the line coverage in order to be eligible for a discount. That might mean you’re breaking even.

The 3 Year Rule

Most drivers know that insurers are looking for a minimum of three years of good driving history, but what does that exactly mean? It’s not enough to have accumulated no points on your license—most insurers are only interested in traffic violations and at-fault accidents.

Also, three years of good driving history is not a hard and fast rule. Some companies will go back as far as five years. What if you’ve been a good driver for a long time, but you’re changing insurance companies?

Many insurers will make you wait a year before offering you the safe driver discount, as they’d like to have some history with you prior to handing you discounts.

Line Item Discount Only

Though your insurer might tell you that you get some percentage off for good driving, it might not be as simple as that. The percentage is not necessarily taken off the entire premium—instead it will be deducted from one line of coverage, such as your liability premium.

There is no industry-wide standard for safe driver discounts, so each of these articles of fine print may or may not be true with your insurance company.

The bottom line is that it is important to know that signing up for a safe driver discount does not necessarily mean a huge difference in your bill. Be sure to review your auto insurance policy periodically to ensure you are getting the best discount.

Brag a little. What kind of discount are you getting for being a safe driver?

Photo by Scott McLeod

Safe Driver Discount: What’s the Catch? is a post from: PT Money: Personal Finance by PT.
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5 Types of Homeowners Insurance Policies

Philip Taylor — Mon, 06 Jun 2011 16:23:43 +0000

Austin, who occasionally writes here at PT Money, is in his 2nd year of teaching English in western Japan. With the Japan Tsunami fresh on his mind, he generously offered to write a couple of pieces on preparing for major disasters. You can check out his personal finance site for 20-somethings at Foreigner’s Finances.

This is part 2 of a short series about insurance for your living area. Part 1 covered renter’s insurance for condos and apartments.

Do you know the different types of homeowners insurance policies?

Buying a house is the biggest, most expensive, and time-consuming purchase of your life.

The idea of home-owning has been romanticized because it’s good for the country if many people own homes. But if you talk to someone going through the process of buying a house, they’ll tell you it’s not so fun because of the huge amount of decisions you have to make (e.g. how much house you can afford).

One of these decisions is also the type of homeowners insurance you want for your new home.

When you purchase a home and have a mortgage, the mortgage lender will require a certain amount of insurance to be purchased. You have some choices when it comes to the extent of coverage you want to buy.

The Different Types of Homeowners Insurance Policies

Like I said in the insurance for renter’s post last month, insurance is not an area of your life where you want to try to save a few bucks by cutting some corners. With that said, here’s some of the most popular homeowners insurance packages available to you.

HO-1 Basic Form Homeowner Policy: This package has limited capabilities and only covers a short list of perils (serious or immediate damages) like fire, vandalism, explosion, smoke, and personal liability. Most notably missing from this coverage is flood and earthquake coverage.

HO-2 Broad Form Homeowner Policy: This package includes 16 perils including all from HO-1 as well as perils like broken pipes and hot water heaters.

HO-3 Special Form Homeowner Policy: This is the most popular type of coverage for home owners. This is the insurance you want to get for your home if your considering purchasing a home soon. Still, events like earthquakes and floods are usually excluded from HO-3 so you’ll have to contact your insurance provider for special insurance for these perils if you happen to live in an endangered area.

HO-5 Premier Homeowner Policy: This is the most comprehensive coverage and if you are a very cautious person is the type of homeowners insurance for you. This coverage lists the perils not covered by HO-5 and anything not listed is insured.

HO-8 Older Homes: This coverage is pretty basic and for homes that are much older. Perils covered by the HO-8 are fire, smoke, vandalism, theft, as well as some others.

When you talk with a company or agent about the type of homeowners insurance you will need, be sure to discuss all of the details. Don’t rush the process for any reason. Make sure you understand exactly what insurance you’re getting, what’s covered, what’s NOT covered, and exact pricing.

The right homeowners insurance can save you hundreds of thousands of dollars someday.

What type of policy do you have?

Photo by N1NJ4

5 Types of Homeowners Insurance Policies is a post from: PT Money: Personal Finance by PT.
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Why Your Apartment or Condo Needs Renter’s Insurance

Austin — Mon, 16 May 2011 19:13:11 +0000

One of my best friends lives in Birmingham, Alabama and was luckily 5-10 miles away from a destructive tornado this week that took out houses in seconds.

Some of his friends weren’t so lucky as he told me via email:

“All my friends from Tuscaloosa survived, but lost everything.”

The place you call home is your rock and the most valuable and expensive tangible item you will ever put money in to.

As valuable as a home can be, we sometimes don’t treat it that way and tend to look the other way when someone brings up the idea of theft insurance, lightning insurance, or any other insurance that will protect your home – and your wallet – against an unexpected personal disaster.

Last week we looked at how to protect your wallet in case a disaster hits. Insurance is a broad topic, so today let’s take a look at a few things you the tenant can do to protect your rented apartment or condo in case disaster or damage strikes.

Don’t Risk It – Get the Insurance

Often people who rent try to save a bit every month by forgoing renter’s insurance. Although your building is insured by the landlord, the items in your apartment are not insured. Meaning your 42 inch TV, your new sofa, your laptop and any other valuables are not covered by any insurance.

What you’ll need to purchase as a renter is HO-4 coverage or HO-6 coverage if you live in a condominium. You can purchase these coverages from any insurance company and it will protect your valuables in case of 17 different perils. Some of the big ones, according to InsuranceGuide101.com, are:

Fire or lightning
Windstorm or hail
Vandalism and theft
Electrical surge damage
Water related damage from home utilities

Contact any insurance agency today and they’ll walk you through the steps to purchase renters insurance – like listing the value of your items and deciding on a deductible price. If you’re wondering how much is renter’s insurance per month. Know that monthly coverage will run anywhere from $10-50 a month depending on the extent of your policy and situation.

Click here to get a free renter’s insurance quote from insureme.com.

The bottom line: don’t try to save money by forgoing renter’s insurance and risking it. Cut back in a variety of spending areas or try to pick up some side work to make money because the cost of insurance is worth it; regardless if you ever use it.

Insurance For Your Situation: Earthquakes, Tornadoes, Floods

You may have noticed that in the 17 perils covered by the HO-4 renter’s insurance, none of the large scale natural disasters are covered. You’ll have to go a step further to protect your living area from these types of disasters.

Insurance for earthquakes, tornadoes, or floods is a type of property insurance. There is no all-reaching disaster coverage so you’ll have to figure out what disasters have the probability of affecting your area. See the probability of a tornado in your State.

Contact your insurance provider today and ask them to walk you through the steps for purchasing this type of coverage.

Once again, you may say “The chances of something happening to my apartment aren’t very high. I’ll pass on this one.” However, right now there are thousands of people who have lost all of their possessions in Alabama. They are going back to shattered houses to see if they can pick up anything after the disaster.

This is not an area of your life to skimp on. Get the insurance and sleep easy knowing your valuables are protected.

Keep Your Insurance Updated

A lot can change over the course of the year. Keep your list of insured items updated and fresh by going over your personal inventory every 6-12 months. If you’ve purchased a new $3,000 refrigerator but the insurance company doesn’t know about it, that item won’t be replaced after a fire or theft.

Tech tip: Create an event in your Google Calendar every 6, 9, or 12 months that simply states: “Check Insurance Inventory.” You can even create an email reminder and you’ll get an email on the day reminding you of your event.

When this happens, all you have to do is look around your apartment or condo and see if anything of large value has been purchased. If so, contact your insurance agency and inform them of the item so they can update your policy.

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Remember that your insurance company works for you. Ask them for their opinion on different coverages and don’t be afraid to shop around for better rates. Never let an agent bully you in to coverage that you don’t want, but use their knowledge to better your situation. There are thousands of types of insurances for tenants who rent so just ask.

It’s not fun to add another bill to your monthly expenses, but it’s even less fun to live day to day knowing your entire life can be desecrated by one freak accident. Buy the extra insurance and forget about it. You’ll never regret the decision to go the extra mile to protect you and your family.

Photo by LakeMartinVoice

Why Your Apartment or Condo Needs Renter’s Insurance is a post from: PT Money: Personal Finance by PT.
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Understanding Your Health Care Coverage

Emily Guy Birken — Tue, 03 May 2011 15:40:33 +0000

Confused about your health care coverage?

It happened again last week.

In our mailbox were another two envelopes from our health insurance company, each one with a check for a seemingly random amount reimbursing us for medical coverage—although we couldn’t tell you exactly what visit the check was for.

Ever since my husband started his new job and we officially changed health insurers, we’ve had inexplicable “Explanation of Benefit” mailings, checks, and dizzying formulas for determining what is and is not covered.

I will admit to burying my head in the sand and just paying whatever was asked right after our son was born. At that point I was too sleep deprived to try to understand the labyrinthine logic of the health care industry. Plus, I was comforted in the fact that I had group vs individual health insurance.

But I recently decided that I needed to actually familiarize myself with what it is that our insurance covers and why we keep getting checks. Below is the cheat sheet for your health insurance terms.

Once you understand these, you’ll be in a better position to know your benefits and dispute problems—and keep your budget healthy!

1. Deductible

Anyone who has ever carried car insurance knows that the deductible is the minimum amount that you must pay before you can get any benefits from the insurance company. The deductible is generally a yearly amount, so it resets every year.

The deductible can get to be hairy if you have several family members on the plan, as we do. We each have an individual deductible of $300, and then there is a cumulative deductible of $900. So if any one of us incurs $900 or more in medical expenses, the benefits kick in for all three of us for the rest of the year.

Just to make things more complicated, we have a non-comprehensive deductible, meaning not all procedures will apply toward the deductible. For many policies, a regular checkup will not apply to the deductible, but a visit to the ER or a surgery would.

Self-employed? Consider a high-deductible plan to make your premiums more affordable.

2. Co-Insurance

This is the part that so confused me about the hospital stay for the birth of my son. I knew that we had met the deductible prior to my son’s birth, so I was confused as to why we still owed the hospital money.

That was because we had co-insurance, meaning that our policy will pay for 80% of a procedure or visit, while we are responsible for the remaining 20%. We had gone into the hospital thinking that we were completely covered, and came out with a somewhat hefty bill.

Luckily, most doctors and hospitals know that co-insurance can take anyone by surprise and will happily set up an interest-free payment plan for the remainder of the bill.

Make sure you avail yourself of this service, because it really will help you to keep medical bills from eating up the rest of your budget.

3. Co-Payments

This is the fixed amount that you will pay at the time of service or when filling a prescription. The one benefit to our new insurance plan is that it has no co-payments, so each doctor visit is simply a quick trip without having to take out the checkbook.

However, at least in our case, by trading out co-payments, we got a much more confusing policy.

4. Annual Out-of-Pocket

Most insurance policies set an annual cap at how much you will pay yourself, including deductibles, co-insurance and co-payments. This will be a boon if you are ever plagued with a bad year, health-wise.

5. Lifetime Maximum

Your insurance company has decided ahead of time how much it can pay for the health of an individual or a family. This lifetime maximum is an important figure to know, because if it is too low it could leave you with a very high bill at a time of great family stress, and it will leave you scrambling to find another insurer for the other members of the family.

Do make sure you know the difference between the individual and family lifetime maximum, as the numbers will often be different.

It’s important to understand your health insurance policy so that you will not be surprised by bills (or checks!) after you have had medical care.

It’s also important to make sure you’re getting the best care for your money, and you can only do that if you understand what options are available to you, both within your insurance policy, and among other possible policies you may buy into.

No one wants to think about health insurance, but both your family’s health and finances are depending on it.

Photo by Brian Lane Winfield Moore

Understanding Your Health Care Coverage is a post from: PT Money: Personal Finance by PT.
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Going from Individual to Group Health Insurance

Philip Taylor — Thu, 14 Apr 2011 19:38:59 +0000

Every day, many people go from an individual health insurance plan to a group plan. That’s a good direction to be going, right? Most people worry (with good reason) about the opposite move: group to individual.

I did this once, back when I quit my corporate job, and I can tell you that it’s not much to worry about. See my post from last year on buying health insurance when self-employed.

With some jobs returning to the economy though, going from individual to group is likely a more popular move than ever.

In most cases, this move (individual to group) will mean better coverage and a portion of the costs to be absorbed by the employer. Praise the Lord, right?! But there are some other things to consider.

You should stay insured with your individual plan until you are certain you are on your new group plan (duh!). You don’t want to have a lapse of coverage and give your employer a reason to make you wait 12 months before they cover you, in case of any pre-existing conditions. Just be sure you haven’t ended your individual plan too soon.

Also, make sure that your new employer will allow you to include your spouse and dependents on the plan. Finally, don’t expect the two insurance plans to communicate, even if they are the same company. Group and individual are usually two completely different businesses, even within the same company.

I recently moved back to group health insurance and between the two separate Blue Cross Blue Shield plans, no one had a clue I had moved within the BCBS family. Odd, I thought.

Because they don’t necessarily communicate, even within the same company, make sure you call each plan and first understand your coverage. Then understand your stop/start dates so you’ll be exactly sure of when your coverage ends and begins. Finally, you should understand your payment options with each so that you can be prepared to make payment.

What has been your experience with going from individual to group?

Going from Individual to Group Health Insurance is a post from: PT Money: Personal Finance by PT.
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Will Your Small Business Survive Your Death?

Guest — Sun, 27 Mar 2011 16:23:57 +0000

This is a guest post from friend and attorney, Robert Newton, who’s website, Bizbrook.com aims to guide you in your journey from employee, to self-employed, to employer. Check out his recent series, 10 steps to starting a business.

What will be there to keep your business afloat long after your ship sinks?

It’s a daunting question. Each of us possesses a strong aversion to discuss our own mortality, much less deal with it.

But, as Mr. DeVoe and Mr. Franklin intelligently reasoned, nothing is more certain than our death (and taxes). In business, the survival of your business upon your death is called a “succession plan.”

If you have not truly reflected the state of your business after your death, you should. It is the most important thing you can do for your family.

Further, a succession plan is just as important, if not more so, when a business has multiple owners. Here are some key elements to a solid business succession plan:

Life Insurance (Key-Man Insurance)

Life insurance is a critical asset of any business. When a business obtains life insurance on a key person, it is called key-man insurance. And, it can be utilized in many different manners.

For sole-owner businesses, life insurance (which does not necessarily have to be “key-man insurance”) may be maintained to insure the spouse does not have to work after the key person’s death. Or, enough insurance may be purchased for the spouse to quit his/her job and work for the business.

Alternatively, the spouse may continue his/her present employment and use the insurance proceeds to hire another key person to continue running the business.

For companies that have multiple owners, the life insurance proceeds can be used to hire another person or pay debt that may be in default because of the other owner’s death. Life insurance could also be used to buyout the deceased owner’s spouse or estate (either due to a preexisting agreement or otherwise).

Buy/Sell Agreements

A buy/sell agreement is a predetermined contract that provides either (i) a mandate or (ii) an option for one owner to buyout another owner at a predetermined price or methodology. Buy/sell agreements are oftentimes placed in the organizational documents of the company, such as a partnership agreement or operating agreement.

Buy/sell agreements may be based on a stated price, a stated formula, or an agreement to hire an appraiser to determine the value of the ownership position at the time of death. When combined with life insurance to the benefit of the surviving owner, buy/sell agreements can be an incredibly useful tool.

Wills and Trusts

Another useful tool in your succession plan would be your last will and testament. When drafting your will, don’t forget about the ownership of your company. If you desire your business ownership to be left specifically to someone, then you better mention it. Otherwise, you may leave a really big mess that your survivors could spend years trying to clean.

Sale to a Third Party

Some small business owners will die without a survivor that has the desire or ability to operate the business. Try to find someone interested in buying your business in case you die. Determine his/her wherewithal to continue the business upon your death. In addition, look for business brokers that specialize in your specific business.

Be sure to obtain enough life insurance for your business to survive twelve to twenty-four months so that your survivors have time to sell it. Most importantly, keep your spouse informed of these matters to insure a clean transition.

I’d love to hear whether you have a succession plan and what it is.

Photo by djLicious

Will Your Small Business Survive Your Death? is a post from: PT Money: Personal Finance by PT.
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20 Tips for a More Affordable Auto Insurance Policy

Philip Taylor — Thu, 24 Mar 2011 17:45:41 +0000

What does it take to get affordable auto insurance? As I mentioned earlier when I shared my story of getting more affordable auto insurance with GEICO, there are two main ways to go about lowering your auto insurance premiums: (1) reduce the cost of your current policy, or (2) get a new auto insurance policy. Today I’m going to walk you through both of those ways, plus introduce some more drastic steps you can take to lower your auto insurance.

Consider these tips for getting more affordable auto insurance.

Review Your Current Policy

1. Ensure Your Policy is Accurate – The very first thing you need to do is make sure that your current policy accurately reflects your situation. This includes all your vehicle information, like age and make. Also, make sure your yearly estimated mileage is properly stated. If you work at home or have a very short commute, make sure that your policy reflects that for that vehicle.

2. Be Aware of State Minimums – The state you live in will have a minimum set of auto insurance liability coverage requirements. You can find these at your state’s insurance commissioners website. You can also visit this page to see the full list of state’s insurance requirements. The minimums will be expressed in bodily injury liability limits and property damage liability insurance. Just make sure you know the minimums you have to maintain.

3. Be Aware of Financing Requirements – If you currently finance your vehicle, the financing company may have additional requirements of their own for you to maintain in insurance coverage. This usually affects your deductible, so be sure you know your required limit before you raise your deductible.

4. Consider Raising Your Deductible – Now that you know your requirements, it’s time to consider raising your deductible. If you raise your deductible, keep in mind that you will be responsible for that amount if you get into an accident and it’s your fault. If you’ve set up a nice emergency fund, you’ve already self-insured to a degree. So, raising your deductible wouldn’t be a bad idea. To my knowledge, raising your deductible has the biggest impact on your auto insurance rates. Read more about car insurance deductibles.

5. Consider Dropping Certain Coverage Items – Each insurance policy will have different levels of coverage. Some are required, some are recommended, and some just aren’t needed for your situation. I’m not going to tackle each type of coverage here today, but I will discuss the main three and when you could consider lowering the coverage.

Liability – This type of coverage pays for personal injury to others, including medical expenses and lost wages. It also includes property damage, which covers the damage you do to their vehicle or other property. Liability is the baseline of insurance coverage and most states, as mentioned above, have minimum requirements. If you’ve got a decent car and a few assets to protect, you should consider getting 100/300/100 level coverage here. There’s no reason to skimp in this area.
Collision – This type of coverage pays for the damage to your vehicle. How much is your car worth? If only a couple thousand, it may be a good idea to drop this coverage, since you’ll only need a couple thousand to replace it.
Comprehensive – This type of coverage pays for any loss or damage to you vehicle for anything other than an accident. For example, if your car is stolen or damaged in a flood. Similar to collision, factor in the value of your vehicle and how much the insurance premiums are.

Those are the three main types of coverage, but here are some more add-on types you can consider lowering or dropping all together: Medical Coverage, Personal Injury Protection (PIP), Uninsured Motorist, Under-insured Motorist, Rental Reimbursement

The bottom line: meet your requirements, get plenty of liability insurance, and factor in the value of your vehicle when deciding on collision and comprehensive.

6. Consider Dropping Extras – Many insurance policies will have little extras that you simply don’t need. Emergency road side assistance is one that comes to mind for me. I just don’t need this and so I make sure I’m not paying for it on my policy. Have a discussion with your agent or insurance company and know exactly what extras you are paying for. Evaluate which one’s you want to drop.

7. Get Every Discount You Can – The quickest way I’ve found to do this is to call your insurance company or agent and ask them for a list of all their discounts. Write them all down and them systematically work through the list to ensure you’re getting the full discount. One that I have on my list right now is the defensive driving discount. I just need to find a place to take the course. Consider more ways to save on car insurance.

8. Combine Policies if Newly Married – If you just got married, and have the same insurer, call them up to have your policies combined. This will save a great deal because of the multi-car discount.

9. Consider Paying in Full – You may be paying an extra fee for paying your policy month-to-month. Start saving now and pay your auto insurance premium in full next time.

Consider a New Policy

Let’s say you’ve looked over your bill and you’ve exhausted all the tactics above. You should still check to see if there is a more affordable auto insurance policy available from another insurance company.

10. Shop Online for Quotes Through Insureme.com – A website like insureme.com will allow you to run one check and get back several auto insurance quotes. This way you can see who is offering you the best deal.

11. Shop Direct for Auto Insurance Quotes – You can also go straight to the source, as some insurers aren’t included in the multi-quoting process above. Get direct quotes from Allstate, Hartford, GEICO, etc..

Here’s a video on buying auto insurance:

12. Consider a Multi-Policy Discount – If you are considering a new policy, it might be a good idea to check with your home insurer to see if they have a discount for multi-policies. Most of the companies above insure both home and autos, so it’s worth a try to see if you can pay less by bundling insurance policies.

13. Take Advantage of Multi-Car Discounts – If you’re getting a new policy, consider going with the insurer that your spouse uses, if you aren’t already. There are big savings for keeping all the cars under your roof within one policy.

14. Group or Organization Discounts – As a member of a trade organization or other group (i.e. your employer), you may be eligible for a discount. Check to see if you need to purchase through them to get the discount though.

Consider These Big Changes

Here are some more drastic changes you might could make to lower your rates and make your auto insurance more affordable:

15. Consider Going to One Car – Do you really need that extra car? If you’re married and one of you work from home, consider going with just one car. The savings on payment, maintenance, and insurance could be in the hundreds.

16. At Least Consider Lowering Your Commute – If you can’t drop to one car, consider working closer to home, working at home more, or taking alternative transportation to work. The lower your commute to work is, the lower your auto insurance policy will be.

17. Move to a Different City or State – Different states not only have different requirements, but they also have very different premiums. Read more about the most expensive places to insure a car in the US.

18. Improve your FICO Score – Insurers can use your FICO score to determine how safe a driver you are. Therefore, having a better FICO score will lower your insurance premiums. Check your FICO score and then review these ways to improve your FICO score.

19. Get a Different Car – Lastly, we saw last week how the type of car you drive can have an impact on the amount of insurance you pay. Consider driving a different vehicle. At least one that’s less likely to be stolen.

20. Do You Have Something to Add? – Help me think of the 20th tip. Let me hear from you in the comments below.

20 Tips for a More Affordable Auto Insurance Policy is a post from: PT Money: Personal Finance by PT.
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Cut Spending: When to Drop Full Coverage Auto Insurance?

Emily Guy Birken — Thu, 03 Feb 2011 18:26:58 +0000

If you’ re like me, the idea of going over the details of your auto insurance policy can make your eyes roll back in your head. It may seem easiest to simply continue with your current policy, even if you pay for full coverage auto insurance. But adjusting your policy—which can be the most expensive aspect of owning your car after the purchase price—can lead to substantial savings and lead to more affordable auto insurance.

Full coverage auto insurance generally refers to a policy that includes comprehensive and collision insurance in addition to the state minimum. Comprehensive insurance comes in handy if your car is stolen and not recovered, or damaged by anything other than a car accident (e.g. fire, flood, or act of God). This will pay for your car to be fixed or replaced for the amount that your insurance determines to be the car’s actual cash value, minus your deductible. (For a general estimate of your car’ s worth, consult Kelley Blue Book at www.kbb.com). Collision coverage pays for repair or replacement (minus your deductible) in the case of a crash.

The question is when these types of coverage are necessary, and when you can pocket the money you’d otherwise send to insurance. Up front, you should know that unless you have paid off your car loan, you won’t be able to drop full coverage. After that it depends on the age and value of the car. A newer, more expensive car ought to carry full coverage and an older, cheaper car should not. But what if you drive a car somewhere in the middle range? How do you know if you are carrying too much coverage?

There are several factors to consider. For example, seven of the ten most commonly stolen cars in the United States are more than a decade old. So even if you drive an older car, if you can’t replace the car yourself, you might want to keep your comprehensive insurance.

Something else to consider is the cost of parts. If you drive a European car (which typically do not hold their value) or an older reliable car, such as a Honda or Toyota, you can expect the price of parts to be prohibitive. Damage to a single part can “total” a low- or mid-value car, even if the car is otherwise drivable. In that case, it does not make fiscal sense to keep collision coverage. A fender-bender could result in the total loss of your car, and it would be difficult to buy a replacement with the Blue Book value. Your money is better spent in saving for a new car.

A final factor to think about is where your car spends most of its time. Urban drivers face many more automobile hazards than suburban or rural drivers. If you are carrying full coverage and do little to no city driving, consider changing your auto insurance policy.

Whatever plan will give you enough money to put you back on the road after a loss will be the one that is best for you. For me, that meant reviewing my auto insurance policy and raising my deductible initially. I saved the difference in my payment until I had enough put away so I could afford to drop my full coverage. Now, I can buy a replacement vehicle should my 12-year-old Mazda go to that big garage in the sky.

What about you? How did you decide when to drop full coverage auto insurance?

Cut Spending: When to Drop Full Coverage Auto Insurance? is a post from: PT Money: Personal Finance by PT.
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Do You Need Insurance For Your Internet Business?

Emily Guy Birken — Fri, 24 Dec 2010 10:30:53 +0000

Killer internet business idea: check. Business plan: check. Domain name: check. Customer base: check. Insurance: ch…wait, what?

For many internet business owners, internet business insurance is not one of their first (or even fifth) concerns. While no traditional small business owner—with stock to lose, a storefront to maintain, and payroll to meet—would consider operating without insurance, many internet startups do just that. The question is, are these internet entrepreneurs flying without a parachute, or are they simply saving themselves from an unnecessary bill?

Unfortunately, the answer to that question is rather complicated. Although the internet is about 20 years old, and many of us cannot recall what life was like BW (before the web), it is still a very new phenomenon. As such, the insurance industry does not yet have the actuarial data on the likelihood of different types of losses for internet business. That means it is very difficult for insurers to calculate premiums. The lack of data also means it is tough for business owners to shop around and know that they are getting the best coverage for their money.

So should internet businesses just avoid the hassle and expense of insurance? Not so fast! There are many traditional and internet-specific calamities that a business owner would want to protect himself against, making internet business insurance a must. In addition to the possibility of loss of income because of physical damage to some aspect of your business (e.g., a loss of internet connection because of weather/fire/vandalism, etc), internet business owners have to worry about hackers, computer viruses, copyright violations, lost ad revenue, and privacy of customer information, among other issues specific to virtual business. And these virtual problems could lead to a real loss of income or even the business itself.

How should you navigate all of this? The first step in protecting yourself is shoring up your security. The Center for Internet Security provides business owners with a list of benchmarks for enhancing protection of web-based businesses. These benchmarks range from enabling pop-up blockers, to disabling remote desktop sharing, to managing firewalls. Whether you decide to insure your business or not, taking the time to explore these security benchmarks will certainly help you to protect your website.

As for insurance coverage itself, it does make sense to purchase a policy. A single accusation of plagiarism or copyright infringement, a single determined hacker breaking into your customers’ information, or a single internet outage during peak traffic could spell disaster. Do you have the money to pay for a protracted legal battle or to cover a huge revenue loss? If not, you will want to find a policy.

To make sure that you are purchasing an appropriate internet business insurance policy, it might make sense to do your shopping offline. Without actuarial data, the human element can help you decide which deal is right for you. Do you have an insurance agent you trust for something else in your life? Talk to her about insuring your internet business, in addition to your home, car and life. That will help reassure you that she won’t try to sell you something don’t need and that she’ll cover you for what you do need—and doesn’t your business deserve protection?

Do You Need Insurance For Your Internet Business? is a post from: PT Money: Personal Finance by PT.
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