Personal Financial Tips

Archive for October, 2011

Car insurance is required, but it is also helpful not only for car owners, but all drivers. In the event of breakdowns, accidents or other emergency, car insurance helps reduce costs for repair and damage.

Single Vehicles

Auto insurance often covers repair costs to the owner’s car. For single-vehicle incidents, this can take the worry out of fixing damage. Windshields, for example, are often the victims of bouncing rocks and flying debris through no fault of the driver. Simply driving down the highway, objects can come from tractor-trailers, uncovered dump trucks, shattered sheets of ice or loose loads. Once they hit the windshield, dings, spider webs or cracks form. With extreme temperatures, these tiny cracks can become large ones running across the entire expanse of the windshield in less than a day. At this point, the damage affects the driver’s ability to see clearly and the stability of the windshield is compromised.

No Fault

Although insurance is required, sometimes people are involved in accidents with drivers that have no insurance and sometimes don’t even have a driver’s license. No matter whose fault it is, in times like these, the insured driver may need to make a claim in order to get the vehicle repaired. Dents may affect the stability of the car’s frame or the soundness of the tire. Punctures or bent rims that are not fixed will result in blow-outs or flat tires and loss of control over the vehicle, especially at high speeds.

Routine or Preventive Maintenance

Depending on the type of car insurance a person has, maintaining a vehicle before it has problems may be covered by a person’s insurance. This includes discounts or reduced co-pays for things like oil changes, tune-ups and tire replacement. Consumers should check with local businesses to determine whether these benefits are available. A phone call to the insurance broker will also verify whether the insurance plan will give a break to motorists that take good care of their vehicles.

Legal Fees

Depending on the type of insurance a person has, legal fees may be partially covered by an auto insurance policy. This may include bail or other costs associated with tickets, trials and legal infractions. When accidents involve tickets or police charges, the insured motorist may be covered for all or part of it, depending on the policy.

Anytime there is a cost associated with an insured vehicle, it is best for the consumer to consult their insurance agent or review the policy to see whether it covered. Although making a claim on the policy may involve an increase on monthly or annual insurance rates, this is often counterbalanced by the overall cost of the repairs or fees.

Complaints against debt management companies can occur at any time. Most debt management companies make all efforts to overcome complaints against them. Many debt management companies have complaint clearing sections to deal with the doubts and complaints of clients. Studies reveal that complaints against debt management companies and agencies were skyrocketing in the last decade, but have considerably fallen in recent years.

Credit reporting is one of the major complaints against debt management companies. Many faults can occur in credit reporting. Most of the complaints are against companies that bill themselves as credit counselors. Some companies are guilty of shady services.

Studies regarding complaints against debt management companies by the Office of Fair Trading (OFT) have concluded that most of the complaints occur in three areas. They are unawareness that the lower monthly payments will normally result in an increase in the size of the amount to be repaid, misleading claims and failure in giving sufficient prominence to the warnings. Almost half the states in the Unites States have adopted some kind of licensing requirements for all debt management companies. But nonprofit agencies are excluded from these requirements. They charge high fees from the clients and are irresponsible in their duties. This leads to increasing complaints against debt management companies.

There are many fraudulent companies with shady operators, who make attractive offers but cheat people in the end. By the time customers become aware of these shady deals, the vendors might have disappeared from the scene. A few fake debt management companies accept money from debtors, but do not pay off correctly to creditors. Debtors may not know of it until the creditors call them and demand the missed payments. This will also lower the debtor?s credit score. Such cases occur frequently and many Americans are unsatisfied with most of the deals. The consequence is that more and more people are now walking away from debt counseling and management companies.

In reality, California insurance professionals and agents have a lot to do with the projection of a certain image toward the public. Mainly because the insurance professional initiates contact with a prospect, determines the prospect’s need for insurance, recommends and then implements the proposed plan. The first impression is always the most lasting. Coupled with the opportunity for a long-lasting relationship with the client, the first impression becomes that much more critical.

The California agent represents an industry that is loaded with technical information. Public perception will be severely hampered by unethical agents. The insurance professional has two basic ethical responsibilities to the public:

* To inform the public about insurance with the utmost, highest level of professional integrity; and

* To strive for the highest level of professionalism in all public contacts in order to create and maintain a strong positive image of the industry.

We will focus on the above responsibilities and look at some of ethical practices, which have tarnished the industry. We will also discuss property and casualty insurance, and the manner in which it is marketed to the public.

California Property and Casualty Insurance Coverage

California Property and casualty insurance is usually classified by several major lines: fire and allied lines, marine, casualty, multiple line insurance and fidelity and surety bonds. California Property insurance, such as fire or homeowners policies, covers the loss or damage to real estate or personal property from fire, lighting or other covered perils. California Marine insurance (also called transportation insurance) covers goods in transit against pure risks related to transportation, whether those goods are shipped over land (inland marine) or water (ocean marine).

A broad field of insurance called casualty insurance encompasses almost everything not covered by fire or marine insurance: automobile insurance, general liability, burglary and theft, worker’s compensation, glass coverage and other miscellaneous lines

The California agent may also sell multiple-line or package policies that combine property and liability coverages. Finally, an agent may sell fidelity and surety bonds that provide the insured with protection against losses caused by the dishonest or fraudulent acts of employees or that provide monetary compensation in the case of a bonded person’s inability to perform certain acts, such as the completion of the construction of a building.

Property and casualty insurance take care of most risks to an individual or a business’s property, like damage, theft, losing money, records, furniture, machinery, trademarks and supplies as well. Some examples of specialized insurance policies that are currently available cover disasters such as fires, earthquakes, and floods that damage your primary residence.

Property can be insured either by multiple or named dangers. You have to identify exactly what you have lost. One example of this is if your house burned down, you would only be able to make a claim under “named peril property insurance” if you had explicitly requested to insure your house against a fire. Other perils commonly covered are explosion, lightning, and theft. You should consider all problems that are part of your insurance plan. If not, you might be paying for insurance that would not aid you in case your car is stolen.

Open perils cover all causes of loss or damage that have not been excluded by the policy. Unless your contract specifically forbids it, you will be able to receive assistance from open peril property insurance for any instance. If you refuse the option to be covered for floods, you will not receive a reimbursement for any damage to your home caused by flooding. You can find the following items on a list of open peril exclusions: earthquakes, nuclear incidents, war, acts of terrorism. While your property may be in danger from these events, such as earthquakes, you can purchase additional coverage in the event your open peril property insurance does not cover an open peril that you may face. You might find this information very useful, particularly for West coast residents. However, those who live either on the East Coast or in the Midwest should probably consider a plan that takes the winter damage of sleet and ice into account.

Property insurance premiums may be decreased if they have a good claim history, and have the proper measures in place to reduce the risk of loss or damage. You can reduce the costs of property insurance by installing alarms, smoke detectors, sprinkler systems, and security personnel. Much of it gauges on whether or not these steps can actually prevent damages.

Many companies choose to have their properties insured with a Business Owner’s insurance policy (known ass BOP. Property insurance and liability insurance are combined into one policy to create these special policies. Some BOPs offer extra expense and business interruption insurance as an option. There is a product called “extra expense insurance,” which would give you money to cover a short-term move after an incident that was covered by the policy. Extra expense insurance will pay for any moving costs incurred because of a flood. Business interruption insurance pays for any loss of profit in case your business is interrupted.

The BOP usually provides less coverage than a traditional property insurance policy, although it is convenient. This is why companies buy additional policies for full coverage.

Product liability insurance guards businesses against claims from people who allegedly suffer illness, injury, or loss due to the product the business supplies. In product liability insurance, a product is defined as a tangible item that is given away or sold. Under the Consumer Protection Act of 1987, the manufacturer or supplier of the product is responsible for the damages that his product may cause to the consumer.

Should a product cause damage, the supplier is liable to be hit with a claim, even if he is not the one manufacturing the product. For example, if you are running an eatery and the food you serve results in the case of food poisoning to seventy-five people, the claim will be great. Though conventional logic suggests that the liability should fall on the heads of the food manufacturers, it would be difficult to prove so.

The magnitude of the risk as well as the claim and the premium are determined by various factors, like the people who purchased the product, the way it was used and the kind of warning labels provided on the product.

Product liability insurance coverage guards you against unanticipated circumstances. If an individual is to manufacture an inferior product then insurance does not protect him. For a manufacturer, this kind of coverage is of massive importance. A tiny defect can make him a target for huge claims.

It is prudent to look for a coverage that protects you against manufacturing quality, safety claims, indemnity costs, et al. Also, you can decrease the premiums by taking measures in advance. Of course, you should let the insurer know about these measures.

Having a high school driver added onto your auto insurance policy can be pricey. However, the cost of insuring your young driver can be reduced by applying a good student discount. Many California auto insurance companies offer a good student discount. If your child maintains a high grade point average, the savings from such discounts could be hundreds of dollars a year.

When a young driver is added to an auto insurance policy the rates increase significantly. The lack of driving experience associated with adolescent drivers is the main cause of this increase. Many times, the vehicle that the child is driving will cost more that both of the parents’ vehicles combined. Depending on what type of vehicle is being added and the coverage on this vehicle, the rate could even be higher that of the previous policy covering both parents.

Many auto insurance companies will offer a discount to student drivers if they maintain a grade point average of 3.0 or better. These students will need to be full time students, attending high school or an accredited university. There are no limits to the number of drivers that can qualify to receive the good student discount. Parents with multiple children in school could actually save several hundred dollars per year on their auto insurance, if their children qualify for the discount.

With the average savings of 20% per child and an average premium of $1000 per child, a parent with 3 youthful drivers would save $600 per year by getting the good student discount applied to each child. To find out if your auto insurance company offers good student discounts or if your student driver qualifies for such discounts, call your insurance agent today. Lowering your monthly premium by taking advantage of all the discounts available to you is a great way to manage the added costs of having a young driver.