It's Expensive To Let Your Car Insurance Cancel!

During these tough economic times I have noticed amongst my own clients a large increase in those who don’t make their insurance payment. Although this may help you get through yet another month of paying bills it can also have a very expensive effect on your current insurance rates. In the state of Arizona every Valid Driver License Holder has the responsibility to obtain and maintain automobile insurance. In the event that we go even 2 days with out insurance we will then have to file form SR-22 with the Department of Transportation. The SR-22 (Financial Responsibility Form) is a notice from your insurance company to the MVD that electronically notifies the State when your policy is cancelled. When this takes place your vehicle registration is automatically suspended. By needing to file the SR-22 you more than likely can not qualify for any preferred rates nor will you qualify for a good driver discount despite a good driving record. Not only will you not get preferred rates, many times it is even more difficult to qualify for a standard rate. Many people have to go with a non-standard rate and drop many discounts that they once had.

So if you ever find yourself in the dilemma of not being able to make your auto insurance payment you will be better off at least calling your insurance company to make the appropriate arrangements. Many times they can change what day of the month your bill is due, they may be able to extend your grace period or they may even be able to let you spread that month’s payment over the next 2 or three months. I know for a fact that you insurance company would rather work with you than have your policy cancel.

How Much Life Insurance Should I Have?

Nobody likes talking about life insurance. Let’s face it, it’s not very fun planning what needs to be done in the event of your death. But can you imagine being the person who does have to do the planning after you are no longer here? There are 2 common questions that I come across when helping my clients with their life insurance plans. HOW MUCH COVERAGE SHOULD I HAVE? And WHAT TYPE OF LIFE INSURANCE IS BEST?

The amount of coverage you really need is only something that you and your loved ones can decide. It is a very personal decision. I urge many people to consider what they want their policy to be able to do. Do you want to pay off the whole mortgage or just a portion of it? Do you want to be able to pay off all of your liabilities? Do you want your spouse to have to go get a job right away or do you want that person to have some time off? How about your kids? Do you want to pay for their college even though you are no longer here? These are the types of questions that we need to ask our selves when deciding how much coverage we need. The Insurance Information Institute recommends an individual carry as much as 12 times their annual salary in life insurance.

There are 2 general types of life insurance, Term Insurance and Cash Value Life Insurance (Mainly Whole Life). Term Insurance allows you to purchase more coverage for your buck. You can purchase the insurance with a guaranteed premium for either 10, 15, 20, or 30 years. The guaranteed premium means that during the 30 year term policy your premium will not change for the 30 years that the policy is in force. Term life insurance if great for everyone, especially for those who need the coverage but worry about their monthly budget. Cash value life insurance is a little more expensive. Let’s talk about whole life. Basically, unlike a term policy which has it’s 30 year limit whole life never expires. The premium is often times guaranteed for as long as you live. Whole life also builds cash value which can sometimes be used as a retirement tool. But like I mentioned, whole life is more expensive than term insurance which can sometimes not make too much sense when dealing with One’s budget. Personally, I feel that if someone is looking to help out with retirement there are better investment options available than doing so through life insurance.

So pull out your life insurance policies and review them today. Make sure you have enough coverage and that the premium is affordable for as long as you need the coverage.

Get All The Discounts You Can

Insurance companies definitely want your business. In return, you definitely want their discounts. All insurance companies offer a wide range of discounts. Some of the most known discounts are multi-vehicle discounts, safe driver discount, and the best discount, in my opinion, the good student discount. However, there are more discounts that are often times not applied when they could be. Each insurance company does vary when it comes to additional discounts, but for the most part they are all pretty similar. One of the biggest discounts is if you insure more than one thing with the same company. For example, if you have both your auto and home insurance (or renters insurance) or your life insurance and home insurance with them you could qualify for a multi-policy discount. Most companies these days prefer you pay your monthly invoice through some type of EFT (Electronic Fund Transfer) program from your checking account. The advantage to this is typically an EFT discount and not to mention a smaller ‘processing fee’. I have seen people save $250 a year just from changing from a paper invoice to an EFT plan. Let’s remember that your premium is generated according to how much of a risk you are to the insurance company to pay out a claim. So the more safe and secure either your home is or your car is the more discounts you can get. If you have an alarm on your car you may qualify for a safety device discount. Protecting your home is just as important; if you have an alarm installed in your home, whether it is a local alarm or a central alarm, this will generate an additional discount. Put a fire extinguisher in your kitchen and let your agent know. Also, if you live within a gated community, depending on the insurance company, this could generate another discount. Some homes even have fire sprinklers built-in, if this is the case that is definitely another discount.

I guess the point is that there are so many discounts available to consumers that we should always make sure that we are getting everything that we are entitled to. Speak with your agent sometime this week and find out what discounts your insurance company offers that aren’t currently applied to your policy. You don’t want to pay your insurance company more money than they need.

Why Do I Pay So Much For Car Insurance?

There are many factors that insurance companies take into consideration when determining your auto insurance rate. Not all insurance companies think each factor is as important as the other and thus creating such a wide range of auto insurance rates for just one consumer. First and foremost, the insurance company is going check out your DRIVING HISTORY. Statistically speaking, the more at fault accidents or tickets that you have, the more likely you are going to cost XYZ Insurance Company money. Secondly, they are going to look at your CREDIT HISTORY. A common misconception is that the insurance companies look at your credit report, for example, Equifax, Experian, or Trans Union. This is not the case. Insurance companies do what is called a ‘soft hit’ on your credit history, not your full credit report. Third, they are going to consider what TYPE OF VEHICLE YOU DRIVE. Is it an SUV? Does your vehicle have an excellent safety rating according to the National Highway Safety Advisory Committee (NHSAC)? Is it considered high performance, an antique, etc? Another important factor that XYZ Insurance Company looks at is HOW MANY CLAIMS HAVE YOU FILED RECENTLY? If you are prone to turning in a claim to fix the $180 dent in your fender, then that is going to cost you some extra money. One of the last things that will be considered when determining a non discriminatory rate for you is WHERE DO YOU LIVE? Many insurance companies will break their rates up according to zip codes. Some zip codes have more people, more traffic, and more accidents. This will affect your probability of costing XYZ Insurance money.

If you are negatively affected by one of these criteria, I recommend shopping your insurance around. Like I say, if you are paying more because of your claims history there may be another company that specializes in giving more affordable insurance to people in your situation. If claims are something holding you back from getting your best rate, consider raising your deductibles to $1000. You will be surprised at how much you save a year.