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Spring 2011  

The Importance of Having Insurance in a Recession

There are many different types of insurance that people should have. Renters/homeowner's insurance, auto insurance, health insurance and the list goes on. Carrying insurance isn't on everyone's top ten list of things to pay for this month. There are good reasons why you should carry the insurance that is particular to your needs. Insurance is important because the cost of not having it can be much more than you can afford.

Here is a look at the different insurance types and the reasons they are so important:

Auto Insurance Auto insurance is important to carry because, first, it is mandated in most states to have insurance coverage when you are driving a vehicle. You will get into major trouble if you get caught driving without it. The most important reason that you should carry auto insurance is that if you are in an accident and it is your fault, you will have to pay an astronomical amount of money for any damages, including medical costs, out of pocket. Most people can't afford to do that. It is much easier to carry insurance whether you live in a state that mandates it or not. If you are in a state that mandates it and you get into an accident, the accident will be your fault no matter whose fault it really is. That is because you weren't supposed to be on the roads at all because you have no insurance. If you hadn't been on the road, the accident couldn't have happened.

There is no point in dropping your auto insurance coverage because as per state laws, you are required to keep a minimum amount of insurance coverage. However, if you have a good driving record and have less number of speeding tickets to your credit, you may be in a position to reduce your premium to some extent. Talk to your insurance carrier and make sure you are clear enough to convey the reason for your inability to make auto insurance premium.

Raising your deductibles may have a marked effect on your auto insurance premium. However, don’t raise it too high. Alternatively, you can shop around for a better rate before your insurance policy is due for renewal.

Recession has also given rise to the increase in the number of “intentional accidents”. Barbecuing a Beamer is a very common insurance fraud. Reports suggest that auto insurance policy holders are pushing their cars off cliff. Cars are being intentionally torched. In addition to that the number of claims involving slip-and-fall injuries increased by 60% during the first 3 months of the year. The incidence of intentional torching of vehicles was recorded as 34% and incidence of damage to commercial property was at 76%.Incidents of insurance fraud are on the rise as the number of vehicles set on fire increased to 757 in the first 3 months of 2009. This is in sharp contrast to the number of vehicles set on fire which was 596 a year back during the same period. 

Health Insurance Anyone who has gone to the doctor or hospital and had to pay the bill realizes how important health insurance is. Health insurance can be expensive, but the cost of not having it when you get one small illness is far greater. You can end up with very high hospital bills that you can't pay off because you didn't have health insurance. That is why so many people who are uninsured will not go to the doctor when they are sick. Health insurance should be of main interest to everyone because the chances of getting sick are extremely high. One illness can send you into bankruptcy and your credit could be ruined for life.

Homeowners/Renters Insurance If you do not have homeowner's or renter's insurance and something happens, such as fire, you will lose all of your belongings along with your home. You will not have enough money to replace the things that you lost. If you are the person whose name is on the lease or mortgage, it is utterly imperative that you carry insurance on your home. This covers the things inside your home as well as outside. In fact, it covers any accidents that happen on your property if you are a homeowner. It will generally even cover your property when it isn't in the home. For instance, if you go away on vacation and take your laptop computer and someone steals it, you can make a claim with the insurance company to pay for the loss and replace the laptop. Without the insurance, you just lose the property. Renters insurance is fairly cheap and you should seriously consider getting it to cover your property.

There are far too many insurance types to list here. You get the general idea though. It is important to have insurance to cover you needs. Everyone has different needs. For instance, if you are a boat owner, you should have boat insurance. If you don't have a boat, there wouldn't be much point in having boat insurance. If you want to make sure that you will have enough money to cover incidents that could happen in your life, you will have to realize the importance of carrying insurance on those basic needs and follow through. 

Consumers are ready to compromise with their safety to save some cash. This holds true not just in case of the auto insurance industry but other areas too. More and more people are shedding their insurance coverage so that it can bring down the cost of insurance premium. And this is undoubtedly helpful but may land you in serious trouble if you don’t have adequate coverage and you are in real need of it. Financial experts are of the opinion that during recession, having adequate coverage is even more important.

Insurance is one of those things that you only regret not having AFTER it's too late. By then, your business or income or even health could be in jeopardy. It can be avoided proactively with policies for your business.

In these tough financial times everyone is looking to cut costs to save money, homeowners to business owners all want to reduce their bills.

Ways to Minimize Your Auto Insurance Premiums Costs

1. Shop Around

Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers. (State insurance department phone numbers and Web sites can be found here.)

You buy insurance to protect you financially and provide peace of mind. It's important to pick a company that is financially stable. Check the financial health of insurance companies with rating companies such as A.M. Best (http://www.ambest.com) and Standard & Poor’s (http://www.standardandpoors.com/) and consult consumer magazines.

Get quotes from different types of insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several insurance companies. Others do not use agents. They sell directly to consumers over the phone or via the Internet.

Don't shop price alone. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they provide information on consumer complaints by company. Pick an agent or company representative that takes the time to answer your questions. You can use the checklist on the back of this brochure to help you compare quotes from insurers and on the same coverage.

2. Before You Buy a Car, Compare Insurance Costs

Before you buy a new or used car, check into insurance costs. Car insurance premiums are based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. These include daytime running lights and anti-theft devices. To help you decide what car to buy, you can get information from the Insurance Institute for Highway Safety (www.iihs.org).

3. Ask for Higher Deductibles

Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.

4. Reduce Coverage on Older Cars

Consider dropping collision and/or comprehensive coverages on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley’s Blue Book (http://www.kbb.com). Review your coverage at renewal time to make sure your insurance needs haven’t changed.

5. Buy your Homeowners and Auto Coverage from the Same Insurer

Many insurers will give you a break if you buy two or more types of insurance. You may also get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce the rates for long-time customers. But it still makes sense to shop around! You may save money buying from different insurance companies, compared with a multi-policy discount.

6. Maintain a Good Credit Record

Establishing a solid credit history can cut your insurance costs. Insurers are increasingly using credit information to price auto insurance policies. To protect your credit standing, pay your bills on time, don't obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.

7. Take Advantage of Low Mileage Discounts

Some companies offer discounts to motorists who drive a lower than average number of miles a year. Low mileage discounts can also apply to drivers who car-pool to work.

8. Ask about Group Insurance

Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups, or other associations. Ask your employer and inquire with groups or clubs you are a member of to see if this is possible.

9. Seek Out Other Discounts 

Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also get a discount if you take a defensive driving course. If there is a young driver on the policy who is a good student, has taken a drivers education course or is at a college out of the area without a car, you may also qualify for a lower rate.

Types of Small Business Insurance: Importance of Having Them

 

Insurance is right up there (or perhaps, right down there) with going to the dentist, doing your taxes, or standing in line to renew your driver's license. It's torturous, but it must be done. Insurance allows your business to survive should disaster strike. 

Here are some of the insurances you'll need in your business:

Medical insurance Medical insurance insures your health and pays the hospital if you need medical help. It is helpful for you to have so that you don't have to borrow against the assets of your business should you find that you or your loved ones have to pay for medical expenses. Determine all the people you'd have to pay for (including immediate and extended family as well as business partners or key employees) and take out medical insurance on them. 

Life insurance. Life insurance insures your life and pays your survivors. Whole life and term are two types and you may consider a combination of both for permanent and temporary expenses. (A permanent expense is your funeral cost; so whole life is appropriate for that while a temporary expense would be your mortgage, which gets paid off eventually, so a term policy would be appropriate for that). 

Key person insurance. Key person insurance insures the life of the major influencers of the business and pays the company if that person passes away. It ensures the survival of the business should anything happen to you. If you plan on passing the business on to your children, for example, this insurance will help to pay for a replacement if you die or become unable to work

Criss-cross insurance. Also called Buy/Sell insurance, it insures the life or work-ability of each partner and pays the other partner if the life or work-ability ceases. This is similar to key person insurance but it is a policy taken out by a partner on the life of the other partner. If one partner dies, the surviving partner may not want to have the deceased partner's family taking part in the business. Criss-cross insurance allows the surviving partner to buy out the family's share of the business. 

Disability insurance. This insures the health and work-ability of someone in your business. This is valuable insurance because it pays someone an income if they lose the ability work. 

Liability insurance. Liability insurance insures your business against lawsuits and expenses associated with injury or damage and pay the injured party should those things arise. It is important to have because someone who slips and falls on your freshly mopped floor could conceivably destroy your business with a single lawsuit. 

Asset insurance. Asset insurance is an umbrella term for insurance on your business assets against fire, theft, flood, or other types of disasters. It is important to have to keep your business going even if you lose assets from one of those events.

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The Importance of Health Insurance

Having health insurance is as important as having savings in the bank. This is because having one can give you peace of mind, knowing that you will get timely medical care whenever you need one. Some people believe that medical insurance is unnecessary since the government provides free medical services, but even cities with a well-funded healthcare department cannot guarantee complete healthcare security to citizens. So before you dismiss health insurance as something you do not need, think about the consequences of not having one.

People with no medical insurance often receive less medical care. Generally, uninsured people and families get only about half as much care as those people who are insured by private healthcare policy providers. In addition, with the skyrocketing cost of healthcare, majority of uninsured people less likely obtain recommended follow-up care if they receive some initial care.

Another negative consequence of not having health insurance is that it can create a financial burden to patients and their families. This is because medicine and healthcare are so expensive, and uninsured people often do not benefit from the discounted medicine that are routinely imposed by public programs or negotiated by private healthcare providers. For example, in many countries, those without healthcare coverage are billed full of their hospital charges. This can be hard on low-income families with zero emergency savings. Surveys found that medical bills are the number reason for bankruptcy in more than fifty percent of families in the UK and the U.S. So, consider getting medical insurance now to protect yourself and your family from this financial disaster.

Five Ways to Cut Your Health Insurance Costs

Today's society has led to economic hardships for a large mass of middle- and lower-class families. Health insurance costs have also become burdensome on those families as premiums are lowered for higher deductibles and co-payments. For those people who need to pinch every penny out of their pocket, the health insurance industry offers some ways to minimize unnecessary costs by being smart about your plans.

1. Know Your Plan

The first and easiest thing is to simply learn the ins and outs, cover-to-cover, material covered within your plan. Make sure you know which doctors; hospitals, etc. are covered within your health insurance plan and stick to those. If you stray away from businesses covered in your plan, you will end up paying more for the same service.

2. Negotiate

Another way to save on your self-employed health insurance is to learn how to negotiate prices with for the services you receive. This is also associated with knowing the details of your health insurance contract so that you can be informative to the representatives of the various businesses you use. Use this information to justify why your payments should be lower than what they offer and if they don't seem to care what you think then consider using a different medical business.

3. Go Generic

The third way to cut your health insurance costs is to look into buying generic brand prescription drugs rather than the higher priced name brand. All you have to do is ask your doctor if there is a generic brand available that you could use. If there is then you will vastly change the amount you will have to pay for these prescriptions.

4. Add an HSA

If you plan ahead you can save money in the long run. There are plans available for you to set aside money for out of pocket expenses, such as deductibles and co-payments. These plans are known as Health Savings Accounts. By setting this money aside, you avoid paying taxes on them when you use it to pay off these expenses, which brings us to the final subject...

5. Write it Off!

The fifth way to cut your health insurance costs has to do with taxes. Keep track of exactly how much you are spending. By doing this you can follow a government procedure that allows you to write off all spending for medical bills over seven and a half percent of your adjusted gross income. If you spending a lot, this could really save you much of your hard earned money.

The Importance of Commercial Insurance Policy for Businesses

Commercial insurance is an extensive category of insurance intended for business operation. Also referred to as business insurance, it mainly consists of different types of insurance policies and coverage. What a commercial insurance policy typically covers includes property insurance, casualty insurance, liability insurance, commercial auto insurance, workers compensation, group health insurance, life and disability insurance, and other insurance types covering disruptions in the business. Whether you are running a small-scale business or a corporation, having a commercial insurance policy is necessary to protect yourself against losses. For a business, a commercial insurance policy can spell the difference between bankruptcy and survival. The market is volatile, and if there is one thing that recession can teach us, it’s that even the biggest companies can be shaken. Apart from that, every business is exposed to risks resulting from transactions made on a daily basis. Lawsuits and other liabilities are costly, and they can cause businesses to suffer insurmountable loss. 

Commercial insurance policy: buffer against untoward incidents In the same manner and degree that a profession is in need of insurance against malpractice or negligence, business owners need a commercial insurance policy to protect its financial and legal interests. Untoward incidents, such as fire and theft, can happen anytime and result in loss that might take a lot of time for a business to recover. These incidents, however, do not excuse or release a business from its responsibility to pay rent, utility bills, employee salaries and benefits, as well as other operating expenses. A commercial insurance policy enables the business owner to share the costs of covered incidents to its insurer and to remain solvent.

Choosing a commercial insurance package A packaged property and casualty (P&C) insurance policy is oftentimes enough for small-scale businesses, as it provides coverage for damage or loss of property and liability for negligent acts and blunders. However, if you intend to purchase this type of insurance for your business, make sure to get into the details. Pay particular attention to the scope of its coverage and exclusions. Otherwise, you may end up with a few surprises when you file a claim. Other factors to consider when choosing a business insurance are your employees and the nature of your business. If you have employees, make sure that you have workers’ compensation coverage to provide for employees suffering from job-related injuries. A good choice in business insurance is one that protects against damage to the cash flow due to business interruptions, so opportunity costs can be avoided and income lost can be recovered.

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The Importance of Having Enough Home Insurance

While finding home insurance can be a daunting process, it's important to have enough home insurance to cover your belongings, and the house you love, in case of an accident.

Experts are warning that it's important for homeowners to ensure that they have insurance to rebuild their home entirely in the same location. Having the right home insurance will make sure your livelihood is covered in case of accidents that can ultimately destroy your house.

The warning that stresses people to be fully covered follows a recent report released which found that five million Brits are considering cutting back on their costs, including home and car insurance, during the current economic recession.

A large proportion of those surveyed said that insurance cover was one area they were prepared to cut back on because they cannot afford it, leaving many experts warning that the decision could cause more harm than savings. It was also found that flood risk insurance in particular was one aspect that many people were considering cutting from their house insurance. Experts have warned that cutting flood damage or home contents insurance could lead to devastating and expensive consequences in case of an accident. It was noted that while insurance payments may seem unnecessary at the moment, it could lead to greater repair costs in case a natural disaster or accident does damage to your home.

Consumers are being urged to seek the right insurance that fits their personal home and budget. Evaluating your coverage can help ensure that no money is wasted and that your home is continually insured against damage.

Added to that, consumers are being reminded to ensure that their home insurance is up-to-date, and that you understand your current policy. It can be easy to forget to renew or increase your home insurance, but it's an important step in ensuring that homes are fully insured against anything that could happen.

In addition to home insurance, it can also be useful to have personal belongings insured in case of damage that can ruin expensive and sentimental items. There are also plenty of ways to save money while still keeping your home insured, including shopping around for the best agency and rates and requesting an inspection to prove the state of your home.

Seeking appropriate home insurance doesn't have to be expensive. Consumers can rest assured that they're covered no matter what happens when they find the home insurance that's right for their home and budget.

This era of the “Great Recession” has been a challenging one. Dramatic economic conditions have affected both the U.S. real estate market and the residential construction industry. National data collected over the past year indicates extreme financial decline, with property market values plunging up to 40% in some areas, permits for new construction down by 36.9%, and foreclosure rates spiking across the country. Ironically, the costs to rebuild and repair a home are not declining at this same rate. 

Overall construction costs actually increased approximately 1.3% nationwide from January 2009 to January 2010.* As a homeowner, you may be perplexed by the gap between the current market value for your home and the replacement cost listed on your homeowner’s insurance policy.

Market value vs. replacement cost

Market value (the price at which your home may sell today) is not the same as replacement cost (the price to repair or rebuild your home if it is severely damaged). When rebuilding a home, contractors must work with and match existing materials, which requires skilled labor that costs more. Plus, when a contractor rebuilds a single home, there are no economies of scale. The cost to rebuild is always higher than the initial cost to build. 

Market value includes factors such as the quality of the local school system and popularity of the neighborhood and, therefore, is not a good indicator of the proper amount of insurance coverage for your home. The estimated replacement cost for your home, however, is a significantly more reliable indicator of the appropriate coverage limit needed in the event of a major loss.

Key factors that contribute to rising construction costs• Varied spikes in building material costs throughout 2009 and expected for 2010-2011.• Fluctuating energy costs.• A 3% increase in the cost of skilled labor from 2009-2010.• Increased demand for imported raw materials and building products.• Anticipated rise in inflation for 2010.

Factors that can affect home replacement cost· 

Contractor Fees. The typical contractor fee is 15-20% of the overall building cost or even more for larger, more ornate homes.· 

Architectural and Related Fees. Fees for architecture, interior design, engineering, and other related services should be included in the home replacement cost. These fees can add another 10-15% to the overall building cost.· U.S. 

Environmental Factors. Natural disasters such as hurricanes in coastal regions, floods in the Midwest, and wildfires in the West have contributed to shortages of building materials and overall cost increases. Building codes are continually enhanced following these natural disasters, which can increase the replacement cost of a structure.· 

Green Construction. The trend to build “green” is gaining momentum and popularity with consumers. Building with ultra efficient technology has contributed to rising construction costs that are 15-20% more than traditional construction.· 

Rebuilding Custom and Historic Homes. The materials used to reconstruct custom homes or restore historic homes are more expensive than those used to build average homes, due to finer quality and the fact that specialized homebuilders buy these materials in relatively small quantities. Also, fewer craftsmen specialize in custom construction and historic renovation, and greater demand for these specialists has led to increased skilled labor costs

Here are Eight Ways on How You Can Lower Your Disability Insurance Cost:

  1. Ask your employer if they have any group disability insurance plan and if you qualify for one. Group policies offer lower disability insurance cost than getting an individual plan yourself.

  2. You can try to apply for a lower monthly benefit to lower your disability insurance cost. This benefit is normally given as a percentage of your income for a given period of time.

  3. Changing the waiting period of your disability insurance can help lower its cost. Most policies’ waiting period lasts for one month before benefits are paid. You can increase this waiting period to three months or more, just make sure you have extra resources to cover your expenses.

  4. Cut your policy’s benefit period to lessen its disability insurance cost.

  5. Make sure you separate your disability’s insurance cost from its price. Price is the amount you pay for your coverage and cost is what the insurance will be worth in the long run. Make sure that getting the price of your policy lowered will not suffer its disability insurance cost.

  6. If you don’t know anything about disability insurance and would want to make a guess work from 3-4 free quotes you have just received, it is better to get professional advice than regret a mistake that will make you pay for a higher disability insurance cost. Not all insurance agents are familiar with the in’s and out’s of disability insurance. Seek advice from someone who does.

  7. To get the most out of your disability insurance cost, make sure you are covered for both accident and sickness.

  8. The younger you are when you purchase a disability insurance, the lower it will cost you to get one. By buying a non-cancelable policy at a young age, you lock the rate of your premium at lower rates.

Keep in mind that a disability insurance is a legal contract and you need to read your fine print very well before signing up. You must know your insurer’s ratings through A.M. Best, Standard & Poor’s, or Moody’s to be sure these insurance firms are the best in town. Don’t be too shy to ask for a quote and summary of the benefits your policy covers, and ask questions to clarify any issues you may have. Getting the best disability insurance cost can simply be having an eye on your insurance provisions, and not just on price alone. In the end, you will always get what you have paid for when it comes to your disability insurance. If you think you have bought the wrong one, you still have ten to thirty days to return your policy and get your money back. Shop for Your Policy Very Well!

 


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Did You Know

Allsafe Insurance and Financial Services provides Free Notary Services to all current clients and their friends and family.

 Factors that may affect your Auto Insurance premium are: 

  • Age

  • Gender

  • Marital Status

  • Driving Record

  • Previous Insurance Coverage 

  • Credit History 

  • Geographic Location 

  • The Vehicle Type

  • Vehicle Use 

  • Theft protection devices

  • Multiple cars and drivers

 An Educated Consumer is an Empowered Consumer!

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