Buying your first home is one of the most exciting times. Your mind is running at a high speed of planning your future.
Excitement is in the air and this is one of those times in life when emotions overflow as the individual/couple is making one of the biggest investment decisions of their lives.
After you just spend months shopping for your dream home you finally make the decision to purchase the home you can imagine your future in it. In your mind you’re already planning the changes you have to make so the house will become your home.
This is the time when for weeks you are shopping for the best mortgage rate. Your lender suggest taking out mortgage insurance to protect your prized assets.Your home is probably the biggest investment you’ll ever make. When you arrange a mortgage with a financial institution they must ask you if you want to insure your mortgage through them.
When years ago we brought our first home and I didn’t have much knowledge about how mortgage insurance works my broker looked at me and she said:
“Legally, in Canada Mortgage Brokers MUST to offer Mortgage Life Insurance with every mortgage they place. We are no insurance people, and even if we don’t believe in the product, legally we are bound to offer it. I prefer to advice my clients to talk with a Financial Planner, who is an expert in the field, someone who will actually see that you are qualified AND covered in case the worst happens”
Then she looked at my 3 kids and said:” Make sure you have a personal term insurance, as you have 3 kids and can’t take a chance”. I was blessed with the right broker because at that time I would take whatever she would offer me, I didn’t know better and I trusted her. Sometimes just because people are nice and we “feel” that we can trust them they may not always put your best in front of their commission.
On the surface it sounds like a good idea: protecting your loved ones against a serious illness or death seems like a prudent decision, so at the lender’s suggestion you decide to take on the premium to your mortgage payment.
This scenario unfolds hundreds of times each week yet many consumers still do not realize that they may getting ripped off.
Compare auto insurance prices-5 tactics
It is very important to compare auto insurance quotes provided online. The comparison is necessary to make sure that you are getting the lowest auto insurance quote. It is very easy to compare auto insurance quote, if you are doing an online search. Most of sites give you an opportunity to get three auto insurance quotes side-by-side for comparison.
No limitation is given for quotes; you can get as many quotes as you wish to compare one with another. Here are some simple tactics to compare auto insurance quotes.
1. First of all you have to fill an online form, to request free quote for the coverage you desire to include in your policy. Always compare auto insurance quotes for the same coverage.
2. Always remember that price is not the only criteria to approve any auto insurance. Try to know how long the company is working in the field of auto insurance. At the time of comparison, you will find that emerging companies offer lower quotes. This will be a great idea to ask auto insurance quotes from newer companies, but be aware while buying insurance from them.
3. If you have two accidents and/or 3 traffic rules violations in your account then it will be difficult for you to find cheap auto insurance quote. In such a condition you have to do an extensive comparison to find a good quote that suits your budget.
4. It will be better to make up your credit history before requesting for an auto insurance quote, as it will give adverse effect to insurance company. Company may offer you higher quotes. Thus it is not a recommended step for people with bad credit history.
5. It is better for you to start requesting auto insurance quotes in advance. If your insurance policy is nearing the expiry date you might face problem to get a cheaper quote. Start from current company, they might offer lowest quotes
No limitation is given for quotes; you can get as many quotes as you wish to compare one with another. Here are some simple tactics to compare auto insurance quotes.
1. First of all you have to fill an online form, to request free quote for the coverage you desire to include in your policy. Always compare auto insurance quotes for the same coverage.
2. Always remember that price is not the only criteria to approve any auto insurance. Try to know how long the company is working in the field of auto insurance. At the time of comparison, you will find that emerging companies offer lower quotes. This will be a great idea to ask auto insurance quotes from newer companies, but be aware while buying insurance from them.
3. If you have two accidents and/or 3 traffic rules violations in your account then it will be difficult for you to find cheap auto insurance quote. In such a condition you have to do an extensive comparison to find a good quote that suits your budget.
4. It will be better to make up your credit history before requesting for an auto insurance quote, as it will give adverse effect to insurance company. Company may offer you higher quotes. Thus it is not a recommended step for people with bad credit history.
5. It is better for you to start requesting auto insurance quotes in advance. If your insurance policy is nearing the expiry date you might face problem to get a cheaper quote. Start from current company, they might offer lowest quotes
Secerts you don't know about car insurance
Want to learn something new about auto insurance? Something that can save you a lot of money or get a claim paid? Forget the usual tips. Check out these secrets.
1. Demand the legal policy minimums if you have no assets.
Do you really need a lot of liability coverage if you have no money in the bank? Insurance companies will tell you that you do because you can be sued regardless. It's possible.
I can't promise you that you won't be sued and end up paying a chunk of your paycheck to someone for life. However, honest insurance salesmen admit that people without assets are rarely sued. Lawyers work on a commission in these cases, and won't take a case where there is no money to be collected. In fact, having a bigger liability policy can be an invitation to sue, and it won't protect you from personal liability, because they always sue for more than the policy limit anyhow.
If you have no assets to protect, why buy auto insurance?
Because it is a legal requirement. In that case why not just buy the minimum coverage required? But be careful. My own insurance guy lied for years, claiming I had just that, when in fact I was paying for "company-recommended minimums." You might have to push the point, and may even have to sign something saying you understand how risky it is to be "under-insured."
2. Claim diminished value.
If you have a collision policy, your insurance company will pay for the repairs after an accident. However, is the financial damage really fixed? Not necessarily.
A car that has been in an accident and had the body fixed may look the same, but it won't sell for the same price. Would you pay the same for a car that has been in an accident? A car that has been in an accident might be worth $2,000 less than a similar un-damaged car.
This is called "diminished value," and may be covered by your policy. However, diminished value is often not paid unless you push the point. Get a car dealer to do an estimate of the diminished value if necessary, and present this to the insurance company. You pay for insurance to have your losses covered, and they aren't covered if you aren't paid for this.
3. Lower your premiums by removing kids from the policy.
You may have already discovered that you pay a lot for insurance as long as you have driving-age children at home. Even if they are off at school, if their legal residence is your house, you pay more. However, there is a little-known exception to this rule. If your children are at a college that's more than 100 miles away, you can have them taken off the insurance policy.
This can dramatically reduce your premiums. The catch? They are excluded drivers, so you can't let them drive the car when they come home to visit.
These are just a few examples of the auto insurance secrets that insurance companies probably don't want you to know.
1. Demand the legal policy minimums if you have no assets.
Do you really need a lot of liability coverage if you have no money in the bank? Insurance companies will tell you that you do because you can be sued regardless. It's possible.
I can't promise you that you won't be sued and end up paying a chunk of your paycheck to someone for life. However, honest insurance salesmen admit that people without assets are rarely sued. Lawyers work on a commission in these cases, and won't take a case where there is no money to be collected. In fact, having a bigger liability policy can be an invitation to sue, and it won't protect you from personal liability, because they always sue for more than the policy limit anyhow.
If you have no assets to protect, why buy auto insurance?
Because it is a legal requirement. In that case why not just buy the minimum coverage required? But be careful. My own insurance guy lied for years, claiming I had just that, when in fact I was paying for "company-recommended minimums." You might have to push the point, and may even have to sign something saying you understand how risky it is to be "under-insured."
2. Claim diminished value.
If you have a collision policy, your insurance company will pay for the repairs after an accident. However, is the financial damage really fixed? Not necessarily.
A car that has been in an accident and had the body fixed may look the same, but it won't sell for the same price. Would you pay the same for a car that has been in an accident? A car that has been in an accident might be worth $2,000 less than a similar un-damaged car.
This is called "diminished value," and may be covered by your policy. However, diminished value is often not paid unless you push the point. Get a car dealer to do an estimate of the diminished value if necessary, and present this to the insurance company. You pay for insurance to have your losses covered, and they aren't covered if you aren't paid for this.
3. Lower your premiums by removing kids from the policy.
You may have already discovered that you pay a lot for insurance as long as you have driving-age children at home. Even if they are off at school, if their legal residence is your house, you pay more. However, there is a little-known exception to this rule. If your children are at a college that's more than 100 miles away, you can have them taken off the insurance policy.
This can dramatically reduce your premiums. The catch? They are excluded drivers, so you can't let them drive the car when they come home to visit.
These are just a few examples of the auto insurance secrets that insurance companies probably don't want you to know.
Car Insurance
Car insurance is an absolute necessity for anyone who drives a car.
Even ignoring the fact that some types of car insurance are mandated by law, coverage is essential: the potential costs surrounding an accident -- whether they be repair/replacement costs of the cars or other property, or medical costs of the victims -- are simply too huge to run the risk of being without adequate coverage.Car insurance policies can be divided into two distinct categories: third-party liability and first-party insurance. In car insurance terminology, the owner of the policy is the first party, who has contracted with the second party (the insurer) for the coverage.
The third-party is the other person(s) in the accident, or the person(s) whose property the policy-owner damaged. Thus, in general, third-party liability insurance covers the damages to other people that are attributable to the policy-owner. First-party insurance covers damages that are done to the policy-owner or his passengers.At least some amount of third-party liability coverage is required by law in most states; for the most part, first-party coverage is not.
However, car insurance is not the place to save money by cutting corners; a single accident could easily wipe out someone's life savings, whether they're at fault or not. Also, price isn't everything... if the insurance company balks at every claim, low premiums are meaningless.
Types of Car Insurance Policies
Third-Party Liability
There are two types of third-party liability policies: bodily injury and property damage. Bodily injury liability pays other people for damages the policy owner has done to them, such as medical expenses, lost wages, and pain and suffering; property damage pays other people for damages done to their property. If someone files suit against the policy owner as a result of a car accident, these policies will provide monetary protection (up to the limit of the policy).Nearly all states require a set minimum amount of third-party liability coverage.
Generally, states that don't require these policies are "no-fault" states, which have enacted laws that eliminate most claims of "pain and suffering" and many other standard small claims. Regardless of these "no-fault" laws, experts agree that the ideal policy should have more third-party liability coverage than is required by law. Juries sometimes award very large damages to plaintiffs with only minor injuries; the minimum required policy is highly unlikely to significantly defray liability costs in the event of a major lawsuit. And "no-fault" laws generally only protect drivers from petty claims - big injury suits are still allowable.Bodily Injury - The common notation for bodily injury policies looks like 50/100 or 100/300, where the first number is the dollar amount (in thousands) of total coverage in the event that one person is injured or killed, and the second number is the total dollar amount (in thousands) for an entire accident.
Again, this coverage will also handle legal expenses involved in settling suits brought against you.
Experts suggest that a policy have at least 100/300 insurance ($100,000 coverage for one person's injuries, $300,000 per accident).Property Damage - Following the same notation as above, property damage is the third number listed on the policy, e.g., if the policy were 100/300/25, it would offer $25,000 worth of coverage to repair or replace others' property (including cars). Typically, states require property damage insurance of around $15,000, but because the cost of the average new car is well above $20,000, coverage of at least $25,000 generally makes sense.
First-Party Expense
First-party coverage comes in many forms, some of which are essential, and some of which are usually not worth the premiums. First-party coverage is used to repair damages to the policy-owner and his or her passengers in the event that:
-The policy owner was not at fault in the accident
-No one was at fault in the accident
-The driver at fault can not be found (e.g., a hit-and-run)
-The driver at fault does not have adequate means to repair the policy owner's damages
The most important types of first-party coverage are collision, comprehensive, uninsured/under-insured motorist, and MedPay/Personal Injury Protection (PIP) insurance.
Collision / Comprehensive - Collision coverage guarantees the policy owner's car will be repaired or replaced in the event of an accident, no matter who was at fault. Collision coverage premiums are based on a deductible, usually $250 or $500. Collision coverage is often required when purchasing a new car on a loan, to protect the lender. Comprehensive coverage will pay to repair or replace the policy owner's vehicle and personal property inside of it if it was damaged or lost due to other agents, e.g., fire, theft, flood, vandalism, etc. Comprehensive coverage is also based on a deductible, generally of the same amounts as Collision, and is also often required when purchasing a new car using a loan. Both Collision and Comprehensive coverage can be RCV (replacement cost value) or ACV (actual cash value). RCV will pay what it would cost to replace the car with a new one, ACV will pay what it would cost to repair the car to its prior condition (or replace it with one of a similar condition).
Thus, RCV has a higher maximum benefit, but also a higher premium.Uninsured / Under-insured - Uninsured / Under-insured Motorist coverage (also called UM/UIM coverage) pays the policy owner and his or her passengers for pain and suffering, lost wages, etc. in the event that the driver at fault can not be found (as in a hit-and-run), has no insurance, or has too little insurance to cover the damages. Experts say that UM/UIM coverage is at least as important as bodily injury coverage: it is unlikely that the driver at fault will have enough coverage to pay the damages resulting from a serious accident.
Further, while other policies can combine to offer the same kind of coverage as UM/UIM, there are several advantages to this type of coverage:
-It is more broad that most health or disability plans - it can cover loss of limb, pain and suffering, funeral expenses, etc.
-It has much higher coverage than other types of medical-expense car insurance, such as MedPay and PIP (described below).
-It is relatively inexpensive.UM/UIM coverage is described by the same notation as bodily injury coverage (e.g., 100/300).
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Generally, insurance companies will only the allow purchase of UM/UIM coverage up to your current bodily injury limit; experts suggest you purchase the maximum UM/UIM.Medical Payments - MedPay covers medical and funeral expenses to the policy-owner and his or her passengers, regardless of who is at fault in the accident.
Personal Injury Protection (PIP) extends basic medical coverage to include lost wages and other damages, and also pays regardless of fault. PIP is often mandated by states that have "no-fault" laws. The maximum coverage for MedPay and PIP is generally much less than that allowed by UM/UIM.
-Non-Policy-Owners
Most car insurance policies go with the car; that is, they will pay out appropriately regardless of who is driving the car at the time of the accident (as long as the policy owner allowed the driver to use the car). However, if a non-policy-owner is going to use the car on a frequent basis, be sure to include him or her on the insurance policy. Furthermore, if someone drives the car much more often than the policy owner, he or she should consider becoming the primary driver of the car.
The primary driver in large part determines the insurance premiums, and providing false information can give the insurance company cause to void the policy.
Stolen Cars
The owner of a car is not responsible for third-party damages resulting from or during the theft of his/her car. If the car owner has collision and comprehensive coverage, they will pay out to repair or replace the car (either for its theft or for damage to the car as a result of the theft).
Rental Cars
The term "Rental Car Coverage" is used to refer to two different things: coverage offered by rental car agencies for cars rented from them, and an add-on to insurance policies that allows free rentals while the car is in repair. Coverage from a rental car agency is rarely necessary, assuming the renter already has third-party liability, collision, and comprehensive coverage; those policies should extend protection to the rental car (but check the policy).
Rental car companies often offer other types of coverage; experts usually suggest avoiding most of these.The rental car add-on to insurance policies is very inexpensive, but may be an unnecessary expense if the policy owner has another car to rely on during an emergency.
Even ignoring the fact that some types of car insurance are mandated by law, coverage is essential: the potential costs surrounding an accident -- whether they be repair/replacement costs of the cars or other property, or medical costs of the victims -- are simply too huge to run the risk of being without adequate coverage.Car insurance policies can be divided into two distinct categories: third-party liability and first-party insurance. In car insurance terminology, the owner of the policy is the first party, who has contracted with the second party (the insurer) for the coverage.
The third-party is the other person(s) in the accident, or the person(s) whose property the policy-owner damaged. Thus, in general, third-party liability insurance covers the damages to other people that are attributable to the policy-owner. First-party insurance covers damages that are done to the policy-owner or his passengers.At least some amount of third-party liability coverage is required by law in most states; for the most part, first-party coverage is not.
However, car insurance is not the place to save money by cutting corners; a single accident could easily wipe out someone's life savings, whether they're at fault or not. Also, price isn't everything... if the insurance company balks at every claim, low premiums are meaningless.
Types of Car Insurance Policies
Third-Party Liability
There are two types of third-party liability policies: bodily injury and property damage. Bodily injury liability pays other people for damages the policy owner has done to them, such as medical expenses, lost wages, and pain and suffering; property damage pays other people for damages done to their property. If someone files suit against the policy owner as a result of a car accident, these policies will provide monetary protection (up to the limit of the policy).Nearly all states require a set minimum amount of third-party liability coverage.
Generally, states that don't require these policies are "no-fault" states, which have enacted laws that eliminate most claims of "pain and suffering" and many other standard small claims. Regardless of these "no-fault" laws, experts agree that the ideal policy should have more third-party liability coverage than is required by law. Juries sometimes award very large damages to plaintiffs with only minor injuries; the minimum required policy is highly unlikely to significantly defray liability costs in the event of a major lawsuit. And "no-fault" laws generally only protect drivers from petty claims - big injury suits are still allowable.Bodily Injury - The common notation for bodily injury policies looks like 50/100 or 100/300, where the first number is the dollar amount (in thousands) of total coverage in the event that one person is injured or killed, and the second number is the total dollar amount (in thousands) for an entire accident.
Again, this coverage will also handle legal expenses involved in settling suits brought against you.
Experts suggest that a policy have at least 100/300 insurance ($100,000 coverage for one person's injuries, $300,000 per accident).Property Damage - Following the same notation as above, property damage is the third number listed on the policy, e.g., if the policy were 100/300/25, it would offer $25,000 worth of coverage to repair or replace others' property (including cars). Typically, states require property damage insurance of around $15,000, but because the cost of the average new car is well above $20,000, coverage of at least $25,000 generally makes sense.
First-Party Expense
First-party coverage comes in many forms, some of which are essential, and some of which are usually not worth the premiums. First-party coverage is used to repair damages to the policy-owner and his or her passengers in the event that:
-The policy owner was not at fault in the accident
-No one was at fault in the accident
-The driver at fault can not be found (e.g., a hit-and-run)
-The driver at fault does not have adequate means to repair the policy owner's damages
The most important types of first-party coverage are collision, comprehensive, uninsured/under-insured motorist, and MedPay/Personal Injury Protection (PIP) insurance.
Collision / Comprehensive - Collision coverage guarantees the policy owner's car will be repaired or replaced in the event of an accident, no matter who was at fault. Collision coverage premiums are based on a deductible, usually $250 or $500. Collision coverage is often required when purchasing a new car on a loan, to protect the lender. Comprehensive coverage will pay to repair or replace the policy owner's vehicle and personal property inside of it if it was damaged or lost due to other agents, e.g., fire, theft, flood, vandalism, etc. Comprehensive coverage is also based on a deductible, generally of the same amounts as Collision, and is also often required when purchasing a new car using a loan. Both Collision and Comprehensive coverage can be RCV (replacement cost value) or ACV (actual cash value). RCV will pay what it would cost to replace the car with a new one, ACV will pay what it would cost to repair the car to its prior condition (or replace it with one of a similar condition).
Thus, RCV has a higher maximum benefit, but also a higher premium.Uninsured / Under-insured - Uninsured / Under-insured Motorist coverage (also called UM/UIM coverage) pays the policy owner and his or her passengers for pain and suffering, lost wages, etc. in the event that the driver at fault can not be found (as in a hit-and-run), has no insurance, or has too little insurance to cover the damages. Experts say that UM/UIM coverage is at least as important as bodily injury coverage: it is unlikely that the driver at fault will have enough coverage to pay the damages resulting from a serious accident.
Further, while other policies can combine to offer the same kind of coverage as UM/UIM, there are several advantages to this type of coverage:
-It is more broad that most health or disability plans - it can cover loss of limb, pain and suffering, funeral expenses, etc.
-It has much higher coverage than other types of medical-expense car insurance, such as MedPay and PIP (described below).
-It is relatively inexpensive.UM/UIM coverage is described by the same notation as bodily injury coverage (e.g., 100/300).
-------------------------------------------------------------------
Generally, insurance companies will only the allow purchase of UM/UIM coverage up to your current bodily injury limit; experts suggest you purchase the maximum UM/UIM.Medical Payments - MedPay covers medical and funeral expenses to the policy-owner and his or her passengers, regardless of who is at fault in the accident.
Personal Injury Protection (PIP) extends basic medical coverage to include lost wages and other damages, and also pays regardless of fault. PIP is often mandated by states that have "no-fault" laws. The maximum coverage for MedPay and PIP is generally much less than that allowed by UM/UIM.
-Non-Policy-Owners
Most car insurance policies go with the car; that is, they will pay out appropriately regardless of who is driving the car at the time of the accident (as long as the policy owner allowed the driver to use the car). However, if a non-policy-owner is going to use the car on a frequent basis, be sure to include him or her on the insurance policy. Furthermore, if someone drives the car much more often than the policy owner, he or she should consider becoming the primary driver of the car.
The primary driver in large part determines the insurance premiums, and providing false information can give the insurance company cause to void the policy.
Stolen Cars
The owner of a car is not responsible for third-party damages resulting from or during the theft of his/her car. If the car owner has collision and comprehensive coverage, they will pay out to repair or replace the car (either for its theft or for damage to the car as a result of the theft).
Rental Cars
The term "Rental Car Coverage" is used to refer to two different things: coverage offered by rental car agencies for cars rented from them, and an add-on to insurance policies that allows free rentals while the car is in repair. Coverage from a rental car agency is rarely necessary, assuming the renter already has third-party liability, collision, and comprehensive coverage; those policies should extend protection to the rental car (but check the policy).
Rental car companies often offer other types of coverage; experts usually suggest avoiding most of these.The rental car add-on to insurance policies is very inexpensive, but may be an unnecessary expense if the policy owner has another car to rely on during an emergency.
Insurance Definitions
Insurance:
A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insure. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest. Examples include car insurance, health insurance, disability insurance, life insurance, and business insurance.
Death benefit:
The payment made to a beneficiary from an annuity or policy when the policyholder dies. also called survivor benefit.
Accidental death benefit:
A life insurance policy provision that calls for an additional payment, usually equal to the face amount of the insurance, in the event of accidental death. also called double indemnity.
Adequate coverage
protection that covers the replacement cost of an insured asset.
Third party
Someone other than the principals directly involved in a transaction or agreement.
Transaction
In accounting, any event or condition recorded in the book of accounts.
Account
A record of financial transactions for an asset or individual, such as at a bank, brokerage, credit card company, or retail store.
Payment
The partial or complete discharge of an obligation by its settlement in the form of the transfer of funds, assets, or services equal to the monetary value of part or all of the debtor's obligation.
Moetary Value
The value or worth that a product or service would bring to someone if sold.
http://www.investorwords.com/6582/monetary_value.html
Copyright©1997-2009 by InvestorWords.com. ALL RIGHTS RESERVED.
A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insure. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest. Examples include car insurance, health insurance, disability insurance, life insurance, and business insurance.
Death benefit:
The payment made to a beneficiary from an annuity or policy when the policyholder dies. also called survivor benefit.
Accidental death benefit:
A life insurance policy provision that calls for an additional payment, usually equal to the face amount of the insurance, in the event of accidental death. also called double indemnity.
Adequate coverage
protection that covers the replacement cost of an insured asset.
Third party
Someone other than the principals directly involved in a transaction or agreement.
Transaction
In accounting, any event or condition recorded in the book of accounts.
Account
A record of financial transactions for an asset or individual, such as at a bank, brokerage, credit card company, or retail store.
Payment
The partial or complete discharge of an obligation by its settlement in the form of the transfer of funds, assets, or services equal to the monetary value of part or all of the debtor's obligation.
Moetary Value
The value or worth that a product or service would bring to someone if sold.
http://www.investorwords.com/6582/monetary_value.html
Copyright©1997-2009 by InvestorWords.com. ALL RIGHTS RESERVED.
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