Bite-Sized tips from 23-year Insurance Veteran
This tricky insurance question is about homeowners and auto insurance and the theft of cash.
If cash is stolen from your car while parked in your driveway, what policy covers it or is it covered at all?
Your insurance deductible is one of several cost shares that you may have on your insurance policy. Cost shares are what you the policyholder have to pay when you have a claim.
On car insurance policies and homeowners insurance policies your deductible is applied to each claim. On medical insurance policies, the deductible applies to claims made over a period of 12 months. This can be a calendar year, or a year that starts on the date the policy was effective.
When you buy car insurance your policy only has a deductible if you have physical damage coverage. Physical damage coverage pays you if your car is damaged by one of the covered perils. One of the perils is vandalism.
If it costs $3,000 to repair your car after it is vandalized and you have a deductible of $1,000, your insurance company will pay $2,000 towards the repair. The amount of your deductible is deducted from the amount of the claim.
On a car insurance policy the deductible only affects the physical damage coverage. This part of your policy pays you for damage to your car. Your deductible will not apply to payments made to fix another party’s car.
(The section of the policy that covers property damage and bodily injury payments to others is the liability section. This section never has a deductible.)
The only cost share on auto and homeowners insurance policies is the deductible. This is not the case for many medical insurance policies.
You can expect to have more than one type of cost share when you purchase health insurance coverage. You might have copayments, coinsurance and a deductible.
You might have no cost shares on certain types of claims; you might have more than one type of cost share on other types of claims. A preventive care exam might not have a deductible or any other cost share. A doctor visit for the flu might have both a deductible and a copayment.
There is a lot of inconsistency to the way these cost shares are applied. Copayments, coinsurance and deductibles can be applied differently to different types of expenses. The rules will be different on different policies. This is often the case on different policies offered by the same insurer.
A copayment is paid per incident. You might have a $20 copayment for each prescription refill. You might have a $30 copayment for each doctor’s visit.
Coinsurance is always expressed as a percentage. The most common coinsurance percentage is 20%. For certain types of claims, you may have to pay your 20% coinsurance.
You can expect to have annual limits on your deductible and your coinsurance. This reduces the amount you have to pay if you have a catastophic claim.
Your will have only one deductible over the course of the year. You can reach this deductible in by having one larger expense or several smaller expenses. If you have a $2000 deductible, you might satisfy that deductible by one $2,000 visit to the emergency room or by ten $200 visits to your doctor.
Coinsurance is usually limited by your out-of-pocket maximum or stop-loss. When you have paid a certain amount, you can expect to stop paying coinsurance. You might have a maximum coinsurance of $2000 on some policies. Your copayments may or may not be limited.
If your policy has a deductible, you will probably have to satisfy your deductible before your coinsurance goes into effect. In another words if you have a $1,000 deductible, you will have to pay the first $1,000 of applicable expenses over the course of the year. You will have to pay the coinsurance percentage on any expenses that you have until you have met your out-of-pocket maximum.
Higher deductibles mean lower insurance premiums and vice versa. Deductible choices give the consumer choice. The consumer can decide how much risk they are willing to accept in exchange for a lower price.
The objective when choosing a deductible should be to find the best balance between your risk and your monthly premium. Usually a moderate or a higher deductible will give the consumer the best value.
An SR22 is a certificate filed by an auto insurance company to prove that an individual has an insurance policy that meets the minimum requirements mandated by his or her state. The company will notify the state’s department of motor vehicles if the policy is cancelled for any reason during the specified time period.
Some of the reasons a person will be forced to file an SR22 include:
If you have to get an SR-22 to drive, it will likely raise your auto insurance premiums substantially. Do what you can to avoid needing more a expensive auto insurance policy.
Getting caught driving while intoxicated can mean that you will have to find an insurance company that will file an SR-22 on your behalf for 3 to 5 years. How long does DUI affect car insurance? As much as 10 years!
The rules regarding an SR-22 vary by state. You should contact your motor vehicle department if you want to know your state’s specific requirements. Here is information on the Texas sr 22 insurance requirements.
Unfortunately 16 year old and 17 year old car insurance rates are very high. Car insurance rates are largely determined by the likelihood of accidents one might have. Younger drivers, particularly teen male drivers have the worst driving records.
More accidents mean more claims. Since the cost of claims have to ultimately be paid by other drivers who are in the same demographic group, young teen drivers pay more.
You can find out how much is car insurance for a 16 year old by getting rate quotes online.
If you need to insure a teenage driver, it will pay to shop around and get quotes from several insurers. Each company will likely charge different rates so comparison shopping for your 16 or 17 year old driver will likely be time well spent.
An insurance premium is the payment you make to your insurance carrier to “rent” your policy. The word “premium” as it applies to insurance is just a fancy word for “rates” or “costs.” You can substitute either word in the phrase “what are monthly auto insurance premiums in nyc?”
An insurance premium may be paid monthly, quarterly, semiannually or annually.
At one time life insurance premiums were collected weekly. This is back in the days of the debit agents. These agents went door-to-door and sold small policies and collected premiums.
Insurance premiums can be guaranteed for the life of a policy as with some life insurance policies. They can also be subject to increase at any time as with some health insurance policies.
The money you pay your insurance company to keep your policy active is your premium. This may be one aspect of insurance that isn’t complicated.
There are a lot of things that you can do to get a better price for insurance coverage. One of the better ideas is to shop around. Using a good broker can often reduce the amount of time this takes. However, you should have a basic understanding of the policies. You should also know enough about the companies your broker recommends to make sure that you select one that is stable and has a good reputation.
Prices are determined by factors that are both within your control and those that are not. Being aware of the factors that you have some influence on is the first step in reducing your costs.
The biggest issue here is your driving history. Those who drive more slowly and thoughtfully tend to have fewer tickets and accidents. They will often be rewarded with better auto insurance rates. The car you drive can have an impact on your rates. More expensive cars can cost more to insure. Buying a sports car can raise your rates as well. You may want to get an auto insurance quotation before committing to a new car. Your location also has an impact on your auto rates. If you are thinking about moving, see how it will affect your insurance rates.
Your history of claims is a big issue here. Making intelligent choices about combustible materials can reduce your chances of having a claim. Also being conscious of safety hazards can keep you from being sued and having a liability claim on your insurance. Owning certain breeds of dogs and other pets, certain types of pools and even trampolines can have impact on your insurability and rates. Have a discussion with your agent before you commit to something that might raise your rates.
How much your life or health insurance costs is largely determined by your health history and your height and weight. Doing what you can to be healthy will tend to keep your rates down. Sometimes a little thing can mean a lot; you can miss getting a preferred rate because you are one pound overweight. You can also be one pound too heavy to qualify for a policy at all. You may want to ask your agent for help here. If your weight close to a point that makes a difference in your rate, you should be aware of that and see if you can get your weight down before you apply.
Health history and body mass index (height and weight ratio) are big factors for disability insurance as well although your occupation plays a bigger role with disability insurance. If you are thinking about changing professions, you may want to see if you can get a better deal by buying disability insurance now or by buying it after you change jobs. As a general rule, the more physical a job is the more you will pay for disability insurance. If you are an office manager who wants to be a carpenter, you may want to lock your rate in before you change professions.
Getting the best deal to insure your teen driver starts before he or she is able to drive. If you try to shop for insurance after your kid starts to drive your options will be limited. Why? Teen drivers have the least experience and the most accidents. Your current insurance company will not drop you just because your child started driving. However a competing company may not let a new customer buy a policy who has a teenaged driver. If they do let you buy, they may not give you their best rate.
Shop for the best rate when your oldest is a year or so away from being eligible to drive. Ask each auto insurance agent to calculate the best rate for your present situation and for the situation you expect to have when your child begins to drive. Explain that you want to switch policies now. Switch policies early so that you are an existing policy holder before your child starts to drive.
This strategy has the added advantage of letting you know in advance the approximate rate you will pay when your “baby” starts to drive. Also since your car insurance rate may be impacted by your child’s grades, this may give you some extra incentive and leverage to motivate your child to do their homework.