How to Save Money when Insuring Teen Drivers

Most parents dread the day their teens take to the road: high insurance rates combined with natural concern for your new driver do little to alleviate the suffering.  Fortunately, you can reduce high insurance premiums while keeping the entire family safe with these rules for the road:

Ask about Good Grades and Other Discounts

Honor students and those who invest in driver education classes can instantly cut 10% to 20% from their annual premiums.

Consider Buying a Clunker Rather Than Loaning the Family Car

One of the main causes of increased car insurance is allowing your teen to borrow the family car. Rather than risk the wreck of an expensive vehicle, carefully weigh the savings of buying a safe but inexpensive car for your teen instead. The independence and insurance savings often more than compensate for the initial outlay.

Calculate the Total Cost

Having a teen driver in the home impacts the family finances in more than one way: professionals and small business owners may be especially vulnerable to increased liability in the event your teen is involved in an accident.

Remember, even though your teen may not own a lot, it is a mistake to scrimp on liability coverage. Most lawsuits will not seek damages from the teen; they’ll go after the family. Don’t risk your family’s financial future – increase the liability portion of your insurance prior to handing over the keys.

Go It Alone

Sometimes it makes more sense for teen drivers to go-it-alone and purchase an independent insurance policy, especially once they leave for college.

Different cities,vehicles, and other demographic data impact auto insurance premiums. Always obtain quotes as part of the family plan and as a stand-alone policy to determine which is the best option.

How to Make Sure Your Most Valuable Things Are Insured

Many homeowners assume their big-ticket items like jewelry and antiques are covered by a standard insurance policy. Unfortunately, that assumption is often wrong. Most standard homeowners insurance policies provide a cap or limit on luxury items, collectibles or other expensive belongings; usually $2,000 to $3,500. Above that level, it is necessary to obtain additional coverage typically in the form of a rider or endorsement.  Protect all your property by following these simple steps.

  • Make a list of all “big ticket” items – be sure to include gifts, inherited items or large purchases. Common examples include works of art, collections, electronics, cameras, computer systems and jewelry.
  • If you have an appraisal, be sure to include it; otherwise, photographs, receipts and other items documenting the condition of the object(s) are helpful.
  • Call your insurance agent for quotes. Ask about replacement coverage as well as limitations. For example, if the item is used for business, you may need a different policy than for items retained exclusively for personal use. Items such as jewelry or collectibles may require additional coverage depending upon geographic areas – for example, when traveling out of the country or when away at college, it may be necessary to obtain a temporary policy to ensure that full protection is in place.
  • Do your homework. Ask your agent if the same provider insures big-ticket items and what would happen in the event of a claim.

Why Long-Term Care Insurance Is a Wise Buy

What you don’t know about long-term care insurance could hurt you for years to come. Everyone knows they need insurance, but even those who are diligent about other forms of insurance tend to forget about long-term care insurance until late in life. Unfortunately, that is often a big mistake. Not only does it cost more the longer you wait, but you may not even be able to obtain it once an accident or illness strikes.

What It Is

Long-term care insurance provides needed assistance during one’s later years and, even more important, also provides the type of coverage required in the event of a disability or severe illness.

Why It’s Important

Since federal Social Security disability or SSD benefits require a minimum of six months’ illness or injury prior to even applying for coverage – and it takes an average of six months to two years to obtain benefits – there is a significant gap in coverage until basic expenses are covered. Even then, the federal government plans do not cover all expenses.

According to the US Census, four out of five people will eventually experience at least six months of illness or injury that leaves them unable to provide for their own basic activities of daily living.

When to Buy It

Purchasing long-term care insurance early in life is the most affordable and certain way to guarantee your family doesn’t encounter hardship due to unexpected circumstances during your high-income years and long-term outlook.

Part of Your Portfolio

If you are the primary wage earner for your household, have no children or family members to assist during your retirement years or simply can’t count on Social Security to provide for all of your needs, then long term care insurance is a must for your insurance portfolio.

Remember, plan ahead and purchase while you are young and healthy in order to obtain the best rates.

Don’t Forget Life Insurance for the Stay-at-Home Spouse

One of the common misperceptions surrounding life insurance is that the working spouse is the only person who should be insured. If you or your spouse stays at home with the children it is essential to calculate the equivalent cost of replacing that support in order to maintain your standard of living in the event of a major loss.

Make a list of what it would cost to provide care and support if your spouse was not at home. Common examples include day care and babysitting fees, meal preparation or the cost of purchasing meals outside the home, transportation, tutoring, housecleaning, and errands. Remember, it is rare or even impossible for one spouse to do it all alone.

Once you have created the entire list, be sure to add in the rate of anticipated inflation. Based upon the age of your children, determine what the total cost of care will be until they are grown. Healthcare and education tend to rise faster than the general inflation rate, so leave wiggle room.

Don’t forget yourself. While it’s important to preserve the quality of life for your children, it is equally important to add in the loss of companionship and care that will impact the surviving spouse. Couples benefit from the help and assistance afforded by the relationship: everything from travel to and from medical appointments to a second income that would provide an additional layer or protection for couples as they age. Include the long-term impact and cost to your own quality of life when considering the total amount of life insurance to purchase.

Secret Dangers of Shopping Online for Insurance

While shopping online for insurance is fast and convenient, there are a few dirty little secrets that might end up making it cost more than you realize. Find out why using an agent or broker beats shopping online for insurance.

Only advertisers: Online insurance quotes compare only the rates of companies that advertise on their website. Although it can be convenient to shop online for insurance, online insurance websites make money by selling advertising space. Insurance providers that don’t participate won’t show up in search results. Since a broker make money only when they sell policies – not when they sell advertising space – you can be sure to obtain the most competitive rates the broker has available.

No spam or solicitation: Not only do online insurance quote sites sell advertising space but many collect personal information for re-sell to other agents or companies. Carefully read the terms of use for the website prior to supplying personal information; in most instances you will discover the website requires users to “opt in” or release information in order to obtain a quote. Avoid spam and telephone solicitation by using a broker who provides an instant quote at your convenience rather than a website that makes money by selling contact information.

Personal service: Insurance is complex, so it should come as no surprise that terminology and other contractual situations can be confusing. Work with a broker who is able to inform you about available options that could impact your coverage or cost.