At one time or another, nearly everyone borrows and lends a vehicle. Whether it’s for a quick trip up the road or a cross-country journey, understanding a little about insurance and borrowed cars can help reduce the risk of mis-information or costly mistakes.
Insured or Not Insured?
Most auto insurance is connected to the vehicle in question, so when someone borrows the car, insurance is usually in effect. However, it is always important to remember that some policies may contain additional riders that exclude drivers other than those specifically listed on the policies. If you are not sure whether or not coverage is in place, it is a good idea to contact your agent rather than risk it.
Other stipulations may also need to be met, including obtaining prior permission of the owner before driving the car and/or limitations of liability based upon the policy, driving history and insurance of the driver.
When the Worst Happens
Unfortunately, accidents have a tendency to happen in the worst situations. Call it Murphy’s law. Before borrowing or loaning out a vehicle it is a good idea to understand the consequences.
If an accident takes place when someone is driving a borrowed car, typically the owner’s insurance will kick in first. However, if the owner of the car is un-insured or under-insured your insurance will typically pick up the difference.
However, if the driver is uninsured or underinsured, and at fault for the accident, the personal assets of the owner could potentially be at risk.
Always verify the driver’s license and auto insurance policy is in place before allowing anyone to borrow your car – even for a short period of time, like test-driving a car that is for sale. It’s also a good idea to discuss co-payments or deductibles prior to loaning the vehicle in order to avoid potential problems should an accident or fender bender take place. Remember, an ounce of prevention is worth a pound of cure, especially when it comes to dealing with insurance-related issues.
Many people are unaware their credit history may strongly influence the cost of homeowners insurance. A poor credit score can result not only in higher insurance premiums but also in a denial of coverage altogether.
As credit lending standards continue to tighten, experts agree that it is more important than ever to keep a close eye on your credit score in order to avoid insurance rate increases or non-renewal of policies.
Why It Counts
The most commonly cited reason behind charging higher insurance premiums to those with lower credit scores is the belief that people who do not properly manage their finances are at greater risk of submitting a claim.
Visit www.annualcreditreport.com to order your free annual credit report. Review the information for accuracy and immediately dispute any errors in writing. Not only will it help save money on the cost of obtaining a new loan, but it might help keep your homeowners insurance rates low.
Keep an eye on credit limits, late payments and other common credit problems. Lenders throughout the nation are reducing credit lines, increasing minimum payments and requiring higher credit scores. Smart consumers should make a point of keeping an eye on available credit and avoiding late payments, over the credit limits or other common problems.
Many retirees own stock they bought decades ago but are reluctant to sell it because of the capital gains taxes that will be due. So what should you do with long-held stock?
Before taking any action, you probably want to think about why you hold the stock in the first place.
If your goal is to leave money to your heirs, having a stock-heavy portfolio – which you probably have, due to appreciation – may not be a bad idea, because your portfolio can potentially grow more than it would if you invested more in bonds, and you have some time to weather any market fluctuations that might occur.
On the other hand, if your goal is to generate income for yourself, it’s important to have a diversified portfolio of stocks and bonds.
While diversification can’t protect you from a loss, it can help you better weather the ups and downs of the market. So you may want to consider eliminating some stocks.
One option is to use highly appreciated stocks to fund a charitable trust or gift annuity.
You’ll get an income each year and a tax deduction that could be worth half the market value of the gift.
Note: This article is not intended to provide tax or legal advice and should not be relied upon as such. It is a summary of an understanding and interpretation of some of the current laws and regulations and is not exhaustive. Investors should consult their legal or tax advisor for advice and information concerning their particular circumstances.
Health Savings Accounts, or HSAs, are one of the most useful but frequently overlooked forms of health insurance available to the average consumer.
A combination of savings account and health insurance policy, HSAs allow consumers to save money on the cost of health insurance while taking advantage of tax-free savings. However, there are a few things to keep in mind when trying to determine if a HSA is the right thing for you.
Deductibles: Part of the savings associated with HSAs comes from a high deductible, usually ranging from $1,100 (the minimum) to $5,600. In fact, the actual insurance policy is often called a high-deductible health plan (HDHP), with the HSA denoting the actual savings account where the pre-tax savings are held.
Choices: Much like other health insurance policies, there is a wide range of different coverage options, including in-network/out-of-network, prescription drug benefits and other choices to be made. It is essential to work closely with a knowledgeable agent in order to select the right high-deductible policy.
Fees: Depending upon your selection of savings account, a bank or credit union may charge an annual fee for overseeing the distribution of funds from the account. Because you determine how to spend the money in the HSA, no third-party or health insurance provider is required. However, you may also be required to make decisions related to the investment of those same funds depending upon the account selected. Annual contributions, plus combined earnings on the investment portion, may generate substantial returns that roll over from year to year, making HSAs an especially attractive option for those wishing to supplement health benefits during retirement.
Savings: One of the reasons behind the popularity of HSAs is undoubtedly the cost savings. Not only do the monthly rates for HDHPs tend to be significantly less than traditional health insurance coverage, but the total cost may also be less. Depending upon the terms of the policy, many HDHPs require little to no additional out-of-pocket expenses once the annual cap is reached (which is often the same as the deductible).
Life insurance is one of the most important considerations when it comes to planning for your family’s financial future, according to experts.
But for those who are self-employed, there is an even greater urgency.
The following information and tips will assist you in finding the best rates:
Loss of Income: Life insurance provides your family with protection from the loss of income that could result should you pass away. Your family will suffer a loss of income, but potential assets of the business could also be impaired or held in probate. Life insurance helps bridge the gap while providing important protection against the loss of a lifetime of income.
Personal and Professional Security: Not only does your family depend upon you, but so does your small business.
Clients, lenders and employees often feel more secure when adequate life insurance is in place on key employees. This is especially important for those who hope to seek angel or other start-up funding as well as those who have personal assets at risk.
If you’re a small-business owner and you’re not sure about what’s right for you, speak to your insurance agent to learn more about the different types of policies.
Some of the more common forms of life insurance for small businesses include term life, whole life, variable life, universal life, variable universal life and business owner policy.