Top Personal Finance Blogs
Tuesday September 26th 2017

Will Pay as you Drive Insurance Save You Money?

Pay as you drive insurance plans are becoming more popular as more states approve the option. With a pay as you drive car insurance policy, drivers only pay for insurance to cover the actual miles that they drive. If someone drives fewer miles, their rates should go down accordingly. The mileage is tracked by an electronic device that can be installed on the steering wheel of any car. The device sends information back to the insurance company, where it is used to formulate the current month’s insurance rates.

Reducing Your Mileage will Impact Your Rates

State Farm insurance company reports that reducing your annual mileage by as little as 500 miles will create a noticeable difference in your insurance premium. Some drivers have the flexibility to adjust their driving schedules so that they put fewer miles on the odometer. Other drivers have very few options when it comes to the amount of driving they do on a daily basis. Drivers who are not able to reduce their mileage will not benefit much from a new pay as you drive policy.

Reckless Driving Patterns Could Balance Lower Rates

The data collecting device that is installed in your car tracks more than just how far you drive. It also reports driving patterns that could be interpreted as risky by the insurance company. Drivers who regularly make fast stops and accelerate quickly from a stop may see their rates adjusted upward to cover their higher likelihood of being involved in an accident. If a driver cannot adjust their driving habits to meet the insurance company’s safety standards, they will probably not see their rates improve while they are participating in a pay as you drive program. In fact, they may see their rates increase.

State Farm Program Offers Immediate Discount

In California, State Farm customers have the option of reporting their mileage once a month rather than installing the electronic device. Drivers who choose to report their own mileage are immediately offered a discount when they sign up for the program. This is the best pay as you drive policy for people who are concerned about the electronic reporting devices being an invasion of their privacy. All drivers who are enrolled in the program will save money right away because of the discount that they receive simply for agreeing to participate in the plan.

Adjusting Driving Habits Will Save you Money

In the long run, drivers have the ability to choose how much money they save through a pay as you drive insurance plan. The people who will see the biggest savings on their insurance premiums will be those who find alternatives to driving and consolidate their trips so that they spend less time on the road. Drivers who adjust their habits behind the wheel so that they drive more safely will also see a difference in their bills. When a customer has the flexibility to stop driving as much, he or she has the ability to control the savings on a monthly basis.


How To Choose A Health Plan That Is Right For You

Choosing the right health plan can be confusing and overwhelming. There are multiple options available, all with different levels of coverage, copayments and deductibles. Finding the best plan depends on individual needs, how much one can afford and participating providers.

What Type of Plan Should You Select?

Before reviewing any details, choosing which type of plan you want can narrow down the field of options. A health maintenance organization (HMO) usually requires a primary care physician to be the first point of contact for all issues and they will refer patients out for tests and specialists. Providers need to be part of the network for benefits to be paid. A preferred provider organization (PPO) does not require referrals and any doctor can be seen as long as they are in the network. Doctors and specialists out of the network can still be seen but may be billed differently.

What Benefits are Included?

After deciding on an HMO or PPO, carefully consider the benefits associated with the plan. All plans generally cover hospital and doctor visits in some capacity, but benefits like prescriptions, mental health and vision are not standard benefits. The first step to determining if a plan suits your needs is to make a list of the services and providers that you and your family use most often. This list will help you compare the different plans available so you can find one that has all the services you and your family need.

Know the Costs

Cost is a major deciding factor for many families choosing a plan. In addition to monthly or annual premiums, many plans have deductibles and copayments that can vary extensively. When budgeting for a health plan, remember to account for all out of pocket expenses, not just the premium. A less expensive insurance premium may cost you thousands of dollars a year in deductible and pharmacy costs.

In Network or Out?

The providers that are part of a plans network can also influence the cost and suitability of the benefits. If you currently use specific doctors and hospitals, make sure they are part of the network you are joining. If they are not, be willing to change providers.

Buy with Confidence

Before purchasing any insurance, be sure to check out the company you are purchasing from. Read reviews and surveys to get positive and negative feedback. You can also check with the state insurance departments for any relevant information. Talk with representatives from the company and review all of the plan documents before signing up. Make sure you have all of your questions answered before making a commitment. Also review cancellation policies as well as any additional fees.

Choosing a health insurance for yourself and your family is an extremely important decision. Review all of the facts, costs and benefits carefully before making a decision. Look for advice and information from a variety of sources including doctors, family and friends, unions, websites and employers. Making an informed and confident decision will ensure the best benefits to suit your needs.


Mutual Insurance Companies

Traditional insurance vs. Mutual insurance: what’s the difference?

Not all insurance companies are run in the same way. In fact, there are two types of companies that provide property and casualty insurance, the types most consumers use. These include home, auto and life insurance. These companies are either owned by stockholders or by the policyholders. As you can imaging, there are significant differences between these two ways of running a business.

(more…)


8 Ways to Waste Money on Insurance

Consumers don’t like risk and that’s probably why insurance is such a big business in America. There are some types of insurance you absolutely should not go without, like health, disability or long-term care, auto, flood, and renters or homeowner’s insurance. But what about all those other policies out there being pedaled on TV and online? Should you buy them? Here are eight types of insurance policies to which you can comfortably say, “no thanks.” That wasted money is put to much better use buying the vital types of insurance you have been neglecting.

Private Mortgage Insurance (PMI)

You can’t always avoid PMI, but you should whenever possible. If you owe more than 80% of the value of your home on a mortgage, the lender is likely to force you to pay for PMI as a high-risk borrower. Focus all your energy on paying down your mortgage principal until it is under 80% of the home’s value, then kick PMI to the curb.

Credit Card Insurance

You see ads on television all the time that say, “How will my family pay my bills after I’m gone? I don’t want to leave them with that burden.” Well, as it turns out, that burden won’t be theirs to begin with. Credit card debt is unsecured debt. If there are no funds in the estate to pay the debt, then the credit card has no further option. They have no right to pursue your loved ones for the debt. You are better off using that $15 a month to pay down the principle and leave your cards paid down instead.

Some purchase credit card insurance in case of disability. But this type of insurance does little for you. It will only cover minimum monthly payments (and you know where that gets you) so the debt will not really get paid. In addition, most lenders will work with you if you are disabled. Disability insurance is a much better value for the money. That money can be used to pay down the debt instead of just stringing it along with minimum payments.

Mortgage Life Insurance

Just like credit card insurance, this policy will pay the balance of your mortgage if you pass away before paying it yourself. The only person this benefits is your lender, since they are the beneficiaries. A good life insurance policy will let your loved ones decide if they should pay off the house or sell it.

Children’s Life Insurance

What parent doesn’t want the best of everything for their children? Children’s life insurance seems like just one more good-parenting tip. While its true there is an off chance your child might grow to have a chronic illness making life insurance hard to get, more often than not, your kids will be able to get term insurance through their employers. Think hard about how much better of your child might be if you used the money to invest in college or a first home instead.

Extended Warranties

Warranties are simply not necessary. Most products break down during the manufacturer’s warranty period. The money you pay for the warrantee might be unnecessary. If you bought it with a rewards card that offers free warranties, it’s clearly a waste of money. A good warrantee plan costs the same as a maintenance visit minimum and gives you the option of buying the warrantee and having the visit covered by it instead. Then you have coverage for a full year for anything else that might go wrong. Some warrantees come with free technical service on computer products, another good reason to buy one.

But when you look at all the warranties in your home, chances are only one product has given you trouble. It’s also very likely that the cost of warranties overshadowed the cost of repairs on the troublesome appliance. Consider keeping keep a savings account instead and start putting $60 – $100 a year in it for each appliance. When something breaks, you’ll have the money sitting and waiting to pay for repairs or a replacement.

Physical Damage Auto Insurance

Collision and comprehensive auto insurance makes little sense for most cars. When the value of your car breaks even with the amount you have paid for physical damage insurance, stop paying for it. Start putting the money in a savings account so you can pay for damages if they happen. If your car is older than five years, it’s probably time to start saving that money instead of paying it.

Rental Car Insurance

Most people renting cars already have their own cars. If you don’t own a car, then rental insurance makes sense. But the insurance on the car you already own covers anything that happens in the rental, so why would you pay twice for the same thing?

Roadside Assistance

While being able to call for a tow without worrying about the cost is nice, there are cheaper ways to get this coverage than buying from your car insurance company. Dollar for dollar the charges are similar to a AAA membership, but the extra claims on your policy might hurt premiums in the long run. That’s why its smarter to keep roadside assistance on a separate policy for the same cost.


Lost Your Job? Cobra Can Help

The Consolidated Omnibus Budget Reconciliation Act (COBRA), passed in 1985, works as a stabilizing force for families when the primary breadwinner loses his or her job. The unemployed can continue carrying health insurance despite the loss of employment. Unexpected medical expenses can cripple an already struggling family.

(more…)


The Economics of Car Theft

Jobs are hard to find, unemployment is on an ever-increasing upswing in spite of official talk of reprieve and support. It’s at times like that anyone would assume theft would increase. Items of extreme value such as cars are one of the most commonly sought after items. First of all, because they are in such demand, second of all, because of the relative ease of selling them off by bits and pieces rather than as a whole, making them hard to track in spite of registrations, vin numbers and such. So why is it that in this time of economic crises auto theft is not on the rise right along with unemployment and insecurity?

(more…)


Have to Buy Your Own Health Insurance? Here’s How.

New federal legislation signed by President Barack Obama will provide increased opportunities for uninsured people to buy health insurance.


Most people still obtain health insurance as a benefit from their employer. However, the number of people required to purchase their own insurance has increased with the recent recession. Consumers can buy insurance through their employer, directly from private companies, through subsidized government programs, or through the Medicaid program.

Employer Group Insurance Plans

Many companies allow you to purchase health insurance at special rates through group plans. In most cases, such insurance is offered as a benefit usually once the person becomes a permanent employee. However, some companies offer such insurance plans as an option that the employee must pay for with their own funds. If employer insurance is offered as a benefit, the employer pays the insurance premium without any impact on the employee’s pay.

As the company offers many customers to the insurance company, they qualify for lower rates as an incentive for their business. The health insurance companies also know that by having many customers they distribute the risk since the chance of multiple employees getting sick at the same time are low.

Private Health Insurance

If the employer does not offer an insurance plan, or a person or family is self-employed, then they must find private health insurance plans on their own. Blue Cross is an example of a company that offers health insurance plans directly to consumers.

Since these are most likely not group plans, the premiums will be higher for the same services offered at group rates. Also the deductibles will tend to be very high. However, as health insurance companies recognize that self-employed people can have limited budgets, they usually offer a wide range of programs, so that everyone can have at least some minimal coverage. Some insurance plans work together with a health savings account that provides tax-free funds to pay for health-related costs.

Finding health insurance plans is not difficult and can easily be done online where many websites offer comparison services. Such sites allow you to sort different policies based on criteria that you select. Most insurance companies also offer free online quotes to help you when shopping around for the best deals.

Subsidized Government Health Insurance

The new federal health care bill will allow Americans to obtain low cost health insurance through special markets known as “exchanges.” In order to qualify for these exchange programs, the person or family must not earn more than 400 percent of the federal poverty level.

Although these exchanges will not be available until 2014, there are some special programs available now to seniors and children. Seniors at least 65 years old, and certain other individuals like the disabled are eligible for Medicare health coverage. Children are covered by a federally-mandated state program known as the Children’s Health Insurance Program (CHIP). CHIP coverage is available for families who cannot afford private health insurance.

People who belong to certain high risk categories such as those with pre-existing health problems can take advantage of a special high risk pool. The pool was established by the new health care bill and will stay in existence until 2014 when the exchanges begin operation. People who qualify as high risk will have out-of-pocket medical costs capped at $5,950 for individuals and $11,900 for families.

Free Medicaid Health Insurance

Each state has its own Medicaid program that provides coverage for families who do not qualify for other types of coverage, or who otherwise need additional coverage. In order to qualify, families must meet specific limits on income and assets. Some families may also qualify for Medicaid with a spend-down, a monthly deductible that must be paid before coverage begins. Medicaid is a federally mandated program, but each state is allowed some leeway in how they run the program.

Starting in 2014, the new healthcare legislation will expand Medicaid coverage to anyone who earns less that 133 percent of the federal poverty level. In 2009, the federal poverty level for a four-member family was $29,327. The program’s reimbursement system will also be brought up to par with that of Medicare in order to encourage more doctor participation.


Saving Money on Disability Insurance

Maybe you or someone you know is disabled and looking for a way to save money on disability insurance. If this is you, then there are many things to consider when looking at the different types of insurance. There are the plans that are right for you and your disability, as well as what your level and function is – (meaning which type of insurance is best suited for you – for example), and whether or not it’s going to be long or short term. Are you still going to be able to work in your career or not?

Because purchasing disability coverage/insurance is most often a more important element then getting life insurance is, you need to know the facts involved so that you can make the right decision. There are numerous insurance policies out there and knowing which ones to choose from can help clear up some of these questions for you. We’d now like to explain four of the more prevalent types of disability insurance to you.

The first one is long-term disability coverage. This is the type of insurance set up to protect you against the loss of your salary, whether it is weekly or bimonthly. The long-term disability plan usually kicks in after you’ve missed work because of a short-term disability absence or about a six-month period. The coverage plan explained here is open to you, although it is at a reduced percentage of what your normal income is, and generally is in the 80 to 90% bracket.

Our second type of disability coverage is known as short-term disability insurance. This type of insurance will protect you against your loss of salary for the 3 to 6 months period of time. Your employer will carry this plan if they have that type of insurance and it will be classified in a group policy. The coverage that you get here is designed for a short-term stoppage of income flow that will otherwise be considered a severe financial hardship for you or your family. Checking with your employer’s insurance policy will be the key for determining the percentage of income, or lost wages, that you will be able to receive.

Coming up in our third position of disability insurance is the group long-term disability coverage. The money that you will be able to save here is geared at the group dynamic. One of the sticking points that you may encounter here is; if a member in your group ceases employment with the company, then termination of coverage will occur.

Rounding out our prevalent types of disability insurance is the granddaddy of them all — the Social Security disability payment plan. This type of insurance plan is set up for individuals experiencing a life changing disability and who are otherwise not able to continue working at all. Of course, this will not come out of your insurance plan with your employer, rather from the federal level of Social Security. To be eligible for this plan will mean that you’re unable to work for least a full year. In lieu of the fact that this type of insurance doesn’t consider your lost income as a factor, it will set you up for regularly scheduled disability payments.

In order to make one of the most important decisions about disability insurance coverage, you need to be aware of the many factors involved in purchasing the right plan. Because an insurance plan is comprised of both; the nature of the plan being purchased, and the actual cost of the insurance, you need to make sure and highlight your needs with the insurance advisor. Looking at the amount of income that you will be paying out, in collaboration with your current monthly expenses, is another surefire way to determine if this plan is economical enough for you.

A critical factor for you to evaluate is the schedule in which your premium payments are made. Should I make the payment in monthly, quarterly (every three months), or if my monetary schedule allows, even annually making large insurance plan payments? The choice of course up to you, yet it is a good idea consider all of your needs accordingly. For standard term insurance policyholders, the premium payments that you will make are already on a set schedule. Keeping this in mind, payments will increase as you get older and even if your disability is one that is progressively getting worse.

What is going to be the length of the disability? Variations in plans are available to you; whether or not you need coverage for the remainder of your life, or for just a few years until you get back up on your feet again. A majority of the time, insurance policy terms will be set up for your anticipated retirement age. If this is the case for you, it is a good idea for you to include in your thoughts: a plan for your kid’s college expenses, any vacation plans you might have in store for your retirement years, and/or paying off the mortgage entirely on your house.