Paying for your policy

Posted by ndre | Business & Finance | Monday 8 February 2010 7:51 am

Looking around the US economy right now, all you see is the wreckage of dreams. Homes have been foreclosed, bankruptcy looms on private debts and the retirement 401ks have taken a serious hit. Life as we knew it has been turned upside down without anything in place to catch us as we fell. So how did we get into this mess? The economists tell us we have been living beyond our means. Credit was cheap and, with banks and credit card companies raising their borrowing limits, there seemed to be nothing we could not afford. There was no need for savings. Everything could be charged. If the limit was reached, the housing equity could be released as cash. Over a period of about twenty years, we switched from a country that saves to a country that spends on credit. In the period just after World War II, we had “prudence”. People mostly paid cash for what they wanted and, if they did not have enough, they saved. It was a revolution when, suddenly, everything could be paid for in affordable monthly instalments. In one sense, this is the easiest way to get into serious debt without noticing. When you only pay a few hundred dollars every month, it hardly registers the total debt is tens of thousands.

Insurance companies were the last of the hold-outs. For years, they insisted everyone should pay them a lump sum once a year. Then, slowly, there was a cave. First it slipped to every six months, then quarterly. Now almost every company across the nation accepts monthly. What’s the problem for the insurance companies? Well, they estimate the likely total cost of the claims they will have to pay over the next twelve months and divide that amount between all the policy holders as the premium. If the company has done its sums properly and everyone pays once a year, the company always has the cash in the bank to pay out on all the claims. If people pay monthly, they can easily change to another insurer. They can miss one month’s payment when the family budget is under pressure. That means the insurer may not have enough money to pay the claims. So, to encourage all you people with some savings (or some slack on your credit cards), they offer discounts if you agree to pay every six or twelve months. It gives them more security and saves you some money. Paying monthly costs you the most.

That said, paying monthly gives you flexibility. You can use the online search engines to find auto insurance quotes at the lowest price. Then for just one month’s premium, you can be driving. In effect, this becomes a monthly policy. You can keep shopping around for new premium offers from different insurers. If you find a better monthly rate, you can transfer at the end of the month. But if you pay once or twice a year, the insurer will hit you with high cancellation charges to lock you in. Whatever you might save disappears. Worse, if you change the make and model of your vehicle during the longer policy term, it can be too expensive to move the policy to a cheaper company. You end up paying the higher premium until the six or twelve months end. So make a wise decision. Auto insurance is never cheap. Avoid making it too expensive.

Get ready for winter driving!

Posted by ndre | Autos, Business & Finance | Monday 8 February 2010 7:51 am

winterDriving_resizeUnless you retreat into a cave to sleep through the winter, you cannot have missed one of the most recorded Christmas songs of all time. Every mall in the country plays “Winter Wonderland”, usually the Bing Crosby and not the Ozzy Osbourne version, until you wish it was Spring. The myth of happy white Christmases is completely misleading. Unlike the southern states where the only problem is the dazzling sunshine, the northern states experience the annual covering of their roads with ice, sleet and snow, closely followed by the misery of melting slush then freezing over as the next cold front moves in. Trying to drive safely on the roads at this time is a nightmare. Nobody is ever prepared. Somehow, there is a mass amnesia as we all forget those defensive driving skills. That way, when the first snow falls, we can all panic as we move sideways across the road, pumping at the brake pedal without any effect.

Talk to an insurance company at this time of year brings depressing news. The number of claims arising from traffic accidents rise by nearly 40% in December through February. There is a spike on the first days of real snow in each area and people suddenly remember all the things they forgot. So what should you do to prepare for this annual festival of destruction on the roads. Well, the first and most basic rule of all is simple. If the journey is not essential, do not make it. The safest place on the first days of winter is in the safety of your own home with your vehicle safely parked off the road. Remember, if you have your vehicle parked on the street, it is a target for any other driver to crash into. Leave it with your friendly mechanic and take the chance for a few maintenance chores. If the snow looks set in, fit snow tires.

If not, then have all-season tires with good treads to maximize the grip on the roads and carry chains with you. To improve visibility in sleet and snow, you need new windshield wipers. Have the brakes and steering checked, and retune the engine to give the best chance of it starting in the lower temperatures – there’s nothing worse than being stuck with a vehicle that will not start. Finally, pack an emergency kit and keep it in the vehicle. That way, if the worst happens, you can keep warm and warn other drivers away from you with hazard flares until help arrives. Ah yes. To speed the arrival of help, program the numbers of tow truck companies and garages in your area so you can be rescued. Membership of one of the clubs like AAA can offer good rates on emergency roadside assistance.

And you should care because, with collision and comprehensive coverage in place on your newish vehicle, the auto insurance company is not going to sit quietly if you suddenly file a number of claims this winter. Your premium rates will rise. When it comes to getting auto insurance quotes, the rates will also be higher than you expect if you are an inexperienced driver or moving from a state where it is summer all year round to one with four seasons. Everyone has to learn how to drive safely in snow.

Flights for less than a hundred

Posted by ndre | Business & Finance, Travel & Treasure | Monday 8 February 2010 7:51 am

cheapflights_resizeTo be able to get a cheap flight you will need to know how the system works. Discovering how airlines determine airfare pricing and discounts will definitely give you the opportunity to get dirt cheap flights under $100 and get the most out of your travel. There are destinations that are never cheap due to the high popularity among people. But there are also those that have he prices going up and down the scale.

One of the best advices we were given by specialist in the traveling domain is to book in advance. You should give yourself time to think it over, to compare and make up your mind so you don’t have to feel bad about your decision. Ticket prices are prone to severe fluctuation and a patient and observant consumer can catch some great deals just by keeping an eye on them.

Getting a ticket for less than a hundred should be awarded with a prize. It is some form of art. Just imagine how relaxed and happy you would be, knowing you didn’t use your last pennies to get on that plane. This is the type of trip that is most likely to bring you pleasure and joy and of course, satisfaction is guaranteed.

If you want you ticket cheap you should know to book it in ‘off’ season. What it means is that you might be traveling to the country that doesn’t have the perfect weather conditions – depending on the climate – it can be too hot there at the moment of your trip or rainy and cold. Well, it is a risk but just think how pleasantly surprised you will be when everything turns out to be just fine.

If you are aware of the conditions under which the airlines determine discounts, you will know how to get flights for less than a hundred. But we want to stop you from making a mistake. Don’t fall in for some trap. Always double-check everything to know you are not spending money in vain.

You can try to find you first cheap ticket online. Visit multiple discounted traveling sites and compare prices. Make a list of them. Nowadays many airline companies are using promos and different package deals to attract costumers. What if there is something you need there as well? Cheap airline tickets could be waiting for you one of those websites. Use your chance to find it and you will see that airline tickets don’t have to make you cry from anger. They can bring a smile back to your face.

What is this antitrust status?

Posted by ndre | Business & Finance | Monday 8 February 2010 7:50 am

In the midst of all the heated debate about healthcare reform, there is one element that tends to get slightly less publicity. Yet, when it comes down to making the reform work, it is one of the most important changes to push through both the House and the Senate. To understand the issue, we need to go back to the Supreme Court decision in United States v. South-Eastern Underwriters Association which, in 1944, allowed the federal government to apply antitrust laws to insurance companies by extending the Commerce Clause in the US Constitution to break up abusive monopoly control. For many years, the lack of competition had allowed South-Eastern to fix outrageously high premium rates and to defend their monopoly through intimidation and coercion in six US states. When the Supreme Court finally signalled a potential end to these abusive practices, the McCarran-Ferguson Act of 1945 appeared. The key provision exempts insurance companies from the general run of federal laws imposing antitrust limits so long as each state puts local regulations in force. This has produced a patchwork of state laws which, to a greater or lesser extent, encourage free competition between insurance companies.

It is an undisputed fact that, as competition declines, the remaining one or two suppliers in a market have the power to abuse their dominant position. The results are usually higher prices, lower quality products and poor service standards. The interests of the consumer are lost in the rush to extract the maximum possible profit. In the healthcare industry, consumers have been penalised as insurers refuse to accept people with pre-existing conditions and refuse renewal of policies if expensive longer term treatment appears necessary. You cannot have failed to notice the steady increases in the premium rates – in fact, there has been a slightly faster rate of increase over the last year despite the fact of the recession. This is made possible because there is a lack of real competition between insurers in the majority of US states. The House has already included provisions in the bill to repeal this exemption from federal regulation. The Senate is now about to debate the same issue. Without this repeal included in the final law, insurance companies will be able to continue fixing prices and dividing up the market as it suits them. You will remain helpless victims. With the repeal in place, insurers will suddenly have to compete with each other. This should drive down premium rates and improve the quality of the service delivered. However you look at it, you will benefit directly.

Unfortunately, it is unclear whether there is sufficient support among the Senate Democrats for passing this repeal. It seems possible that the special interests that persuaded the original legislators to pass the exemption law in 1945 may prevail in preventing its repeal. In many ways, this is an extraordinary situation. With the majority of adult Americans victimised by the health insurance industry, you would imagine there would be a groundswell of angry voters insisting their pain should end. Yet the reverse has been happening with most of the obvious anger aimed at preventing any positive reform of the health insurance market. It seems insurers can fool most of the people all the time.

Finding affordable insurance if you are a high risk driver

Posted by ndre | Autos, Business & Finance | Monday 8 February 2010 7:50 am

driver_resizeRemember, the general rule always has exceptions. So when everyone tells you insurance companies load up the premiums of the inexperienced drivers and the drivers who have a bad safety record, that is true as a general rule. But this does not mean it’s impossible to find reasonably cheap insurance. All it means is you have to work harder to get results. So the first rule is, “Never give up hope!” There are always ways in which you can save on the premium and find reasonably good coverage. Who are you? You may:

  • be a new driver;
  • have been involved in multiple traffic accidents;
  • have been convicted of driving while under the influence or other serious offenses; or
  • have had you license suspended and/or your previous insurance cancelled.

The second rule is always to tackle the problem honestly. It is pointless to lie about your record. Even if the lie goes undetected when you buy the policy, every company makes thorough checks once a claim is made. If your dishonesty turns up, the company will cancel the policy and you will be left with no indemnity against the claim. Be open about your high-risk status and get two sets of quotes using the online search engines. You should aim to compare the prices on general policies with the premiums charged by the companies offering special policies for drivers with poor records. The bad news is the majority of general insurers will refuse to quote or quote high premiums. These are the companies only writing policies for people aged between 25 and 70 who have never had an accident in their lives. The quotes you get are still useful because you find out which is the lowest of the high quotes. The good news is there are a small number of companies offering a specialised service to high risk drivers. Ask for high risk auto insurance or nonstandard auto insurance and get their quotes.

The third rule is to improve your driving ability and record. If you are a new driver or have recently had a serious accident, go through one of the advanced driving courses approved by local insurance companies. Successful completion usually entitles you to a discount. You then have to put all you best driving skills into practice and drive without collecting tickets and getting into accidents. The longer your license stays clean, the lower your premium will be. Sadly, it takes years to remove the negative marks from your record but, once you have proved you are a good driver, you will be rewarded.

The final rule to find every possible discount to bring the premium down. Drive a low-powered vehicle only at low-risk times of the day and avoid driving long distances. Fit safety features to your vehicle and store it off the road at night. You may not end up with really cheap auto insurance, but it should be reasonably affordable. In any event, cheap auto insurance is often bad value for money. It’s always better to find good coverage at a price you can afford.

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