 |
| Metropolitan Life Insurance (6) (Photo credit: Wikipedia) |
The economy may be in the tank, yet inflation continues to drive the cost of living. According to the market experts, the recession has already given way to a recovery period. These experts seem to be more focused on stock prices than the unemployment rate, however. Workers are constantly looking for ways to save on regular expenses, so it is worth asking whether the rates of auto insurance have gone down or up and what can be done to minimize this necessary expense.
The cost of state-run auto insurance programs, such as the California Low Cost Automobile Insurance Program, have decreased while income caps on eligibility have increased. Most states, however, do not have a similar program. According to the National Association of InsuranceCommissioners, private insurance rates did not change significantly from 2007-2009. The NAIC further reported a 6.75 percent decrease in the 2009-2010 period. The American Automobile Association, on the other hand, found a 5.7 percent increase over the same period.
Conflicting Numbers Not the Point
Nothing can be done by consumers to change the average insurance rates or the rate of inflation, just as they can't do anything to change the nation's economic state. But, plenty can be done to change the costs of premiums paid by your household. NAIC has found and assessed some of the most common tactics drivers are using to lower the insurance burden on their monthly budgets during this weak economic time.
Dangers of Policy Cancellation
Reducing monthly expenses is the only way for many families to save their homes and other assets from repossession. From 2010-2011 about 20 percent of drivers reduced or cancelled their policies. While reducing the policy may be a good idea in some cases, you need to check with the state commissioner to stay in compliance with state laws. Financed vehicles, for instance, require a state-specified level of insurance.
Policy cancellation is never a good idea unless you intend to stop driving altogether. Lapses in coverage can cause future policies to be more expensive. Any accidents during the policy lapse can be financially devastating. Police in many states have been instructed to immediately impound vehicles without coverage, and those charges will be added to already hefty fines. There are better ways to lower the cost of insurance.
Early Action to Lower Expense
Several factors are considered by insurance providers in setting your premiums, and these may differ by state. About 20 percent of drivers have traded in newer cars for older ones, or dropped a second car entirely. This is a good strategy in any state. Another 40 percent of drivers reported using more public transportation to reduce the miles they drive. Some providers base their rates in part on mileage. Other changes to address early include:
- Select a higher deductible
- Repair or strengthen your credit score (some states allow insurance providers to use your credit report)
- Take a defensive driver education class
There is no getting around the auto insurance requirement, and premiums are not responding to wage stagnation or unemployment numbers. There are still options for reducing the cost of insurance without canceling your policy.
Author bio: Michael Goodall is a freelance blogger who investigates cheap car insurance policies. Michael recommends www.carinsurance.org.uk as an affordable car insurance option during the recession.
Insurance: A Guide
"Remember kids, I have life insurance" - Adam Savage
This is a guest article from Tatyana Levin
These days one must be financially savvy. Money is not easy to come by and should be managed carefully. With the availability of tools that make it easy to keep track of current events, the stock market, and even your own money, it would be almost a crime to not utilize these tools to make the best and most informed financial decisions. Unfortunately, the more there is, the more there is to keep track of. This applies both to tracking tools and money (the small curse within the comfort of having money to keep track of).
The savvier ones of us dabble in investments, and the savviest make their living that way. The key is that they know what to invest in. Not magically, of course; investors do a significant amount of research to learn how to optimize their portfolios, but they have the understanding.
A grossly overlooked investment is insurance. This may be because is not typically referred to as an investment with the exception of whole life insurance that has a specific investment component within it. Webster’s defines the word “invest” as a commitment of money for a return and “insurance” as a guarantee. This makes insurance the safest type of investment, because your returns are guaranteed. But returns are not always financial in the case of insurance. They can be, if there is an unforeseen accident, but the most certain return is the feeling of security.
Now there are many different types of insurance, and what you need depends on your current situation. Obviously you only need auto insurance, found using auto insurance leads if you have a car, and you only need renter’s insurance if you rent and have possessions that you would need insured. Insurance is for those who have something to lose. With an attachment to something, either emotional of physical (or dependence, not like physically being glued to your car), comes the fear that it will be damaged or ruined in some way. For example, if your house caught on fire, you would be devastated. What would add insult to injury is not having a way to recover from this horrible disaster.
These types of examples are not unique to this article. That is the way that insurance is sold. As they say that clichés are clichés for a reason, insurance is promoted this way for a reason. The foundation of the concept of insurance is uncertainty, and it is the same uncertainty that is conjured up when investing.
The main difference between insurance and investment is that not having insurance creates a feeling of uncertainty while investments by nature are uncertain. Therefore, investing in insurance creates security and is the only secure investment that exists (and is legal). Getting insurance should be one of the easier financial tasks if you apply all the resources available with technological advances like smart phones.
About the Author: This article was written by Tatyana Levin, a copywriter for InsuranceFiles.com
No comments:
Post a Comment