Finance Tips

Looking around the US, all but three states mandate drivers to carry liability insurance. Some states have no-fault schemes. Others add in a requirement to buy a personal injury protection policy. As the healthcare reform bill was signed into law, many asked whether all insurance mandates were unconstitutional. This is a fun debating topic which sounds possible but will get nowhere. States have always had the right to impose conditions on people’s voluntary activities. If you want to drive, you have to carry liability insurance to pay compensation to anyone else you may injure. A more interesting question is the amount of the minimum requirements imposed by your state’s lawmakers.

Most of these minimums have not been changed for thirty and more years. For example, in 1972, Maryland set $20,000 for a person injured subject to a maximum of $40,000 for losses arising out of a single traffic accident. This was intended to cover medical treatment, loss of earnings while recovering, and so on. In 1972, the average annual salary was $12,000 and most hospitals charged no more than a few hundred dollars for treatment. Most new vehicles cost less than $4,000 to put on the road. You could easily buy a new home for less than $30,000. Looking back now, you wonder how we managed on so little money. Prices have risen fast for medical treatment. Injure the wrong person and the claim against you for loss of earnings is going to be frightening. Why should this matter?The liability coverage only pays out the minimum. You get to pick up the bill for all the other losses. So any savings or property you have may be taken to satisfy a judgment against you.

Should states increase their minimums? Many are thinking about doing so, but the politics of actually making new laws is difficult. During the recession, people are under financial pressure. Forcing them to spend more on vehicle insurance is not going to be popular among the poorer sections of the electorate. For the middle classes, there is the option to buy more coverage including an uninsured and underinsured policy. This is the American way. Those who have money can use it to protect themselves against losses. Those who are poor must take life as it comes.

In Maryland, the legislators have just increased the minimums to $30,000/60,000. This is curiously unreal. An increase to match the rate of inflation since 1972 should make the minimums $100,000/200,000. But, the political situation does not permit the lawmakers to restore the value of the minimums overnight. The answer was annual increases to inflation-proof the amounts. We would have arrived at $100,000 without anyone being too upset about it. But we have grown used to accepting the cheapest solutions even though millions of people across America actually lose money because of it.

Why millions of people? These are all the victims of bad driving who never recover anything more than the minimums and suffer major financial losses as a result. This is injustice on a massive scale. And it will never be cured because it would cost too much to make the necessary increases. The only people who come out of this smiling are the investors in the auto insurance industry. Their profits and dividends have been rising steadily despite the recession. To protect yourself, always get auto insurance quotes from this site to find the most affordable coverage. Insurance may be mandated but you don’t have to pay excessive premiums.

For most of us buying a home is the biggest investment to mike during the whole lifetime. And it seems reasonable that such an important investment needs reasonable coverage. That’s why you need home insurance.

What’s included in your homeowners insurance?

In case you finance your house purchase through a mortgage, your lender is most likely to require you buying basic homeowners insurance. The basic homeowners insurance includes coverage against the following risks:

• Theft
• Fire and lightning
• Smoke
• Frozen pipes
• Ice and snow

Basic insurance policies also usually include liability coverage for cases when someone is injured in your house. In case there are legal actions taken against you it will also pay for court fees. Basic insurance will also cover your costs in case it’s impossible to live in the house due to fire or any other accident.

What’s left out of coverage?

To learn what is not included into the coverage you should read through your policy, especially the Exclusions part. Things not covered by standard policies vary from one insurer to another, but most likely they will include damage due to earthquake, flood, nuclear accident (very useful isn’t it?), war, act of terrorism and similar. Of course, you can buy additional coverage for such events to be included into your home insurance policy. Wear and tear damage is never included into the policy because it’s considered to be maintenance, which is the owner’s sole responsibility.

How much coverage do I need?

When buying a house through mortgage loan your lender will require you to purchase minimum home insurance coverage. However, it’s usually not the amount of coverage to meet your insurance needs. Instead, try calculating how much money it would require to rebuild your house entirely and use this amount as the base for getting the right coverage amount. Speak to your agent when completing the insurance policy to calculate the exact amount, or even run a full inspection for qualified appraisal.

Typically, liability limits are around $100,000, however it’s too little to protect your assets in case of legal action. You may opt to raise your limits up to $500,000 for an additional price. Sometimes it may be useful to get umbrella coverage, which pushes your limits beyond $1 million, however such coverage is typically offered only when you have both your auto and home insurance from the same carrier.

Money saving tips

Sometimes homeowners insurance can be quite expensive. Especially when you have many items under additional coverage. In order to keep the coverage you need while still having reasonable rates you might want to consider raising your deductibles first. Deductibles are the amount of money you will have to pay out of your own pocket for the damage before the insurance policy kicks in. and the higher is that amount the lower will be your premium. The usual deductible within standard policies is $250. Try raising it to $500 or even $1000, and your rates will go down by up to 15%.

Another good way to make your home insurance cheaper is installing security features such as alarm or video, special locks and so on. This way you protect your assets and the insurance company is likely to give you a good discount for that.

Depending on the breed of your dog, you may either not qualify to receive insurance from certain companies or you may face a significantly higher home insurance premium. Many insurers believe certain types of dog to be dangerous and therefore high-risk. So although dog owners consider their pet to be as much as family-member as anybody else, they must also be considered expensive assets in terms of homeowner insurance.

There is a debate raging between dog owners, organizations and home insurance companies around the topic of breed discrimination. As the temperament of dogs can vary greatly even within a breed, it is controversial to consider any one breed more high-risk than another. Never-the-less, dog owners should be aware of whether their particular breed is deemed dangerous by their insurer so they can estimate their liability coverage and the price of their quotes.

The factors and criteria by which homeowner insurance companies determine how dangerous different canine breeds are can vary between companies. Dog owners should be well aware of how dangerous their pet is deemed to be before taking out or renewing their cover.

Because of the varying criteria used by different companies to determine the risk-level of each breed, dog owners should research and compare home insurance extensively before settling for a policy. They should also speak to an agent for guidance but shouldn’t be surprised if the agent refuses to offer any cover at all or if he/she does, it is at a high rate.

The size of the dog is a key factor in how dogs are evaluated for home insurance. Small dogs are less likely to be a problem as they might be less likely to bite. Larger dogs, however, will always be evaluated by how violent they are, could be or the harm they are capable of inflicting.

The bite is another key factor is determining the risk level. Breeds with a history of inflicting frequent bites to humans are inevitably going to cost more to insure than those without. Unfortunately, the dog owner has to pay the price, fairly or unfairly, for the history of the breed of his dog. However, according to the Centers For Disease Control and Prevention, 4.5 million Americans suffer dog bites every year so it is an important factor that must be carefully considered.

Reputation of the breed is also a key factor. Insurance companies collect reports involving dogs made by authorities such as the Centers For Disease Control and Prevention and use them to judge the risk level of the breed and how dangerous it is to its owner.

Highest risk Canine Breeds according to Homeowner insurers

The following breeds are considered as the most high-risk and those homeowners should avoid:

• Akita
• Alaskan Malamute
• Chow Chow
• Doberman Pinscher
• German Shepherd
• Pit Bull
• Presa Canario
• Rottweiler
• Siberian Husky
• Staffordshire Bull Terrier
• Wolf hybrid

Dog owners with any of the above breeds can expect to pay a high homeowners insurance premium. In some cases, dog owners can consider themselves lucky even to find a homeowners insurance provider willing to insure them and their beloved pet.