Auto Insurance – Understanding the Different Types of Collision Insurance

When choosing auto insurance there are several options to keep in mind when trying to build a policy that best suits your needs. Everyone knows that in almost all of the states, to drive a vehicle legally, you must have at least liability coverage on your car – but what about other types of insurance? Well, one of the most important options is your collision coverage.

If you finance a vehicle for purchase or lease, your lender is going to insist that you have collision coverage, and the more the better. For example, in the state of New Mexico, if you were to lease a Cadillac, the company responsible for the lease will likely insist that you purchase the maximum collision coverage available. There are levels of collision coverage that you must become familiar with to make the correct choice for your situation.

The least amount of collision offered would be called the "Limited" option. If you choose this option and you rear-end another car, which would be your fault, your Limited policy would pay nothing. If you got rear-ended, making this the other person's fault, you would pay your chosen deductible, and then the insurance company would pay the rest. So, if you are better than 50 percent responsible for a collision and you have Limited collision coverage, you foot the bill.

The middle of the road collision choice is called the "Standard" option. In this instance, if you broad-side another car or they side-swipe you, you will be responsible for your chosen deductible, ranging anywhere from $ 250 on up to $ 1000. Basically, with the Standard option, what you pay is the same no matter whose fault the accident is. Some states offer a zero deductible choice, but the premium rates would be considerably higher. The Standard collision option is most commonly chosen by the average driver.

The highest and most expensive collision option is called the "Broad Term" option. In this instance, if you are responsible for the collision – or at least better than 50% at fault, you will be responsible for your deductible and the insurance company will cover the rest. If you are not at fault for the collision and you have Broad Term collision coverage, you pay nothing. The insurance company would pay for everything for you at 100%.

Also keep in mind that the insurance company is only responsible to cover damages up to the value of the car. So, if you really get into a huge pile-up and your car is crushed and will cost more to repair than its actual value, it will be declared totaled – just food for thought.

So, shop carefully for your auto insurance policy, choose your options wisely, be a safe driver, and make sure that you are covered as best as your budget allows.

Pros and Cons of Owning Your Own Independent Insurance Agency

There is always a lot of pride in owning your own company, but there is also a great deal of responsibility, work and hassle. Here's how to tell if owning an insurance agency might have enough benefits for you to outweigh the liabilities.

Every employee has had the experience of looking at their boss and / or the owner of their company and thinking "I could do this so much better than you." If you find yourself thinking this too often, you may soon find yourself looking into actually starting a business. And if you've got experience working in the insurance or financial products industries, as so many people do, then you are probably considering starting your own insurance agency.

Let's start off with some clarifications. Any small business is either going to be an independent insurance agency (which sells policies from a number of major insurance companies) or a "captive" agency, which sells policies from just one company. To actually start providing people insurance requires something called a "corporate insurance license", and they can $ cost 50,000 or more to buy. To actually be able to originate insurance policies requires over a million dollars of capital, just to start, so what most small business people want is to sell insurance, not create the policies themselves.

To sell insurance you will have to be licensed in your state for the kinds of policies you want to sell. There are three major kinds of insurance policies: health, liability, and life insurance. Many insurance licenses also let you sell financial products. Because insurance is so much of a financial product there's a lot of overlap both in services and licensing.

The pros of having your own shop are that you get to choose which hours you work – but only to a certain extent, because you have to be on the job enough to stay in business. You get to decide how long and when you will take vacations – but again, only to a certain extent, because you have to make sure your business can stay afloat while you are gone. Another major pro is that if the business is successful, you will be the owner and will have a valuable asset that can generate income for years to come. Also, as the owner, you get to decide when and how to hire and fire people. If you are brave, you can even decide which clients and customers you want to fire.

While to pros sound great, here are the cons: you will probably work more than 60 hours a week the first years. If your agency is not successful in the first year or so (and many are not) you may end up not paying yourself a wage at all in order to be able to balance the books. Also, until your agency can afford to hire people for different jobs, you will be wearing a lot of different hats – accountant, computer guru, secretary, marketing manager, printer fixer, and many, many more. You will almost always have five to ten times more things that need to be done in one day than you can possibly do.

Being an owner is stressful, and so while there are dozens of benefits to having your own insurance agency, you will need to be resilient enough to handle the challenges. But if you can do it, hopefully you'll be able to give yourself a raise.

The Hidden Dangers of "Permissive Use" Restrictions in Your Auto Insurance Policy

One of the most frequent questions I get as an auto insurance agent is "who is insured to drive my car?"

Sometimes the answer to this question can be trickier than most people realize. If you never loan your car to others and you never will, none of the restrictions I discuss here will matter to you and you can stop reading now.

Short answer:

People that are listed on your policy enjoy the full benefits of your policy coverages with no restrictions. For those that borrow your car that are not listed, they are generally covered as long as you have given them permission to use your car; this is called "Permissive Use" and all policies have some form of, or interpretation of, permissive use. Excluded drivers are never covered nor are un-named drivers who "use the vehicle without a reasonable belief that the person is entitled to do so" (sometimes referred to as "theft").

Depending on the company you are insured with , interpretations of permissive use can vary dramatically and some insurance carriers are very strict in their enforcement of the rules.

By reducing or restricting coverages through different applications of permissive use, carriers can reduce their risk (and claims costs) thereby reducing the cost of their policies to make them more affordable for their policy holders.

Three examples of the "Permissive use" restrictions carriers utilize include: "Drop-down limits"; "Double deductibles"; and "No physical damage coverage".

Drop-down Limits:

Oftentimes there are dramatic reductions in coverage amounts on insurance policies even when a permissive user has an accident. One such reduction is called "drop-down limits". "Drop-down limits" means that if a person has an accident while borrowing your car, the limits of liability are reduced to what the state's minimums are. For example, the state of California requires minimum limits of only $ 15,000 per person for bodily injuries (BI) / $ 30,000 per occurrence maximum for bodily injuries (BI) / $ 5,000 for property damage (PD).

Example: Driver "A" has an insurance policy with full coverage with permissive use and his liability coverages are $ 100,000 per person (for BI) / $ 300,000 per occurrence (for BI maximum) / $ 50,000 per occurrence (for PD). His policy has a "drop-down limit" clause. Let's say he loans his car to a friend (driver "B") and that friend has a serious accident where the bodily injuries to other party amount to $ 65,000 and he totals the other car which has a value of $ 28,000. In this scenario, the "drop down limit" is in effect and the most Driver A's policy will pay is $ 15,000 for the other persons injuries and $ 5,000 for their vehicle which clearly is not enough. In this case, Driver A is legally liable for the balance of the damages because he is the owner of the vehicle; $ 50,000 for injuries and $ 23,000 for the vehicle. If Driver B has coverage, their coverage would be secondary and their limits would then apply until they run out as well. Otherwise, Driver "A" will most likely be sued by the other party.

Double Deductibles:

One coverage that is available with your auto insurance is called collision insurance. Collision insurance protects your vehicle for damages that are a result of a collision with another object. Ie another vehicle, a building, etc. Collision coverage has a deductible which is the "out of pocket" amount you have to pay first before the insurance carrier steps in to repair or replace your car. Typically deductibles can range from $ 100 to $ 2500 but most of the time they are $ either 500 or $ 1,000.

They way the "double deductible" restriction works is if an un-named driver has an accident while driving the car with your permission, the collision deductible is doubled. Hence your $ 500 deductible is now $ 1,000, or your $ 1,000 is now $ 2,000. Hopefully your friend that borrowed your car is willing to chip-in and pay the extra deductible amount.

Sometimes the "double deductible" restriction is based on the age of the driver who borrows your car. For example, the deductible for collision is only doubled if the driver is younger than 25 years old.

No Physical Damage Coverage:

This restriction works just like the "double deductible" described above. However, this restriction is much more punitive.

Simply stated, if an un-named driver borrows your car and has an accident the insurance company will pay the third-party damages (liability), but the damages to your vehicle will not be eligible for coverage.

All of these "permissive use" restrictions are described in detail in your policy initially and also in your renewals. Also restrictions shouldnt these be Disclosed by vBulletin® your agent View when you buy your policy, Which is Post why you want a professional insurance agent View / broker WHO COMPLETE really understands these Intricacies Effectively and can explain these restrictions to you when you apply for coverage.

Permissive use restrictions are also very common and are employed by some large, reputable nationwide insurance companies so be sure to examine your policy carefully.

Auto insurance policies are not all standardized. They are different from carrier to carrier and there are a multitude of coverage benefits, restrictions and exclusions that are unique to each company. Make sure to consult with your agent to see how your particular policy works.

Food for thought – next time you are considering buying a policy "online" without a human helping you, or from an "800 #" with an "order taker", consider how details like these may not be adequately described or may somehow get lost in translation – it pays to have an agent who can really look out for you.

4 Factual Determinants of Insurance Premiums

Without any shadow of doubt, insurance is an important mechanism that succors the individuals, states and the nation at large. You ought to or might have been maintaining one or more policies because of the peace of mind, confidence and security against financial losses that insurance proffered. Then, let me ask this question. Have you ever taken the pain of knowing the nitty-gritty of the premium you paid to the Underwriters annually, whether is reasonable or otherwise? The purpose of this article is to bring you to the limelight and be acquitted with the composition of the premium you paid.

Risk premium: Anyway, insurance is all about risk and in order to rate a risk appropriately the underwriter must know the degree of exposure of that property to a particular risk. So that portion of the premium that is allocated to the risk element of the cover is refers to as risk premium which accounted for about 50% of the total premium.

Expense loading: Based on the literary meaning of expenses. This is the apportionment that covers the expenses of the insurance companies like overhead, lighting and heating, rents, staff salaries etc. Conservatively, this will accounted for about 25% of the premium paid to the insurers.

Profit loading: Insurance like any other business operates on the principle of profit centre. To this end, they are in business to make an increasing profit on annual basis. Borne on this fact, the underwriter put this into consideration in charging their premium. The profit element is about 15% of the premium chargeable.

Contingency loading: As you are fully aware that the financial market is dizzy and highly volatile. And to make the situation worst, here come the issue of global economic meltdown that ravaged the whole world. Guess what, insurers behave like a seer (prophet) that is they subjected their businesses to reasonable foreseeability. That part of the premium that is used to cushion the effect of bad wealth or unfavourable business year (s) is referred to as contingency loading.

Here you are, 'am sure you are no more a novice on factors that constitute the determination of office premium. Have a good day and see you again, your insurance intelligence is my concern.

Claims Settlement Record of Private Insurance Companies

As we know, there are 20 odd private life insurance companies in India, and there is LIC which is a public sector company. LIC is the 800 pound gorilla, managing to hold on to about 75% market share even 10 years after private companies have been allowed into the life insurance space. The private life companies position themselves on being more customer friendly, wider array of products etc while LIC holds on to its positioning of trust, experience and government backing. One of the key parameters on which to judge a life insurance company is their claims payment record. At the same time, we must note that given that life has become more of a savings and investment product, the returns that they provide are perhaps more important than claims payout ratios. Nevertheless, claims record is definitely not a variable to be ignored. A table illustrating the claims rejection percentages of the top life insurance companies in 2009-10 is presented below:

Life Companies: Claims rejection ratio (%)

LIC: 1.21%

Aviva: 9.75%

Bajaj Allianz: 5.2%

Birla SunLife: 10.62%

HDFC Life: 4.67%

ICICI Prudential: 3.27%

ING Vysya: 4.26%

Kotak Mahindra: 4.29%

Max New York Life: 12.31%

MetLife: 5.94%

Reliance Life: 7.05%

SBI Life: 14.75%

Tata AIG: 12.3%

An important observation from the above table is that the claims rejection ratio of LIC is the lowest, thus implying that their record is the best as far as claims payment is concerned. At the same time, the very high percentage of claims rejection of SBI Life and Max New York Life surely comes in as a surprise.

It must however be noted once again that in Unit Linked products that life organisations promote aggressively (or at least was promoting till Sep 2010), the returns earned on the fund is perhaps a more important variable than the claims payment (or rejection) ratio. However, for non life companies, which offer pure protection / insurance products with no savings or investment component, claims payment is the crucial variable along with the speed of processing of claims.

Let us now look at the incurred claims ratios of the non-life companies:

Non-Life Insurance Company: Incurred claims ratio

New India Assurance: 89%

Oriental Insurance: 99.69%

United India Insurance: 78.62%

National Insurance: 99.16%

Royal Sundaram: 68.95%

Reliance General Insurance: 77.3%

Iffco Tokio Insurance: 83.44%

Tata AIG: 60.54%

ICICI Lombard: 85.35%

Bajaj Allianz: 71.9%

HDFC Ergo: 80.73%

Bharti Axa: 104 %%

One data point that stands out from above is that Tata AIG General Insurance seems to be sourcing the best quality business from the underwriting point of view, whereas the claims payment ratio of Bharti Axa seems to be quite high. Alo, the claims payment ratio of the public insurers, at an overall level, is higher than that of the private non life insurers.

Why You Need An Umbrella Insurance Policy?

You might have heard about Umbrella Insurance, but may be you do not exactly know what it means. It does not guarantee you to stay dry, while walking in the rain, but it provides an umbrella of almost everything that other traditional insurance policies do not. As well as this, fills in gaps in coverage after your limits of standard policy are exhausted.

After realizing the meaning of this insurance policy, you will probably have one question – Why I need an umbrella insurance policy? This article will basically respond to your question.

On a daily basis, there are personal complaints filed opposed to ordinary people, with various reasons. Once or if it happens to you, you might be prepared for it. Frequently, individuals are charged and have no further protection to protect the claimant from going in the lawsuit after this. In this case you need to have an umbrella insurance coverage and you will avoid such sticky situations.

Umbrella insurance is often stated as excess liability. It gets going when the basic limits on your car or home insurance are exhausted, or if you are generally charged for something that is not included in your traditional insurance policies.

The majority of insurance companies will not give you coverage except you have both home and car insurance agreement with them.

It is essential to understand that the excess liability defends you for all kinds of items that have nothing to share with your auto or home. Things like mistaken arrest, false custody, slander, unlawful access or deportation are included in your umbrella.

In addition, some umbrella insurance policies offer coverage for those, who have connection to any charitable organization where they associate.

It is not a requirement that everyone should have an umbrella insurance policy, but you may be amazed at how many citizens necessitate it. You are recommended to obtain this policy if:

1. You hire out your house or join in a holiday exchange program with other holidaymakers.

2. You are a business proprietor and if you possess a multimillion dollar company, in that case make sure you have this policy.

3. You allow people to look after your house while you are away.

4. You have a housekeeper, gardener or other person who works at your house and who are not qualified or joined.

These are the main points that will help you recognize why you need umbrella insurance policy. If you find yourself in one of these categories, you are advised to call insurance companies and get an estimate of an umbrella insurance policy. Prices are low and so it is well worth your money. It does not even make awareness to take additional risks when safety can be acquired at such a low price. Remember that your safety is the foremost.

Enjoy yourself with an umbrella insurance policy. This kind of insurance provides an extra peace of mind by defending your possessions and your well-deserved money.

Pros and Cons of Critical Ilness Insurance Coverage

Critical illness insurance is a relatively new type of policy that is frequently misunderstood. Today, we will clarify what it is, and what it covers.

How Does Critical Illness Insurance Work?
Critical illness is similar to term life insurance, except it is paid out when you are diagnosed with an illness covered by the policy, rather than being paid out upon death. However, some people confuse this type of insurance with disability insurance, which substitutes your income if you become disabled.

Illness insurance, like term life insurance, is paid in a lump sum, should you be diagnosed with a pre-defined disease such as cancer. You decide how this amount will be spent – some people put it into additional medical treatment (especially if there are some treatment methods that are not covered by provincial healthcare), others decide to take time off work to spend with family, or to travel.

As with many insurance products, this type of insurance plan comes with an extensive insurance quote, application and underwriting process that the insurer analyzes before you can get a policy; and as with any insurance policy, a critical illness policy comes with both pros and cons.

Let's take a closer look at the pros and cons of this type of insurance.

Pros of Critical Illness Insurance
There are several positive aspects:

  1. Funds that can help where needed: The lump sum you receive if you are diagnosed with a critical illness will allow you to get better treatment and, hopefully, fully recovery in some cases. You can also spend these funds on other needs or projects (such as travel or taking items off your bucket list).
  2. Protection for your own business: If you have your own business, you might need to work part time, after being diagnosed with a critical illness (reduced work hours are common when extensive medical treatment is required). It closes the financial gap created by your reduced hours at your company. With the funds, you could hire somebody to help out with your business.
  3. Stackable protection: Unlike disability insurance, critical illness coverage is "stackable". With disability insurance, coverage is limited because it is based on your income, and you can not go over that limit even if you have several disability policies. You can, though, have several policies with varying coverage amounts of different diseases. If you have, for example, two policies with benefits of $ 250,000 and $ 300,000, you can get a $ 550,000 payout when you make a claim.

Cons of Critical Illness Insurance

  1. Expensive: This type of insurance policy is not cheap. As an example, a Term 10 insurance policy with $ 500,000 coverage (Term 10 means a policy that covers you for 10 years) for a 35-year old non-smoking male without any pre-conditions costs around $ 180 / month (exemplary quote) whereas a Term 10 life insurance policy with coverage of $ 1,000,000 for the same person costs around $ 50.
  2. Definitions matter: If a diagnosed disease, such as a heart attack, is not aligned with the definition of this illness in the policy, your claim may be not paid.
  3. Does not cover you immediately: Policy typically comes with a waiting period (eg 90 days) during which you are not covered.
  4. Payout is not immediate: If you are diagnosed with a critical illness, there is "survival period" – (eg 30 days). If you die within that period, your claim will be not paid.

Summary
Critical illness insurance provides solid coverage for being unexpectedly diagnosed with a serious disease, but this coverage comes at a cost. It's a good idea to work with an insurance broker to get a critical illness insurance quote and to apply for a policy. Brokers have access to multiple insurance companies and will help you navigate through the complex application process, especially if you have medical pre-conditions.

Is My Insurance Company Trying to Cheat Me?

Let's be honest, anyone who has had an insurance claim has had this or a similar thought run through their head. For many years insurance companies have done things to earn a bad rep. I've been in the insurance restoration industry for the last 10 years, and during this time I can honestly say that I have rarely met an adjuster or contractor that wanted to skimp on the settlement. The few times I've seen this is when the policyholder has been extremely difficult to work with. Yes, bad estimates happen, however, most of the time the feeling of being "shorted or cheated" comes from not understanding your policy and how it pays out.

The biggest misunderstanding is most often the issue of matching. Insurance policies are specifically written with terminology and phrases to avoid matching. Homeowner's coverage is to replace the damaged items with like kind and quality. While as a homeowner and contractor I often do not agree with this and I will fight it to the best of my abilities. To explain this policy the easiest is to give you situations where you will most likely run into this situation. Let's say you have a flood where the carpet has to be removed in the hallway. The same carpet runs throughout the home. The living room opens and connects directly to the hallway with the same carpet and you have 3 bedrooms directly off of the hallway and an office with french doors off of the living room. The carpet in the hallway and living room will be replaced but the carpet in the bedrooms and office will most likely not be replaced as most insurance policies are written to stop at doorways.

The other situation is most often with kitchen cabinetry. If water damages your lower kitchen cabinets (or a fire, your uppers) most insurance companies will allow replacing the run of damaged cabinets (meaning all of the lowers or all of the uppers). If you have specialty / custom cabinets you will most likely be given a custom price to rebuild that run of cabinets to match what was there. Very rarely is matching kitchen cabinets likely these days, however, it is not impossible. Over the past 25 years, there are hundreds of cabinet styles and specialty finishes, from dozens of manufacturers. Unless you recently replaced the kitchen, it will take countless hours of research to find the cabinet manufacturer that made your cabinets (a good place to locate the manufacturer is on the inside of the door. Let's say you've managed to find the manufacturer, companies usually discontinue a line every 4-7 years, or they make considerable changes to it. on top of the possible discontinued issue, it is very likely that the elements have changed the finish on your cabinetry. Perhaps your contractor has pointed the issues out to your adjuster, depending on the difficulty they may add extra money to allow to get a close match, perhaps a custom cabinet.

This is where you have several options:

1) You can take your budget and get quotes from cabinet places on a less expensive cabinet to replace all of your cabinetry. Remember that by using less expensive items elsewhere in the reconstruction you will have that money to allocate towards your new cabinetry budget.

2) You can certainly create a unique custom kitchen by finding an opposite finish cabinet to replace your lowers or uppers with. It is very common today to mix cabinetry finishes to give a unique custom look to fit your style. For example, let's say your cabinets are a stain cherry cabinet in a shaker style. You could go with a complementing stained or painted finish cabinetry, perhaps in antique white or black.

3) If the mix / match is not your style consider a paint treatment. My best example of this is a fire I did in Durham, NC in 2007; my client had a small grease fire that scorched the finish on 3 of her upper cabinets above her stove. The insurance company allowed for replacement of these upper cabinets. She was not happy with that. (Now to be fair, this was an extremely smart professor at Duke University and as soon as the fire happened she started dreaming of her new kitchen.) When I broke the estimate down into our budget for the cabinets she was highly disappointed. She wanted her new kitchen. I replaced the 3 damaged parts of the cabinets with unfinished stock pieces that matched in style and repainted all of her dated oak cabinetry to a new beautiful modern black. We added new hardware, repainted the walls and I was able to get new countertops for her, by choosing a less expensive replacement floor. Within 2 weeks she had a brand new remodeled kitchen with nothing more than her deductible out of pocket.

4) You could order the cabinets to match your existing cabinetry and if they do not match well enough you can go back to your insurance company and have them come back out to assist you with another option. PLEASE NOTE: if you're set on getting a kitchen completely different than what you had and you opt to try and match your existing cabinets and fail, the insurance company is not going to pay to replace the newly replaced cabinets again. Do not go out and get cabinets that clearly will not be a match to your cabinets and then call the insurance company and say "I tried to match the cabinets but they do not match." This is fraud and you can be charged.

The best advice I can give anyone is to understand your policy. Look at your declarations page thoroughly. Understand your coverage. If there are any changes in your home update your insurance as necessary, to protect your home, yourself and your family.

Understanding your claim can be both easy and confusing. It's easy if you listen, take notes and ask questions (to both your insurance company and your contractor). I've seen homeowner become completely befuddled by a claim when they try to make sense of it without knowing enough or by trying to break down the estimate line item by line item and add up the totals to "checkup" on the contractor or adjuster. Just remember that life becomes unsettled when it's least convenient. There is never a good time to have to file an insurance claim. However, life is unpredictable and it will slap you in the face when you have all your balls in the air. I recommend to all of my clients to get a spiral notebook or notepad the moment they have to file a claim. Write everything down because if you're like everyone else as soon as you think of a question for you adjuster you'll forget their name and lose their contact information and / or your claim number. Keep track of everything. Start collecting pictures of things you like that will have to be replaced, it's good to dream but do not be unrealistic. Do not assume that because something got wet it will be replaced. Carpet is one of the most argued for items. Most homeowners assume that because the carpet was wet for several hours before it was discovered it will be claimed as unsalvageable. In a general Class 1 / Category 1 (Clean water) loss most carpet can and will be saved. Restoration companies are HIGHLY trained to dry these items. Carpet is replaced as a last resort. It may need to have the pad replaced and be restretched / rekicked and cleaned but in rare situations does it require replacement. Delamination is a reason for replacement. Delamination is when the primary and secondary backing of the carpet separate. One of my favorite arguments for carpet replacement was from one of my homeowners in Virginia who said that her carpet was not wet before and therefore should be replaced. I had to laugh on the inside when she said this because while I am confident that the 83 gallons of water which we removed from her living room were not present prior to the loss; the water did not damage her carpet. She argued her point (I think she was a law student) for nearly an hour and a half. She did not win. She argued that water damages fabric and since it was not wet prior to her loss it should be replaced to prior condition. I agree that water does damage some fabrics but her carpet was not made of silk or wool. It was average nylon carpet, and after checking the tags of 8-10 pieces of clothing (looking for nylon) that she normally wears and washes, she dropped that argument. She rebutted that the carpet color changed / darkened where the carpet was wet. Yes, it was darker where the water was, because it was still wet! Two days later upon completion of drying the carpet, the homeowner confirmed that the carpet color returned to its original shade. Nonetheless, her next argument was that by getting wet, the carpet's structure was now damaged. She could not really explain what she meant, but I was confident I knew where she was trying to go. When I explained to her that during the manufacturing process carpet is routinely exposed to several "water baths" in order to manufacture it. When she learned that water is used in the manufacturing process she had no further arguments. Feel free to use any of her argument should you want to try and get your non-damaged carpet replaced. If you're carpet gets wet with clean water and is not found to be delaminated, look for staining from furniture feet. Staining IS a valid reason to replace carpet.

Drywall and trim are the other most commonly damaged items in a home during a water loss. Drywall patches are 100% acceptable in restoration. The insurance company does not owe to replace all of the drywall in a room because there was a section that had to be removed. Understand that drywall can usually be dried without any relating issues. If a section has to be removed a patch fit to the squared-up removed section is acceptable. Once properly taped and mudded that patch will not be noticeable, if it is than your contractor needs to have another drywall crew redo the repair. Yes, drywall is hung in 4×8 or 4×12 sheets but that does not mean that you need an entire new sheet of drywall "because it was not previously patched." Any new drywall will be sealed and painted to match.

Insurance companies / adjusters are starting to release the reins on painting of a room. It varies company to company- adjuster to adjuster- and on the clients' attitude. For years the standard has been to apply two coats of paint to the new drywall and 1 coat to the remaining section of wall (corner to corner). The corner to corner theory is that when painting a room you can / typically stop in the corner once you have an entire wall painted. You never want to stop mid wall because that will be noticeable. Also with corner to corner if the paint shade is slightly off it will not be visible as it stops in the corner and light casting shadows will affect the paint shade as well. Having been met with so many contractor arguments over painting the remaining walls, during the last 2 years we have seen the corner to corner rule relax. Typically now, if I have a 12×12 room and I patch one of the walls, I will apply two coats of paint on top of two coats of primer to the new drywall. I can usually get the adjuster to approve repainting the remaining walls, to match. This does not mean that you get to change your 12×12 powder blue dining room to Victorian red. This means that you get a fresh coat of powder blue paint in your dining room. However, if you're nice to your contractor you can update that powder blue to a similar tonal value color such as a grey blue. Cultivating and fostering a good relationship with your contractor can only benefit you.

One of the other biggest items homeowners do not understand that do not get covered are the source repair costs. Example: the ring between your toilet tank and bowl rots, causing your toilet to leak. The insurance coverage will be to repair the damage that the toilet caused. It however, will not cover the cost of fixing or replacing that toilet, or your cost to hire the plumber to come out and shut off the water and remove the toilet. In short, your insurance company is not trying to "stick it to you". It is important to note that any form of water damage should be cleaned in a timely manner. Damage can spread Water to mold damage, and your insurance company is not Likely to pay for a mold inspection the if they 're you feel View That aided the progression of the mold by vBulletin® in delaying the drying area Hotels . If something does not make sense. Ask about it. If you do not understand the answer or are having difficulty with your adjuster ask for their supervisor. If something raises a flag in the supervisors head they can and often will either send out another adjuster / field reinspector or come out and investigate. Do not be afraid to ask if you truly feel that you're not being treated fairly. Your insurance agent can also help to explain your policy to you.

Regardless of what you feel you're owed, just because you've been paying into you policy for x number of years does not mean you get everything and anything you want. Indemnity is a basic insurance principle that states that you, as an insured should not be allowed to profit from an insurance loss. This principle is important and helps to protect both the insurance company and you.

7 Ways To Spend Less On Your Home Insurance Policy

Property is a prized possession, and to safeguard it from unexpected damages in the event of fire, flood, earthquake, etc. getting a home insurance is always necessary. However, if your existing health policy is exhausting your monthly income, listed below are a few sure shot ways with which you can control your home insurance costs:

1. Shop around: The decision of buying a home insurance policy should not be taken in haste. Instead, you must explore and make a list of insurance policies that are being offered by various insurance providers. You may also get insurance quotes online to estimate the costs of different policies. Choose a reliable company from which you can buy the comprehensive home insurance plan that suits your needs, and of course, your budget.

2. Increase your deductibles: Deductibles is the fraction of the claim that you have to pay before your insurer pays the claim as per the terms of the policy. The higher the deductibles you set, the lower premiums you will have to pay every month. However, you must set the deductibles as high you can afford.

3. Locate intelligently: Purchase the property in a strategic location but make sure that it is based away from the damage-prone areas. Reason being, if you live in a disaster-prone areas where flood, storm or earthquakes are a common occurrence, there are chances that your home insurance policy may have a separate deductible for such kind of damages.

4. Avoid making small claims: This is the most common mistake that many people make. You exhaust your policy in small claims thus leaving no room for bigger loss protection. Rather it is advised to deal with smaller issues on your own and keep this policy to protect your home from bigger catastrophic losses.

5. Improve home security: To avoid getting your home damaged from little mishaps, it is suggested to increase the security in your home by installing devices like smoke detectors, burglar alarm, etc.

6. Merge Policies with one Insurer: Just like you pool your internet, phone, and TV package, you can also merge your insurance policies with one insurer. Buy your health insurance, homeowners, life, and auto insurance plan from one insurance company and come out cheaper by bundling these insurance products together. You may also buy policies in a package that is less expensive as compared to single policies. It also liberates you from the trouble of policy renewal.

7. Eliminate Unnecessary Coverage: Don’t buy the coverage you don’t need. Like earthquake coverage is often unnecessary in most zones, don’t include jewelry if it is at a catchpenny price etc. Also exclude a land value from your policy. Covering land on which your house is constructed is simply of no use as it is unlikely that your land will be stolen or burnt is fire. So to save big, insure the value of your home only.

There are many insurance providers who offer age and profession discounts as well. Some times there certain discounts for retirees and people with good credit rating. Never eliminate the coverage that is important just to save your money as spending extra on important services will benefit you in the long run.

Twelve Secrets and Tricks to Buying Life Insurance

Secret #1: Don’t spend too much time on a life insurance quote.

Do not be fooled by the low price quotes you get online – they don’t apply to you unless you are extremely healthy. Statistically only 10% of people who apply actually get the lowest priced policy. The premium you end up paying has nothing to do with the initial quote you get online or from an agent. It is amazing to me how often I see people getting duped by an agent who quotes company X at a lower price than another agent.

Life insurance policies are the same price no matter who you buy from! One agent or website quoting a lower premium means nothing. Prices for any given policy is based on your age and health. There are a few exceptions to this but that is beyond the breadth of this article.

Most life insurance companies have 10-20 different health/price ratings and no agent or website can assure you the quote they give you is accurate. You have to apply, do a health check, and then go through underwriting (meaning you complete a mini-exam with a nurse in your home and then the company checks you doctor records and reviews and ‘rates’ your health) to get the real price of the policy. Remember that a health rating also factors in your family history, driving record, and the type of occupation you have. Only use quotes to help narrow down your choices to the top companies. You may want to consider a no load or low policy. The more that you save on commissions the more money builds up in your policy. You can even buy term insurance no load, and save a lot on premiums. You will not get the help of an agent, which may be worth something if they are very good.

The most important factor determining price is matching your particular health history with the company best suited for that niche. For instance company X might be best for smokers, company Y for cancer survivors, Company Z for people with high blood pressure, etc.

Secret #2: Ignore the hype on term versus cash value permanent insurance.

You can go crazy reading what everyone has to say on buying term insurance versus a whole or universal life policy. Big name websites give advice that I think borders on fraudulent. Simply put there is NO simple answer on whether you should buy permanent cash value policies or term insurance.

But I do think there is a simple rule of thumb – buy term for your temporary insurance needs and cash value insurance for your permanent needs. I have read in various journals and run mathematical equations myself which basically show that if you have a need for insurance beyond 20 years that you should consider some amount of permanent insurance. This is due to the tax advantage of the growth of the cash value within in a permanent policy. I am divorced and have taken care of my children should I die. I probably no longer need as much insurance as I now have. I have earned a great return on my policies and have paid no taxes. I no longer pay the premiums, because there is so much cash in the policies. I let the policies pay themselves. I would not call most life insurance a good investment. Because I bought my policies correctly, and paid almost no sales commissions my policies are probably my best investments. I no longer own them, so when I die my beneficiaries will get the money both tax free, and estate tax free.

Since most people have short term needs like a mortgage or kids at home they should get some term. Additionally most people want some life insurance in place for their whole life to pay for burial, help with unpaid medical bills and estate taxes and so a permanent policy should be purchased along with the term policy.

Secret #3: Consider applying with two companies at once.

Life insurance companies really don’t like this “trick” because it gives them competition and increases their underwriting costs.

Secret #4: Avoid captive life insurance agents.

Look for a life insurance agent who represents at least fifty life insurance companies and ask them for a multi company quote showing the best prices side by side. Some people try to cut the agent out and just apply online. Just remember that you don’t save any money that way because the commissions normally earned by the agent are just kept by the insurance company or the website insurance company without having your premium lowered.

Plus a good agent can help you maneuver through some of the complexities of filling out the application, setting up your beneficiaries, avoiding mistakes on selecting who should be the owner, the best way to pay your premium, and also will be there to deliver the check and assist your loved ones if the life insurance is ever used.

Secret #5: Consider refinancing old life policies.

Most companies won’t tell you but the price you pay on your old policies has probably come down dramatically if you are in good health. In the last few years life insurance companies have updated their predictions on how long people will live. Since we are living longer they are reducing their rates rather dramatically. Beware the agent may be doing this to obtain a new commission, so make sure it really makes sense.

I really am amazed at how often we find that our client’s old policies are twice as expensive as a new one. If you need new life insurance consider “refinancing” your old policies and using the savings on the old policies to pay for the new policy – that way there is no extra out-of-pocket costs. We like to think of this process as “refinancing your life insurance” – just like you refinance your mortgage.

Secret #6: Realize life insurance companies have target niches that constantly change.

One day company ‘X’ is giving good rates to people who are a little overweight and the next month they are super strict. Company ‘Y’ might be lenient on people with diabetes because they don’t have many diabetics on the books – meaning they will give good rates to diabetics. At the same time company ‘W’ might be very strict on diabetics because they are insuring lots of diabetics and are afraid they have too big of a risk in that area – meaning they will give a bad rate to new diabetics who apply.

Unfortunately when you are applying a life insurance company will not tell you, “Hey, we just raised our rates in diabetics.” They will just happily take your money if you were not smart enough to shop around. This is the number one area a smart agent can come in handy. Since a good multi-company agent is constantly applying with multiple companies he or she will have a good handle on who is currently the most lenient on underwriting for you particular situation. The problem is that this is hard work and many agents are either too busy or not set up to efficiently shop around directly to different underwriters and see who would make you the best offer. This is a lot harder than just running you a quote online.

Secret #7: Don’t forget customer service.

Most people shopping for insurance focus on companies with the lowest price and the best financial rating. Unfortunately I know of some A+ rated companies with low rates who I would not touch with a ten foot pole simply because it’s easier to give birth to a porcupine backwards then it is to get customer service from them.

Before I understood this I used a life insurance company that gave a client a great rate but 2 years later the client called me and said, “I have mailed in all my payments on time but just got a notice saying my policy lapsed.” It turned out the company had been making lots of back office mistakes and had lost the premium payment!

We were able to fix it because we caught the problem so early. But if the client happened to have died during the short period the policy had lapsed, his family might have had a hard time proving that the premium had been paid on time and they might not have received the life insurance money – a loss of hundreds of thousands of dollars in that case.

Secret #8: Apply 3-6 months ahead of the time you need the insurance if possible.

Don’t be in a hurry to get a policy if you already have some coverage in force. But go ahead and apply right away knowing that you might need months to shop around if the first company does not give you a good rate. Even though the life insurance industry is getting more automated your application will still often be held up for weeks or months while the insurance company waits on your doctor’s office to mail them a copy of you medical records.

If you are in a hurry and buy a quickie ‘no-underwriting’ policy without going through the full health checks and underwriting that a mainstream life insurance company requires, you will end up paying 20%-50% more because the insurance company will automatically charge you higher rates because they don’t know whether you are healthy or about to die the next day.

Secret #9: Avoid buying extra life insurance through work if you are healthy.

I am sure there are exceptions to this “trick” but I have rarely found one. By all means keep the free life insurance your employer provides. But if you are healthy and you are paying for supplemental life insurance through payroll deduction you are almost certainly paying too much. What is happening is that your ‘overpayments’ ends up subsidizing the unhealthy people in your company who are buying life insurance through payroll deduction.

Usually the life insurance company has cut a deal with your employer and will waive the required health exam for all employees – instead they just average the price for all the employees and offer one or two rates for males or females at any given age. Life insurance companies know they will pick up lots of unhealthy clients this way so they jack up the price on everyone so that the healthy people end up overpaying so that the unhealthy employees get a cheaper policy. Also, unlike the guaranteed term policies which we recommend, most life insurance you buy through work will get more expensive as you get older.

Also group life insurance is generally not portable when you retire or change jobs meaning that when you retire or change jobs you might have to apply all over again even though you will be older and probably not as healthy and risk being turned down for a policy. If the group plan does allow portability they generally limit your conversion choices and force you to go into expensive cash value plans.

I remember helping someone evaluate his supplemental life insurance. He was sure it was a better deal than any policy I could find him. Little did he know that the price of his group plan would go up every year? By the time he retired his premium would have risen to over $10,000/year. I found him a policy for around $1000/year that would never go up. Also, unlike his old group life policy, he could take the individual policy with him when he changed jobs or retired.

Secret #10: Do a trial application on a COD payment basis.

Only send money with the application if you need the life insurance coverage right away. Sending a check with the application is a traditional practice agents used to do – I think mostly because it got them their commissions faster. If you send money with an application you usually get temporary coverage immediately but if you already have plenty of coverage and are just trying to get better rates ask your agent to do a trial application on a COD basis so you only pay once the policy is approved. If you do not send money, and you die before paying for the policy there is no coverage.

Secret #11: Wear your shoes when the nurse measures your height.

When the insurance company sends out the nurse to do your health check try to be as tall as possible if you are overweight? In most states you are allowed to wear shoes and if you are a little overweight your taller height/weight ratio will look a little better to the underwriter who is determining your health rating and policy price. Also do your exam early in the morning with no food in you – this will make your cholesterol count and various health ratios look the best.

Secret #12: Be careful with extra perks and riders.

Most policies come with options like accidental death benefit, child riders, disability riders, return of premium etc. If you do the math on most of these “extras” they usually don’t make smart financial sense. Life insurance companies are out to make money and these riders are usually profitable because they either cover something that rarely happens or they are so stringent that the benefit never gets paid out. Keep things simple and focus mainly on getting a life policy to cover your life without many strings attached. Again a good agent can help you weigh the benefits of the extra riders. But be wary of an agent who tries to tack on every possible extra rider.