Liability Coverage

This coverage pays the injured party (the other guy) if you get sued because of injuries you’ve caused in an accident. It also pays for any property you damage in an accident that is your fault, including other cars, houses, personal property, fences, light poles, etc.

Depending on the state in which you live and the company with which you insure, liability coverage can be purchased either as a "split limit" which has separate coverage amounts for bodily injury lawsuits and for property damage, or as a "combined single limit" which provides one pool of coverage.

It’s important that you have adequate liability insurance. If you are involved in a serious accident, you may be sued for a large sum of money. If you do not have enough coverage, you may be forced to liquidate assets to pay for the suit, or have your wages garnished.

Medical Payments

This coverage pays you and your passengers for medical expenses incurred in an auto accident, regardless of fault. It will also cover injuries sustained by you while you’re operating someone else’s car (with their permission) or rental car, in addition to injuries you or your family members incur when you are pedestrians.

Personal Injury Protection (PIP)

PIP broadens standard medical coverage to cover lost wages, survivor benefits, essential services, accidental death and funeral expenses.

Each state has different rules for how PIP coverage behaves. In some states, such as New Jersey, PIP coverage may automatically extend to all members of a household for any personal auto accident they are involved in as a driver, passenger, or pedestrian.

Some states and policies provide extended medical coverage. This may cover you if you are in an accident involving buses, taxis and many other forms of commercial transportation.

Uninsured and Underinsured Motorist Coverage (UM/UIM)

This will cover you if your auto is struck by an uninsured driver, or one who has less than the minimum state limits required (this sometimes happens with out-of-state drivers where they may be subject to different laws).

Depending on the state in which you live and the company with which you insure, uninsured motorist coverage can be purchased either as a "split limit" which has separate coverage amounts for bodily injury and property, or as a "combined single limit" which provides one pool of coverage.

It’s important that you have adequate UM/WIM insurance. If you are involved in a serious accident with an uninsured driver and suffer debilitating injuries, it may be the only way in which you can be compensated. UM/UIM coverage is often relatively inexpensive in comparison to the other protections in your policy.

Comprehensive

This coverage reimburses you for loss primarily from theft, fire, vandalism, falling objects (tree branches or hail, for example) or if you strike an animal while driving.

It is typically required when you have a financed or leased vehicle, and is discretionary and is not required when the car is paid off. Many people will drop this coverage when their car is getting older, typically when the cost of coverage is high versus the present market value of the car. You may not eliminate comprehensive coverage on your policy without first eliminating collision (see below).

Comprehensive insurance is usually sold with a $50 to $2000 deductible, although this varies by company and state. The higher the deductible, the lower the cost of your insurance - and the less money you get back if your car is stolen or damaged.

Some companies offer glass coverage with or without a deductible.

Comprehensive and Collision coverage together on a policy comprise "full" coverage. A policy lacking these coverage is sometimes termed a "liability" policy.

Collision

This coverage pays for damage to your vehicle when you are in an accident. If you are at fault in the accident, or if your vehicle is damaged by a hit and run driver, your company will pay you minus your deductible. If you are not at fault, your company will subrogate - that is, obtain payment from the other party’s insurance policy.

It is typically required when you have a financed or leased vehicle, and is discretionary and not required when the car is paid off. Many people will drop this coverage when their car is getting older, typically when the cost of coverage is high versus the present market value of the car.

Collision insurance is usually sold with a $50 to $2000 deductible, although this varies by company and state. The higher the deductible, the lower the cost of your insurance - and the less money you get back if your car damaged in an accident.

Comprehensive and Collision coverage together on a policy comprise "full" coverage. A policy lacking these coverage is sometimes termed a "liability" policy.

Lawsuit Option

Some states require insurers to offer you a choice of options for lawsuits - often terms the verbal threshold as opposed to the zero tort threshold.

A zero tort threshold gives you the ability to retain an attorney and sue under any circumstance, a verbal threshold imposes restrictions.

In general, it is much cheaper to accept the verbal threshold than to retain the zero tort option.

A Few Other Options to Consider

Most companies offer rental reimbursement and towing if you car is in an accident or stolen. Some also provide general roadside assistance, trip interruption insurance, and other, more exotic coverages. All of these are available at additional cost.

Many states permit a basic policy with a subset of these coverages to be offered. Generally speaking, these policies are inferior and may actually cost more than the standard ones as described above.

A Few Things to Know

All states have a minimum coverage level and will not have a problem with you getting liability coverage only for your car. However, if your car is financed, your finance company may not agree with liability only coverage. Until you finish paying for the car, it belongs to them; and they require you carry full insurance (which includes comprehensive and collision coverage). This coverage will help cover the vehicle up to its actual cash value - so they can recoup the value of the vehicle if it is a "total loss" in an accident. If you do not carry comprehensive and collision coverage, they can force you to carry their insurance at much-increased rates, or even worse, repossess the vehicle. In general insurance companies will not allow you to drop full coverage on a financed car.

Additionally, many online insurers will be happy to let you "roll your own" coverage and take the state minimums to induce you to take a cheaper policy, or reduce your medical coverage in a way that provides inadequate coverage. This might save a few dollars up front, but exposes you to serious risks and possibly gaps in coverage.

There are really only two ways that your insurance carrier can drop your policy. They include, cancellation or non-renewal.

Insurance companies cannot cancel a policy that has been in force for more than 60 days except when:

• You fail to pay the premium.
• You have committed fraud or made serious misrepresentations on your application.
• Your driver’s license has been revoked or suspended.

Non-renewal is a different matter. You or your insurance company can decide not to renew a policy when it expires for any reason except a reason that would be prohibited by law. In most states, an insurance company must give the policyholder a written notice at least 30 days prior to the end of the policy term if it intends to non-renew.

It is important to note that the non-renewal decision may not be because of something you did. A possible reason for not renewing include, the company deciding to drop that particular line of insurance or to write fewer policies in your state. On the other hand, if you did do something that raised the insurance company’s risk considerably, like driving drunk, the premium may rise or you may not have your policy renewed.

If your insurance company did not renew your policy, you will not necessarily be charged a higher premium at another insurance company.

Most states require car owners to buy a minimum amount of bodily injury and property damage liability insurance before they can legally drive their cars. All states have financial responsibility laws. This means that people involved in an automobile accident will be required to furnish proof of financial responsibility up to certain minimum dollar limits. To comply with financial responsibility laws, most drivers purchase automobile liability insurance. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident since accidents may cost far more than the minimum limits mandated by most states.

Health insurance is a type of insurance which pays for medical expenses when the insured becomes sick due to covered causes, or due to accidents. This agreement between insurer and the insured is call the health insurance policy.

A health insurance policy is a binding contract issued by an insurance company to an individual or group which promises to pay for health care reasonably required by the "insured" or "policy holder" to treat illness or injury. If the insurance policy is issued to an individual, the individual applies for the policy and pays the premiums either directly or through payroll deduction, if acquired through their employer. Typically, in individual health insurance the individual policyholder is insured and also, in exchange for a higher premium, the insurance covers a spouse and dependent family members.

In the circumstance where the health insurance is obtained by an employer or a group or an association, the entity is the "group policyholder" and the covered individuals receive "certificates" of insurance. Generally, in addition to payment of premiums by the policyholder, the insured is also responsible for payment of deductibles and co-pays (a percentage of actual charges or a fixed amount per visit) which are predetermined in the policy at set amounts or rates.

There are many different types of health insurance plans available to consumers. Once you figure out the kind of policy or plan you want/need, you should select the company that offers your product(s) and service(s) at the quality you desire for the lowest cost. However, it is also import to take into consideration the financial quality of a firm. Do your research, you will want to ensure that the company will be able to pay, should you need it.

HMO Health Plans

An HMO, also known as a health maintenance organization, is one of the most widely-used health plan types in the country. This type of plan is based upon a HMO network, which is a group of doctors and other health care providers who contract directly with the HMO company in order to reduce health care costs. HMO plans are most closly related to managed care health insurance plan, in that the HMO is directly involved in the medical treatment of their customers. Which means that the HMO has to approve tests and treatment before they are performed.

Other HMOs are more loosely affiliated models, sometimes called Individual Practice Associations, where the participating health care providers operate from their own offices.

HMO health insurance plans are generally the cheapest kind of coverage available, but they are also the most restrictive.

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PPO Health Plans

PPO insurance, also known as preferred provider organizations, are types of managed care health plans that are similar to HMO’s in structure, but offer more flexibility to consumers when it comes to choosing their health care providers. PPO networks tend to be much larger than HMO networks and the majority allow you to see doctors outside of the network. If you do see a doctor out of network, the insurance provider will pay less than they would pay for an in-network provider.

With a PPO you probably will not have to designate a primary care physician or obtain referrals before you can visit a specialist if you are a member of a PPO. However, PPOs often require more paperwork than comparable HMO plans.

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Point-of-Service Plans

A point-of-service health insurance plan is a type of policy that combines features of HMO’s and PPO’s. While they are generally more flexible than an HMO, they do have many restrictions that do not apply to PPO coverage.

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Managed Care Plans

Currently, almost all health insurance plans are managed care insurance plans. Managed care means that the insurance company actually influences the treatment choices through a specific network of health care providers. HMO’s, PPO’s, and point-of-service plans all fall into the category of managed care.

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Indemnity Health Plans

Indemnity health plans, or reimbursement plans, are the most flexible and most expensive type of plan for sale today. Indemnity health plans are an excellent selection for people who are willing to pay the additional price as a trade off for maximum flexibility.

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Health Savings Accounts

Health savings accounts are not actually health insurance. However, they are used in conjunction with an individual health plan, like and HMO or PPO, to help cover the costs of health care for consumers. A relatively new product, a health savings account can be a valuable tool in helping you pay for health coverage, and they also have a number of important tax advantages.

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Major Medical Insurance

Major medical insurance can be either managed care or indemnity coverage. Regardless of the type of plan, major medical insurance is simply a medical insurance plan that comes with a high deductible and only covers serious injury or illness.

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Catastrophic Health Insurance

Catastrophic health insurance is simply another term for major medical insurance. As the name implies, this type of plan offers coverage only in the event of a "catastrophic" occurrence, such as a serious accident or prolonged illness.

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Dental Plans

Dental plans are generally offered as a supplemental coverage along with another type of a medical insurance. There are also "dental discount cards" available for purchase without health insurance. This section discusses the different types of dental insurance and dental discount plans that are available to consumers.

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Vision Plans

Vision plan coverage, like a dental plan, is often provided as a supplement to regular health insurance. This type of coverage is used to maintain eye health for the insured individuals and generally includes basic exams and eye care. This section describes different options related to vision insurance coverage that you may want to purchase along with your primary medical insurance.

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Prescription Coverage

Prescription coverage is normally included at some level in most primary health insurance policies. Aside from this type of supplemental prescription benefit, consumers may purchase standalone drug discount cards for saving on prescription medications. This section discusses all types of prescription coverage available to health insurance consumers.

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Disability Insurance

Disability insurance is not really health insurance. However, this type of coverage is often purchased along with traditional health insurance to help pay for bills and lost wages in the event that the recipient becomes ill or injured for a prolonged period of time. Almost no medical insurance policies provide this type of coverage.

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Health Discount Plans

Health discount plans are not health insurance. They are plans that allow for discounts on health care and prescriptions at certain health care facilities that have contracted with the discount plan company. These types of plans can be very risky and often do not provide adequate health coverage, so consumers should be very careful when opting to purchase this type of plan. Get more details in our guide to health discount plans.

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Hospitalization Insurance

Hospitalization insurance is coverage that pays for specific costs associated with a stay in the hospital. Although some health insurance plans provide a level of hospitalization coverage, others do not. When they do offer this type of coverage, it is often significantly less than what is needed in the event of a major illness or injury. For this reason, it may be a good idea to purchase separate hospitalization insurance or to increase the levels of coverage in your current health insurance policy.

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Short Term Health Insurance

Short term health insurance is coverage generally purchased to fill the gap of coverage between jobs. It can be a very valuable tool to protect an individual or family from a serious accident or illness or to ensure continuance of coverage between jobs.

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Long Term Care Insurance

Long Term Care refers to help with basic activities of daily living. These include things like bathing, dressing, eating, and using the toilet. This help can be provided in the home, in middle-ground settings such as assisted-living facilities, or in nursing homes. Long Term Care Insurance seeks to provides ongoing income to cover the costs of such assistance.

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Temporary Health Insurance

Temporary health insurance is just another term for "short term health insurance." This is coverage usually purchased for less than 12 months, which typically provides catastrophic or "major medical" coverage to the insured, without providing more extensive health care benefits that a primary HMO or PPO plan would.

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Supplemental Plans

Supplemental health insurance is a broad topic and includes many of the plan type mentioned above. Common types of supplemental plans are supplemental accident insurance, disability insurance, Medicare supplement insurance (primarily for seniors), insurance for specific diseases like cancer, and supplemental hospital insurance, to name a few. This section provides detail on many types of supplemental coverage.

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Travel Health Insurance

Travel health insurance is a type of coverage you can purchase when traveling outside of the United States. Since most health insurance plans do not cover illness or injury that occurs outside the country, this is generally a highly-recommended type of coverage for travelers. It can assist in getting and paying for health care if it’s needed and may even pay to bring you back home if the situation is serious enough.

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Limited Benefits Plans

A limited benefit health plan simply covers some specific health care cost, such as a stay in the hospital, surgery, or emergency care. As the name suggests, this type of policy in very "limited" in coverage but it can be a good option for some people.

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Medicare

Medicare covers only "medically necessary" care. In some cases it will cover nursing home or home healthcare, but only after a three-day stay in the hospital, and only for services provided by "skilled medical professionals," such as registered nurses and physical therapists.

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It’s a fact, people will happily pay less for the same amount of insurance coverage they have now or better. Here are some tips, which can help reduce your health insurance bill...

A large part of your insurance rate is based your risk level. (The higher the odds that you’ll file a claim, the higher the health insurance rates you will pay.) Insurers calculate your risk level using many factors. Many of these factors are outside of your control, however, there are a few factors you control.

Smoking

If you or your significant other smokes, you are seen as high health insurance risks. In addition, if you are a direct smoker and a parent, there are even more unknown costs that may occur from exposing your kids to second-hand smoke. Second-hand smoke can be quite harmful to your kids or others in the house. They may develop certain health conditions simply because of such exposure. This will in turn make them higher risks consumers now or in the future.

This may seem like an impossible mission. However, the tangible benefit of lower health insurance premiums and savings from your smoking budget make it worthwhile. After 13 smoke-free months you’ll be considered for a discount.

Additionally, many employers have started handing out rebates on health insurance premiums if employees promise to stay away from smoke for the calendar year.

Stay Healthy

Stay healthy and observe basic hygiene. One factor that affects your insurance premium is your general health and the number of times you or your children visit the doctor because of illness. Exercising, eating healthy food, maintain a healthy weight, avoiding addictive substances (like excessive alcohol) and using a first aid kit at home helps prevent frequent visits. A healthier lifestyle protects the body from some, although not all, diseases and costs you very little. This will ultimately reduce your spending and lower your health insurance in the long run.

College Programs

If you have college kids, save yourself a bundle by excluding them from your family insurance plan. There are health insurance programs that are specifically designed for them. With the exception of pregnancy, these programs cover all major areas needed, review them carefully, talk to your insurance professional and select one.

Comparison Shop

Use the services provided by the site or other comparison sites to obtain a few objective quotes, and educate yourself on basic insurance term. Using an independent insurance broker will allow you to compare offers from leading insurance companies. Additionally, you should get at least 3 additional quotes from direct providers to be complete. Then simply read through policy terms, ask questions and picking the one you think is best for you.

Contribute to a Flexible Spending Account

Many employers offer a flexible spending plan. This kind of plan allows you to put pre-tax dollars into an account to later reimburse your out-of-pocket medical expenses. These expenses can include prescription drugs, co-payments, dental and vision care. Because flexible spending contributions are taken out of your pay before federal and state taxes are calculated, you get to use pretax dollars to pay your medical bills.

Homeowners insurance, also commonly called hazard insurance, is the type of insurance that provides financial protection against disasters. A standard policy will cover loss of ones home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home.

Typical insurance policies will cover damage caused by most disasters. Disasters caused by floods, "Acts of God", earthquakes, poor maintenance or war are typically not covered. However, you can purchase separate policies for flood and earthquake coverage.

A Homeowners policy premium will vary depending on the cost to replace the house, the outstanding balance on any loans as well as any additional riders. These riders are a list of additional items to be insured, including things like jewelry, engagement ring, valuable paintings or antique furniture and collectibles.

It is very important that you review and understand the liability portion of your insurance policy. As a property owner you are legally responsible for any injuries and property damage you or members of your family (including pets) cause to other people. As a result you can expect your premiums to adjust with the risk of injury to your family of visitors. Things like adding a trampoline, a backyard pool or the kind of dog one acquires can have a significant impact on your insurance premiums.

Aside: According to a study from the Centers for Disease Control and Prevention study, Pit bull, Rottweiler, Chow Chow, Doberman Pinscher, Akita and Staffordshire Bull Terrier purebreds are responsible for the greatest number of dog-bite-related fatalities.

1. The Structure.
2. Personal belongings.
3. Liability protection.
4. Living expenses in the event of displacement.

The Structure

This part of your policy pays for repair or to rebuild your home if it is damaged or destroyed by fire, hurricane winds, hail, lightning or other disaster listed in your policy. It will not pay for damage caused by a flood, earthquake or routine wear and tear. When purchasing coverage for the structure of your home, you should buy enough to at least rebuild your home.

Most standard policies also cover structures that are detached from your home such as a garage, tool shed or gazebo. Generally, these structures are covered for about 10% of the amount of insurance you have on the structure of your home. If you need more coverage, talk to your insurance agent about purchasing more insurance.

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Your personal belongings

This part of your policy pays for items lost, damaged or stolen due to fire, hurricane or other insured disaster. Personal items include things like your furniture, clothes, jewelry and sports equipment.

The coverage limits are usually between 50% and 70% of the amount of insurance you have on the structure of your home. Say you have $100,000 worth of structural insurance; you’d have between $50,000 to $70,000 worth of coverage for your personal belongings. As a result it is very important that you periodically review the values of you personal belongings and keep an updated inventory.

It is also important to note that your coverage does not just cover items that are always in your home. This means that your belongings are covered anywhere in the world, unless you have decided against off-premises coverage. Many companies limit this coverage to 10% of the amount of your structural insurance. Expensive items like jewelry, furs and silverware have dollar limits if they are stolen, generally between $1,000 and $2,000. Further, you can purchase additional insurance called endorsements or floaters. This kind of additional insurance will also cover "accidental disappearance".

Trees, plants and shrubs are also covered for loss due to theft, fire, lightning, explosion, vandalism, riot and even falling aircraft. However, damage by wind or diseases are not and coverage usually limited to 5% of the structure and up to $500 per item.

Finally, this kind of coverage provides up to $500 of coverage for unauthorized use of your credit cards.

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Liability protection

Liability covers you against lawsuits for bodily injury or property damage that you or family members, including pets, cause. So, if a family member accidentally ruins a neighbor’s expensive rug, you are covered. This kind of insurance does not cover you for damage done to your own home.

The liability portion of your policy pays for both the cost of defending you in court and any court awards-up to the limit of your policy. These limits generally start at about $100,000. However, the industry average is about $300,000 worth of protection.

Liability coverage also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses are paid without a liability claim being filed against you. Basic coverage usually ranges from $1,000 to $5,000 worth of this coverage.

Additionally, you can purchase umbrella coverage for additional liability coverage. Umbrellas provide broader coverage, including claims against you for libel and slander, as well as higher liability limits.

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Additional living expenses

This pays the additional costs of living if you are displaced from your home due to damage from a fire, storm or other insured disaster. It covers hotel bills, restaurant meals and other living expenses incurred while your home is being rebuilt. Many policies provide coverage for about 20% of the insurance on your house.

Additionally, if you rent out part of your house, this coverage also reimburses you for the rent that you would have collected from your tenant if your home had not been destroyed.

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The following is a list of various types of homeowner, rental and dwelling policies available. There are no fixed rules on each designation - every company creates their own policy that will generally conforms to this list, but there may be differences in coverage and in perils excluded from coverage.

Homeowner Policies

The Insurance Services Office, ISO, a provider of underwriting, risk management and legal/regulatory services, has defined seven standardized homeowners insurance forms in general and consistent use. These include:

HO1

A basic policy that provides coverage on a home against 11 listed perils (including fire, lightning, windstorm or hail, explosion, riot, aircraft, vehicles, smoke, vandalism, theft, breakage of glass and volcanic eruption). Contents are generally included in this type of coverage, but must be specifically outlined in the policy, as are "other structures" (detached garages, gazebos, sheds, etc.), loss of use, and liability.

HO2

A more advanced policy that provides coverage on a home against 17 listed perils (including all of HO1 and freezing of plumbing, accidental discharge or overflow of water from an appliance or plumbing system, collapse due to weight of ice, snow or sleet, damage from falling objects, sudden and accidental tearing apart of systems or appliances, and damage from sudden surges of artificially generated electric current. The coverage is usually a "named perils" policy, which lists the events that would be covered.

HO3

The standard policy issued for single-family homes. This provides "all risk" coverage on the home with some perils excepted, such as earthquake and flood, and therefore provides the most comprehensive insurance. This kind of insurance includes liability that may arise from daily use, as well as any visitors who may encounter accident or injury on the premises as well as loss of use.

HO4

A policy used for renters or tenants in an apartment, condo or multi-family home. Principal coverage includes contents and liability exposure.

HO5

A comprehensive homeowner’s policy that provides all-risk coverage for the home, other structures, personal property, and loss of use. This kind of coverage is available in limited circumstances.

HO6

A policy used for a condominium. This type of policy is based upon the assumption that the condominium building is insured by the overall organization that runs the complex. Principal coverage includes contents, furnishings, cabinets, fixtures, and personal liability for accidents within the unit.

HO8

This is a variation of the standard homeowners policy that provides for replacement at actual-cash-value of the home because of their location or construction. This is sometimes used for higher value homes that have unique features, such as ornate moldings, that cannot be effectively replaced with modern construction techniques or materials.

Dwelling Policies

There are three general dwelling property insurance policies for secondary homes or rental properties. These policies are also typically issued on houses of non-standard construction, or very old homes. All of these policies cover the basic structure of the home or dwelling. They include:

DP1 or Basic Form

A basic policy that provides minimum coverage on a home. It is the most popular kind of insurance used for rental properties. DP1’s covers dwelling, other structures on the property against fire or lightning and internal explosions. It does not cover loss of use, personal property or additional living expenses.

DP2 or Broad Form

A more inclusive policy that provides coverage on a home for dwelling, "other structures" (detached garages, gazebos, sheds, etc.), household/personal property, rental value and additional living expense. It provides coverage against loss by fire or lightning; debris removal; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; falling objects; weight of ice, snow or sleet; collapse of building, vandalism or malicious mischief, breakage of glass, accidental discharge of water or steam, freezing of plumbing, heating systems or appliances, burglary damage, fire and lightning.

DP3 or Special Form

This provides "all risk" coverage on the home with some perils, like theft coverage for personal property or liability/medical payments coverage. This kind of coverage provides the most comprehensive insurance.

Any additional protections are options that are offered only at the discretion of the insuring company, and you should inquire before settling.

For landlords, umbrella policies are especially crucial. If one of your tenant’s clumsy friends breaks an arm falling down stairs, there could be significant additional costs above standard liability.

A personal article policy (PAP), sometimes known as a rider, provides additional coverage for jewelry, electronic equipment and other valuable items you own. These items might not be adequately covered by the limits in your standard homeowners policy if they are accidentally lost or damaged.

For example, if your laptop computer is accidentally damaged, your homeowners’ policy might not cover the claim.

A PAP can also cover items such as laptops, cameras, furs, musical instruments, silverware, gold ware, fine arts, collectible conies, stamps, antiques or other valuable items.

We recommend that you periodically update a list of these items, and review their values with your insurance agent, to ensure that you are adequately covered.

Finally, it’s always good practice to save receipts for proof of purchase and/or certificates of value if available.

Most insurance companies use credit to provide a price or to establish the acceptability of an applicant. By using an insurance score, which is a rating factor based upon credit, a policy will be either priced lower (for good credit) or more (for bad credit).

Studies have shown a close correlation between an individual’s credit score and their likelihood to make a claim on their insurance. Companies that use credit create an insurance score by establishing different weighting factors for various components of an individual’s FICO score. This means that each insurance company uses credit with regard to pricing or acceptability differently. Making it even more important to periodically review your credit from all 3 credit reporting companies.

Actuarial statistics show that people who have a poor insurance score are more likely to file a claim.

Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance.

The use of insurance scoring does not affect an individual’s FICO score.

An umbrella policy provides additional protection against lawsuits that might be brought against you. Umbrella policies are so named because it acts like an umbrella, sitting on top of your auto and/or homeowners liability policies. You should consider obtaining umbrella coverage if you own substantial assets.

In general your auto and homeowners policies have at least some liability insurance that would be used to settle legal claims. However, if the settlement or judgment exceeds these limits, you would still be liable for the remainder. At which point virtually everything you own would be fair game to pay off the debt. Your future income and inheritance you may receive could easily be jeopardized or seized for settlement payments.

Umbrella liability insurance usually requires a minimum amount of liability coverage in your underlying policies, usually about $300,000. At the very least you should obtain enough umbrella coverage to protect your assets.

With Americas love affair with lawsuits, you can’t afford to not have umbrella liability insurance.

Co-Insurance - Generally expressed as the percentage that you pay of any covered medical services after you have paid the deductible and co-pay.

Co-Insurance limit - The dollar amount you have to pay with Co-insurance before the insurance company begins paying your bills at 100% for the remainder of the plan year.

Out Of Pocket Maximum - The total dollar amount paid out by a subscriber (deductible plus coinsurance).

Co-Pay - A fixed fee you pay for services rendered. Most plans cover 100% after the co-pay for services rendered, however this can be adjusted to any amount depending on how the plan is set up.

Life Time Maximum - The total your policy will pay out. Many plans have a yearly restoration amount which will replenish the total so that after the policy money is exhausted there will still be some money in the following plan year for new claims.

Co-Ordination of Benefits or COB - How your plan pays when it is second to another plan. There are three principle methods in US health plans:

1. Maintenance of benefits - If the other plan pays the same amount or greater than your plan, then your plan pays nothing. If the other plan pays less, your plan pays only the difference between what it would have paid and what the other did pay.
2. 100% allowable - The secondary plan pays the patient responsibility up to the full allowed amount by the plan.
3. Government Exclusion - In general these plans take the patient responsibility remaining from the primary plan and treat it as a brand new claim and pay it under the normal plan benefits.

Self-Insured - Many major U.S. and world corporations hire insurance companies as administrators to manage a pool of money held by the company. Many state and federal laws do not apply to these plans.

Fully Insured - The insurance company collects the premiums and pays claims from its own money.

Reciprocity - Most insurance plans deal with networks of doctors. If for example you have an HMO plan that allows you to see any HMO provider anywhere in the country, it is called Full Reciprocity, but if it only allows you access to local area networks of providers it is called Limited Reciprocity and if you can only go to select networks that your company has purchased access to, it is called No Reciprocity.

Experimental/Investigational - Most insurance companies will deny coverage for any procedures or tests which have not been medically verified by clinical trials conducted by recognized bodies of physicians or scientists. Many medical providers use tests which they believe in but have not been clinically validated.

No-Fault - This is generally for automobile insurances, however if your auto policy is no-fault and you are injured, the medical insurance will become a secondary payer and will not be able to process claims until explanation of benefits are received from the auto insurance carrier.

The Birthday Rule - Many insurance companies have adopted this rule to determine which parent is primary payer when both parents cover the same dependents. Whoever has the earlier date of birth, excluding the year, is designated primary insurance carrier. Exceptions to this rule usually arise when there is a court order for one of the parents to be the primary carrier.

Subscriber - The primary member on the insurance policy.

In-Network/Participating/Par Providers - Medical providers who have an established relationship with an insurance company.

Out-of-Network/Non Participating/Non-Par Providers - Medical providers without an established relationship with an insurance company.

Of all kinds of insurance Life Insurance is the most difficult to discuss, since it is ultimately dealing with the death of a loved one. Life Insurance provides coverage in the event of your death. It is coverage that is meant to ensuring that your family continues to have financial protection even when you are gone. Which means that at different stages in your life you will require different kinds and amounts of coverage.

Stages of Life:

If we were to look at the stage of your life, we’d notice that different types of insurance would suit different life stages, needs, and financial abilities. You would have no need when you’re young, progressing to greater and greater need as you take on more and more responsibility, and finally beginning to diminish, as you grow older.

Single

At this stage in your life you would most likely not be responsible for any dependents or significant other. There would be no one who would miss your income should you pass away. However, it may be wise to consider getting life insurance since at this stage rates would be at their lowest.

Married

At this stage a small amount of life insurance would be recommended. Should either the unforeseen occur, the life insurance money could be used in the short term to pay mortgage/rent, credit card bills and funeral costs. This money could also be used to give the surviving spouse time to adjust to their new circumstances.

Children

At this stage of life, life insurance is crucial, since the care of your children would hang in the balance. They are more likely to be affected by the loss of your presence and financial support.

Retirement

During retirement, it is most likely that you would no longer be responsible for children. As a result there would be no one relying on your income and in turn your need for life insurance is reduced. However, it is still prudent to consider some limited insurance to cover funeral expenses, any debts, as well as to supplement your surviving spouse’s retirement funds.

• Whole Life
• Term Life

Whole Life

Whole life, sometimes called permanent insurance, provides protection (death benefit) for your dependents while building a cash-value-account. These kinds of policies pays a death benefit to named beneficiary and offers you a low risk cash value account and tax-deferred cash accumulation. They provide a fixed premium, which can’t increase during your lifetime as long as you continue to pay the planned amount.

During this time the insurance company manages the policies various investment accounts. These accounts can pay dividends directly to the insured or be re-invested in the policy to reducing payments. Which means that at some point the policy could pay for itself. Additionally, whole life policies allow the owner to withdraw from the policy during their lifetime.

Please note that the cost per $1,000 of benefit increases as the insured person ages, which could become very high later in life. As a result some insurance providers will sometime change a higher premium in earlier years, investing the overage, using the gains to supplement premium levels later in life.

By law, when these "overpayments" reach a certain amount, the cash value must be available to the policy owner if he or she decides not to continue with the original plan. Which makes this life insurance policy a kind of tax-deferred long-term savings account for you and your beneficiaries.

Whole life insurance encompasses several subcategories, including 3 other subcategories: variable life, universal life and universal variable life.

Variable Whole life insurance - Provides all the benefits of whole life insurance, but allows you to vary the death benefit in relation to the fund returns of the cash value account.

Universal life insurance - Allows you to earn market rates of interest on your cash value account.

Universal Variable life insurance - Allows separate accounts for you to invest in such as money market, stock, and bond funds, while offering premium flexibility.

Term Life

Term life insurance is the simplest form of life insurance. It pays death benefit only if death occurs during the term of the policy, which is usually from 1 to 30 years. Most term policies have no other benefit provisions, like withdrawals, investment accounts or cash accounts. However, term premiums are significantly lower than whole life.

There are two basic types of term life insurance policies, level term and decreasing term. "Level term" means that the death benefit stays the same throughout the duration of the policy. While "Decreasing term" means that the death benefit drops, usually in one-year increments, over the course of the policy’s term.

The family pet is a genuine family member and as a result most people would not flinch, even from incurring debt, to save their pets. Further, today there are treatments available for pets that match those available for human beings. As a result, many ailments, which were earlier never detected and consequently diagnosed, are very easily identified and cured. Consequently, the cost of veterinary treatment has skyrocketed, making pet insurance wise choice, and the sooner the better.

Pet health insurance helps you pay your vet bills. These policies provide either reimbursement coverage, or pay veterinarians directly for your pet’s eligible medical treatments due to accidents or illnesses, routine preventive care, surgeries, lab fees, X-rays, prescriptions and more. Some policies also pay out if the pet dies, or is lost or stolen.

Pet insurance covers all kinds of pets, not just cats and dogs. Chinchillas, parrots, guinea pigs and even birds can be covered.

The typical structure of pet insurance is very similar to standard health insurance. There is usually a co-pay, a per-incident or annual deductible, an annual maximum and a list of covered illnesses and treatments. Additionally, many pet insurance companies have a list of recommended veterinarians. Some companies will refuse to pay claims unless the treatment is performed or approved by a certified vet on their list, similar to HMO’s.

Finally, it is important to note that insurance companies are not equipped or may refuse to pay for pre-existing medical conditions your pet may have. As a result it’s best to obtain pet insurance while your pet is young, which will also result in lower premiums.

Pet insurance eliminate the financial stress of providing unexpected medical attention. You can’t predict the future of your pet’s health, pet insurance will prepare you for it.

Lowering your auto insurance rates can seem like an impossible mission. However, there are 10 simple things you can do, (besides the most obvious, and without questions most effective action of) having a spotless driving record, to get the best rate for yourself.

1. Shop Around
   
   Get quotes from several different insurance companies. Different companies will vary in the way that they interpret their risk for your situation. Using the other tips on this page obtain the best price that each company can give you and compare.
   
   
2. Keep an eye on your credit
   
   Insurance companies will periodically review your credit to determine if you are a responsible individual. Which means that you pay your bills on time and that your debt to credit ratio is under control.
   
   
3. Re-think the car you drive
   
   Before you buy a new or replacement car, obtain quotes for that type and year vehicle. Some cars are considered high risk of theft, or carry the potential of aggressive driving. Sport cars will typically cost more to insure than their sedan relative, not to mention the vehicles overall safety rating. The safer a vehicle the less risk the insurance company has to pay high medical bill in an accident.
   
   Additionally, discounts are available for cars with build in anti-theft and recovery devices, daytime running lights, traction control and electronic stability systems, to name a few.
   
   
4. Deductibles
   
   This is the minimum amount, per incident, that a repair needs to cost before the insurance company will get involved. The higher the deductible, the lower the rate. This is a very delicate balance, since you will be responsible for, and be encouraged to pay, to have the vehicle fixed if you don’t own the vehicle outright.
   
   
5. Adjust Coverage
   
   Review your insurance policy in detail to see what you are covered for and if you need it. If you’re car is worth less than 10 times your annual policy, consider dropping collision and/or comprehensive coverage. If have another car handy, you might want to drop rental car coverage, etc. For a detail description of what this covers review Auto Insurance Basics.
   
   
6. Combine Coverage
   
   Relationship building can be a big help. Have the same company hold your auto, home, renters and even life insurance policies. Longer term and multi-policy customer receive many additional discounts. However, if you do this remember to verify the financial stability of the company you choose to ensure that they will be able to pay should issues arise.
   
   
7. Group Discounts
   
   Just like buying in bulk can save you many, there is power in numbers. Companies Insurance will offer discounts to group plans from your employer, or other professional organizations. You may even be able to establish a group plan or a plan with better rates if you and your (large) family insure through the same agent.
   
   However, the opposite is also possible. If your group has a number of high risk members, it is possible, but not likely, that your rate might be better going elsewhere, so don’t forget to shop around.
   
   
8. Communicate driving style
   
   Many insurance companies carry discounts for low manage driving. If you live close to the office or periodically work from home, ask you agent if that option is available.
   
   
9. Ask about other discounts
   
   Every company has other on advertised discounts, which may apply to you. Good grades for students, defensive driving and driver training courses. Talk to your insurance agent to see which other ones are available to you.
   
   
10. Assign Cars
    
    If you have a new / teenage driver in your household your rates can sky rocket. The best solutions for this would be to assign a lower cost vehicle to that individual to driver and let your insurance company know. The hard part would be sticking to that assignment, but as that person gains experience their rate will decline over time.

If you’re going to rent a car, you’re going to need insurance. In general, if you have adequate insurance coverage on you own car, including collision and comprehensive, that’s all the insurance you’ll need. In addition, many credit car companies provide more coverage, when you use their card to rent the car.

However, you should contact you insurance agent and credit card company to determine your coverage limits and weather or not you are covered in the states you will be traveling to.

If you are lacking in any area, you would not need to increase the coverage on your own car, instead buy the additionally coverage at the rental counter.

If you don’t have collision or comprehensive coverage you should look at getting Collision Damage Waiver (CDW), also known as Loss Damage Waiver (LDW) or optional vehicle protection. CDW is not insurance, it’s coverage that relieves you of financial responsibility if your rental car is damaged or stolen. However, CDW may be voided if you cause an accident by speeding, driving on unpaved roads, driving while intoxicated or other illegally activities.

Note: In New York, collision damage is already included in the rental price and rental car companies are not permitted by law to charge extra for the CDW.

Personal Accident Insurance provides coverage to you and your passengers for medical/ambulance bills, but in most cases is not necessary, because it would be covered by your personal injury protection (PIP) under auto insurance or your health insurance policy.

Additionally liability coverage is also available, which provides protection for up to $1 million for the time you rent a car. By state law you cannot rent a car unless you are carrying the state required minimum liability insurance. However, these minimums are usually not enough to cover the expenses of a significant accident, and unless you are carrying an umbrella policy, we would recommend getting this coverage.

Finally, you can purchase personal effects coverage, which protects against theft of personal items in the vehicle, such as laptops, ipod or cash. However, you homeowners, renters insurance or personal article policy, minus the deductible, covers this, provided you have receipts or other proof of ownership.

Workers compensation, otherwise know as workers’ comp, is an insurance system that exists in all states to protect workers who become hurt or ill in the course of employment. In doing this, the employee agrees to relinquish their right to sue, unless there is extreme negligence on the part of the employer. This system allows injured or sick employees to receive medical care, payment of a certain percentage of a worker’s wages, compensation for economic loss (past and future), and benefits payable to the dependents of workers killed during employment.

Workers compensation acts like several other insurance service, including health insurance, life insurance and disability insurance.

As soon as a workplace injury occurs, it is the responsibility of the employee to immediately provide notification to their employer. This allows the injury report to be filed with the state workers compensation board. Failing to do this can provide justification for a workers compensation carrier to deny benefits, claiming that the injury must not have been as serious as it might be. Reports must include how, when and where the accident occurred with witnesses if available.

Typically, workers will receive about two-thirds (2/3) of their weekly wages. These payouts to the individual are tax-free under the workers compensation act, unless a part of the payout is sourced from your social security benefits or equivalent railroad retirement benefits. Workers may also receive a workmans’ comp lump sum settlement, based on the degree of impairment suffered (such as the loss of a finger).

However, there are 2 longer-term issues concerning compensation.

If the worker is permanently and total incapacitated, a court will determine if the individual qualifies for total and permanent (long-term) disability benefits, paid for his lifetime. Or, the individual might qualify for long-term disability benefits under social security. They may also receive a lump sum settlement, which typically takes into account a worker’s earnings and projected life expectancy.

If the individual is permanently disable, such that they can only return to work in a lesser capacity for lower pay, workers comp would pay the difference between what a worker formerly earned and then later earned, based on set time and maximum payout limits based on jurisdictions.

In all case it’s best to consult an attorney who can guide you through the process.

Do Landlords need more than the basic homeowners policy? Absolutely. This is because individuals/landlords actually have higher risk to own a tenant-occupied property than owner occupied. There are more things that can go wrong and less possibility of preventing liability related claims. A landlord policy protect the owner against:

• Loss of Rental Income
• Accidental Damage
• Malicious or Deliberate Damage by Tenants
• Loss by Fire, Storm or Theft and other Perils
• Public Liability and Legal Costs

These policies provide piece of mind against the many possible issues that many arise. Let’s say there was a fire. Not only would the insurance pay to repair the property, but it would also pay for loss of rent while the property is being repaired. Furthermore, if the ideal tenant becomes your worst ’nightmare’ and sues due to injuries experienced on the premises, the increased liability coverage comes in very handy.

This liability coverage doesn’t just stop at the tenants. Landlords face liability risks from several other factors such as uninsured or under-insured repairmen working on the property, aggressive animals and occurrences from slip and fall accidents to the tenant or guests.

It’s critical to protect not only the rental, but also other assets, should your liability coverage be exceeded, as a result we also recommend getting umbrella coverage for excess liability protection.

Additionally, landlords can purchase "Legal Expenses" coverage as part of the landlord’s insurance policy. This provides coverage for all costs accrued in fighting legal cases where he tenant stop paying the rent and refuse to leave the property.

Finally, as a landlord, you should consider requiring your tenants to carry renter’s insurance. Renters insurance will not only protect give you tenants coverage for their items, but also provide you with added liability coverage in the case the actions of the tenants cases harm to someone on your property.