Health Insurance Reform Losing Steam

August 31, 2009 0 Comments

A poll was released over the weekend showing Americans are less concerned about health care costs than they used to be. Americans are less worried they will lose their health care insurance and less likely, they say, to postpone needed health care treatment. The public option has many Americans reconsidering their current health care situation and deciding that it is not that bad after all given the alternatives.

Insurance Companies

August 27, 2009 0 Comments

Don't think insurance companies are that important to the economy? AIG was the largest insurance company in the world and when it almost failed, it cost US Taxpayers over $85 Billion dollars. Its failure was predicted to bring down the US financial system. Now that the economy has stabalized somewhat, some insurance companies are leading the charge with storing stock prices. AIG's stock price, once the company that alsmot brought down the US financial system, is up about 500% since its low last March. Insurance Companies are huge and they can help drive the economic recovery.

Health Insurance War?

August 26, 2009 0 Comments

Town Hall meetings are turning into armed bar brawls...politicians are comparing each other to Hitler...other politicians are degraded American Citizens speaking their minds...the White House is strong arming Health insurance companies...and Health Insurance Companies are spending millions of dollars on lobbying to mold health insurance reforms to benefit them. With politicians warring with each other and even the public in some cases, will Health Insurance reform cause a class war? Just illustrates how important insurance can be in our society.

States likely to increase minimum car insurance requirements

August 26, 2009 0 Comments

Several states are considering raising the minimum amount of liability car insurance required. Most states currently require a minimum of $20,000 in liability insurance with some lower and some higher. Higher limits mean higher premiums. With the recession still in full swing and unemployment still rising, I think the states are making a big mistake. Their intent is to provide more insurance coverage to those injured in auto accidents. But I think it will do the opposite. If the state raise limits, the higher premiums required for those limits will cause some drivers to drop their insurance all together. Therefore, I think the end result of raising the minimum limits will be to increase the number of uninsured drivers.

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While some forms of insurance are optional, in almost all states, buying car insurance is legally required.  Most states require operators of motor vehicles to purchase third party liability insurance coverage at specified minimum limits.  Liability coverage pays for bodily injury or physical damage caused by the operation of a motor vehicle. For instance, if you cause an accident which damages another car and injures the driver of that car, the liability coverage portion of your car insurance policy would pay for the injuries and damages up to your policy limit.

States require drivers to carry liability insurance to ensure that drivers has a source of payment to compensate accident victims.  If you are caught operating a motor vehicle without the legally required liability insurance, your license can be suspended.  And in some states, your vehicle can be impounded after multiple offenses.  Under Personal Car Insurance policies, there is generally no deductible for liability coverage.

Liability coverage is just one coverage offered under Car Insurance policies.  Since it is legally required, it is the most commonly purchased.  The next most common type of coverage is collision coverage.  Collision coverage pays for physical damage to the policyholder's car regardless of who is at fault for an accident.  Collision coverage pays for a "collision" as defined by the policy.  If physical damage to a car is not covered by Collision coverage, it is covered by Comprehensive coverage.  Comprehensive coverage covers all physical damage to a policyholder's vehicle not covered by collision coverage.  The most common incidents covered under Comprehensive coverage are collision with an animal, damage by weather such as hail, or damage to glass such as a cracked windshield.

Both Collision and Comprehensive coverages generally carry a deductible.  They can be the same or different.  The Deductible is defined in the policy and is chosen by the policyholder when the policy of insurance is purchased.  The Deductible is the portion of the loss the insured must pay before the insurance policy makes a payment.  For insurance, if you have a $250 deductible and you incur $1000 of damage to your car, then you the first $250 of the loss and the insurance company will issue you a check for the remaining $750 of the loss.
The lower your deductible, the more insurance coverage you are buying and the less out of pocket expense you will incur in the event of a claim.  However, a lower deductible will also result in a higher insurance premium for your policy.  So choose your deductible wisely.  Many people favor high deductibles because it lowers their monthly car insurance premiums.  However, do not choose a deductible which you cannot afford.  If you cannot afford to pay $1000 in the event of an accident, choose a lower deductible.

In addition to liability insurance and physical damage insurance coverages, there are a wide variety of other insurance coverage option to choose from.  Rental car insurance is another popular coverage option.  Rental car coverage pays for you to get a rental car if your car is in an accident and must be repaired.  This coverage is normally fairly inexpensive.  However, there are some drawbacks.  First, most rental car companies will not rent a car to anyone under 21 and many will not rent to anyone under 25 years of age.  So if you are under 25, check to ensure you could get a rental car if needed.  There is no need to pay for the coverage if you cannot get a rental car.  Also, most coverages only pay a small amount, say $25 day, for a rental car.  This amount will only get you a sub compact car.  So if you do not want to drive a subcompact, skip the rental insurance.

Another important coverage is Uninsured/Under-Insured Motorist coverage.  This is mandatory in some states but optional in others.  This type of coverage requires your insurance company to step in and act as the responsible party for an underinsured or uninsured driver that causes you injury or physical damage to your car.  For example, if an uninsured driver hits your car and injuries you, your insurance company would pay for your medical bills and for pain and suffering since the other driver does not have insurance.  This type of coverage is expensive, but well worth it if you are involved in an accident with an uninsured driver.

As mentioned above, every states has different car insurance laws.  In addition, every car insurance company has different options and coverages that are available at different prices.  To ensure that you purchase the proper coverages at the proper limits for you, we recommend that you choose a good insurance agent to help you navigate the process.  You can browse through local agents by clicking here.