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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Homeowners Insurance is insurance that pays for damage to your home caused by a covered peril under the insurance policy as well as for the contents of your home.  A covered peril is any cause of loss not excluded by the insurance policy.  There are several normal exclusions such as earthquake and flood.  These causes of loss are excluded from normal homeowner insurance policies but can be purchased as separate, stand alone insurance policies.

While homeowners insurance is not legally required like car insurance, it is normally required by banks and other lenders.  And since most people in the United States have a mortgage on their home, most people are therefore contractually required by their mortgage holder to purchase homeowners insurance.  Banks and other lenders want to ensure that if your house is damaged, there are adequate funds available for the repair of the home. In fact, many lenders will add your monthly homeowners insurance premium to your mortgage payment and charge you along with the mortgage payment.  In this way, the lender guarantees the homeowners insurance premium is paid and the policy remains in force.

When purchasing homeowners insurance, one of the most important factors to carefully consider is the value of your home and contents.  When you purchase homeowners insurance, you purchase coverage up to a certain limit.  You want to ensure that if you suffer a total loss, such as your house burning to the ground, that your homeowners insurance limits are sufficient to rebuild your home as the way it was.  So you want to insure your home for its full value.

However, you do not want to over-insured your home as the premiums you pay are directly related to the amount of coverage you purchase.  So you want to do your best to insure your home for its full value without going over.  A good insurance agent can help you establish the value of your home given local building rates.

Homeowners insurance premiums (the amount you pay for your policy) can be a significant cost for most homeowners.  The premium you pay is based on several factors.  Some you can control and some that you cannot control.  First, the premium is based on the value of your house and therefore the amount of insurance you must purchase to fully cover your home.  Second, the premiums are based on where your home is located.  If you are located in South Dakota where natural disasters are rare, your premiums will be low.  If you are located on the coast of Florida where damage from tropical storms and hurricanes is high, your premiums will be high.  Other things such as your claims history, credit history and whether you have multiple lines of insurance with the same insurance company can also affect the premiums you pay. 

Like many other types of personal insurance policies, homeowners insurance policies typically have deductibles which must be paid by the insured before the insurance company will pay.  Choose your deductible wisely.  A low deductible will mean less out of pocket expense in the event of a claim.  However, low deductibles will cause the premium you pay to increase.  So you want to find a balance between lowering your insurance premiums and maintaining a deductible that you can afford to pay in the event of a loss.