Understanding Your Auto Insurance Needs

If you own your own car, you probably already know a little about car insurance. You may have heard the words deductible or premium. But, do you truly understand the different parts of an auto insurance policy and do you know how to choose the best coverage?

Forty-seven states require that you have at least some kind of car insurance, so it's a good idea to know what the law requires you to have and what additional or optional coverage will help to protect you in the event of an accident.

Before purchasing auto insurance, you must consider a variety of factors including what kind of car you have, your driving record and the amount of money you are willing to pay. Understanding the simple basics of auto insurance will make you confident that the car insurance policy you choose will take care of your needs in the event of an accident.

In this article, we will walk you through the types of coverage that insurance companies offer and discuss possible insurance needs. Additionally we will look at what affects the price of auto insurance, how to bring the costs down and how to understand the components of your policy.

The Price of Auto Insurance

There are several factors that affect the price of auto insurance. Of course, prices vary by company and you should compare prices thoroughly before you purchase a policy. The first thing that affects your policy's price is, of course, what kind of car you drive. For instance, a sports car costs more to insure than a family sedan. If you purchase a vehicle that has a high theft rate, your coverage will probably be more expensive. Essentially, though, your coverage will be based on the value of your car.

Another factor that affects auto insurance costs is where you live. If you live in an area where there is a high occurrence of accidents or vandalism, insurance will cost more money. For instance, since more cars are damaged in urban areas than in rural areas, you will probably pay more for insurance if you live in a city.

How often you drive will also affect your insurance costs. The more you drive, the higher the chances you will be an accident. Drivers who have long-distance commutes will pay more than people who live near their workplace. Meanwhile, if you only use your car on weekends, your insurance rates should be lower than someone who commutes to work daily.

The final factors that affect the price of auto insurance have to do with who you are. Your age, sex, marital status and driving record are all taken into account when you buy an insurance policy. Accident rates are higher for drivers under the age of 25, so if you are young, expect to pay a little more. Also, accident rates are higher for young males and single males. It doesn't seem fair, but if you are an unmarried 19-year-old male, your insurance rates will definitely be affected. If your driving record is impeccable, though, your rates will be lower. Obviously, drivers who are prone to traffic violations or accidents will have to pay more for insurance than safe drivers.

If these cost factors are beginning to scare you, don't worry. There are several ways to keep your insurance rates down.

There are four main factors that can keep auto insurance rates down. See if you fall into any of the following categories. If you do, you may be able to save money on your car insurance regardless of the value of your automobile.
If you are looking to buy a car, consider buying a car that "looks good" to insurance companies. For instance, insurance companies know what kinds of cars are prone to problems. They also know what kinds of cars are most often stolen. If you haven't purchased your car yet, find out what cars make this "good list" among auto insurers.
Most insurance companies offer discounts for a variety of reasons - for example, good students, having more than one car insured and accident-free driving are all worth a discount. Ask insurance companies about specific discounts that may be available to you.
Consider carpooling or using public transportation to get to work. The less you use your car, the less your insurance will cost you.
Finally, drive carefully! Insurance companies are not happy to insure accident-prone drivers, so the safer you drive, the less you will have to pay for auto insurance.

Remember, don't be afraid to ask your insurance company about any discounts they offer - it could save you a little cash.

Car Insurance Deductibles

Purchasing auto insurance is not simply about the value of your car or how often you get into accidents, it is also about how much money you are willing to pay for your coverage. All auto insurance policies have a deductible. The deductible is the part of your policy that you are responsible for paying. Auto insurance policies don't simply take care of all necessary expenses. You are required to pay for some of the damages, but the amount depends on your policy. Deductibles vary by state, but are most often in amounts of $100, $250, $500 or $1,000. For example, if you are in an accident that causes $2,500 worth of damage and your deductible is $500, you are required to pay the $500 and the insurance company will take care of the remaining $2,000.

When deciding what insurance policy you want to purchase, choosing a deductible is an important step. After all, you will have to pay the deductible for each and every situation in which you require your insurance company to cover damages. Deciding how much you are willing to pay and how often you think you will need to make an insurance claim will help you decide what deductible amount is right for you. In addition, the premium you pay, or the price of your total coverage annually, can be lowered by choosing a higher deductible. In other words, if you are willing to pay higher out-of-pocket costs, you can lower the total cost of your insurance.

Purchasing an auto insurance policy doesn't have to be confusing. You want a policy to take care of your expenses in the event of accident, theft, vandalism or most any other instance in which there is damage to your own or someone else's vehicle. By knowing what your state requires, what your needs are, what discounts you qualify for and how much coverage you want for your car, you will be able to choose the right policy.

For more information on car insurance and related topics, check out the links on the following page.

Insurance is important

Reston, VA, March 18, 2009 – NAVA, the Association for Insured Retirement Solutions, announced today fourth quarter results for the variable annuity industry. The combined net assets of U.S. variable annuities decreased 13% to $1.1 trillion, as compared to the end of the third quarter of 2008. Net assets decreased by 24.1% relative to the fourth quarter one year ago.
Variable Annuity total sales, also known as premium flows, for the fourth quarter were $33.3 billion, a 30.3% decrease from fourth quarter, 2007. Fourth quarter net sales of $3.4 billion shows a decrease of 61.5 % from the fourth quarter 2007 net flows of $8.9 billion. The mix in premiums for the fourth quarter showed 67.4% of the total sales were in qualified plans and 32.6% in non-qualified plans.
Total sales for 2008 were $154.8 billion, a 15.1% decrease from the prior year’s 12- month sales of $182.2 billion. Net sales for 2008 were $23.1 billion, or 14.9% of total sales. This reflects a 30.8% decrease in net sales as compared with last year.
The mix of net assets by asset class showed that $504 billion, or 45 % of assets, was held in equity accounts at the end of last year. This is a decrease of 43% as compared with 2007 when $889 billion, or 60% of assets, was held in equity accounts. The mix also shows that $292 billion, or 26% of assets, was held in fixed accounts, which is an increase of 14% as compared to 2007.
About Annuities – With the demographic trend of people living longer, the decline in traditional sources of retirement income (pensions and Social Security), and the responsibility of retirement funding shifting to the individual – an annuity is a critical component of a retirement plan. It is a long-term retirement investment vehicle offering a combination of insurance benefits, guaranteed lifetime income payments and tax-deferred savings. Variable annuities allow individuals to invest in a variety of underlying fixed and equity funds, and provide returns based on the performance of these funds. Only annuities protect retirement assets against market volatility and guarantee retirement income that cannot be outlived.
About NAVA - NAVA, Inc., the Association for Insured Retirement Solutions, is a nonprofit trade association located in suburban Washington D.C. NAVA provides a variety of services to the industry including educational forums, research, and conferences aimed at furthering the development and understanding of fixed and variable annuities, income annuities and variable life insurance.


WHAT IS LIFE INSURANCE AND HOW DOES IT WORK?

In simple terms when you take out life insurance you are insuring your life against when you die. In the event of your death your policy will provide your family or loved one's with a cash lump sum and also pay your funeral expenses plus any outstanding debts you may have.

You can spread out your payments out over a period of time. The amount you will need to pay for your life insurance will depend on your personal circumstances and what level of cover you decide to opt for. Factors such as age, gender and health will come into play. Obviously the higher payout will mean a larger premium payment.

There are a number of things that can drive down your insurance premium. If you are a smoker, kicking the weed is a good idea as insurers charge smokers extra for their policy than non-smokers. Also making sure you have a healthy weight and get regular exercise can also reduce your premium. It may seem strange to think about getting some life insurance when you are young but the younger and healthier you are will mean you will pay considerably lower payments than if you take out a policy when you are much older.

Although when most of us think about life insurance we associate it with only paying out when someone dies but there are many different types of policy that come under the ‘life insurance' category.

‘Protection only' or ‘term insurance' are policies that pay out only within a certain period of time. This is usually the cheapest way to provide financial protection for your family in the event of your death.

A ‘whole of life' policy lasts throughout your life so your dependants are guaranteed a payout whenever you die. Because you are certain to die while holding the policy, premiums are substantially higher than for term assurance.

Whole of life policies are often reviewable, usually after 10 years. At this point your insurance company may decide to put up your premiums or reduce the cover it offers.

There are different types of whole of life policy – some offer a set payout from the outset, others are linked to investments, and the payout will depend on performance.

Endowment, pension or other ‘life policies' will pay out in the event of a death during the term of the policy but if a person survives that term they will get a cash payout. This type of policy can be seen more as an investment that can be cashed in during your lifetime while also providing protection in the event of a death or critical illness.

Although a payout from a life insurance policy is tax free, it could form part of your estate and be liable to Inheritance Tax (IHT), which could gobble up to two-fifths (40%) of your payment. Ouch!

The simple way to avoid IHT is to place your policy 'in trust', which enables any payout to be made directly to your dependants, neatly avoiding the taxman, your estate and any Will.

It's also worth looking at mortgage life insurance that will pay off your mortgage if you die.