Alice K's Personal Finance Blog

This article is a friendly reminder to update your homeowner’s insurance policy on an annual basis with your insurance agent.

As an insurance agent, I have seen insurance cancelling because the information on the policy is incorrect. Mortgages are bought and sold everyday, especially with all the turmoil in the financial world today. Banks may change the location of their insurance center, change loan numbers and the insurance company has no way of knowing. Invoices are sent to the mortgage company generally 45 days ahead of renewal, if it goes to the wrong address or has the incorrect loan number, the invoice gets lost in the shuffle and the insurance policy does not get paid. Before you know it, you have cancellation notice and the mortgage company is going to write a policy on your house, which does not cover you in anyway, only their interest, the house.

Take a look at your policy or call your agent when the mortgage information changes to keep your insurance in force.

It seems everyone is looking to save money, and your insurance in one place to look.

Insurance is an art, not a science, it is important to shop your insurance regularly unless you have the most fabulous insurance agent in the world and would never think of leaving them. Here are a few tips:

• Go to you local independent agent to shop several companies. Our agency represents 12 companies and frankly we know what discounts and surcharges apply to policies. Have an independent agent help you.
• Make sure if you have a youthful driver they keep their grades above a 3.0 and you have proof, this can save up to 40% on auto premiums.
• New discounts are showing up for driving hybrid cars; ask if your company offers this discount.
• I write with a company that gives a discount for a AAA membership and more if you have been a member for 10 years.
• On your business policies, we have companies where it is actually less expensive to insure your equipment with your General Liability (GL); do not always assume if you just get a GL policy it is less expensive without tools, not to mention you are not fully covered with a GL policy.
• Shop your surety bonds when they renew. You can save 50% by calling and asking an insurance agent what they charge.
• Have an insurance review; I have seen clients spending over $200 every 6 months to carry a $100 deductible on Comprehensive coverage on their vehicle. Have a licensed agent review your policies with a fresh set of eyes and see where you may be able to save some money on premium.
• See if your insurance company has discounts for police, teachers, firefighters, alumnae from certain universities, group discounts, you would be surprised what some companies have on the books for discounts.

Remember the best place to go is your independent insurance agent; they have several companies they are working with and would love the chance to work with you.

Health Savings Account (HSA) is the new buzz around healthcare. I hope to clarify some misunderstandings about HSA's.

HSA's are the account you open with a qualifying high deductible health plan and you use the account to pay your medical expenses. A consumer purchases a high deductible health plan for a monthly rate and also has the HSA, it is a 2 part health system.

The HSA is similar to an IRA, contributions are tax deductible, it is interest bearing, it becomes essentially a retirement account at age 65. The difference is you can withdraw money from the HSA to pay your medical expenses and there is no penalty.

The high deductible health plan (HDHP) is a plan that is generally $1500-$10000 deductible and the deductible is paid by the consumer before the insurance company pays for healthcare provided. Additionally the HDHP pays for wellness care up front with no co-pay. This care includes, annual screenings, immunizations and blood work. Remember that any doctor's visits or prescriptions that the consumer pays for, as long as they are covered on the plan, all goes toward payment of the deductible.

This is a trend in healthcare and I think most consumers don't understand their plans and the medical field has not made it any easier either. This is a way to become aware of your healthcare costs and manage them on your own.

If you ahve questions, please ask.

I cannot begin to tell you the dread in parents voices as their teenager is appraoching driving age. There are ways to soften the blow and it just takes exploring options with your independent insurance agent to figure out what to do. I have some suggestions, they are:

- Make sure your teen maintains a 3.0 or better grade point average. This can translate to up to a 40% discount on the base rate.

- Some companies rate all drivers on all cars, some rate each driver on a car, this can be a huge difference. All drivers can drive all the cars, but it can make for a more favorable rate if a teen is placed on a car.

- Some insurance companies offer a safe driving course, on line, and if the teen completes the course there can be up to a 30% discount on the premium.

- I cannot stress enough a clean driving record. I have seen rates double with 1 speeding ticket. There are companies that won't write a youthful driver with an at fault accident.

- There are companies that will place the teen in the most favorable tier of rates as long as the parents have the insurance score and clean driving record as well as the teen. This can save up to 50% in rates.

- If teh teen can be rated on a "Liability Only" vehicle, that is the most favorable rating.

Youthful drivers have become a challange for insurance companies and there are companies that give the youthful driver the benefit of the doubt, up front. Talk to you Independent Insurance Agent about the company that fits best with your situation.

In today's insurance market, you can not underestimate the effect your credit score has on your insurance rates. In Ohio, that is the state I know, almost all of the insurance companies base thier premiums, to some degree on credit. As an independent insurance agent, I also get to see how much credit is considered with some companies. Here are a few interesting facts about your credit score and your insurance:


-I write for companies that give a 40% - 55% discount on the base premium for a very good credit score.
-Insurance companies have decided to include credit since most rating is done on line and can be pulled into the factors to determine a rate.
-Different insurance comapnies look at credit differently, some weigh it as the number one factor and some only take it into consideration.
-For youthful drivers, because the parent has good credit, could save you $1000's each year because of the credit score.
-Insurance rating systems do not pull a "credit score" it is the insurance score and insurance history can influence the score as well.
-The insurance score does not show as a hit on your credit report like shoppping for an auto loan will.
-Never let you insurance lapse, even if you are canceling to buy another policy, this shows as a non-paid bill on your credit report.
I hope you find this information useful. Most consumers I speak with do not realize this is a part of their final premium rate for their auto and homeowners insurance. If you would like to know more about me or the agency I am with, go to http://www.mma4.net/, or e-mail me at alicek@mma4.net. Thank you.