How to Know If You Are Underinsured

 

You buy insurance primarily for the purpose of protecting yourself and your family against certain losses from which you would otherwise be helpless to handle financially.  For example:

• Life insurance protects the financial future of the loved ones that depend on your income, so their standard of living can continue at a similar level in the event of your untimely death.
• Auto insurance protects you from losses associated with liability suits if you're held responsible for causing injury, death or property damage to a third-party with your vehicle.  You can also insure against damage or destruction to your vehicle, personal injuries and more.
• Homeowner's insurance provides a long list of protections for what is likely to be your most valuable asset, your home.  If your home is damages or destroyed as a result of any of the perils listed within you insurance policy, the insurer is responsible for helping you deal with the financial costs.

Life Insurance 

Since life insurance is meant to help replace your income should you die prematurely, you're underinsured if the death benefit of your policy falls short of taking care of such things as:

• The income your now provide
• Debts/financial liabilities your have incurred, including your home mortgage
• End of life expenses
• Higher education expenses for your children

Auto Insurance

Almost every state requires a minimum amount of liability coverage for every vehicle driven on public roads but these minimums are woefully inadequate.  In North Carolina, for example, you're required to have liability insurance of $30K per person (bodily injury),  $60K per accident (bodily injury) and $25K for damage to a third-party's property.

An accident for which you're held liable could incur costs many times these minimum amounts and any amount above your policy limits would fall directly to you for payment.  One serious accident could ruin you financially for life.  Unless your auto liability coverage is many times higher than the minimum required, you are underinsured.  For best coverage, look into purchasing an umbrella policy.

Homeowner's Insurance

The worst case scenario for the company insuring your home is if it becomes totally destroyed by something like a house fire or a tornado.  If your insurance policy would pay 90% or less of the cost to completely rebuild your home, you are underinsured.  This includes using the same or similar materials and replacing everything in your home.  Homeowner's coverage should be rechecked every year or two.

8 Factors That Influence Car Insurance Premiums

There are numerous rating factors insurance companies use to determine what car insurance premiums they charge, some of which you can change and others, such as your age, you can do nothing about. If you're a new driver, for example, you'll likely have some of the highest car insurance premiums out there. The reason for this is simple. Statistically, new drivers have the most accidents and file the largest claims of any group. The good news is that your rates should reduce significantly when you reach nine years of experience.

While there are several rating factors over which you have no control, such as age or gender, there are many more over which you do have control. Here's a list of 8 common factors used by insurers to rate prospective policyholders:

1. Age – as discussed above, young, inexperienced drivers pose the highest risk to submitting claims and are therefore charged the highest car insurance premiums. This applies to drivers of all ages. Rates are also generally higher for drivers 70 years of age and older, as they have also been shown to have a higher risk of being in car accidents.
2. Gender – in most states, male drivers pay higher rates than females because they're been shown to drive more miles and drive more aggressively. Some states, however, including North Carolina, don't allow car insurance companies to use gender as a rating factor.
3. Marital Status – statistics from the National Institute of Health tell us that single drivers are twice as likely to being in a vehicle accident as married folks. As a result, premium costs for singles are typically higher.
4. Location – claim rates in urban areas are higher than in rural areas due to more traffic congestion, more accidents and a higher likelihood of your car being vandalized or stolen.
5. Driving Record – safe drivers earn a lower premium and often qualify for a safe driver discount. If you have accidents or moving violations on your record you'll pay higher rates because your insurer considers you a higher risk.
6. Vehicle Type – insurers will consider vehicle cost, cost of repairs, theft rates, accident rates and safety test data.
7. Types of Coverage – adding options to your liability coverage such as collision and comprehensive will raise your premium rates. Choosing a higher deductible will lower rates.
8. Discounts - ask your insurance agent for applicable discounts. There are many.

7 Questions to Ask About Greensboro Auto Insurance

If you take a minute to Google Greensboro Auto Insurance you'll get nearly 500,000 results! Seriously? That's almost double the population of Greensboro. Who knew Greensboro auto insurance agencies were so prolific?

Actually, there's one listing that pegs the number of Greensboro auto insurance agents and brokers at 123 and provides a complete alphabetical listing. But with all these choices, how are you supposed to narrow down your selection?

First off, many agents represent one single insurer, meaning they have few options as to what they can offer a client. Independent brokers, on the other hand, represent multiple insurance companies and are able to offer a much wider selection of comparative policies. If you're looking for maximum options, look to an independent broker representing a collection of different insurers.

Questions To Ask

Whether you've just started driving and are looking for your first policy or you've been with the same company awhile but have decided to shop around to see if you can get a better deal, there are some questions you should have ready to ask your prospective insurance provider. You may have a basic idea about how car insurance works but lack knowledge regarding the finer points of a policy. Your goal isn't necessarily to get the very best policy possible or the least expensive. What you want is the best value for your money. Asking the following questions can help in accomplishing this. Remember, when comparing one policy to another you need to be comparing apples to apples, which means similar benefits, deductibles, discounts and premium amounts.

1. Will my insurance cover others driving my car? How about me driving a car belonging to someone else?
2. How does my job affect my coverage? Can I be involved in sales or delivery activities and still be covered? (Most policies do not cover these activities).
3. What discounts do I qualify for? Can you tell me about  all your discounts? (This is important. Many agents won't bring up all applicable discounts unless asked).
4. What coverage should I have over and above the minimums required by the State of North Carolina?
5. How is my premium affected by the deductible amounts I choose?
6. What are the premium payment options and which will give me the biggest discount?
7. What exactly does my insurance cover? (Get a walk-through of policy details).

Hopefully these questions will help as you shop for your automobile coverage.