Life Insurance: Should I Quit Smoking?

To your Greensboro life insurance provider, the most important concern when underwriting a life insurance policy is if you, the policyholder, are at risk of suffering a premature death.  Risk level is what determines the cost of any insurance policy and, where life insurance is concerned, whatever behaviors you exhibit may play into the formula used to determine whether you qualify for coverage from a particular insurer and at what price.

Following are some of the major factors that figure in to determining life insurance rates.  Some of these are criteria over which you have no control, such as age and gender, while others are lifestyle choices over which you have complete control:

• Age - you have no control over this main factor determining premium rates.  Older people are more at risk of dying sooner.  Young people are more likely to live longer and to pay premiums for a longer period of time.  
• Gender - statistically, females live longer than males and therefore have less risk to insurers of premature death.
• Smoking - any tobacco use, whether cigarettes, cigars, pipes or chew, has been shown to foster numerous health problems.  Smokers can sometimes pay twice as much for their coverage as nonsmokers.  This includes vaping and using nicotine gum, patches and even marijuana.  Quitting smoking not only saves on the cost of life insurance but also on the costs of buying all the smoking materials.
• Health - during most life insurance underwriting, a medical exam is required where certain vital information is recorded such as height, weight, cholesterol level, blood pressure, etc. While "no exam" policies may be available, coverage costs may be higher.
• Lifestyle - any risky pastimes such as motorcycle racing or mountain climbing will likely make a life insurance policy more expensive.  Dangerous occupations such as mining, fishing, or logging may also be considered risky by your Greensboro life insurance policy provider and will add to your cost.
• Family Medical History - if you have a family history (parents/siblings) of serious medical conditions which may have contributed to a premature death, this may factor into higher premium rates.
• Driving Record - insurers may look at your driving record to see if you exhibit any risky driving behavior.

Change What You Can

Not much you can do about several of the above factors, but smoking is something you can stop.  You should.  Save on insurance and prolong your life.

Reconstruction Cost Versus Market Value

When buying homeowners insurance, it's important to make sure you get the correct type and amount of coverage.  While it's not especially common for people to have too much homeowners protection, it's not uncommon at all for them to be underinsured.  In fact, according to current statistics, nearly two out of every three homeowners in America (59%) have homes that are underinsured.  It's been found that the average homeowner today only has enough insurance coverage to pay for 78% of the replacement or reconstruction cost of their home if it was to be destroyed by a covered loss such as a house fire.

Reconstruction Cost Versus Market Value

You may be surprised, as many are, that your homeowners insurance protects your home for a greater amount than you thought the property was worth (market value).  If so, you likely have a more realistic amount of protection than those homeowners who are underinsured, as most are.

"A more realistic amount of protection" means enough coverage to rebuild your home to like or original standards at today's costs for labor and materials within your particular geographical area.  This amount represents the actual reconstruction cost.

Unfortunately, most US homes are insured based on a property's market value rather than their cost of reconstruction.  With today's increasing prices for building materials and labor, it's continually becoming more expensive to rebuild a home than it initially cost.  You also have to factor in changes in building codes that require costly upgrades.

Why Underinsuring is so Common

One major concern with homeowners insurance coverage is that policyholders don't periodically update or increase the coverage on their homes.  Whenever remodeling or home improvements are done to your home, you should call up your agent and revisit your policy's coverage. 

Just the fact that building materials and labor costs continue to increase year over year, that annual or semi-annual update to your homeowners policy becomes imperative to ensure you maintain appropriate coverage on your home in advance of any catastrophe.

Additional (Optional) Coverage

When going over your policy specifics during your annual update, you may want to investigate these additional coverages to bring your policy in line with your reconstruction needs:

• Replacement cost coverage
• Building code/ordinance coverage
• Automatic inflation guard
• Extended replacement cost coverage
• Additional living expense coverage

Most policy holders surveyed report that they have not added or are not sure if they've added these important protections.

Many Thousands of Types of Surety Bonds

 

Surety bonds are contracts entered between three parties:

The principal, the business or individual purchasing the bond in order to guarantee future work performance.

The obligee, the entity requiring the bond.  This is often a government agency regulating industries in an effort to reduce the chance of financial loss. 

The surety, the insurance company backing the bond.  The surety provides a line of credit to be used in case the principal fails to perform in accordance with the terms of the bond and the obligee makes a claim against the bond.

Although it's not insurance as such, a surety bond is a promise and guarantee by one party to underwrite the debt, default or failure of another party.  Surety bonds ensure that services being performed by one entity for another are fully and properly completed.  If not, the party suffering damages due to the service not being completed or being done improperly, may take a claim as the obligee for full compensation within the financial limits of the bond.

How Does It Work?

Regardless of the bond specifics, it is a legal agreement among the three parties as explained above.  The principal is the individual or the business who has promised to provide professional services and is the one who pays for the bond.  The obligee is the individual for whom the service is being provided and the one who suffers if the service is performed improperly or is incomplete.  The surety is the entity who provides compensation to the obligee in the event the principal fails to perform according to the specifics of the bond.

Types of Surety Bonds

Surety bonds can fall into one of three general categories:

Commercial Bonds - used to keep working professionals from either committing fraud or using harmful business practices.  These types of bonds are typically license and permit bonds and are commonly required by the government before issuing licenses and permits.  Some common examples include sales tax bonds, auto dealer bonds and business service bonds.

Contract Bonds - used to ensure contracts are completed according to the terms of the contract.  Commonly used in the construction industry, the three most common types are Bid bonds, Performance bonds and Payment bonds.

Court Bonds - put in place to reduce risks of financial loss to persons pursuing a court action.  

It's estimated that there are more than 50,000 bonds in the U.S.

Preventing Theft While on Vacation

 

Preventing theft while you're on vacation calls for proactive deterrence measures along two avenues:

1. Prevention needed to ensure that your home, property and personal belongings are safe from would-be vandals or thieves wanting to break in, believing your property is unoccupied
2. Preventive steps needed to ensure the safety of your person, your family and your personal belongings during your travels

Home Burglary Protection While on Vacation

According to statistics gathered by the FBI, a home is burglarized in the US every 15 seconds, with an average loss of approximately $2,188 per burglary.  This means there are about 4,800 burglaries every day or 2.5 million per year.

While nearly 50% of all homes in the US are without a security system, statistics show that a home without a security system is three times as likely to suffer a break-in or burglary.  Burglars are known to look for signs of a security system in a property they're considering robbing.  They'd much rather prey on a home without a system and, if a system is apparent, will often move on to a different victim.

This makes an active home security system the number one item for preventing home theft, especially if the alarm is monitored by off-site authorities.  Systems are also available that can notify you personally on your cell phone if your home security system is triggered.  Other theft-deterrence items include:

• Solid wood or steel exterior doors with deadbolt locks.
• Motion-activated sensors on exterior flood lights and cameras.
• Locks on pet doors.
• Hardware installed on garage doors to prevent easy access.
• Windows should be locked and blocked and basement windows have well covers.

Make sure you have comprehensive homeowners insurance protecting your home and personal belongings.  Complete an inventory of your personal belongings.  Include photos and serial numbers.  Some other safety tips for protecting your home while on vacation include:

• Don't publicize your upcoming travel in public or on social media
• Put a halt on your newspaper and mail deliveries or arrange for a trusted friend or neighbor to collect them regularly
• Put an inside light on a timer
• Park your car in the garage and ask a neighbor to park in your drive once in a while
• Make sure your lawn gets trimmed

Preventing Theft on Your Travels

Tips to avoid theft while on your travels are too numerous to list individually here but many can be found here and here.

Do I Need Insurance for My Moped or Scooter?

 

In North Carolina, low-powered vehicles like mopeds, scooters and e-bikes have become more popular lately, especially since the cost of gas has been rising so significantly.  If you're thinking of becoming a convert to this form of two-wheeled transport, you may have questions about the insurance requirements you'll face in order to operate your moped or scooter on North Carolina roads.  You can find answers to those questions here.

Mopeds or Scooter?

In the State of North Carolina, a motorized two-wheeled vehicle with an engine less than 50cc and a top speed of less than 30 mph is legally considered a moped.  A moped usually has pedals, like a bicycle, but not always.  Traditionally, mopeds had pedals, thus the name, which is a combination of motor and pedal.

A scooter, defined as having an engine size of 50cc or greater, is considered a motorcycle but, to be considered a scooter, will have a platform to put your feet.

Moped Requirements

State laws in North Carolina require that all mopeds operated on public, state-maintained roads be registered with the state division of motor vehicles.  They are not required to be titled.

The law also requires these vehicles be covered by at least a minimum amount of liability insurance in amounts as follows:

• $30,000 bodily injury liability coverage per person per accident
• $60,000 bodily injury liability coverage for all persons per accident
• $25,000 damaged property liability coverage per incident

This liability protection is for losses suffered by a third party or parties in an accident deemed to be your fault.  The minimum required amounts are the same as those set for larger scooters or motorcycles and, in the event of an actual accident, especially a seriously damaging one, may be significantly lower than the costs an at-fault rider will face.  You will be personally responsible for any costs above these minimum amounts that your insurance is obligated to cover.  Financial experts generally agree that your liability protection should be considerably more than what's required by law.

Approved motorcycle helmets are required to be worn at all times when riding either a moped or scooter on public roads.  You're required to have a valid driver license on your person when operating your scooter, but a license is not required to operate a moped.  You need only be sixteen years of age, have it registered with NC DMV and display a state-issued license plate.

What Does Golf Cart Insurance Cover

Each U.S. state has its own laws regarding golf carts, including: 

• Who can legally drive them?
• Where they can legally be driven?
• When they can legally be driven?
• What insurance, if any, is required or recommended?

Senior Transport

Golf carts aren't just for use on the golf course.  They can often be seen buzzing around gated communities and are especially favored by seniors for traveling short distances in lieu of walking, particularly when transporting various items.  They can be seen at swap meets where there may be lots of ground to cover or on large properties where distances between buildings may be too great for easy walking for some.

Golf carts may be driven on public roads in North Carolina provided applicable laws are followed.  These include the following:

• Driver must be at least 16 years of age and licensed to operate a motor vehicle in the state.
• A golf cart may only be operated during daylight hours unless fitted with two headlights and two tail lights, in which case it may be driven during any hours.
• Golf carts may only be driven on public secondary roads with posted speed limits of 35 mph or less.
• Golf carts on public roads must be registered with the NC DMV and drivers must have proof of ownership.
• A minimum amount of golf cart insurance (liability coverage) is required and proof of this insurance needs to be carried when you're operating your cart.

NC Golf Cart Insurance 

Golf carts driven on public roads in North Carolina are required by state law to be covered by at least a minimum amount of insurance in the form of liability coverage.  Like requirements for other motor vehicles driven on North Carolina's public roads, minimum golf cart insurance requirements include:

1. Bodily injury liability coverage amounting to $30,000 for one person per accident and $60,000 for all persons per accident
2. Damaged property liability coverage of $25,000 per accident

As with your standard automobile insurance, golf cart coverage is available with a number of options beyond the required liability protection.  These options include:

• Collision - pays toward the cost of repairing your cart if it's damaged in an accident
• Comprehensive - pays toward repairing or replacing your cart if damaged or destroyed in a non-collision loss such as fire, theft or vandalism
• Medical Payments - pays toward medical expenses if you or your passengers are hurt in an accident

 

 

How Do Car Insurance Companies Set Rates?

All types of insurance, including car insurance, involve a transfer of risk between two entities - the insured and the insurer.  As a car insurance policyholder, you're contracted with your insurer for them to underwrite a number of the risks posed by the ownership/operation of your vehicle.  The number of risks being underwritten will partially determine premium rates.  The greater the risks being underwritten, the greater the policy premium costs.

These risks protections may include:

• Liability coverage for bodily injury or death of a third person or persons (legally required coverage in NC)
• Liability coverage for property damage of a third person or persons (legally required coverage in NC) 
• Uninsured motorist coverage (legally required coverage in NC)
• The risk of collision
• The risk of a non-collision loss such as fire, theft, vandalism or severe weather damage
• Personal Injury Protection to help toward the medical costs of your own injuries, regardless of who is found to be at fault

Collision coverage is typically the most expensive portion of a car insurance policy, since the risk of a costly claims payout may be greatest in a serious collision deemed your fault.  This high cost can be reduced by increasing your deductible amount from, say $500 to $2000.  The amount of your policy deductibles is another factor affecting your final policy rate. 

Other Factors Affecting Car Insurance Rates

A broad range of data is used by car insurers to determine rates.  Some factors are more important than others but, taken together, they give underwriters a good idea of what kind of insurance risk you represent to their company.  Consider the following:

• A major rating factor, especially for young drivers, is policyholder age.  The most expensive rates are for teenagers and the least expensive are for those drivers in their 50s.  The reason is because teens have proven to be faster, more reckless and aggressive drivers.  Higher risks equal higher premium costs.
• Driving history - a history of moving violations and/or accident claims are a red flag and will cause higher costs.
• Location plays a role because certain zip codes show higher accident rates and higher risk of theft, vandalism, wildfires or floods.
• Gender - primarily affects young drivers.  Young males are more likely to drive recklessly than females.
• Mileage traveled - more miles driven means higher risk to your insurer.
• Age and value of your vehicle plays a role in rating your insurance.