September 30th, 2009 by sugig

Getting a good deal on auto insurance and keeping your premium from rising is hard. Here are a dozen ways the industry works, with tips to help you save:

1. If you have good credit, you’ll pay less. Almost all insurers pull your credit report. Studies show a direct correlation between your credit score and the likelihood that you’ll file a claim. Insurers know that if you pay your bills on time and have the same credit accounts for a long time, you’re more stable than someone who pays late and frequently opens/closes accounts. This information is used to create your “insurance risk score,” a factor that determines your auto-insurance rate.

Tip: If you have unusual credit activity, wait a month for it to return to normal before buying auto insurance.

2. Your car model affects your premium. The auto insurers have a rating system for every car make and model. Most use a system devised by the Insurance Services Office, which starts with the vehicle cost, then factors in safety and theft data. Cars are rated from 1 to 27. Higher number means higher premium. If you’re buying a new car, ask your insurer about the difference in premiums for cars you’re considering. Search online for the latest top 10 lists on the most and least expensive cars to insure.

3. Pay in full to avoid installment fees. Payments usually are offered on a six-month, quarterly or monthly basis, but most insurers charge an administrative fee for breaking up the payments. The more you break it down, the more those fees add up.

Tip: Remember that insurance companies can cancel your policy for late payment, sometimes with minimal notification, so make sure you don’t miss an installment. If you can pay the premium up front it may save you a few dollars.

4. That Beethoven CD in your car isn’t covered. Stolen or damaged personal items aren’t covered by your auto insurance.

Tip: You can file a claim on your home insurance. Most home-insurance policies will cover smaller, less expensive items such as compact discs. But if you carry expensive items such as computer equipment, ask about a rider to your home-insurance policy. It’s wise to take photos or video of any expensive personal items before they go missing.

5. You’ll pay for your bad driving. The industry standard is to increase your premium by 40% of the insurer’s base rate after your first at-fault accident. For example, if the company’s base rate is $400, your premium will go up by $160. Not all auto insurers play by this rule, though, and some may increase your individual rate by 40%. Regardless of what formula they use, most of the time, your rates will increase.

Tip: Some insurance companies have a “forgive the first accident” policy. The qualifying variables are wide-ranging, so ask your company if it has a forgiveness policy and how to qualify.

6. You’ll pay for your friend’s bad driving, too. If your friend borrows your car and crashes it, you’ll have to file a claim with your insurance company. You’ll have to pay any deductible that applies, and your rates will probably go up as a result of your claim.

Tip: If your friend didn’t have permission to take your car, in most cases you won’t be held liable for the damage. But if your friend is uninsured and causes damage that exceeds your policy limits, the injured party can come after you for medical and property-damage expenses. Best bet? Don’t lend out your car.

7. Your car’s real worth. The value of your “totaled” car may surprise you. Auto-insurance companies don’t use the standard Kelley Blue Book or National Association of Automobile Dealers value. Instead, each company has its own proprietary list of car values, and most have specialized software for valuing cars in each region. They take into consideration the car’s mileage and pre-accident condition. The insurance company may also ask local dealers what they’d charge for a similar replacement car. However, the insurer will consider quotes from suburban towns as reasonable estimates. You might have to drive several hours to reach the cheapest dealer, just to save the insurance company money. And they might be quoted a better deal than you could get if you walked onto the lot.

Tip: If you disagree with your insurance company’s value determination, there are several things you can do:

Next time, get “gap” insurance. It will pay the difference between what an insurer will cover and what you owe, which can be several thousand dollars.

If you have maintenance records that show you’ve had the oil changed every 3,000 miles and you’ve had the car checked routinely by a mechanic, present copies to the insurance company to show the car was maintained. If you’ve been paying premiums on any special parts or upgrades, make sure those are included in the insurance company’s evaluation.

Get price quotes on replacement cars from three dealers within a reasonable driving distance and submit these to your insurance company. Ask the insurance company for a list of dealers within a specific distance who can sell you an equivalent car for the value the company is claiming. If you still aren’t satisfied, you can step up the process and go to mediation or arbitration. Mediation involves presenting your case to a neutral party for help in reaching a compromise; arbitration is a binding decision. You can also, of course, take the issue to court.

8. Check into “diminished value.” Say your car has been in an accident, but repaired. Is it worth less than the exact same car that hasn’t been in an accident? It’s a hot topic, but some say yes. In 14 states, you’re allowed to file a claim with your insurance company for that lost value.

Tip: Thirty-six states and Washington, D.C., allow insurers to exclude payments for diminished value, so if you live in one of those states, you can’t claim the loss. But in Florida, Georgia, Hawaii, Kansas, Louisiana, Maine, Maryland, Massachusetts, North Carolina, South Dakota, Texas, Virginia, Washington and West Virginia, you have a chance of getting a diminished-value payment. If you weren’t at fault in the accident, you often can make a successful case against the insurance company of the at-fault driver.

9. You may not owe sales tax on your replacement car. Twenty-eight states require auto insurers to pay for the sales tax when you replace your totaled vehicle with a new or used car: Alaska, Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Vermont, Washington, West Virginia and Wisconsin.

Tip: Make the request; don’t expect the insurer to offer to pay upfront. Even in states that do not require sales-tax reimbursement, you should request it. Many auto insurers will not deny the request because the policy requires that they make you “whole,” returning you to where you were before the accident at no cost to you.

10. The tax will be calculated based on the pre-accident value of your car. If the insurance company values your car at $10,000, and you purchase a new car for $20,000, the tax will be calculated on $10,000.

11. You can wait to add your teenager to your policy until he or she is licensed. You’re not required to add your teenager to your policy just because he/she has reached driving age. Usually you can wait until he/she has a license or, if you’re in a high-risk insurance pool, a permit.

Tip: Don’t forget to tell your insurance company that you have a licensed teen. If you have to file a claim on his/her behalf, your insurer is entitled to charge you back premiums from the date your teen received a license.

12. You must officially cancel your insurance policy when you switch insurers. Your policy likely states that you can cancel by notifying the company in writing of the date of termination. Don’t assume that you can terminate the policy at the end of the coverage period by simply ignoring the bill. The insurers won’t see it that way. They’ll send you another bill for the next premium payment, and when you don’t pay it, you’ll be cancelled for nonpayment. That goes on your credit record.

Tip: Call your insurance agent or company and state that you’re canceling your policy. Give a specific date, or you may end up uninsured for a period of time. The company will send you a cancellation request. Often, the form is already filled out and just requires your signature. Read it to check for errors. You may have to provide proof of new coverage to your former insurer. And if you’ve financed through a dealership, give the dealer your new insurance information, because purchase contracts often require proof of coverage.

September 27th, 2009 by sugig

Virtually everyone experiences a time in life when money is extremely tight. While these aren’t the best of times, we have to find a way to overcome our financial crunch and get back to a quality living. Luckily most people have a variety of ways that they are able to cut the costs of their daily living and allow themselves to live substantially better in a short period of time.

One of the easiest ways to cut back money is to look at your account and see what you are paying for that you don’t need. This could range from a monthly credit score checker, to a subscription to Netflix or Vongo, or could be virtually anything that is a monthly subscriber fee. You can start by eliminating these items. That should save a pretty good amount of money to start. Most everyone has several subscriptions.

Next you need to consider how often you go out to eat. You are in a financial crunch, try to eat at the house at all times. This will save you far more money than you can imagine.

Try lowering your other bills by lowering your cell phone plan, possibly switching to a house phone. Remove your cable, lower your internet plan, turn off the lights when you aren’t in the house, make sure that you turn off the heat or air when you leave the house or turn it down substantially.

Next, you will find that you probably just freed up a few hundred dollars extra per month. The next step is to take advantage of this extra money while you are already suffering through the financial crunch so that you don’t have to ever experience it again. Take this extra money and apply it to your credit cards, starting with the lowest balance one first. Pay them off one at a time until you have no credit card debt. This will solve a lot of issues, including improving your credit, all in one. Now, you have even more freed up money that you can use to payoff other debts. The idea is to keep paying off your debts, until you are capable of living with relatively few overall expenses. Without all of the extra expenses, you will find that you can live extremely well and even be able to put away a little money into your savings each month.

The trick is to understand your problem, live tight for 3-6 months, and by then if you are paying off debts, you should have enough freedom where you can return to your previous quality of living, plus have extra money to play around with. The longer you are able to leave cheaply and pay off your debts, the better you can make this situation, until you really only services to pay for each month, which would be the ideal situation both for your credit score and for your own monthly financial situation.

September 23rd, 2009 by sugig

I am convinced that Mutual Fund investing is more profitable than investing in single stocks over the long run for the average investor. My own portfolio of funds bears this out over a 40+ year period. I made more than several individual stock purchases during this period based on good information and investigating the stocks as best I could with the tools available at the time. Most of those stock transactions were not as profitable as the fund investments. In fact, the only money ever lost was in individual stock transactions.

The key for the average investor is to find Mutual Funds that are “no load” and have decent management fees. You can usually invest with a minimum $2000.00 in most funds. Some will let you start with less if you set up for a monthly investment plan. These are especially prevalent in the IRA arena. Do be especially aware of the total cost of all fees you are being charged as 1% or more can make a vast difference in the amount of money you will have over a long investment period.

As a note to all very young peopletime is on your side and the power of compounding is an awesome principle. Start as early as possible, save something from every paycheck or receipt of money that comes your way and don’t be too conservative in your choice of investments while young. You have a long time to ride out these up and downs in the financial markets. Once you become older you can invest in less aggressive funds that take less risk. Read at sites like Morningstar.com that has huge amounts of data on the different funds. They have unbiased reporting similar to Consumers Report.

“Don’t put all your eggs in one basket.” So buy funds that invest in different sectors, both US and overseas. Review these funds occasionally and rebalance them as your risk tolerance changes. That is keep yourself diversifieddon’t let one fund become too large of a percentage of your total investments unless you have substantial reasons based on your investigations to allow a bet on one sector over another.

If you really think you have discovered the next Microsoft and want to dump all your money in that particular stock; my advice is to buy lottery tickets insteadyou have about the same chance for success.

September 19th, 2009 by sugig

Before you sign to borrow money, you need to understand the cost. This goes for any type of borrowing, whether it’s a bank loan, a car loan, credit card, or mortgage. There is a cost involved, ans sometimes that cost can be very high.

The first cost is interest. Be aware, this isn’t straight interest, it’s compounded on a regular basis. For instance, lets say you borrow $10,000 at 10% APR (Annual Percentage Rate). When you repay the loan, you’re not going to get away with just 10% (in this case $1,000). No, that interest is compounded. Every period that interest is added to the total you owe. when you make payments, some of the money goes to pay down the debt, but a big chunk of it goes to pay the interest. In this case, over the course of a 5-year loan, you will have paid over $2,700 in interest. That’s on a fixed rate loan. The interest on a credit card is many times more expensive.

That’s only part of the cost of a loan. The other cost is what you lose out on by having to make those loan payments. So, instead of paying out an extra $2,700, let’s say you invest that in a Roth IRA, and leave it there untouched for the next 25 years. At the same interest rate (10%), that money will have grown to nearly $20,000.

The other cost of borrowing money is that it can become a vicious circle. You borrow money, now your money is going to pay off the loan instead of going into savings. When an emergency comes up you don’t have enough in savings to cover the expenses, so you have to borrow more money, which takes away more of your income.

If you have to borrow money, do what ever it takes to pay off your debt, even if it means taking a second job. Your financial health depends on it.

September 16th, 2009 by sugig

Do you have enough of the right kind of insurance? If you get hit by a disaster – fire, flood, earthquake, will your home and possessions be covered? How do you know if you are truly protected?

Insurers claim it is the responsibility of the homeowner to determine the appropriate levels of insurance for their property. However, your insurance agent or broker will not know your property and your possessions as well as you do. You need to accept the responsibility to properly insure your house.

If you do not purchase the appropriate amounts of coverage, the loss will be yours to suffer.

Back in 2003 and 2007, homeowners throughout San Diego County suffered devastating losses of their homes. Multiple fires raged in all regions of the County and people helplessly watched as their homes and possessions turned to ashes.

Now, years after the fires, homeowner’s losses continue to increase and many have not been able to re-build. The main reason for the increase of loss is due to the widespread issue of homeowners being underinsured.

These San Diego county fire survivors have learned a very important lesson. Relying upon their insurance agent or insurance company to set the limits of their policy was not a good idea. It only hurts the homeowner, without repercussion to the insurance agent or insurance company.

How can you prevent this from occurring?

There are several coverage areas that need to be considered. Some of the areas to review are:

· Replacement Cost versus Actual Cash Value
· Guaranteed Replacement Cost
· How to determine the real replacement cost value of your property
· Do not base the replacement cost limits on the amount of your mortgage
· Is all of your personal property correctly insured
· Do you have extensive or expensive landscaping, trees, plants or shrubs that need to have higher limits?

September 6th, 2009 by sugig

Single life might not be all it is cracked up to be, a life subjected to surviving in a world geared towards a two budget household. There has to be some ways to make living the single life a more pleasing and manageable experience. After-all the whole world doesn’t dream of being married with 2.5 kids a two car garage.

One way that comes to mind is having a room mate to split costs with you but not want to hop into your bed. Room mates can also be a great way to also have someone to keep you company if that is something you want.

Renting opposed to buying is another way to live where you want and not be responsible for every little thing that goes wrong with your appliances, your landlord will be.

Another sure way to always save money is eating in instead of going to a restaurant or getting take out not to mention much healthier as well.

Figure out your budget according to how you get paid decide how much your bills are for the month, what you are required to pay, and what you have left over. Doing that gives you a much better idea of what you have to spare so you won’t end up going over and putting yourself in the negative.

Avoid credit cards at all costs if it is not absolutely necessary because the interests you acquire are not worth it. You will end up paying that credit card for the next fifteen years if you’re making the minimum payment, and in the long run it will cost you much more than if you would have bought your purchase with cash.

Besides the things mentioned above anyone can save a few dollars here and there by cutting back on the things that are not completely necessary “our guilty pleasures”, but honestly you probably wont be single forever and have all the time in the world to cut back on your wants. So enjoy your single-hood now and have your fun before it’s too late.

September 3rd, 2009 by sugig

Credit that cannot be managed or is not being repaid requires debt consolidation. Debt consolidation offers borrowers with a chance to repay their high interest loans at low interest rate. You must be thinking, ‘it sounds good, but how is it possible.’ How can high interest loans repaid at low interest.

This is how debt consolidation works – it replaces multiple unsecured loans with single loan. As compared to several different loans, you obtain one single low interest rate loan. The single monthly payment on this loan is divided to repay the individual loans. This will also make your debt situation manageable. Debt consolidation should be accompanied with low interest rates; otherwise debt consolidation doesn’t make any sense.

It is almost mandatory to find debt consolidation with low interest rate. Otherwise, it would mean financial mishap of the worst kind. You might end up paying more in the long run. Debt consolidation plan can have serious shortcomings to if the plan is not carefully structured.

Finding a good low interest debt consolidation is not always easy. However, an extensive research can certainly open ways to find one. First of all it is important to understand that your financial situation is unique, so what works for your neighbour might not work for you. Your debt consolidation plan will be as unique as your financial status.

While looking for debt consolidation, keep in mind why you are looking for debt consolidation. You are trying to cut off your monthly payment, looking for low interest rate, low fees and a loan term that does not stretch beyond a few years. A longer loan term with low monthly payments would mean paying more. A debt consolidation loan should not stretch beyond 3-5 years and maximum upto 10 years. There are numerous companies offering debt consolidation online. Settle on the company which offers low interest rate debt consolidation with least hassle.

A way to debt consolidation is through credit cards. This debt consolidation would not require you to place collateral, so it can be a good option. Good credit history would provide you with low interest rate. Ask your current creditor what interest rates would be offered, in case you transfer balances from other credit cards to theirs. A low rate that is fixed with no transfer fee would be ideal. Otherwise, shop for a new credit card. However, don’t go overboard with your credit search. Numerous credit applications would have a negative impact on your credit report.

You can use equity in your house for debt consolidation at low interest. A 100% refinance would tap the equity in your house to repay loan and bills. Refinancing at low interest rate would mean getting rid of high interest rate loans with low monthly payment. Another way to tap on the equity is equity home loans. Home equity loan with fixed interest rate over a fixed period of time is an option. Also, you can take up home equity line of credit. Here you borrow upto a pre approved credit limit and borrow more if you still have money. These loans are offered with low interest rate and good repayment options and have great deals. With home equity loans, however, there is always a risk of losing the property if you fail to repay.

A debt consolidation loan that is unsecured would not come with low interest rates. Since you are offering no security, they imply risk to the loan lender. A loan lender would try to minimize his risk with higher interest rate. But with good credit, you might find exactly what you need. Try to look for another way to debt consolidation if interest rates are high. Calculate the cost of the entire loan term, before you settle on a debt consolidation loan.

Debt consolidation sounds like a very beneficial proposition to most of the borrowers but it may not always be good for ‘your’ finances. It is possible that with debt consolidation you end up paying a lot more interest rate. It is very essential to know whether debt consolidation is serving the purpose it is opted for, mainly, lowering interest rates.

Debt consolidation works as a boost to your credit situation. If you are looking for debt consolidation, you would be treated favorably because you are making an attempt to repay. And if you make your repayments on time, you will certainly be improving your credit. A positive credit history would make room for better finance options.

Debt consolidation in most of the cases is a good idea. But you need to be disciplined with your finances, henceforth. So, when you have finally opted for debt consolidation – no more loan borrowing. You don’t want to get deeper into debt. Without a plan and self restraint, debt consolidation won’t work. Debt consolidation with low interest rate would apply if you have only one thing in your mind – getting out of debt.

September 1st, 2009 by sugig

Owning credit cards is cyclical in nature.

Most people begin this cycle with the intention of:

1) Convenience.
2) Savings (”I got it on sale”).
3) Travel flexibility.
4) Payment shifting.

What seems easy at first - when finances are in balance - soon grows to include other cards with ever better options and choices. There is often a reliance and faith in this process, which can work, but only when that balance is maintained.

However, introduce too many errors:

Missed, shifted or forgotten payments, change of jobs/reduction in income, too many charged items at one time, far too many cards and choices and the interest factor starts to snowball.

It comes with every card and can grow exponentially. When that payment balance is finally lost, denial sets in and the shell game begins.

Credit card companies know all of the above and make their money from that unfortunate principle. Most of the profit they make comes from people in these situations. What they’re doing - for the most part - is offering unsecured loans at higher rates of interest than banks would charge on ‘normal’ debt.

Frankly, if a person can’t afford to pay for something to begin with then how on earth can they afford it with the added penalty of interest?

Ultimately anyone who finds that they need to borrow too often simply to pay for another card and/or meet living expenses will know that they have too many credit cards. It’s at that point that the ‘cycle’ is complete. They will have learned something about the concept of ‘easy money’.

Therefore, it seems that the wisest number of cards (2 or 3 perhaps) would be the smallest amount possible that gives the greatest flexibility and keeps you out of trouble.