10 Things You Need to Know About Car Insurance

10 Things You Need to Know About Car Insurance - Do you bother shopping around for car insurance? Do you bother to check the small print? When it comes to car insurance, most people fall into one of two camps. There are those who just renew with the same insurer, year after year, with the same insurer and there are those who scour the market and just go with the cheapest they can find. Either way, you could end up paying out far more money you need to, so here are ten surprising facts about car insurance that you may not have realised and a few tips to go with it.

1. Don’t lie on your car insurance forms
I suspect that most people tell the truth when it comes to the type of the car and the size of the engine, but what about the little things, like where you park your car, or what you use it for. If you say that your car is parked in a garage, and it gets written off while it’s parked in the road, the insurance company is quite likely not to pay out. Likewise, be careful about what you say you use your car for. Even driving your own car to a meeting is classed as business use.

2. Don’t forget that you might have to pay that excess one day
This really shouldn’t need saying, but people do get caught out with this. Taking out car insurance with an increased, voluntary excess will reduce your premiums, but only agree to an excess that you know will be able to afford. Even the most careful driver in the world can make a mistake or even have to take the blame for something that wasn’t really their fault, so don’t leave yourself open to an unexpected repair bill, just to save yourself a few quid extra each month.

3. Don’t forget to notify tour insurer of any changes
Another slip up that you can make with your car insurance is failing to notify the insurer of any changes to your circumstances. You will probably remember to tell them if you move home, but what about if you change your job, or your wife starts using the garage and your car is now parked on the road? If you fail to notify your insurer of any changes to your circumstances, you could end up not getting paid out for a claim.

4. Always pay up front if you can
If you can, it’s usually cheaper to pay for your car insurance in one lump sum rather than spread it over monthly payments. Most insurers treat monthly payments as a form of credit and they will charge you interest for doing it. The extra that you pay can be as high as 30% more, so do your sums!

5. Don’t renew without shopping around first
Shopping around for car insurance might not the most fun way to spend a weekend, but it could save you a lot of money. Insurance companies know that most people just renew without thinking, so they keep all their best offers for attracting new customers. Always shop around for car insurance and get a few quotes, or check it out on a price comparison site, before you renew any type of insurance cover.

6. Your fully comp car insurance may not be as compressive as you think
This is one area where reading the small print definitely comes into play, because the cheapest fully comp car insurance policy that you can find is probably not as compressive as you might think. Some of the common things that are missing from the cheaper policies are windscreen cover, legal cover and a courtesy car in the event of your own car being if the road.

7. Don’t claim unless you have to
If you have a minor collision, then it can often be cheaper to pay for the repair work yourself, rather than claim it on the insurance. Any type of claim that you make might increase your premiums and excess. You should still inform the insurer that you have had an accident though, that is often a requirement in car insurance policies.

8. Don’t only look at comparison websites to find car insurance
Price comparison websites certainly make shopping around much easier, but don’t forget that not all insurers are on them and those that aren’t, offer some pretty good deals, so that they can compete with all the companies that are on the comparison sites.

9. Do always take photographs of any accident
Sadly, there are a lot of people who see a minor knock in their car as a great opportunity to get a complete respray and six weeks off work with whiplash. I know because it happened to me!  However slight you think the damage is, take photographs of both cars, grab a witness, if there are any around and, if your insurer’s assessors want to check out your car, let them come and do it.

10. Protecting your no claims bonus doesn’t stop your premium rising
If you opt to pay to protect your no claims discount, that doesn’t stop your car insurance premiums rising of you have an accident. Your percentage discount may well stay the same, but the underlying cost of car insurance may still increase, which means that your premiums will still increase as a result of your having had an accident.

10 Surprising Things That Can Invalidate Your Car Insurance

10 Surprising Things That Can Invalidate Your Car Insurance - There are an estimated one million uninsured drivers on Britain's roads and that is what is partly to blame for the spiralling costs of motor insurance. You probably think that those people who are driving without insurance should be punished, but did you know that you could be driving uninsured and not even know it? There are reasons that would mean that, when it comes to the crunch, your car insurance won't pay out. Here are ten of the surprising ways in which you could be invalidating your motor vehicle insurance.

1. You've upgraded your car

If you don't notify your insurer when you upgrade your car, you could well find that your car insurance is invalid. This doesn't only apply to the obvious things, like increasing the engine size of your vehicle, it could also apply to something as simple as fitting alloy wheels.

2. Allowing your dog to run loose inside the vehicle

If you allow your dog to romp around inside your car then, quite obviously it could distract you from your driving. If you have an accident then your dog could get the blame and you wouldn't get any money from your insurer.

3. Being in arrears on your instalment plan

You need to make sure that all your car insurance instalments are kept up to date because if you have one payment that is outstanding, it will invalidate your car insurance, even if you have kept up the payments since that one missed payment.

4. Allowing your MOT to expire

If you forgot to take your car in for an MOT, then that could mean that you are no longer insured. Insurers will view a lack of a valid MOT as being an indication that the vehicle is not roadworthy and that will contravene the terms of your motor vehicle policy.

5. Using your car for business

You have to check the small print on some policies as to what is classed as business use and what is not. On some motor polices, your insurance will not cover you for using your own car to drive to a one-off business meeting. Some insurance policies don't even cover you for your daily commute.

6. Leaving your keys inside the car

Are you one of those people who leave the keys in the ignition of your car sometimes? Even if you leave your vehicle unattended with the keys in it for just a minute you will be uninsured. If you need to pop back indoors because you forgot something, take your car keys with you.

7. Car sharing

If you are taking friends to work in your car and they pay you for it, be careful that your insurance company does not take that as being an indication that you are running a taxi service. If you start to make any money at all out of car sharing, you could be invalidating your motor insurance.

8. Not abiding by road signs

If you ignore road signs that tell you a road is closed, or is not suitable for motor vehicles, then don't ignore the signs. Even if the road looks OK to you, if you have an accident, you won't be covered by your insurance if there was a sign that told you not to go there.

9. Starting a new job

Be careful if you get a promotion at work or if you change your job. Different professions are assumed to have different levels of risk so, what your job title says, could affect your insurance premiums. You need to advise your insurance company when you change your job, or they may not pay out when you need them to.

10. Not disclosing the driving history of a named driver

If you add a named driver to your car insurance policy, then you need to disclose details of any accidents that they have had in the past. Failure to tell your insurance company about the history of a named driver could mean that you are not insured to drive your car.

5 Tips for Buying Life Insurance

Tips for Buying Life Insurance - Buying life insurance is hardly an everyday purchase — you may do it only once or twice in a lifetime. So you may not know all the ins and outs of this important part of protecting your finances.

But you can benefit from the knowledge of folks who deal with life insurance matters daily.

They see not only the confusion of customers just starting their life insurance search, but also the problems on the back end, when bad decisions come back to haunt buyers and beneficiaries.

Several experts shared the best life insurance advice they’ve ever given — tips that could save you from making costly mistakes.

1. Before buying whole life insurance, compare term life quotes

“The only ones who really have great positive things to say about whole life insurance are insurance agents,” says Chris Huntley, president of Huntley Wealth & Insurance Services in San Diego. According to Huntley, personal finance experts generally agree that “you should buy term and invest the rest.”

Yet sales numbers show that permanent life insurance is hugely popular, indicating that life insurance agents are heavily pitching the product. Among U.S. households with life insurance, 50% own only permanent life, 32% own only term insurance and 18% have both, according to LIMRA, a financial services research group.

If you’re considering whole life insurance, Huntley suggests you also get quotes for a long-duration term life insurance policy, such as a 30-year term, or a policy that covers you to a specific age, such as 65. That way you can see what it truly costs to insure your life and separate that from the money you’d be paying for fees and the cash value portion of a whole life policy.

“Most people only need life insurance for 20 to 30 years,” typically to cover a mortgage, growing children or working years, Huntley says. “Talk to a financial expert about what you could do with the savings from buying term life insurance instead.”

2. Never name a minor child as a life insurance beneficiary

One of the best reasons for buying life insurance is to provide for children in case you’re no longer around. Here’s the problem: Minors can’t directly receive life insurance money. If you name a child as a beneficiary, “the life insurance company can tie the money up until the kid is 18. Then the child gets it — with no controls,” says Delia Fernandez, a certified financial planner and president of Fernandez Financial Advisory in Los Alamitos, California.

Fernandez recalls one father who named his young son as beneficiary of a $78,000 life insurance policy. The father died, and years later the young man received the funds at age 18. He blew through $57,000 of it on marijuana and trips to Las Vegas with his girlfriend, then had to spend the rest on rehab, she said.

Another young man received $75,000 from a life insurance policy when he turned 18 and immediately bought a sports car. But because he was young, no one would insure it. Nonetheless, he drove it to a party, where it was stolen, Fernandez said. Without insurance to cover the theft, he lost everything in just six weeks. “No one in the family can talk to him about that $75,000,” says Fernandez.

These mistakes can easily be avoided. Parents should create a life insurance trust for children that not only receives the money — no matter how old the child is — but also outlines acceptable uses. You can have the trust disburse specific amounts of the money at certain ages, like 25, 30 and 35.

While it may cost a few hundred dollars in legal fees to set up a trust for life insurance proceeds, it’s a good idea for young adults and essential for minor children.

3. Don’t let a former spouse use group life insurance to satisfy a divorce settlement

If you have a divorce agreement that provides you alimony or child support, it’s a good idea to also make sure it stipulates life insurance on your ex-spouse. Otherwise, you’d lose that important income flow if your former spouse died.

But using group life insurance from a workplace is not a good choice, says Chris Chen, a certified financial planner at Insight Financial Strategists in Waltham, Massachusetts. Term life insurance is fairly inexpensive, maybe cheaper than you think. More importantly, it doesn’t hinge on a job.

“These days the likelihood of changing employment or dropping out of the workforce is reasonably high,” Chen says. “If you have to change jobs, you might not have group life insurance there.” Or you might find that you’re no longer insurable due to health issues.

Here are more divorce-related tips from Chen:

• The life insurance buyer can align the policy’s term to the years of alimony or child support required. If the divorce agreement provides for 15 years of child support, you can buy a term life policy for 15 years.
• If you don’t control your ex’s life insurance but are a beneficiary, your divorce agreement should state that the life insurance policy will keep you as “a party of interest.” That way if payments stop, you will be notified.
• Disability insurance for an ex-spouse can be even more important than life insurance. If your ex can no longer work due a disability, he or she can go to court and seek a reduction in support payments.

4. Make sure your life insurance policy has ‘living benefits’

“Living benefits” have become a relatively common component of life insurance policies that allow you to access the death benefit money yourself while you are still alive under certain circumstances. Being able to tap into your policy this way could prove crucial if you become ill and need money to pay for living expenses or medical care, so make sure your policy has this feature, says Pamela Plick, a certified financial planner in Palm Desert, California.

Living benefits are generally considered “riders,” or policy extras, and include:

• An accelerated death benefits rider. This lets you access your payout if you are diagnosed as terminally ill. Rules vary but might include a life expectancy of 12 months or less, for example. It may be included with your policy or available for a small extra charge.
• A chronic illness rider. This lets you access your life insurance benefit without a diagnosis of terminal illness. Instead, eligibility to use the rider will generally depend on your inability to do two or more “activities of daily living,” such as eating, bathing and dressing.

Plick advises that you understand what life insurance riders are available to you and what you would need to do to claim the benefits.

5. Include payment with your life insurance application to make the policy binding

You don’t have to wait weeks for your life insurance application to be processed before coverage can begin. Include a check for the first payment with your application, and you’ll bind coverage retroactively to that day, says Marvin Feldman, president and CEO of the nonprofit education group Life Happens. It’s an easy way to make sure your family will have the financial safety net on the off-chance you die before your policy is processed.