Get Out Of Debt

One of the more reassuring myths we have today is that it’s always possible to achieve certainty. Even if it’s only being wise after the event, we can always tell who was at fault, who deserved to win, and so on. This gives us all a pleasant feeling of security. If we feel someone somewhere is in control of “things”, we are trusting and more confident “things” will turn out right. Except, of course, there’s no such thing as absolutely certainty. As anyone with even the vaguest interest in sports or gambling and setting odds will tell you, everything can work out different to what you expect or hope for. So never assume the car insurance company knows everything. Yes, they employ these actuaries who work out all the statistics and come up with probabilities. This allows the insurers set general premiums for classes of drivers. These actuaries comb through all the records of every traffic accident. They know who was driving what vehicle at the relevant time, what the road conditions were like, and so on. Adding them all together gives them the right to say younger drivers have the most accidents so they should pay the highest premiums.

Except we should ask whether this is fair. At some point, we are all learning to drive. Equally, we are all going to get old with poor eyesight and slowing reflexes. We can all be distracted at the wrong moment. Every vehicle can have a mechanical failure and deprive us of the ability to slow down or steer where we want to go. So, if the insurers wanted, they could put everyone in the same class as “drivers” and average out the cost of loss between everyone. This would set a “fair” premium. Everyone would pay the same for the right to drive on the roads. In this, the good drivers would be subsidizing the bad, the lucky drivers the unlucky, and so on. What could be more fair than that?

Ah, but you are now up in arms. This is socialism/communism! It’s redistribution! It’s punishing the good drivers by making them pay for the freeloading bad. You say the fair system takes every driver as an individual and asks what vehicle he or she drives, how many miles a year will be covered and at what times of the day, and so on. The individual takes responsibility for his or her driving and never pays anything towards anyone else’s liabilities. Actually, that describes self-insurance where you pay all your own liabilities out of your own savings. All insurance groups people together and shares the risk. That’s why grouped premiums are lower than an individual’s costs should there be a claim. So, car insurance companies strike a compromise. They group similar drivers together and share the cost of loss between them for the general premium. Then the insurers increase or decrease the rate depending on the actual driving record. This means young drivers will pay the highest premiums of all groups, but the best young drivers will pay less than those who manage to hit trees or other moving objects.

There are two major types of health insurance that consumers can choose from, a PPO plan or an HMO plan and you’ll run into both of these when you get your health insurance quotes. Today we are going to talk about the PPO plan.

PPO stands for Preferred Provider Organization. A PPO plan is an insurance policy that allows you to seek medical treatment from a designated provider who is a part of a network of providers and medical treatment facilities that was created by the insurer. Everyone within the network agrees to work for a certain price. If you have a coinsurance amount in the plan, then this agreement to work for a certain price can help you keep your out-of-pocket costs affordable.

In a PPO you also have the freedom to visit a doctor or treatment center outside the network. You will not have all your medical costs reimbursed if you seek treatment outside the network, but your insurance policy will cover some of your expenses. That means if you have a doctor you love who is not in the network, you can still see him or her although it will be more expensive.

There are often copayment amounts with your PPO plan. These copayments are fixed amounts that you must pay your healthcare provider or facility for treatments you have had. You will generally receive a fixed list of these costs when you take out the policy so that you know what to expect.

Your PPO policy may also have a deductible, which is an out-of-pocket amount that you must pay before your insurance benefits will kick in-much like the deductible you have for your auto insurance or homeowners insurance policy.

And because insurance companies cannot guarantee unlimited coverage for all the medical expenses you might have over the course of a lifetime, your PPO policy will likely have limits that are the maximum benefits your policy will pay out. Since most limits are set at one or more million dollars it is unlikely that you will need to worry about exceeding these limits over your lifetime.

So before you decide whether to use an HMO or a PPO to fulfill your insurance needs, make sure you compare the benefits and drawbacks of each plan and find the one that works best for your lifestyle and budget.

When you are shopping for a health insurance quote one of the things you might consider is a group health insurance policy. But you should know that there are many drawbacks to group health insurance policies that can adversely affect you and your family.

The Difference between Individual and Group Policies

Before you get a health insurance quote you should understand the difference between group and individual health insurance policies. Group health insurance policies are those issued to employer, fraternal or trade groups. They have advantageous rates because there is a distribution of policies to both sick and healthy people. In addition, group insurance policies are not individually underwritten so your individual health problems are not taken into consideration when you buy into a group health insurance plan.

Individual insurance policies are issued to individuals and families. The rates are based on the health history and potential health future of the individuals the policy is issued to. The policy issuance is not dependent on being a member of any particular group. You can be denied coverage if you have certain illnesses unless you live in a state with guaranteed issue policies.

The Drawbacks to Group Health Insurance Policies

You can only keep a group health insurance policy for as long as you are a member of the group. Once you leave the group you may have access to COBRA, which allows you to carry the group insurance coverage up to 36 months after you leave the group. If you get a group policy while you are healthy and then you become chronically ill while you have the policy, you may no longer be able to get your own individual policy.

Additionally, while you may be able to choose between plans in your group’s benefit profile, there is no guarantee that the group will offer the type of policy or coverage options that you and your family really need. You may be subject to a restrictive set of doctors and treatment centers, may not be able to see doctors that you are used to seeing and may not have certain care options that you are used to getting.

In short, if group health is the only kind of policy you can get due to poor health or financial issues, then it is a good choice. Otherwise, an individual policy may be a better bet.

There once was a time when flipping a house was no big deal. You simply bought the second property, took a few months to redo the cosmetic damage and create the home of someone’s dreams, put it on the market for way more than you paid for it and more than you paid to fix it up, and then it sold. No muss, no fuss and, for some property flippers, no need for homeowners insurance.

But times have changed and real estate in the U.S. is not selling as it once did. While the home buying credits were in full force in early 2010, the real estate market picked up a bit, but now we are back to our normal lows. Not only that, but property values have fallen as well so you can no longer sell properties for as much money as you once could.

That means that many flippers have turned into the owners of multiple homes that they are forced to turn into rental properties so that they have some income to cover carrying costs. But now that they will own the secondary properties they purchased for years and years, they definitely need to consider some insurance.

It is not up to these new landlords to invest in home insurance that covers contents of the property. That would be the responsibility of their renters. So when you get home insurance quotes, there is no need to concern yourself with contents-but dwelling and other structures are definitely coverages you should consider. But because of the liabilities involved in renting a home out to other individuals, you need to be clear when you get your home insurance quote that the coverage is for a rental property and not for a primary residence. That way your insurance company can ensure that you get all the coverage you need for accidents, damages and insurable incidents that could be caused by your renters.

Whenever you work with a real estate agent to by a new home, townhouse or condo, there is one real estate truism that consistently bursts out their lips: Location, location, location! From the real estate agent’s point of view, the location of your home is the most important aspect to consider when buying because everything else about your home can be changed. Floors, walls, ceiling, even landscaping of your new home can be altered beyond recognition, but the neighborhood, the view and the area your home or condo is in is something that cannot be edited, influenced or changed in any way.

When it comes to underwriting your home insurance policy, your underwriters also consider your location an extremely important consideration-but not for the same reason as your real estate agent. Your underwriter doesn’t care about how your view, location or neighborhood influence your life-they care about the innate risks that these factors carry.

Certain locations could be high crime areas. While you might think that the location is bound for a renaissance and is a good investment, your home insurance underwriter is going to look at the practicality of living in a crime-filled area and is going to consider how this will affect your experience. Since it means that you are a higher risk for theft, they will likely add extra premium dollars to help hedge that risk.

If you live in a home with a wonderful view of the water it might make waking up every morning a glorious experience, but it also means that you could be more likely to suffer storm damage during a hurricane. The insurance underwriters don’t care about your glorious morning routine, they care about the fact that you are delivering increased risk based on your home’s location, and they are going to charge extra for that.

So remember, it is one thing to fall in love with the view, the neighborhood or the architecture of your home before you buy it, but it is a whole different story to think about how these considerations will affect your home insurance underwriting. Before buying a home, condo or townhouse, try to find a balance between a location that makes you happy and that makes your underwriters feel safe about issuing your policy. Then you’ll end up with insurance that you can afford and a home that you love-and what could be better than that?