Month: May 2014

It’s a rite of passage when a teenager gets their first part-time job. As their parent, you’re happy because hopefully they’ll learn how to manage money and develop some measure of responsibility. Unfortunately, a positive experience for your teen could become a negative one for you if they use the family car to perform their job.

For many teenagers, getting a part-time job means delivering pizzas or newspapers, working as a crew member for a landscaping company, or driving for a van service. One of the requirements for employment is that they have their own means of transportation, but what if that transportation is your family car?

Even though your car is insured under a personal auto insurance policy, if your child gets into an accident at work you could be surprised with a claim denial. For this reason, it’s important that you immediately notify your carrier when your child starts driving the family car for work. The insurer will likely charge you an extra premium, but it’s a small price to pay should your child get into an accident on the job. You should also find out whether there are any policy exclusions that might be applicable.

Many insurance carriers are reluctant to cover your teen if they use the family car for these typical part-time jobs because they often carry a great deal of risk. These jobs require the car be driven to different locations and at various times of the day and night. Because there are so many variables, it becomes extremely difficult for the insurer to adequately price the policy to cover the risk they are underwriting.

You may find that you have to purchase a commercial auto policy, which could be more expensive than your personal automobile policy. A commercial policy provides coverage for situations encountered while conducting business that aren’t normally covered under personal auto policies.

Although it may cost more, a commercial auto insurance policy is worthwhile if your child intends to stay at their job for any length of time. Many students keep the same part-time job throughout their high school and college years because it fits their schedule. If that is the case, be sure that your teen is covered during the time they are employed.

Many renters assume that because they don’t own their dwelling they have nothing at risk. In fact, a 2006 survey by the Insurance Research Council found that only 43 percent of people who rent their dwellings said they had renter’s insurance.

Although renters may not face the same level of risk as homeowners, they still have to protect themselves in the event a disaster strikes. Your landlord probably carries insurance, but this only protects the building – not the contents of your individual apartment or home. Renter’s insurance protects your personal property in case of fire, smoke damage, lightning, vandalism, theft, explosion, windstorm and water damage resulting from burst pipes, sprinkler systems, or malfunctioning heating/cooling systems.

The amount you receive if your belongings are damaged or stolen depends upon whether your policy is for “actual cash value” or “replacement cost.” Actual cash value coverage pays you what your property was worth at the time it was damaged or stolen, minus your deductible. Replacement cost coverage pays what it actually costs to replace what you lost, minus the deductible.

While protecting your personal property is an important reason to carry renter’s insurance, there are other equally important reasons you should never rent an apartment without it. Renter’s insurance provides you with liability protection in the event someone slips and falls while in your apartment. If this happens to you, you are covered up to the policy’s liability limit for an award in a court judgment and for your legal expenses.

In some instances, apartments are rendered uninhabitable because of fire, burst pipes, or another disaster. If the event is a covered peril under your policy, renter’s insurance will cover any additional living expenses you incur until you can move back into your place. However, there are certain limitations. Generally, the maximum amount you can receive is between 30 to 50 percent of the total value of the policy, depending upon your coverage. Your insurer will usually continue to pay while your home is being repaired or rebuilt, or until you find suitable alternative living arrangements. Some insurers cap the amount of time you can receive this benefit at 12 months, while others cover you for what they consider a reasonable length of time.

Finally, renter’s insurance can protect you in the event you cause unintentional damage to your landlord’s property.  In most instances of renter-caused damage, the landlord’s insurance company will pay for the repairs, but will seek reimbursement from the liable tenant. In this scenario, your renter’s insurance covers you for the reimbursement amount.

If you are currently renting an apartment and don’t have renter’s insurance, call your agent to discuss purchasing coverage. Your agent can show you how simple things like raising your deductible, or installing smoke detectors and burglar alarms, can help you get great coverage at an affordable rate.

While approximately 80 percent of car buyers either pay cash or finance their purchase, you’re considering joining the other 20 percent who are willing to forgo ownership and lease their next set of wheels. Perhaps you’re self-employed and able to deduct your lease payment as a business expense. Or maybe you’re trying to step up to a luxury model for less upfront cash.

Whatever your reason, if you do decide to lease, keep in mind that the amount of insurance protection you need will likely be more than if you decided to purchase. When you lease, your vehicle belongs to the leasing company. They want to ensure their investment is covered should you have an accident that damages or destroys the vehicle, or if the vehicle is stolen. They will also want you to carry sufficient liability coverage in case you are found to be at fault for an accident. This not only protects you from financial disaster, but also covers the leasing company if they should be held partly responsible in a lawsuit. While all 50 states have different requirements, on average, the minimum liability insurance coverage for most states is about one quarter of what leasing companies usually require.

You will also be required to maintain collision and comprehensive coverage, which pays for damages resulting from fire, theft, vandalism, civil riot, and collisions with animals. While you generally have a choice of deductibles, your lease contract may stipulate a dollar cap on the deductible amount. 

Your lease contract may also include what is known as “gap insurance.” If you wreck your car, this insurance pays the difference between the outstanding balance on your lease and the claim payment from the primary insurer.

After a major accident in which your car is badly damaged, the insurer has the option of “totaling” the car and paying you or the leasing company the actual cash value of the car, or repairing it. Without gap insurance, if the car is totaled, even after the leasing company receives the claim proceeds from the insurer, you may still not have satisfied your lease contract.

If your lease contract does not include gap insurance, you should consider purchasing it on your own. Otherwise, you could find yourself paying for a car you no longer drive in addition to paying for a replacement vehicle.

If the insurer decides to repair your car, make sure the repairs won’t cause problems for you at the end of your lease. Most lease contracts stipulate that you’re responsible for “excess wear and tear.” This phrase makes you responsible for any damage to the car, even that which was previously covered by your insurance.

To avoid repercussions resulting from the repair of your vehicle, be sure that all of the paint matches, the tires match, and that repairs were completed with original equipment manufacturer (OEM) parts. If the car isn’t returned to the leasing company in its expected condition, you may be responsible for the cost of additional repairs.

Buying insurance coverage for your motorcycle can be expensive as bikes present a higher risk than automobiles. They’re more susceptible to accidents caused by bad weather and poor road conditions. They are also less visible to other drivers, and less stable than cars.

In spite of this, you want to be sure you have sufficient coverage for your bike, because you‘ve likely invested a lot of money in it. To help you find the best coverage for the best rates, the Insurance Information Institute offers the following tips:

• Get seasonal coverage – Most bikers aren’t road warriors who consistently ride their bikes all year long. If you store your bike for several months out of the year, there’s no need to fully insure it. Many insurers offer seasonal policies that cover your bike for six to nine month periods of actual usage.
• Take a motorcycle-safety course – Some states require these courses before they’ll issue a motorcycle license. Even if your home state doesn’t require it, you may be eligible for a 10 to 15 percent discount on your policy for completing one. Before signing up for a program, it’s a good idea to contact your insurer. Some companies only recognize certain programs. If you’ve been riding for a while, you might be able to get a discount for taking a refresher course.
• Increase deductibles – A deductible is the amount of money you have to pay before the coverage kicks in. The higher your deductible, the lower your premiums. When choosing a deductible, make sure you can afford to pay out-of-pocket for any costs that are incurred before your insurance kicks in.
• Ask about multiple bike discounts – If you’ve got more than one bike, or live with someone else who rides, you can usually get a discount. Likewise, it might be worthwhile to insure your motorcycle with the same company that covers your car.
• Install anti-theft devices – If you financed your bike, you’ve probably taken out comprehensive coverage. Comprehensive protects against theft, fire, and other damages not caused by an accident. Some companies offer a discount on comprehensive coverage if you utilize an anti-theft device.
• Maintain a good driving record – Insurance companies analyze your driving history to determine rates. How you drive a car usually indicates how you’ll ride a motorcycle. If you’ve only recently obtained a driver’s license, you might want to wait a year or two before getting a motorcycle. If you maintain a good driving record, your rates will be lower once you’re considered an “experienced” driver.

Ride with a group – Membership in a motorcycle club, such as the American Motorcycle Association, BMW Motorcycle Owners of America, Harley Owners Group or Retreads can also save you some money on your the insurance premium.

Home is where the heart is—but it may also be a danger zone. It turns out that harmful substances found in everyday household items can be hazardous to your health.

According to recent studies, older people and young children are particularly vulnerable to the damaging effects of these products. However, a new study shows that a high degree of environmental awareness may help Americans reduce their exposure to hazardous products. That’s why it’s important to do your homework and understand which products carry a high risk.

Here are a few of the potentially hazardous household products you may want to avoid. While you may not be able to cut these things out of your life altogether, you should try to limit your exposure to these items:

Cleaning products

Many cleaning products contain substances like ammonia and chlorine bleach—two substances that can be extremely toxic. Ammonia is known to trigger to asthma, and chlorine bleach is a lung irritant that can be fatal if swallowed. Additionally, some cleaning products include a substance called glycol ethers, which is used to dissolve dirt. When absorbed in the skin this chemical can cause nerve damage.

Be sure to wear rubber gloves if you are cleaning with any of these products, and keep the room well ventilated. You may also want to wear a mask so that you don’t breathe in the fumes. If you want to avoid these cleaners altogether, you could try using hydrogen peroxide, white vinegar or baking soda instead.

Paint products

The fumes from paint and paint solvents, including turpentine and mineral spirits, can be harmful to your health. According to the Environmental Protection Agency’s Aging Initiative, when these items are used improperly, the fumes can stress your lungs and heart and even contribute to an irregular heartbeat. This is caused by volatile organic compounds (VOCs) contained in these products.

Be sure to use and store these types of products in a well ventilated area. You may also consider buying VOC-free paints, which are available in some stores.

Pesticides

The EPA says that people who have weakened hearts or lungs should avoid exposure to pesticides because it could lead to arrhythmia or heart attacks. Additionally, some studies claim that there could be a link between exposure to pesticides and Parkinson’s disease. Research suggests that certain people carry a gene that makes them more susceptible to Parkinson’s—and when these people are exposed to pesticides, it could trigger the disease.

Clothing

Believe it or not, the shirt on your own back could be contributing to health problems. Many permanent press fabrics and older flame-retardant and water-repellent materials contain formaldehyde, which can irritate your upper respiratory system. Clothing companies aren’t required to list these chemicals on their labels. However, experts suggest that you stick with untreated clothing made from natural fibers like cotton.

Nonstick pans

As wonderful as these pans are for stick-free cooking, they can also be harmful to your health. At normal cooking temperatures, these pans aren’t dangerous. However, if you leave an empty nonstick pan on a burner for an extended amount of time, it can release 15 different toxic chemicals, including two carcinogens.

Carpet pads and old furniture stuffing

A flame retardant known as polybrominated diphenyl ethers used in some carpet pads and stuffing in older furniture and mattresses can be unsafe. Some studies show that this substance can affect the thyroid gland as well as the nervous and reproductive systems.

If you own an older couch or mattress, make sure that no stuffing is exposed. If there is some stuffing hanging out of a rip in your old couch, seal the rip properly to reduce your exposure.

People are increasingly using golf carts for more than just golf. Many homeowners use them around their properties or even to travel to neighboring properties. For example, a couple may own a vacation home in a gated community located in a rural waterfront area. They have a golf cart that they use on the roads within the community to shuttle between their neighbors’ homes. The cart may suffer damage in some way or even be destroyed in a collision or fire. Also, it may injure another person or damage someone’s property; for example, it could roll over a person’s foot if the user has not parked it correctly. If something like this occurs, the cart’s owners need to have proper and adequate insurance.

Most homeowner’s insurance policies cover liability for injury or damage caused by use of a golf cart under specific conditions. They cover use of a cart while the user is playing golf on a golf course. They also cover her while using a cart for other leisure activities permitted by the golfing facility, while traveling to or from the golf cart storage area at the course, and while crossing public roads to get from one part of the course to another. Finally, it covers her while the cart is inside a “private residential community” that includes her residence, if the community has authority over the roads and has permitted the use of golf carts on those roads. For example, the gated community may designate certain roadways for golf cart use. If the vacation home is in that community, she has coverage for injury or damage she causes with her golf cart while on those roadways.

The policy will provide coverage for damage to a cart the policyholder owns only if she uses it to service her residence. Most people with golf carts use them for other purposes, so the homeowner’s policy offers little protection. However, a policy change (called an “endorsement”) can supplement it. The Owned Motorized Golf Cart – Physical Loss Coverage endorsement covers golf carts designed to carry four passengers or less and not designed or modified to go faster than 25 M.P.H. on level ground. It covers damage resulting from a wide variety of causes, including fire, theft, vandalism, and others; collision coverage is available as an option. The insurance company will pay for the cost (above the deductible) of repairing the cart or the cost of replacing it minus depreciation.

Another alternative is to ask for coverage to be added to an auto insurance policy. The Miscellaneous Type Vehicle Endorsement covers golf carts, and the policyholder can choose to cover the vehicle for some or all of the coverages that apply to cars on the policy. This coverage may be much broader than what the endorsement to the homeowner’s policy provides. For example, the auto endorsement can provide uninsured motorist coverage and No Fault coverage (if the policy is purchased in a state with a No Fault insurance law). However, not all auto insurance companies offer this; an insurance agent should be able to give advice on which companies will do so. It may be necessary to buy a separate policy for the golf cart if the auto insurance company declines to cover it.

Like any other type of machinery or equipment, a golf cart can offer great convenience, but can also involve the user in an accident. The financial costs of an accident can be significant. A homeowner who owns a golf cart should speak with an insurance agent about getting the insurance protection that makes the most sense for her.

Most Americans are driving less in order to save money on gas. However, decreasing the time you spend in your car can actually make you eligible for another savings opportunity, paying less for your car insurance. If you’ve cut back on your driving, it’s a good idea to contact your agent.

Consumers who are making greater use of public transportation or participating in car pools should contact their insurance company, because significantly reducing the number of miles driven each week could lower the cost of their auto insurance premiums.

Many companies offer low mileage discounts to motorists who drive fewer than 7,000 miles a year. Even though each insurance company calculates rates differently, they all consider how many miles a motorist drives because the risk of an accident increases the more time you spend behind the wheel.

However, decreasing the risk of accidents isn’t the only benefit to driving less. The money you can potentially save on premiums is significant. A motorist who drops from the average of 15,000 miles driven per year to 8,000 miles could qualify for a 5 percent premium discount. A driver who goes from 15,000 miles per year down to 5,000 could possibly receive a 15 percent discount. Keep in mind that your insurance carrier may ask for an annual odometer reading to calculate annual mileage.

The Insurance Information Institute noted some other ways drivers could save on auto insurance rates. SUV and truck owners who exchange their vehicles for a more fuel-efficient car might also reduce their auto insurance costs. Premiums are generally lower for a $30,000 mid-size sedan than for a large $60,000 SUV. Besides sticker price, an insurance company will determine the coverage rate for an individual vehicle based on factors such as the cost to repair it, its overall safety record and the likelihood that it will be stolen.

Drivers can also lower their auto insurance premiums by taking a higher deductible, maintaining good credit, and dropping unnecessary coverages. If you insure your boat, RV, or motorcycle with the same company, you may qualify for an extra discount on your auto coverage.

Rising gas prices are forcing consumers to give up their SUVs and pickups in favor of smaller, more fuel-efficient cars. On the one hand, this shift will greatly reduce the number of rollover incidents, a risk that accounts for 25 percent of all traffic fatalities each year. On the other hand, some experts, such as those at the Insurance Institute for Highway Safety, feel that the growing number of smaller cars on the road poses even greater risks. That’s because over 40,000 people were killed on U.S. roads in traffic-related accidents in 2006, according to the National Highway Traffic Safety Administration (NHTSA). A little less than 18,000 of those victims were riding in passenger cars at the time of the accident.

Certain design features of smaller cars place their occupants at greater risk in the event of a crash. These cars are lighter and more flexible, which means they bend more easily upon impact. In fact, when a small car hits a fixed-object like a telephone pole with its front-end, especially at a high speed, it can cause such a deep intrusion, that the engine can be pulled from its mounts, and hurled through the firewall towards the occupants.

To prevent this hazard, automakers are learning how to make smaller cars stronger. The first priority is to find ways to maximize the amount of energy they can absorb in crashes, so that they will be less resistant to severe damage upon impact. One method is to design these cars using higher-strength steel. The other alternative is to use materials like aluminum and forged alloy. While these materials have the strength of steel without the weight, the downside is they are far more expensive. The situation is further complicated by the fact that the learning curve for developing these structural changes is extremely long, which means that it will be a quite some time before these improvements are available to the public.

Although they have design flaws that make them vulnerable in high-speed collisions, smaller cars have some features that actually give them an advantage over larger vehicles. Smaller cars are more likely to avoid accidents than heavier ones because they can stop more quickly and are easier to maneuver. They are also equipped with collision avoidance technologies that are designed to prevent the car from becoming involved in a traffic accident.