Understanding Fair Market Value & Replacement Cost Insurance

The idea behind insurance coverage is that your losses are covered properly. So, the payment must be sufficient to replace whatever is lost, damaged or stolen. In that sense, claim payments based on replacement costs is fair for you, especially for low value items like home content.

However, this could be problematic for the insurance companies to agree especially when the items insured is expensive like cars. In such cases, they would prefer Actual Cash Value (ACV) which is replacement cost mines depreciation.

Replacement Cost: The term replacement cost refers to replacing a damaged or stolen item with a similar quality and material item that is used for the same purpose. Companies agree to settle this amount if your policy allows replacement cost. Also, the item must be beyond repair or cannot be recovered.

Actual Cash Value: May be described as fair market value that means a price of the item/goods if it was to be purchased today at its latest condition. Another description is the replacement cost of an item after taking depreciation into account.

What Is the Difference between Replacement Cost and Actual Cash Value?

The real difference between two ways of paying for claims is the deduction of depreciation. While one is looking to pay enough money to buy a similar equipment at new the other takes into account that the item was old and lost its value.

Understandably policyholders would want to get the replacement value while the insurers would want to pay the open market value. How you get paid depends on the stipulation of your policy document wording. Some policies are specially marketed with replacement cost value and some agents may push the policies to be better because it pays replacement value.

Agreed Amount Endorsement: This is another way of settling claims where the insurer and insured agrees the value of the item at the start of the policy and insurer confirms that they will pay this set amount it he property is lost or damaged beyond repair. This clause can be highly valuable when you are insuring classic automobiles as their value vary depending on how well it is maintained.

When it comes to home content insurance you would want to have replacement cost clause on your policy. Otherwise, you run into following problems;

  1. You may not get enough money for your claims.
  2. The main problem is that someone else would be judging the value of your items and they may take a piss out of the process and offer you ridiculous amount.
  3. Where are you going to find a slightly used but otherwise well kept camera to replace yours? The fact of the matter is that people go out and buy another camera from shops when they lose theirs. They don’t go through second hand camera shops and try to find exactly the same one.

However, when it comes to auto insurance you don’t have much choices. Vehicles are expensive items and you cannot expect the insurer to pay you the price of a new car when yours was 5 year old. But then, most people accept this fact. Furthermore, automobiles can be valued accurately depending on their age and condition and there is a market where you can buy a new car that is just like your old one.

Tips on Obtaining the Cheapest Auto Insurance

Auto insurance rates offered to any vehicle owner depend on several factors. Some of them may be out of your control while there are enough factors you can influence for better prices. These maybe related to you as a driver, other drivers on the policy, vehicle insured and so on.

Automobile insurance is a necessity not because it is legally required but also it protects the owner of a vehicle from possible losses and damages. You probably get the cheapest car insurance rates by choosing the minimum state required coverage but this would leave you high and drive should you suffer an accident. So, here are a few tips that can reduce your costs and hence allow you to buy the coverage you really need.

  1. Start with Your Car: One of the main reasons why people are charged high premiums is because their cars are deemed to be high risk. You may only have a old, nothing special auto. However, it may be popular among thieves because its engine is sought after in the second hand engine market. The best way of finding out if the vehicle is the main problem is to check its insurance ratings. This information can be obtained quickly online. There may be things you can do to reduce the premiums like installing alarm in the above example.
  2. Check the Position of Insured Drivers: Obviously the drivers who are allowed to use the vehicle will be considered in detail by insurance companies. Check that neither you nor other drivers you are insuring don’t have negative records. It may be that they have had a traffic citation or accident recently. Depending on who this person is and what is his/her car ownership status, you may be able to exclude him/her from your policy and save money.

3. Check that Your Current Insurance Company Is Competitive: You may be with this company for a long time and have no idea about other companies or their prices. Then, it is time to have a look at the pricing of other providers. Switching companies or getting auto insurance quotes online isn’t difficult these days. What is hard is not to check for better prices for a long time and keep renewing. Even television is full of car insurance ads because people are on the look out for better premiums.


4. Check Your Driving Habits: Insurance companies classify applicants based on their details and guess how many miles this particular applicant will be driving. If you are driving particularly less because you take the train to work everyday you probably qualify for low mileage discounts. Just check how many miles you drove last year and include that information when you are getting new quotes.

5. See If You Qualify for Discounts: People qualify for discounts for at least 20 different reasons. This could be because of your safe zip code or safe car. You can also get discounts because of your profession or for just being a member of an association. You can also check with your employer if they have special scheme with any insurance company.

How to Avoid Paying extra on your Rental Coverage

Does rental insurance make sense? Many of you may be asking this question when you want to rent a car. The idea behind getting rental insurance is to protect you and the vehicle in case of any accident just like in car insurance. What may not make sense is buying all of the coverage provided by a rental company. It is very important that you decide on what coverage to buy and what not to buy.

Important factors to keep in mind when buying rental coverage

On the one hand, buying all the coverage provided by the insurer may increase your insurance costs, while on the other, not buying coverage may put you in a bad financial condition when you need protection. There are certain factors to keep in mind when you want to buy rental car insurance:

  • Collision or comprehensive coverage: If you have adequate collision or comprehensive coverage from your auto insurance, you may not need to buy Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). However, you may still have to pay the deductible if the rental car gets stolen or vandalized or even if you crash it. If you want to buy CDW or LDW, you must opt for the one with the broadest coverage. Check with your rental company, since they may have different levels of waivers.
  • Liability Coverage: If you are covered for any liability through your auto policy, you may not buy liability coverage under rental insurance. Most states require these companies to provide the minimum required liability protection free of any charge. If you think you do not have adequate liability coverage through your auto policy, you may buy more insurance through your rental policy for better protection. The liability coverage that you have from your auto policy will kick in first if you get involved in an accident with your rental car and the excess will then be covered by the rental policy.
  • Health and homeowners’ insurance: If you have health insurance and homeowners insurance, you may not need to purchase accidental health and personal property insurance under a rental car policy. In case of any medical situation, your health insurance will kick in first, and same is the case with home insurance when it comes to losing any personal property.

The best thing to do when you want to buy rental insurance would be, to check your auto policy and your home insurance as well as health insurance, to see how you are being covered for different situations. This way you can save money on your rental car and not buy excess insurance that you may not need at all. Check your policy papers properly and in case of any doubt speak with your insurance agent.

5 Strategies to Get Cheap Car Insurance Rates

You may have ignored the increase on your vehicle insurance premium the last time but do you see another increase this time. What are you going to do about it? Are you going to accept it because it is too much hassle to switch companies? This is what many people do when they really want to change their auto insurers but end up renewing again.

And some decide it is time to see what can be done about higher premiums. If you are considering having a good look at your policy in the hope that you get your car insurance cheap you might want to refresh your memory as to what can be done to achieve this. Here are 5 points to consider.

1. You Should Search for New Quotes: Many motorists make the mistake of being persuaded by their current insurers with loyalty discounts. They call their insurers to complain about the high premiums and get offered little discount if they renew the policy again. Even with this discount your current insurer may not be able to beat other quotes. If you are really bothered with your rates and want to do something about it, the first thing you should do is to get a few auto insurance quotes. Then, you can sit down and compare them with each other and decide to get more quotes, change the coverage requirements or accept one of them.

2. Adjust Your Policy Coverage: This can work several ways. For example, if you have an old vehicle you may consider if it is time to drop collision and comprehensive coverage. You may have had a loan on it when you bought and now paid it off. This gives you a chance to drop Gap insurance. Your teenage son/daughter may have left for the college and you can now drop them off your policy and reduce your costs to half. So, have a good look at your policy and see if you need to make adjustments. You may even need to increase coverage in order to get the protection you need.

3. Family Status: Single motorists are charged more for automobile insurance compared to married ones. People don’t necessarily tell their insurance company that they are married now. This is something you should disclose as you need to disclose the people who may drive your car from time to time. Consider other changes in your situation as well. Moving out of student accommodation to your own apartment can reduce your premium because you are not living with your teenage room-mate anymore.

4. Increase Deductible. This is one of the ways you can get instant discounts. Companies are in the habit of setting deductibles too low. This allows them to charge more for policies. You can do the opposite and pay less. Just remember that deductibles is the first part of any losses or damages your vehicle may suffer. You cover this part out of pocket and the rest is paid by the insurer.

5. Get Security Discounts. Parking your car in a secure place rather than leaving it on the public roads can save you money. If you manage to find a house with parking or arranged a separate parking space you should let the insurer know. Actually, any increased security can help you save money.

There are a few more ways of saving money like bundling your home and auto insurance together, buying a safer car or driving less. Have a good look at this website and others to see what other great tips you can find.

Buy Automobile Insurance Online

In case you don’t know it already, getting auto insurance quotes online can save you money. We have nothing against your agent and he/she is probably a nice, friendly person. However, it is a great feeling to be in control and get a few quotes any time you feel like it.

When we say it is easy it doesn’t mean that there is no tricks to the game. You can get better results faster if you follow certain steps. These steps are discussed below in detail.

  1. Find a Car Insurance Comparison Website: These websites are specially designed to offer the fastest and easiest comparison you can get on the net. By just filling one quote form you can get several quotes at once. Why go to the trouble of searching companies one by one and getting quotes from them. Shortly, either you will get lost or get bored and leave without getting the best deals for another year.
  2. Don’t Make a Rush Decision: You never know when you will find the best deal. It may be the first quote you received and the rest would be wasting your time. It may be that it will be in the last corner you look at. Just take your time to exhaust all your options, including getting quotes from your agent.
  3. Give Yourself Time: You need to start your search early to give yourself time to look, find and decide. If you leave it to the last minute you will probably miss the renewal deadline and your policy will have to be renewed with the current provider. Every company sends their renewal information well in time and there is no excuse not to start as soon as you get your notice.
  4. Ask Questions: You are not restricted to online communications only although you can find most answers already provided on companies’ websites. You can always call them, send them an e-mail or chat with them through forums and messaging. Just make sure that all your questions are answered before you think about which company to go with.
  5. Check Where You Are Online: It is easy to get lost on the worldwide web with so many links and pop-ups that you need to keep checking where you are now. This is especially important when you are filling forms and submitting information to get quotations. You make sure that your are on the website you wanted to be. This becomes extra important when you are about to make a payment and buy your vehicle insurance policy. Check and double check that you are buying a policy from a right source.

It really isn’t complicated at all to find quotes, check coverage, ask questions and buy policies online. You just need to follow a few common sense tips and you will be alright.


Things to Understand about Life Insurance Policies

An vital component of your life is making sure your loved ones are cared for. Any time you pass away, it is a terrific concept to currently have in spot free life insurance quotes which will guard your household after you may have passed on. You will be able to locate some invaluable suggestions here for deciding on the appropriate policy for you personally and your loved ones.

When investigating underwriting companies for the whole life insurance rates, make sure that you just pick a corporation that is definitely large and reputable. You will not get that considerably comfort from a cheaper policy that is definitely in fact from a firm that has a poor reputation, and the final factor you want is usually to feel unsafe about the policy you obtain.

Compare term life vs whole life insurance from a lot of distinct companies prior to settling on a single. Policies can vary in length and may well or may perhaps not be renewable immediately after a particular time period. Likewise, two policies you compare may deliver identical sets of benefits, but a single charges lower premiums than the other. It really is critical to complete your homework nicely, so that youll be able to pick out the policy optimal for you personally.

Be each mindful and careful when youre inside the hunt for an agent who handles life insurance. For those who use the solutions of an independent agent, you are going to be able to receive various delivers from various firms, whereas a single company will provide you only the services it provides. Independent neighborhood agents may take the time to definitely ascertain your actual wants, and will have the information to present you with various possibilities which can meet those requirements.

Life insurance is important for any responsible adult, particularly for those who possess a family members that may require support in your absence. Apply these guidelines to select the top policy for the scenario and enjoy your peace of mind.

Should You Stick with Cheap Automobile Insurance?

You may be choosing for an automobile insurance company, and found that there are various companies offering different policy and quotes. You have compared between the quotes on a few top rated insurance companies, and you may wonder whether you should stick with a cheap automobile insurance.

Experts do comment that the insurers who give the best price often give the best service too. In addition, sticking with a cheap auto insurance may be important for students. Insurance company will usually offer young car owners with lots of discounts depending on meeting several risk criteria, like being a good student.

However, it is suggested that you should look at both the price and benefits while comparing the rates and quotes. Choosing a company that is dependable and responsive is essential, for majority of us will claim on our vehicle insurance policies at least couple of times in our life times. Your policy comes handy in such times or financial need and assistance.

After choosing an insurance policy, you should evaluate the service of the agent too. An agent should be able to coach and advice you after an insurance claim. Communicate with the insurance agents and evaluate where that person is the one you can turn to after an accident. Besides that, verify the insurance company’s financial solvency with A.M. Best, Fitch Ratings, and Standard & Poor’s Insurance Ratings Service. Some companies who offer cheap coverage takes your premium and folds, and this is where lower priced covers may not be as good as they looked at the time of purchase.

Therefore, compare the other benefits in addition to the quotes. In other words, choose the companies that give you most benefits within you budget. You can then save money while getting the benefits. Ensure that you have all the information necessary to make the decision. It all depends on the situation; some people opined that getting more coverage is an investment, whereas other people believed that it is extra money.

Term Life Insurance History

Did you know that term life insurance is the original form of life insurance?  The entire story of life insurance begins in a coffee house in London…

Insurance had existed in the trading industry for millennia, and in England at the very end of the seventeenth century, there was no greater call for insurance than in the shipping industry.  It was aptly said of the time that “the sun never set upon the British Empire,” which stretched full round the globe.  On Tower Street in London stood Edward Lloyd’s Coffee House, which served as a place of exchange for business, for news from abroad, most importantly, for investors to underwrite insurance policies.  Their society was the primeval inception of the world-famous Lloyd’s of London.

Details of the first life insurance policy written are lost to history, but should the facts be known today, there would likely be some controversy over which piece of business actually constituted something to be considered genuine insurance, for the practice of gambling on the survival of third parties was positively rampant in England up until it was banned by Parliament in 1774.  More than likely, the earliest examples of life insurance amounted to some cross between a morbid wager and actual insurance.

The first products which incontrovertibly amounted to insurance were term life insurance policies.  More specifically, they were ART (annual renewable term life insurance) policies.  That is, they were contracts to last for only a year, but at the conclusion of the year’s coverage, the policies could be renewed.  If the person being insured were to expire while coverage was in force, the insurance policy’s beneficiary would receive a pre-determined death benefit.

Because many human lives were treated as property during the strong but sordid British slave trade in the seventeenth and eighteenth centuries, insuring those lives created a lot of business for early life insurers.