So, Do You Need Financial Planning?

Well do you need Financial Planning? In this article, I will show you how you can answer this question.

Immediately after we complete our college education, we automatically participate in a race call rat race.

Everyone started the race with a cart. In this cart, we have personal bills, loans and our allowance. As we are single, everything is good and manageable. We can spend what we earn without worry.

Then we meet our partners and get married. Thus we begin our next chapter in life. Our cart becomes heavier and we now worry about our spouse's bills and loans and kids allowance. Some of us must support our parents too. We may even need to bring our family to vocation. As we grow older, our carts get heavier and heavier. Do you have enough savings to meet these expenses?

As we know, life is never a straight and smooth path. We will encounter obstacles. Some of these obstacles may set us back in terms of our financial standing .If we do encounter a big obstacle (e.g. critical illness, operation, surgery, business failure) and need a huge sum of money to recover, Do you have enough money to meet this expense? What if the big obstacle results in us being permanently bed-ridden or out of work for a long time, what is going to happen to our cart? Do you have enough money to support yourself and family if that happens?

Many may say, well we have friends and relatives to turn to for help. But our friends and family have their own carts to pull too. If they help push our cart, who is going to push theirs?

We will all retire from work eventually. From then on till we all rest in peace, we do not have regular income but our life must still go on. We still need to pay our bills and we still need to eat. Do you have enough money to support yourself during retirement?

At old age, our body is no longer working as well as they used to. Our health conditions deteriorate, as we get older. We will need to seek medical help frequently. We may even need to employ a person to take good care of us. Do you have enough money to spend on these medical expenses?

So do you need Financial Planning? If you answer ‘Yes’ to all the above questions, then you are safe and need not worry about Financial Planning. Otherwise, I suggest you start thinking about it.

Public Liability – Whose Fault Is It Anyway?

Have you ever walked past a footpath where the concrete has lifted or watched several people walk around a spill on the supermarket floor? Ever found yourself saying, “Now there’s an accident waiting to happen.” When a member of the public suffers an injury or loss due to the negligence of another party, that party is liable for that injury or loss. Hence the term, Public Liability. Public Liability insurance is a must for all businesses, large and small to safeguard the public’s interests and, indeed, those of the business. Now we’ve all heard the stories about exorbitant judgements being awarded to people claiming to have been injured due to another’s negligence. Most of the time these claims seem justified, however, there are others that cause our brows to furrow a little as we mutter: “What the…?” For example: A person disobeys an official Council sign forbidding swimming and diving in a rock pool. This person dives in and, after sustaining injuries that render him quadriplegic, sues the Council. Is his multi-million dollar payout justified? Granted, he suffered severe injuries and will need specialised care for the rest of his life but should the Council and, as a direct flow-on, the ratepayers of the area, be forced to pay for his thoughtless folly? Then there’s the hotel patron who left the hotel inebriated and sued the publican after tripping over in the street. Claims like these cause Public Liability insurance premiums to skyrocket and yet, the claimants appear to be at fault. (Perhaps the courts are trying to save government money by not forcing these people into the public health system.) It’s a sad fact that in today’s litigious society, fewer and fewer people are prepared to take responsibility for their own actions. Whether it’s tripping over one’s feet while under the influence of alcohol or diving into shallow water, it seems there must always be someone else to blame. The courts have even been presented with cases brought forward by criminals injured in the course of committing their crimes! Unfortunately, when the public’s attention is drawn to public liability insurance, it is all too often because of these less meritorious types of claims. Little is heard of how genuine claims are brought against truly negligent parties and the effects such negligence has had on claimants’ lives. For example: • After many requests to her landlord to repair the state of her backyard, a young mother tripped on broken and uneven paving, breaking her elbow. Her landlord agreed to settle her claim out of court for a figure that took into account her incapacity to care for her children without domestic help. • An elderly man was seated in a fast food restaurant when his chair suddenly collapsed causing back, leg and chest injuries. His chair, unlike others in the restaurant had been inadequately fastened in place. The restaurant settled the claim and took steps to prevent similar occurrences. And who could forget Erin Brockovich, that David and Goliath type class action bringing a giant corporation to its knees? We love to see the little people win, especially against arrogance and “big bucks”. When someone’s life is turned upside down through no fault of their own, they should receive just and proper care. If the cause of their distress is due to the negligence of another party, that party must bear the burden of such care. Medical treatment, loss of income and loss of quality of life are some consequences of injury taken into account when determining claim settlement details. Public liability insurance is crucial to ensure that a. The injured party gets paid, and b. The ‘at fault’ party is not left bankrupt by the result. With the rising number of public liability claims and the soaring premium costs, however, many businesses are finding it difficult to obtain this type of insurance. In such cases it is recommended to: • Ensure sound risk management. I.e.: take every precaution to lessen the chances of injuries occurring. • Create your own ‘insurance pool’. I.e.: approach similar organisations as yours and apply for insurance as a group with a ready-made ‘insurance pool’ to draw from. • Talk to your broker – it is in his best interests to look after yours. All in all, Public Liability insurance is a necessity in today’s society. It allows for justice to be seen to be done in cases of negligence and calls negligent parties to action in doing all they can to prevent other injuries from occurring in the future. Whose fault is it anyway? With careful risk management, that question need never arise again.

Professional Indemnity – Call Yourself And Expert? You’d Better Be…

In business, information can be the most valuable product of all. It can also be the most costly. In a society of enthusiastic litigants, anyone professing to be an expert had better be able to prove it if intending to peddle the fruit of that expertise. Realistically, though, even experts can make mistakes, which is why Professional Indemnity insurance is so important. Professional Indemnity insurance covers the experts when they “get it wrong”. After all, inaccurate information about the stock market can cause a client to lose a lot of money. Likewise, an insurance broker who neglects to inform a client about the correct level of insurance needed is placing that client in potential financial peril. And, if a Business Consultant consults a business all the way to virtual bankruptcy…well, you can see the red lights flashing… So what types of experts should take out Professional Indemnity insurance? The scope is limited these days only by the imagination of new expertise titles, most of which end with the word “Consultant”. Some of the more recognisable professions, however, are: solicitors, architects, insurance brokers, financial advisors, tax agents and health professionals. Basically, anyone who is paid to provide advice, based on the level of expertise conveyed to the public, is vulnerable to claims being made against them if that advice, when taken, goes “pear-shaped”. For example: • A firm of company registration agents was consulted by a business wishing to use a particular name. The company registration agents advised that the chosen name was available, however, a company with a similar name issued legal proceedings. The company registration agents firm was forced to pay the claim. • Structural drawings were prepared for the construction of steelwork. The drawings allegedly contained errors causing delays in construction due to the alterations required. Consequently, a claim was submitted for the cost of those delays. • A patient undergoing plastic surgery is rendered partially blind in one eye. Claiming improper treatment, the patient is awarded a settlement. Professional Indemnity premiums can be quite expensive, however, they are usually also retrospective. Professional Indemnity insurance is written on a Claims Made and Notified basis. This means that a circumstance or event, giving rise to a claim, may still be covered even if it occurred prior to the policy being effected. Because of the nature of liability claims, it may be years after the event occurred before a claim is actually made. As long as the insured has no prior knowledge of a potential claim and the actual claim is made during the Period of Insurance, the date of occurrence doesn’t really matter. This differs from other types of liability insurance policies, which, for the most part, are written on an Occurrence basis – i.e. the incident must have occurred during the Period of Insurance, and a claim may be made at any time afterwards. Retrospective cover on Professional Liability insurance can be limited, however. If the insurer chooses not to cover incidents that might have occurred in the past, it may invoke a retroactive date limitation. This will limit cover to incidents occurring only from the date specified – in most cases the date of policy inception. For example: Archie’s Architectural Services held a Professional Indemnity policy with Professional Indemnity & General (P.I.G.) from 1st July, 2000 until 30th June, 2005. Becoming frustrated with the somewhat pig-headed attitude to service at P.I.G., they decided to go elsewhere. They switched to W.R.G (We’re Really Good) Insurance and effected a Professional Indemnity policy with them. W.R.G. decided to write the policy using retroactive date limitation from the date of inception (i.e. 1st July, 2005). If the retroactive date limitation had not been applied, W.R.G. would have been open to claims for incidents dating back to when Archie’s Architects began operating. With P.I.G. also in the mix there was the potential for some big courtroom bunfights! Instead, W.R.G. will only consider claims made for incidents occurring from the date of inception of the policy. Obviously, a policy without a retroactive date limitation is more advantageous to the insured, however, the policy will be more expensive and the insurer is not obligated to offer it. Professional Indemnity insurance, then, is a vital part of any business that provides services and advice based on its proclaimed expertise. It not only provides peace of mind for the business operator, but also for the clients who faithfully rely on that expertise at some risk, either financially or physically. So, are you an expert yet?

UK Personal Debt Problems Creating Hardship For Nation’s Young Adults

Problem personal debt levels, especially for people under 25, in the UK have risen since last year according to the Consumer Credit Counselling Service (CCCS). In a report released this week they revealed that the average client aged under 25 coming for counselling in 2005 owes £15,000. The report also states that “More young people are getting themselves into situations where they find themselves unable to meet their unsecured credit commitments.”

CCCS chairman Malcolm Hurlston said, "The growing trend for young people to get into these amounts of problem debt is a concern. Bankruptcy figures are soaring, and this rise may be accounted for by the young who are without assets and who have overspent on credit cards and personal loans These trends are a natural consequence of the desensitization of borrowing - credit cards have blurred the distinction between borrowing and spending and for many young people, student loans have made borrowing normal..”

Financial comparison site Moneynet ( http://www.moneynet.co.uk ) believes that, students face a potentially ‘calamitous’ problem with their credit histories on graduation thanks to the now inevitable prospect of leaving college or university with high debt levels. Moneynet CEO Richard Brown said “The majority of graduates are looking at servicing a minimum debt of £15,000 until their mid-thirties.”

University debts are now seriously starting to cause problems for the younger generation. The debts generated at college have for many combined with the spiraling house prices forcing them to stretch themselves financially. Those affected include both those prospective first-time buyers trying to get on the housing ladder and parents trying to help out their children with cash or by being a mortgage guarantor.

Another problem area, although banking organization APACS is keen to emphasize that it only affects a minority of people, is that of credit card debt. Jennifer Brumby from the Newcastle branch of the CCS said, "People are now taking out credit to pay off their credit. But when you get that far into debt, you are really on a slippery slope. People will take out a loan to pay off their credit card and then find they haven't got enough money to survive on so they start running up their credit card bill again and the whole cycle starts over.”

Following accusations by the Citizens Advice Bureau - http://www.adviceguide.org.uk/ (CAB), it seems that the situation does not appear to be greatly helped by the use of payment protection insurance (PPI), which is specifically designed to help those potentially liable to fall into debt by repaying personal loans or credit card debt if they fall ill or lose their jobs and are therefore no longer able to meet their financial commitments. The charity found that PPI is failing many of those who need it most, adding to their debts instead of protecting them against hard times. The CAB said that, “in many cases it is more about providing an additional source of profit for the financial industry than about protecting consumers”. The premiums for policies when added to the full amount being borrowed can increase the cost of borrowing on some credit cards by up to 9% per year. The CAB has lodged a “super complaint” on behalf of their clients, to get the Office of Fair Trading to launch an investigation into the issue.

The CAB stated several different problems with the policies including:

- common difficulties such as bad backs or mental health issues which often lead to claims, are being excluded to prevent payouts
- self employed or contract workers are frequently excluded from claiming
- time limited payout periods reduce the length of time that claims will be paid out for
- low payment amounts being paid for successful claims, usually only covering only the possible minimum payments on a loan
- delays in payments being made following the initial claim and leading to increased financial difficulties for the claimant

CAB has said that 85% of its clients who had tried to claim on their PPI policies had been turned down, however the industry is claiming that only 15% of claims are rejected.

David Harker, CAB chief executive, said "We badly need an official investigation of how this market is operating, leading to effective regulation that ensures a fair deal for all consumers, and which also protects the most vulnerable".

More of the nation’s young adults are coming out of university and starting their working life with greater debts. Many first-time buyers are finding the cost of housing beyond their finances. More emphasis is being placed on individuals providing for their own long-term future privately. Now the financial safety nets are being shown to contain so many holes that more people are falling through than being caught. The financial future of a generation of young Britons is looking bleak. As more financial choice is being made available to people, less automatic help is becoming accessible from the government and more responsibility is also being required of consumers themselves. Debt may for most people, have become a generally accepted part of modern UK life, and should no longer be seen as something to be scared of, but discovering how to control it and not let it take over control of your life is an important lesson which is best learned as early as possible.

Retirement Planning and Your Finances

Credit Cards: Having a credit card is often a necessity for most senior citizens – from paying for medicine and emergencies to booking a vacation. But for seniors living on a fixed income, there are concerns about carrying a large balance from month to month and running up significant interest charges. In the worst cases, the debt becomes unmanageable and a major source of stress for the account holder and the family. Another problem for seniors is having too many credit cards. That's because the more cards you have, the more opportunities you have to get into debt. And that possibility could make it tougher for you to get the best deal the next time you apply for a loan, insurance, a mortgage or an apartment. Having a lot of cards also can make it harder to keep track of when your monthly payments are due or to even realize that a thief may have stolen one of your cards. Home Equity Loans and Lines of Credit: These are loans that use the equity in your house as collateral and often are tax deductible (check with your tax advisor). The equity refers to the difference between what you owe on a house and its current market value. A home equity loan is a one-time loan for a lump sum, typically at a fixed interest rate. A home equity line of credit works like a credit card in that you can borrow as much as you want up to a pre-set credit limit. The interest rate for a line of credit usually is variable, meaning it could increase or decrease in the future. "For elderly people on a fixed income who have paid their mortgage in full or whose mortgage is almost paid in full, home equity loans are tempting to use to pay for expenses, but they can also be dangerous," warned Janet Kincaid, FDIC Senior Consumer Affairs Officer. "In the worst-case scenario, if you are unable to make the required loan payments, you could lose your home." In general, the best uses for home equity-type loans are to purchase goods or services with long-term benefits, such as home improvements that add to the value of your property. The riskiest uses of home equity loans include a vacation or a car because you could end up paying a lot in interest charges for a purchase that's only of short-term value or has gone down in value. Also beware that some unscrupulous people or companies (including home repair contractors) push high-cost, high-risk home equity loans to elderly people and other consumers. Reverse Mortgages: These are home equity loans available to homeowners age 62 or older. In general, a reverse mortgage is a loan that provides money that can be used for any purpose, and the principal and interest payments typically become due when you move, sell your house or die. A reverse mortgage also differs from other home loans in that you don't need an income to qualify and you don't have to make monthly repayments. While reverse mortgages can be a valuable source of funds, they also have serious potential drawbacks. In particular, you will be reducing your equity, perhaps substantially, after you add in the interest costs. "Reverse mortgages can help in some situations, such as when you have large medical bills that are not covered, to make major home repairs or to help people on low fixed-incomes make ends meet," said Cynthia Angell, a Senior Financial Economist at the FDIC. "However, you are reducing your ownership share of the home. That means the inheritance you are leaving to your heirs could be greatly diminished or you could have far less money available for other purposes, such as buying into a retirement community later on. That's why a reverse mortgage should usually be used as a last resort, not as an integral part of a retirement strategy." Also, Angell said, the fees can be high, and that could make a reverse mortgage a poor choice to cover relatively small expenses. Life Insurance: People mostly think about life insurance as a source of income when someone dies, but they forget that many insurance policies also can be a source of cash at other times. If you have a life insurance policy with built-up cash value, you can borrow against that money and either repay the loan with interest or reduce the death benefit accordingly. Example: If you have a $100,000 life insurance policy but you owe $20,000 on a loan from that policy, your heirs would receive $80,000 as the insurance payout. There are other options reserved for people who have been diagnosed with a terminal illness and have run out of other ways to pay their expenses. One example is a life insurance policy that can pay "accelerated death benefits" to an eligible policy holder — generally up to about 50 percent of the face value of the policy — in either a lump-sum payment or monthly payments that are deducted from the policy's face value. When the policy holder dies, the rest of the death benefit is paid out. Another possibility is to "sell" your life insurance policy to obtain a lump-sum of about 40 to 80 percent of the face value in exchange for the right to receive the full insurance payout when you die. This is known in the insurance business as a "viatical settlement." These and other options for tapping life insurance policies can be complicated (including tax and other implications), and they are not right for everyone. Consider getting guidance from your state government's insurance regulator.

The Insurance Agent’s Guide To Success

The successful insurance agent always stays informed on how he or she can improve themselves both personally and professionally. In these days of fast paced lifestyles and the quickly disappearing face-to-face communication styles of doing business, the professional has to adapt. First, your personal good health is an important component to the success of your business. Second, I’ll present some proven business and customer satisfaction strategies that will guarantee you a thriving business and continued success for the future.

Taking care of your personal health is very often overlooked. The daily life of the professional is fraught with burnout and responsibilities. Many of us juggle on a daily basis the demands of family, parenting and other essential duties. Even the regular duties of getting the dog to the vet, grocery shopping and paying the bills, to name a few, can become dreaded tasks. Eventually, we’re going to get burned out and possibly ill. There are strategies to keeping a healthy mind and body.

Start having a social life outside of work. Just like your daily “to-do” lists at work, start planning a social “to-do” list. In other words, don’t forget to have some fun. Listen to your favorite music for a few minutes each day. Take in a concert or musical affair. Go out to dinner occasionally.

Exercise. Start going to the gym or fitness club. A healthy physical body will give the hard working professional the energy needed to be both highly productive and active socially. Go for a short walk in your neighborhood. Get some fresh air and breath.

Manage your time wisely. Poor time management can be costly. Missing appointments or being late NEVER looks good. The client’s time is just as valuable as yours.

Aside from these tips to stay healthy physically, don’t forget your mental health. Be sure to take regular breaks away from your desk, the phone, the laptop or anything else keeping you chained to your desk.

So, you might ask, what does this mean for me? Many studies have shown that productivity levels significantly decrease for the professional that doesn’t take time for fun, a social life, rest and exercise. If you become both physically and mentally weary, your customers are going to notice.

Many professionals are keenly aware of the saying “presentation is everything”. When you present yourself to a potential client, be it on the phone or in person, it is important to be at your best. I don’t know about you but I would definitely re-think associating with any professional that was unkempt in appearance or tired and sluggish in communications with me. It is very difficult to convince your potential clients to accept your advice to stay healthy when you appear physically ill yourself. Be a role model of what you’re trying to sell. Now that you have some vital information to help you stay personally healthy, let’s examine some strategies to keep your business thriving and profitable.

Continuing Education

Many professional associations offer continuing education workshops, seminars or classes. If you are not a member of a group or organization in your field, then look into classes at an institution of higher learning. It is imperative that you keep up to date on the latest news or information regarding the type of insurance you provide. Don’t forget—classes in human psychology can go a long way in providing you an advantage to understanding your customers better.

Network! Network! Network! Experienced agents know that aligning themselves with a company that will appreciate their skills is a must. Building a customer base with a reliable and strong company that can bring the clients to you is valuable. Your reputation as an experienced, reliant and self-assured insurance agent will guarantee a successful business and many good leads for clients.

The Psychology Of It All

Building a relationship with your customer(s) is integral to your success as an insurance professional. People want quality service. They rely on you to guide them into making the best decisions around their insurance coverage needs. If they don’t trust that you know what you are doing (remember the continuing education and how you present yourself?), they will not buy anything you have to offer. How can we gain their trust?

First and foremost, if you have been informed of a potential client looking for insurance, contact them immediately. As mentioned earlier, people want quality service. A quickly returned phone call sets a good first impression. This action alone tells your customer you care about their needs and are interested in their inquiry.

Next, follow through with what you promised in a timely manner. For example, if you stated you would get back to them in 48 hours on a matter, then return your call within that time.

Be sure you are giving them the appropriate and best advice you can. Obviously, I can’t stress the “educational” component enough in this article. None of us knows the answer to everything and it is acceptable to say I don’t know to a client’s question. Let them know that you will find the answer.

A healthy, informed and experienced insurance agent that is genuinely attentive to their client’s best interests and communicates that effectively will have a successful business.

Highway Robbery

Beware; we have modern-day “Dick Turpins’” at work on our roads. Not quite “Stand and deliver” at gun point, but there’s a striking similarity.

Innocent drivers are being targeted in this frightening new crime which appears to spreading across the country. Effectively, we have an ambush situation.

This is what can happen:

· You may be following a vehicle, generally an ageing car or van, onto a roundabout or slip road. This vehicle, which often has no brake lights, brakes hard and you cannot avoid slamming into it.

· There may be two cars involved. One is in front of you and another one may veer into its path, the car in front of you brakes hard and you crash into it.

These “set up” crashes commonly occur at really busy roundabouts or motorway slip roads. The instigators of these incidents are skilled at pinning the blame on the innocent motorist. These modern day highwaymen work in teams, owning and managing repair garages and car hire companies. These firms present falsely inflated invoices for work carried out, hire of a car whilst the car is off the road and so on. They then make a bogus claim on the blameless motorist’s insurers, often inflating it for maximum pay-out and claiming for compensation for so-called injuries to the driver and passengers. Often the vehicle which they use is an old banger, which will probably contain the maximum number of passengers, all claiming to have been injured in some way and seeking compensation for this and probably loss of earning too. In this way a minor accident claim can escalate into a claim of £20,000 or more.

Insurers are quite rightly extremely concerned about the scale of these so called “accidents” and believe there could be as many as 10,000 of them occurring per year. A single insurance company may not easily pick up on the organised fraud but working with other insurers will give benefits. With this in mind the Association of British Insurers have created an Insurance Fraud Bureau. They will monitor details of suspect claims and scrutinize millions of them to find patterns or links. It is intended that the bureau will liaise with police and hopefully will take civil prosecutions against these fraudsters to recover money which has already been paid out.

There was a case of insurers linking 400 “staged accidents” to one particular gang, involving other crimes in addition to the insurance fraud, where the police would only get involved if the investigation was funded by the insurers. Insurance fraud may be low on the priorities list as far as the police are concerned but in view of the danger to drivers as a result of these unpleasant incidents their reluctance to get involved will have to change.

A Home Office fraud review is due out in the summer of 2006 and hopefully the Association of British Insurers concerns will be addressed in this.

In the meantime, some advice from Norwich Union’s head of fraud, Chris Hill, who says “Keep your distance from the car in front at roundabouts and slip roads and cut your speed. Keep an eye on the vehicle in front. The occupants may turn to look at you or may even make a gesture just before the trap is sprung.”

If a crash does happen, remember to get as much information as you can. Note how many occupants were in the other car, their sex and as much detail as you can about how they were dressed. Make a note of these details and make sure your insurer is aware of them.

These gangs are putting innocent drivers and their passengers at risk. It is vitally important that insurers and drivers work together in a concerted effort to stop this crime.

Highway Robbery

Beware; we have modern-day “Dick Turpins’” at work on our roads. Not quite “Stand and deliver” at gun point, but there’s a striking similarity.

Innocent drivers are being targeted in this frightening new crime which appears to spreading across the country. Effectively, we have an ambush situation.

This is what can happen:

· You may be following a vehicle, generally an ageing car or van, onto a roundabout or slip road. This vehicle, which often has no brake lights, brakes hard and you cannot avoid slamming into it.

· There may be two cars involved. One is in front of you and another one may veer into its path, the car in front of you brakes hard and you crash into it.

These “set up” crashes commonly occur at really busy roundabouts or motorway slip roads. The instigators of these incidents are skilled at pinning the blame on the innocent motorist. These modern day highwaymen work in teams, owning and managing repair garages and car hire companies. These firms present falsely inflated invoices for work carried out, hire of a car whilst the car is off the road and so on. They then make a bogus claim on the blameless motorist’s insurers, often inflating it for maximum pay-out and claiming for compensation for so-called injuries to the driver and passengers. Often the vehicle which they use is an old banger, which will probably contain the maximum number of passengers, all claiming to have been injured in some way and seeking compensation for this and probably loss of earning too. In this way a minor accident claim can escalate into a claim of £20,000 or more.

Insurers are quite rightly extremely concerned about the scale of these so called “accidents” and believe there could be as many as 10,000 of them occurring per year. A single insurance company may not easily pick up on the organised fraud but working with other insurers will give benefits. With this in mind the Association of British Insurers have created an Insurance Fraud Bureau. They will monitor details of suspect claims and scrutinize millions of them to find patterns or links. It is intended that the bureau will liaise with police and hopefully will take civil prosecutions against these fraudsters to recover money which has already been paid out.

There was a case of insurers linking 400 “staged accidents” to one particular gang, involving other crimes in addition to the insurance fraud, where the police would only get involved if the investigation was funded by the insurers. Insurance fraud may be low on the priorities list as far as the police are concerned but in view of the danger to drivers as a result of these unpleasant incidents their reluctance to get involved will have to change.

A Home Office fraud review is due out in the summer of 2006 and hopefully the Association of British Insurers concerns will be addressed in this.

In the meantime, some advice from Norwich Union’s head of fraud, Chris Hill, who says “Keep your distance from the car in front at roundabouts and slip roads and cut your speed. Keep an eye on the vehicle in front. The occupants may turn to look at you or may even make a gesture just before the trap is sprung.”

If a crash does happen, remember to get as much information as you can. Note how many occupants were in the other car, their sex and as much detail as you can about how they were dressed. Make a note of these details and make sure your insurer is aware of them.

These gangs are putting innocent drivers and their passengers at risk. It is vitally important that insurers and drivers work together in a concerted effort to stop this crime.

Discounted Term Assurance

Three Tips To Getting Discounted Term Assurance

If you want to take out a term assurance policy then you probably already want to make sure that you get it right and that you get it cheap. After all, there is a very real possibility here that you won’t die during the term of your policy so you won’t get any money back. But, on the other hand, you also need to make sure that your family is given the maximum cover protection if you do die. Follow our top three tips and you will be able to get the balance right!

1. Don’t over-insure

We all panic when it comes to taking out life insurance and sometimes this takes the form of over-insuring ourselves just to be on the safe side. To be honest this will give your family a lovely big sum of money to play with if you die. But, it’ll mean higher term assurance policy costs when you are alive – wouldn’t you rather have the money to play with now as well as make sure that they are protected if the worst comes to the worst?! The key thing to do here is to work out exactly what your family would need if you did die – you can always add a bit extra for luck if you’re worried about things changing in the future!

2. Don’t buy in a panic

Many of us end up paying over the odds for term assurance because we panic buy. One day we suddenly realise that we could die and leave our family in financial difficulties so we simply rush out and buy a policy quick. But, if you can spare just a few minutes to search through your options – which is quick and easy to do on the Internet – then you’re bound to find a great low cost quote. And, it’s really easy to organise term assurance online so you won’t lose any time at all. In fact, you’ll usually save time and money!

3. Talk to an expert

Using a broker to help you find and buy term assurance can make the whole process quick, easy and cheap. Brokers already know everything there is to know about term assurance policies so they can help you target the right one instantly. And, they can search for the cheapest deals AND get you discounts into the bargain. So, you’ll save all round!

Bear in mind that term assurance is really important to you and your family and you cannot afford to get it wrong – keep our tips in mind and you’ll get the right term assurance policy in place cheaper than you could ever have imagined.

Cheap Van Insurance Undermined by Theft Figures

The reality of cheap van insurance being more readily available took a blow when recent research revealed that 17% of small van operating businesses had put in claims for vehicle theft, with over half of these claims being made within the latest 24 months.

The research further revealed that 42% of insurance claimants reported the theft of the insured van, with a similar proportion reporting that the contents of their van had been stolen.
If verifiable the figures indicate a possible cost to the economy of £1 billion.

The problem of van and transit van theft also appears to vary from region to region, which accounts for the differing costs in van insurance premiums dependent on the area in which it is purchased.

The report stated that 31% of commercial businesses in the West Midlands region had put in insurance claims, whereas in the London area the figure was down to only 25%.

The survey also indicated that the construction industry was the hardest hit, with 27% of the insured van policy holders making claims.

The report also indicates that 16% of small commercial business van drivers left tools and equipment in vans overnight, and 21% apparently did not ensure the contents of their vans at all.

With statistics showing continued growth in the van market sector – 322,000 vans are now effectively operating on Britain’s roads – recommendations for greater care and safety are being urged.

Perhaps one possible solution may result from developments in new technology. Recently the Ford Motor Company in the USA, teaming up with the industrial power manufacturer DeWalt, showed off its high security Radio Frequency Identification Technology (RFID) at the 2008 Chicago Auto Show.

The technology, which is operated by a small chip and an antenna embedded into the vehicles, is able to track any construction tools and materials carried in the van, so that they can be monitored at all times.

Ford has also been using RFID in its manufacturing plans and is working on patenting the technology.

Although primarily designed as an inventory device to keep track of tools and materials, the system obviously has a use a deterrent against van and van contents theft.

The company intend to introduce RFID during the 2009 model years as optional for F-series pick ups and E-series vans, and also for the new line of Transit Connect miniature cargo delivery vans.
In the meantime, it is evident that if theft continues on this scale, there is a real likelihood that premiums may rise considerably.

Commercial and business van drivers are therefore well advised to seek the advice and experience of established and reputable insurers when considering or taking out new van and transit van insurance policies.

Cheap Van Insurance

Just like any other insurance coverage – life insurance, property insurance, fire insurance – van insurance also follows the cardinal rule of taking insurance coverage that suits your needs and budget.

To insure that the van insurance coverage that you bought will serve its purpose and your purpose in getting one in the very first place, never haste in determining what your specific needs are and how much are you willing to pay for it. Otherwise, you might end up owning the most comprehensive and most expensive coverage for your van that is not even worth half of what you paid the insurer.

The first step in buying insurance for your van is to know in specific terms why you need to get van insurance. Of course, that the law requires it is out of the question. Ask yourself, what do I value the most that I need to be insured for? What kind of risk do I fear the most that I need to be insured against?

If you value your life and your passenger’s life, then you need to be insured against the risk of physical injuries and death. If you value dignity and honor, and other people’s life, then you need to be insured against the risk of third party liabilities. If you value the van itself, then you need to be insured against the risk of its loss.

If the van is regularly used in the business that puts food on your family table, then you should be insured against the risk of business losses caused by whatever damage to the van. If you value the personal belongings that you or your family usually leaves inside the van, then you should be insured against the risk of losing these personal properties as well.

After you have had determined your needs, it is now time to examine your budget. If you can afford it, it is best and therefore advisable to take the comprehensive insurance coverage. But if you are short on your finances, then dispense with whatever coverage you feel you could leave out but still could drive around with full confidence.

A trusted broker can help you thresh out the really necessary inclusions and services from those that serve nothing but to increase premium.

Bottom line: A well thought van insurance will actually prove heaven-sent while one bought in haste would seem to have burned your money in hell.

Car Financing: Which is Better: Buying or Leasing?

Purchasing a new car is always an exciting time in life; however, it can also be confusing and time confusing, especially with so many different types of financing options available. Should you purchase your next vehicle outright or would it be better to lease it? Which option will be better financially for you? Read on for more tips to help you make the right decision for you and your finances the next time you’re in the market for a new car.

It’s important to understand that there is not a clear cut answer to this question. It really depends on your needs and situation. When considering whether it would be better to buy or lease, it is important to understand all of the terms regarding the lease. Generally, the lease will be for a specified period of time and you will probably be limited to the amount of mileage that can be placed on the vehicle. In the event that you go over that specified mileage at the end of your lease period, you will be liable for paying the overage. Lease agreements also pay what is known as a finance charge at the end of the lease agreement. So, it is important to understand that while your lease payments may be less than payments would be if you bought the vehicle outright, you will still be responsible for a sum of money at the end.

In addition, it should be pointed out that you do not build up any equity in a vehicle when you lease it, only when your purchase it. On the other hand, when you purchase a vehicle and drive it for a long period of time, while you do build up equity, that amount declines the longer you own the vehicle. With leasing, you have the advantage of only having to pay for what you use while with the buying option you must pay for everything, regardless of whether you use it or not.

Leasing gives you the advantage of obtaining lower payments and the option of having a new vehicle every two or three years. This can be important to many people because it provides you with the benefit of having the latest safety features on your vehicle and the comfort of knowing you won’t have any warranty problems. If you don’t care about whether you build-up equity in the vehicle and feel you won’t go over the mileage limits then leasing may be the right option for you.

On the other hand, buying the vehicle outright; will mean higher monthly payments but the overall cost is about the same as leasing a vehicle, especially when all factors are taken into consideration, such as mileage overage payments and finance charges. Purchasing also gives you the benefit of actually owning the vehicle and if you opt to pay off the loan and keep the car, it can mean you won’t have a vehicle payment. You must also take into consideration; however, that when the warranty expires you will be responsible for the cost of repairs. This can be offset when you take into consideration that you don’t have to worry about going over mileage limits as with leasing. Additionally, there are no surprise costs at the end as there are with lease options. In the end you really need to give thought to your own situation, needs and desires.

Basic Financial Information Tips (Part I)

Savings. Pay yourself first. Start now stashing 10% of your income in an “Emergency” savings. Don’t use it for anything but real emergencies. Keep a “For Sure” savings account for yearly expenses you know are coming and you can estimate (e.g. Christmas, insurance, taxes, etc.). Also have a “Buy Stuff” account. If you do, you’ll be able to avoid many financial disasters which will face you, and you can avoid borrowing money from high-rate lenders.

Borrowing. Don’t borrow money unless you are willing and able to pay it back. Failure to pay debts – on time – causes severe financial, emotional, and family problems. Experts recommend you don’t borrow for wants, only for needs, or for things that increase in value. Many lenders will loan you money you can’t afford to pay back, especially high-rate lenders.

Co-signing. Don’t co-sign on a loan unless you are willing and able to pay it back. Often, co-signers end up paying off loans they are unprepared for, and financial hardships follow. Numerous co-signors now have negative credit ratings because a primary borrower paid late. Many lenders do not notify the co-signor before reporting delinquencies or repossessions to the credit bureau.

Compare. Before you decide who to borrow from, compare! Find out who is offering the best deal at that time – look for the loan with the lowest rate (APR).

APR. The Annual Percentage Rate (APR). It is the standard rate, so we may compare the cost of borrowing. It is the cost of credit expressed as a yearly rate. When you borrow, always beat 13% APR (consider “13” to be unlucky when it comes to borrowing). Some have been illegally stating other rates such as weekly or monthly rates. Compare APR to APR. If you pay your bills on time, and you aren’t over-extended, you can nearly always find loans or financing arrangements at rates lower than 13%. Beware though, because beating 13% does not always mean you are getting a good deal. For instance: the difference in total interest paid on an 11% versus an 8% 30-year, $100,000 mortgage loan is $64,283 (assuming all payments are made as agreed).

Consolidation Loans. A consolidation loan can result in great savings to borrowers if the new interest rate is significantly lower, and if you don’t run-up debt similar to what was just consolidated. But beware, because consolidation loans usually result in substantially more money out of your pocket into the lenders’. For instance, mortgage loans usually involve closing costs. They increase the total debt. Many refinances involve reducing the monthly payment, but increasing the length of payback, which substantially increases the total interest paid. Borrowers, who refinance unsecured debt (e.g. credit cards) into a home mortgage, also increase their risk of losing their homes. Also, remember to keep all of your payments current until the old debt is paid off. Too many people have damaged credit ratings, and are in bad financial condition because they counted on money which didn’t come when they expected it. Expect delays when applying for loans, especially consolidation loans. Don’t spend money before you get it.

Desperation. Don’t get desperate for money. The more desperate you are, the less likely you are to get a good loan.

Auto insurance. Keep your auto insurance current. If you fail to keep your insurance up-to-date, you could end up making loan payments for years after your car has been totaled.

Establish good credit. To avoid bad credit, don't borrow too much, and do pay your bills on time. Inexpensive ways to establish good credit: (1) Obtain a good credit card. When you charge things, pay off the balance each month – on time – and pay no interest. (2) Establish a revolving line of credit (an empty loan) as an overdraft protection against bounced checks, and don’t use it as a loan. (3) Get a loan to buy a car, or furniture, or etc.) and pay it off within a few months.

Late fees. To avoid late fees (which multiply the cost of borrowing), pay early, or at least on time.

Repossessions. To avoid repossessions and associated fees, pay early or on time, and keep your insurance current.

Extra principal ® less interest. To pay less interest on loans, pay more than the minimum required payment. Even small amounts of extra principal, can significantly reduce the total amount of interest you would otherwise pay over the life of the loan. Before doing this, however, make sure your lender accepts extra principal payments, and find out what particular procedure you need to follow to ensure your extra principal is properly applied.

Bi-weekly payments. If you get paid weekly, or every other week, paying bi-weekly is a very convenient (almost painless) way to reduce your loan term and interest. For instance, if you make ½ of your required monthly payment every 14 days (a bi-weekly period), you pay the equivalent of 13.052 payments in an average year. If you don’t get paid bi-weekly, or if your lender doesn’t like biweekly payments, you can pay the equivalent amount in monthly installments. If you pay 1/12 of the sum of 13.05 payments each month, you will match the bi-weekly advantage (minor rounding differences).

Contrary to popular belief, the frequency of paying ½ payments bi-weekly doesn’t accomplish much, the real advantage is paying the extra principal (13.05 payments, or more, each year) which reduces the term and the interest paid. If you are considering signing up for a bi-weekly program, pay close attention to the cost. Some servicers have large set-up fees and transaction fees. Also consider the credibility of any company handling your money, some have diverted payments into their own pockets, leaving borrowers to make payments twice (once to a corrupt servicer, and a second time directly to the lender).

Banks vs. Owner Financing

It can often be difficult to obtain a loan from banks, which is why owner financing is becoming very popular among home and real estate buyers. Among the many perks of owner financing, the seller often accepts a low down payment whereas banks often charge 20% or more. In addition, many owner financed properties can be obtained without a credit check. This is especially beneficial for anyone who has a few blemishes on his/her credit report, which may cause banks to charge a higher than normal interest rates. An individual, or real estate developer, who is in the business of providing owner financing will likely extend financing to anyone who agrees to keep the payments current.

In recent years, the internet has become a hub for owner financing properties while also providing plenty of lending opportunities for anyone who wishes to apply for a loan from banks. Currently, a lot of the major internet auction sites have a category that is specifically designed for buying and selling real estate. These categories are more often used for owner financing options related to land purchases, but buyers will find a few homes sprinkled in now and then. From a mountainous retreat to a tropical island paradise, there is owner financing for land in these and other areas.

Customers who wish to apply for loans from banks will find a variety of resources online, including eloan.com and lendingtree.com. These sites offer a customer the ability to have banks competing for their business. According to these sites, offers may begin arriving within hours. Not everyone will be approved, however, as there are a number of deciding factors that banks look at when deciding to extend credit. Among them, the customers credit history, debt to income ratio, ability to repay the loan and the presence of regular income.

Loans that are obtained through banks will require documentation, which may include previous 2-3 years of tax returns, current pay stubs and/or proof of employment. If they own land, individuals who are interested in buying or building a home will find that they have more success with banks. The reason is because the land will become partial collateral for the loan and, if the buyer defaults, banks will foreclose on both the house and the land. In addition, many land owners do not have to come up with the money for a down payment as the equity in their land will serve as the down payment.

Financial Readiness: How Prepared Are You?

Home is where most people feel safe and comfortable. But sometimes — say, when a hurricane, flood, tornado, wildfire, or other disaster strikes — it’s safest to pack up and go to another location.

When it comes to preparing for situations like weather emergencies, financial readiness is as important as a flashlight with fully charged batteries. Leaving your home can be stressful, but knowing that your financial documents are up-to-date, in one place, and portable can make a big difference at a tense time.

Here are some tips for financial readiness in case of an emergency:

Conduct a household inventory. Make a list of your possessions and document it with photos or a video. This could help if you are filing insurance claims. Keep one copy of your inventory in your home on a shelf in a lockable, fireproof file box; keep another in a safe deposit box or another secure location.

Buy a lockable, fireproof file box. Place important documents in the box; keep the box in a secure, accessible location on a shelf in your home so that you can “grab it and go” if the need arises. Among the contents:

- your household inventory

- a list of emergency contacts, including family members who live outside your area

- copies of current prescriptions

- health insurance cards or information

- policy numbers for auto, flood, renter’s, or homeowner’s insurance, and a list of telephone numbers of your insurance companies

- copies of other important financial and family records — or notes about where they are — including deeds, titles, wills, birth and marriage certificates, passports, and relevant employee benefit and retirement documents. Except for wills, keep originals in a safe deposit box or some other location. If you have a will, ask your attorney to keep the original document.

- a list of phone numbers or email addresses of your creditors, financial institutions, landlords, and utility companies (sewer, water, gas, electric, telephone, cable)

- a list of bank, loan, credit card, mortgage, lease, debit and ATM, and investment account numbers

Social Security cards

- backups of financial data you keep on your computer

- an extra set of keys for your house and car

- the key to your safe deposit box

- a small amount of cash or traveler’s checks. ATMs or financial institutions may be closed.

- Consider renting a safe deposit box for storage of important documents. Original documents to store in a safe deposit box might include:

- deeds, titles, and other ownership records for your home, autos, RVs, or boats

- credit, lease, and other financial and payment agreements

- birth certificates, naturalization papers, and Social Security cards

- marriage license/divorce papers and child custody papers

- passports and military papers (if you need these regularly, you could place the originals in your fireproof box and a copy in your safe deposit box)

- appraisals of expensive jewelry and heirlooms

- certificates for stocks, bonds, and other investments and retirement accounts trust agreements

- living wills, powers of attorney, and health care powers of attorney insurance policies

- home improvement records

- household inventory documentation

- a copy of your will

Choose an out-of-town contact. Ask an out-of-town friend or relative to be the point of contact for your family, and make sure everyone in your family has the information.

After some emergencies, it can be easier to make a long distance call than a local one.

Update all your information. Review the contents of your household inventory, your fireproof box, safe deposit box, and the information for your out-of-town contact at least once a year.

Annuity Basics

Annuities can be very good things for some of us and a disaster for those of us who have not been made aware of the pitfalls and traps that in turn can easily befall them.
Since most people have or are going to look into annuities as a retirement or and an investment vehicle, make sure it fits into today’s needs and parameters. It has to be right for the times we are in and it needs to be periodically revaluated for tomorrow’s world.

Precautions to be taken when buying annuities:

1. One should not Buy Annuities With Long Surrender Periods:

People are talked into buying an annuity that locks up their money for an excessive period of time with a surrender period that is longer than another comparable annuity with similar interest rates.

2. Do not fall for First Year Bonus Interest Rates:

Some annuity companies offer you a ‘bonus’ or ‘bonus interest rate’ on your first year deposit into an annuity.


3. Understand exclusion rations and the value of a partial 1035 exchange.

This is a rather complicated subject because there are enormous variables in determining how to properly structure your annuity contract from day one so as to maximize the taxable exclusion ratios when and if you decide to take an annuitization income from your annuities in the future.

4. Do not use small companies with questionable financial ratings

An annuity by definition is a contract guaranteed by an insurance company. Annuity consumers sometimes forget this and buy and annuity without factoring the claims paying ability of the insuring company. This does not only apply to the questions of solvency or bankruptcy but to the more subtle effect it might have ones contract. If an annuity company has financial trouble it most likely will not go bankrupt (even though it is a possibility) because of the various government regulatory groups that monitor annuity companies. But what can happen is the annuity company will lower the rates at which it credits interest to your account in order to make up its losses in other areas of its business.

5. Know the guaranteed cover per person per insurance company

One needs to know if an insurance company goes broke what is the guaranteed cover per person per insurance company is available .One should not invest more than that in the fixed or guaranteed annuities and the variable annuities are not covered. Because if they broke then one may get stuck or spread the amount between different insurance companies.

6. Consider the shortest penalty free surrender date
The next thing you have to consider is getting the shortest possible penalty free surrender date term as possible so long as the interest rate is better than any CD.

Lastly and most importantly get the best professional help, one who will always tell you "like it is" even if its sometimes hard to listen too and even harder sometimes to act upon.

Accident Claim Compensation

There are a number of factors affecting the likelihood of the accident claims’ success.

* Timescale. It is unlikely that a solicitor will be willing to deal with the case if the incident occurred more than three years ago. The limitation period for most personal injury claims is three years and if the case is not settled or proceedings have not been issued in a court of law prior to that time then the matter becomes statute barred. There are exceptions to this rule. The most important one being that time does not begin to run until a person reaches the age of 18 years. There are other exceptions and accident claim advice should always be sought in regards to matters relating to limitation.

* Injuries. The doctor who originally treated the injury will hold medical details, which are of paramount importance when making a claim. The solicitor will use this record as evidence of the type and cause of the injury and if necessary will obtain another specialist's medical opinion as the case proceeds. It is therefore extremely important that medical advice is obtained as soon as possible after any accident either from a General Practitioner or from the local hospital Accident and Emergency department.

* The Police. A specialist accident claims advice solicitor will liaise with any police officers who witnessed the accident or the occurrences shortly after the accident and will usually obtain a copy of the police accident report which will be made available as soon as any relevant criminal prosecutions are completed. A policeman may be called to give evidence in any civil court case for damages if necessary.

* Witnesses: Sometimes there are witnesses and it helps if their statements are collected immediately. Witness statements greatly support the claimant’s case. However, these statements should never be obtained personally by the injured person. A solicitor or a private inquiry agent employed on the client's behalf will usually obtain signed statements which will verify the client's version of events.

* Evidence. The more evidence and information gathered, the greater the success rate. Clients are recommended to take detailed photographs of the location and any injuries. A daily diary charting the recovery from injury is also useful in assessing any compensation payable for pain and suffering. This should include any entries on what kind of activities you can no longer enjoy, or how the pain intrudes on your ability to enjoy a ‘quality” life. All receipts for expenses incurred should be carefully kept and filed (be sure to make photocopies).

7 Great Money Tips To Lead You To Financial Freedom

Copyright 2006 David Maillie

Regardless of where we are in life we can all learn something about money and how to better prepare for our future. Especially when we see that the national average is $10,000 in credit card debt and that savings and preparedness is dropping. This article can put you back on track to a more fulfilling and financially free life.

1) Automate your investing. Experience has proven that if we have to make a conscious effort every time we need to invest we will start with good intentions and then miserably fail a few months later. If you can automate your savings, whether by using your employers 401k, a sep (self employment plan), or direct deductions from your account you will finish ahead. The rule here is if you don't see it, you won't realize it and you won't miss it. Some of these deductions will reduce your taxable income and save you further on taxes (see your CPA and tax advisor for more info on this). A good rule of thumb is to set aside 10% of your income.

2) Real estate. If you haven't already, buy a house. Renting will only make your landlord (hint - house owner) rich. Regardless of what the immediate market does real estate is one of the best long term investments you can make. It also has many advantages including deductions for mortgage interest. Real estate will always go up. People will always need a roof over their head. Just watch HGTV, real estate has made many millionaires and is a key factor in almost every tape and book series on gaining wealth. Stick with the standard 30 year fixed mortgage.

3) Medical and life insurance. You need to have them, if you think you don't just ask anyone that didn't have it when something unexpected happened. If you love your family, they are a must. But, on that note, don't get taken. Buy term life. 20 years will give good term coverage and if you follow all of these tips you won't need anything beyond that. Whole life only makes your agent rich and really never builds any value for the huge costs involved. Term life can be purchased cheap over the internet at great savings. For medical insurance, in most states Blue Cross and Blue Shield offer great plans that are a fraction of Cobra or employer plans. If you have an adequate employer plan, by all means use it. Stick with big names like Blue Cross as they will be around for years.

4) Don't ever buy new cars. It is a fact that new cars lose 25-30% of their value the moment you drive it off the lot. Let someone else pay for that depreciation and get a two or three year old car or truck. With the latest technological advances cars can easily go 150,000 miles and above. A two or three year old vehicle with 30,000 miles on it will save you not only in initial cost, but also on your insurance, and taxes. Also do your homework before buying your car. Get your credit score and see what loans you qualify for. This can easily be done right off the internet and will save you big at your local dealer (never take a dealers word for your credit and rate - they will hold 1-3 points on rate and that can mean thousands in extra interest over the term of the loan).

5) Get out of debt. I put the investment tips above this as you need to pay yourself first. If you are overwhelmed with debt, their are numerous non-for-profit agencies that will renegotiate your debt and terms on your behalf. Work out a plan to get the high interest debt paid off. Be wiser with your purchases - do you really need that 60 inch flat screen tv? a BMW you cannot afford? etc... Cut up all cards but 1 (for emergencies you should have 1 credit card) and no store cards. The whole purpose behiind store cards is to entice you to buy more and pay more. My grandfather said it best - "if you can't afford it, don't buy it." The only good loan to have is a mortgage.

6) Never burn bridges. If you happen to leave your current employ, leave on good terms. Find a replacement if time permits. This will put you in a good light with your former management and can result in a good reference, another job, a callback for more money, etc... Never leave on bad terms. Its just not good Kharma. Also, it won't hurt to take former business associates and customers to lunch regularly. This will keep you in tune to the industry, give you many additional contacts afford you future favors - just think of the lobbyists on Capital Hill, you don't think they spend all that money on their politicians for nothing do you? Don't be afraid to ask for a favor every once in a while. Kharma is the big rule here -when you help others you will inadvertently help yourself.

7) Give back. Once you've made it it is only fair that you help others less fortunate than yourself. Regardless of your beliefs when you donate time and money to help others you will inadvertently help yourself. You will feel great. Also, the cardinal rule of kharma is that when you give you will get many more times what you give back. Take the time to help by volunteering your time. Even if it is 1 hour a week, you will help improve someone else's life. Volunteer, it will make you a better person.

4 Things To Remember When Renewing Your Home Contents And Home Buildings Insurance

Each year when our renewal notices come through the post for our home contents insurance and/or home buildings insurance, most of us automatically sign the form and send it back to the insurance company – after all, we already know how much the premiums are going to be. Big financial mistake, and here are 4 reasons why:

Did You Buy Anything New In The Last Year?

If you bought anything new in the last year, say a new television or video recorder, then the value of this new purchase will not be included in the renewal notice you just sent off to the insurance company. Likewise, if you sold anything of value over the last year, and have not informed the insurance company, then you are paying home contents insurance for something you no longer own. Either way, your not paying the right amount of insurance premiums.

Did The Costs Stay Static?

If you have home contents insurance then you are insuring your personal property for the replacement cost of buying the same thing new. On the other hand, part of your home buildings insurance should cover the cost of labour and materials. Now ask yourself, would the cost of replacing the picture hanging in your living room be the same today as it was last year? If the answer is that it would cost you more, tough luck, you’ll only get paid out what you said the cost of replacing it would be! The same can be said of your friendly builder, would he charge you the same for an hour of his time and for his materials today as he would have done last year? If the answer here is no, then you should be expecting to pay him the difference.

Did The Value Of Your Home Stay The Same?

Similar to the above, with your home buildings insurance you need to be asking yourself whether or not the value of your home stayed the same this year as it was last year? You need to be asking yourself this question even if you didn’t do any work to the house – such as building an extension – that would naturally automatically add value to your home.

Is Your House Any Safer Today?

Here the question is, have you done anything to your house over the last year that would mean your home would be considered safer today than last year? For example, did you add any deadlocks to your doors or windows? If so, then there’s a very good chance your home contents insurance premium would be reduced, as the security in your house is a major consideration in assessing your premium (along with the crime rate in your neighbourhood, so you may also want to check and see if this has gone up or down also).

Keep in mind that time stands still for no man. As such, you need to read your home contents insurance and/or home buildings insurance renewal notices very carefully to make sure that they reflect, as accurately as possible, your life today and not your life of yester-year.