finance self-insurance

There comes a moment when everyone who writes articles for online websites must be allowed a moment of some joy. We put our noses to the literary grindstone and turn out these gems in support of sites designed to help people find better terms at more affordable prices. Now we have confirmation we are doing a good job. Who’s singing our praises? Well, to a loud fanfare, here comes J D Power and Associates with the publication of a new study. This is the fifth year in which the firm has researched insurance shopping habits. A team spoke with some 15,500 adults who were randomly picked when requesting a quotes from an online site like this.

This must trigger a small word of reassurance. Sites like this do not store any of your personal details. The way the survey worked was through a temporary modification to send an e-mail along with the quotes asking for the individual to call a toll-free number. Only those who volunteered were interviewed. The reason for this approach was to talk with people at the earliest stages of looking for quotes. Obviously shopping for insurance can be spread over weeks and involve several different methods of collecting information about what the market can offer.

The results are significant because it’s the first time a comprehensive survey has found a majority of responders relying entirely on the internet for information about insurance. Although it’s obvious the human agent was the only way of supplying information before the arrival of the internet, the rise of online power has been remarkable. If we take the popular interest as starting in 1995, it’s taken only 16 years for the culture of tens of millions of Americans to change in favor of automated systems. Of course, reducing the use of labor is a big saving for the insurance industry and some of the savings will have been passed on to us consumers, but the addition to the number of unemployed is not so welcome. It’s also led to a loss in overall satisfaction levels when it comes to claims handling. With insurers hiding behind call centers, the challenge is to find someone to talk with who knows what’s happening. When asked to rate their insurers, the companies with below average satisfaction levels included Esurance, Mercury, Nationwide, and Progressive. Continue reading →

These days everyone is crazy about savings. Millions of people are looking for ways to cut their costs because of the bad economy that is still haunting the US. And one of the most common objects of such cost-cutting tendencies is auto insurance. Because it’s mandatory in all states and can be rather costly people often feel that they don’t really need it. Some car owners even choose to drop it and then face serious financial and law problems when having an accident without any kind of coverage. You, on the other hand, can be smarter and simply employ the following cost-cutting methods to save some money on insurance:

Cut your coverage

If you have financed your car through a loan and have already paid it off you can consider dropping some coverage types to make your policy cheaper. First of all you can exclude gap coverage that is only useful during the loan pay out period. If there’s no significant market value to your car then consider dropping collision coverage as well. Uninsured motorist coverage can be particularly useful but if you’re driving mostly in areas with no uninsured drivers then there’s no sense in paying for this type of coverage. It’s really important that you review your policy every year and adjust it to your current insurance needs that will definitely change over time.

Raise the deductible

The deductible, as you may already know, is the amount of money you have to pay from own pocket before the coverage kicks in. In other words, it’s the amount of damage you can pay for without using auto insurance coverage. And the higher is the amount the lower are your rates, because there’s a lower risk of filing a claim for the insurance company. So make sure to avoid keeping the deductible low because it will raise your rates. By increasing the deductible from the standard $250 to $500 you can actually get up to 15% off your premium. But keep in mind that raising the deductible too high doesn’t make much sense because you should actually afford paying it when an accident happens in order to trigger coverage. Continue reading →

If there was a truth drug we could secretly administer to all politicians, you would almost certainly hear them agree the current health care services are broken. The reason is easy to state. As it stands, doctors and hospitals operate under the fee-for-service system. This gives them a direct financial incentive to do more work than may be strictly necessary. Even though they may explain everything to the patient and get “informed” consent, not all the tests are strictly necessary and many of the procedures they recommend have little chance of improving patient outcomes. So the best way to improve health care in this country is to change the incentives. Instead of paying for more care, we should be paying for better quality care.

Yet if you look at the proposals made by Rep. Paul Ryan, the Republicans are now committed to changing the cost base of health care. In particular, they want to change the entitlements our seniors have under Medicare. It’s undoubtedly true the service is buckling under the rising burden of spending. Way back in 1965 when we created Medicare and Medicaid, the government spent 2.6% of its budget on health care. Last year, our government spent 26.5% of its budget on health care. If you look at the projections published by the White House, President Obama is projecting this will rise to 30% by 2016. To give you a context, the projected spending on our defense is only 20% of the budget. Just think, all those weapons and people, fighting wars in Iraq and Afghanistan. Something has to be done to bring costs under control.

The unanswered question is how you can bring out-of-control spending under control. For Medicare, Ryan proposes introducing a voucher system in 2022. He believes that, if you give our seniors control over their own budgets, they will seek out the lowest-cost medications and treatments. If you do that to the 48 million seniors expected to be a part of Medicare in ten years time, this will either make or break the system entirely. But there’s no guarantee seniors will have the knowledge and determination to insist on less waste in the system as a whole. Take a simple example. If the effective treatment is ten pills spread over five days, will patients refuse twelve pills? Now scale that up across all treatments. It would be far better for government to regulate, setting national care standards so that our health care service only offers treatments where the evidence clearly shows them to be effective. This is the European approach where the public purse will only pay for the treatments approved by their local quality assurance departments. Continue reading →

It’s such a headache when you have to renew your policy or pay the premiums to have your car insured. If you had the “luck” of getting an expensive policy in the first place then this process is certainly quite unpleasant for you. Paying money for what you feel is over-priced can make you think that you’re wasting your money on something you don’t really need. And this in turn results in some drivers dropping their policies altogether, driving without insurance and ending up paying all the costs out of own pocket in case of an accident. If you think that you are special and can’t have an accident because you’re good driver we have bad news for you – there are millions of drivers out there just like you who think they can handle it but still accidents take place every few minutes on US roads. And you might end up in one of those regardless of how good you are behind the wheel. Continue reading →

In the dim and distant past, someone working for the insurance industry had a good idea. Just as people pay by the minute for their telephone calls, perhaps they should also pay by the mile for their vehicle insurance. You can imagine the awed silence around the table as everyone dreamed of a world without dishonesty. Then, with a sad shake of the head, the idea was buried. No one can be relied on to tell the truth about how far they drive. You only have to look at the reality when the FBI stages a bus crash at an intersection. Half the passers-by run to the bus, climb on board and then fall down injured. At heart, everyone is open to the opportunity for a little extra cash. If this might come from a claim against the bus company for injuring its passengers. . . Well, who cares as long as the cash follows. Now translate that into people self-certifying how many miles they drive a week or month. As we said, this was a good idea that came along before its time.

Have you noticed how many computer chips are now showing up in our cars? It’s amazing how clever some of our vehicles are, deciding how to brake safely in difficult driving conditions, producing more gas efficiency and less emissions. It’s a miracle how we could ever get from A to B before all this technology came along. It’s even possible for the vehicle to tell us how to get from A to B with a computer-generated voice advising on the best route to avoid the slow-moving traffic. Now that’s a miracle.

To make all this possible, the vehicle has to be able to transmit its position to a GPS satellite and calculate where you are on a map. So the vehicle already knows when you drive, where you drive and, if the right program was written into the central processing unit, how well you were driving. It can easily record your pattern of acceleration and braking. From an insurance company’s point of view, this information is like gold. If the vehicles were transmitting this information live to the insurer’s computer, it could bill you by the mile depending on where you were driving and at what time of the day or night. So if you’re out at 2 a.m. driving fast, swerving round bends and leaving rubber on the roads, your premium rate can go up because you’re proving yourself high risk. But if you are driving gently at an off-peak time and never do more than short runs to and from school for the kids, and then down to the mall, your rates reflect your safe lifestyle. Continue reading →