Alice, who owned a coffee shop, was informed by her payment card-processing bank of a potential data breach on her point-of-sale system. A forensics investigation found unintentionally stored credit card numbers. However, the payment card processor demanded indemnification for fines assessed by the credit card companies who alleged a data breach. The payment card processor withdrew $10,000 from the restaurant’s bank account and sued Alice’s restaurant for the balance of the $80,000.
There are many factors that go into the price that you pay for your insurance. In the past few years, insurance companies have gotten very creative at taking into account hundreds (if not thousands) of factors when pricing their insurance. There have always been discounts for having alarms, low mileage driving, insuring multiple cars or multiple policies with one company, being accident free, young drivers having good grades or taking driver education. But lately, insurance companies have started offering discounts for things such as taking a policy out a few days in advance, having good credit rating, not owning dogs, having a laundry room outside instead of inside or on the bottom floor instead of the top floor, being a AAA member, being an AARP member, being a chamber of commerce member, having a college degree, being an employee of a certain business and the list goes on and on. Sometimes consumers love to criticize or argue about the validity of a discount for which they don’t qualify. The reality is that all insurance companies look for factors that make a risk more profitable – and if they can show that those factors make a tangible difference in the frequency or size of claims, they can offer a discount. It’s not my intention to defend any of these discounts, but I do want to let you know about them and qualify you for each and every one you deserve. All companies do NOT offer the same discounts – so having an independent agent (such as myself) search through the many discounts offered by the many different companies will help you to find the company that offers the discounts for which you qualify and in turn help you find the best premium.
I always laugh when I see some insurance company advertising that they have discounts for multiple cars, safe drivers or multiple policies because basically all they are telling you is that they are exactly like every other insurance company – just about every insurance company in existence offers these discounts. It’s the other lesser known discounts mentioned earlier that make an insurance company unique and where you can save some money based on your own particular situation.
THE MOST IMPORTANT THING YOU CAN DO TO SAVE MONEY ON YOUR INSURANCE, in my opinion, is something that is hardly ever mentioned in any insurance advertising and many times not even brought up by your insurance agent – paying your insurance bill.
Tip #1 – Paying your insurance bill:
Insurance companies offer a multitude of options on how to pay your premium and usually each different option has a different total cost for your insurance. That $5 monthly installment fee doesn’t seem like much when you were able to get your policy started for such a low down payment, but over a 5 year period it will cost you an extra $300 per policy. So if you have 4 policies and pay $5 a month each for the convenience of monthly bill, you pay an extra $1200 in insurance over 5 years – probably enough money to insure one or two of your cars free for a year.
Most insurance companies will give you the best rate if you pay the premium all at once for the year. The next best is usually if you have it automatically withdrawn from your checking account. Look into the different options offered by your insurance company and choose the best one – you’ll probably save a nice amount! Another fairly new discount insurance companies offer is when you are taking out a new policy with a company, there is a discount offered for taking the policy out in advance of the date you want the policy to begin. This is kind of a tough one to explain but basically an insurance company will give discounts to those customers who are NOT “last minute shoppers”. The number of days in advance usually range anywhere from 7 days to 30 days for this discount and discount is usually anywhere from 5% to 10% and also usually stays on the policy for the life of the policy. So this discount could save you hundreds (if not thousands) over several years. The best way to explain is to give an example – If you want your policy to be effective on December 1st, then don’t wait until November 30thto take the policy out. Start shopping in advance and get all the paperwork done anywhere from 8 to 30 days in advance and most companies will give you a lower rate for not waiting until the last minute.
Another huge “money drainer” to avoid in insurance is paying your bill late. Insurance companies are allowed to charge you extra money for paying your bill late and/or for reinstating your policy if it cancels due to non-payment. An important thing for the consumer to know about their insurance bill is that you need to think of it as the same type of bill as your house or car payment – you MUST know when it is due and pay it even if you don’t get the bill!!! “I never got a bill” will NEVER work as an excuse for not paying your bill with the insurance company (just like it won’t work with your house or car payment). The insurance company has certain requirements by law on how and when to bill you HOWEVER that doesn’t mean that they have to follow the mail truck to your house and make sure you open the bill. Bills get lost in the mail, delivered to the wrong house, people steal your mail and, yes, on occasion a person might even get a bill and not pay it and then think that they can just say they never got it – well, guess what – it won’t work and it can cost you lots of money. Make sure you know when your bill is due and also make sure you have some type of system to keep track and prove that the payment was made. An option many companies offer now is to bill you through email. Just keep in mind that not getting the email still won’t work as an excuse for not paying your bill. Even if you have automatic withdrawal and some mistake is made and the withdrawal doesn’t go through, the insurance company can cancel your policy for non-payment.
The granddaddy of all payment mistakes is to let your policy cancel. Once your policy cancels and you go as little as one day without insurance, the results can be extremely costly not only in insurance premiums but also with fees/fines to the state (in case of auto insurance). You can also create problems with your mortgage company in the case of home insurance. In the case of life insurance, medical insurance and/or disability insurance it can also mean a requirement to re-qualify for the policy. In addition to these costs, if you happen to have a loss while your policy cancels, you will have the additional cost of paying for the loss yourself which could be huge in the event of an accident in your car or home that is your fault. Insurance companies typically include a discount of anywhere from 40% to 100% or more for people who take a policy out with them who have existing insurance. You never really notice this discount when you switch insurance companies because most people qualify for it so it’s just the norm. However, if you ever let your policy cancel and then try to get it reinstated with the same company or get insurance with a new company, you will get quite the shock when they give you the new price and it’s double or triple what you were paying. If you live in a state where auto insurance is required by law (like AZ), you will also have issues to deal with on a legal level for owning a car and not carrying insurance. Presently, all insurance companies are required by law to report to the state any time a person’s insurance policy cancels and the state will normally require you to carry a SR-22 filing on your insurance if you have a lapse in coverage. I won’t go into all the details of exactly what this is now but just suffice it to say that you won’t be happy with all the extra money a lapse in coverage will cost you.
I can’t stress enough that late payments and cancelled insurance can literally double or triple your insurance bill and can cost you this extra money for years. It is ALWAYS a very bad situation when this happens, the customer is always unhappy and looking for some way to blame it on someone else – but trust me, it will not work – you and only you are responsible for paying your bill on time and you can try to blame the insurance company, the bank, the mailman or your agent but “the dog ate my homework” will not work with the insurance company or the state. Another very important thing for you to know is that your insurance agent and/or insurance company will probably not call you and tell you when your payment is late or cancels. “Back in the day” this was a very common practice for agents to give a courtesy call, but recent court cases have made this a thing of the past. Unless an agent can somehow guarantee that they will call every customer 100% of the time, then they can be held responsible and also could be in trouble for discrimination if they don’t call. So nearly every agent and company are now instructed not to make these courtesy calls. So don’t think that it’s because we don’t like you or you aren’t important if we don’t call you if your payment is late or policy is cancelled – it’s just not something that we can do in the present legal climate.
Hopefully this information has been helpful for you. I will be happy to answer any questions you have about this or any other insurance matter.
We hate facing our own mortality, but most agree our families are our most precious asset. That’s why it is worth taking a short amount of time to review whether those you care most about would be adequately protected in the event of your unexpected death.
How can you be sure your family will have what they need to survive if you are no longer there to provide for them?
You could save and invest for many years but what if you suddenly were not around before the investment was worth enough? A good life insurance policy would take away the worry while waiting for your investments to accumulate. If you don’t have life insurance, now might be a good time to consider it. If you do have coverage, double check to make you have enough to adequately protect your family. Be aware the small amount of life insurance through your employee benefit package might not be enough. Many companies provide $50,000 to $100,000 of employee life insurance. That won’t go far. And you’ll lose this benefit if you lose your job, so it is always good to have a private policy you can keep regardless of your employment situation.
Who needs life insurance?
Anyone who is providing financial support or care for family members or has a current debt such as a mortgage that would need to be paid off in order for surviving family members to continue to live. The need is especially great for younger couples who will need to support children and/or make large mortgage payments for many years. Couples without children would also want to consider life insurance if they are paying on a home mortgage. A two-income family often could not afford the payments on their own. A family tragedy shouldn’t be compounded by getting your house foreclosed on. Life insurance can easily take away this concern.
A rule of thumb is to multiply your current salary by 10 so your beneficiaries would have 10 years’ worth of security. To be more accurate you can calculate what it would take for your survivors to maintain their current lifestyle over the desired number of years. If you want your mortgage to be paid off or have big expenses like your child’s college education, be sure to add on for those items too. Stay-at-home spouses have economic value and should also be insured for the amount it would cost to hire child care.
Buying life insurance isn’t fun, but we are here to make it as easy as possible for you to sort through the information to find an affordable plan will work best for your specific situation.
What can YOU as a consumer do to reduce your auto insurance rates?
As an independent agent in Phoenix, AZ, I’ve had the pleasure of working with hundreds of clients to reduce their auto insurance rates. Although there are many factors that go into determining the cost of auto insurance, here are 10 tips that will help you attain the maximum discounts available and keep your price as low as possible.
1) Package Policies
Every company offers “Multi-Policy Discounts” that range from 10% – 35% on BOTH your auto and homeowners policies. Take a second to figure out what 35% of your annual premium is… If you have your auto and homeowners insurance with separate companies, that’s the amount you are potentially overpaying!
If you aren’t a homeowner, you can still attain the multi-policy discount by combining renters insurance, motorcycle, ATV, boat, etc. Although these may offer a lower discount than a homeowners policy, it is ALWAYS smarter to keep your insurance with one company.
2) Driver Education
Have you taken any sort of driver training in the last 2 years? Most companies offer a substantial discount for this, but you may need to provide a certificate of completion. These classes usually serve as a means to erase a traffic violation from your record as well, which will help to keep the rates low in the future.
3) Good Student Discounts
Still in school? A Good Student Discount can decrease auto rates dramatically for younger drivers, especially young males. Most companies consider a good student to be above a 3.0 GPA. Some companies have different tiers of discounts based on Dean’s List/Honor Roll, Class Percentile, etc. If you qualify, make sure to ask your agent, but be ready to provide a report card for verification.
4) Company Cars
If the company you work for provides you a vehicle, you may qualify for a substantial discount on your personal auto policy. The idea behind this discount is that you will be driving your vehicle less since the company car will be used for commuting. If you drive your car less than the average person would, there is less chance of getting into an accident, which results in a better price!
5) Association Memberships
This usually applies to AAA Members, but many insurance companies have arrangements with different associations to provide discounted rates to members. Make sure to let your agent know any association you are a part of to find out if you qualify.
If you pursued any type of education after high school, you may qualify for a discount. There are different tiers for each company, but many companies give a discount for: associate’s degree, bachelor’s degree, doctorate, etc. Even if you only completed a portion of higher education and didn’t get a degree, some companies will still offer a discount.
7) Aftermarket Alarms
Most vehicles 2001 and newer have “Passive Alarms” meaning that they turn on automatically when you lock the car. When an agent plugs in a VIN # for a vehicle, it will automatically generate the type of FACTORY INSTALLED alarm. This means that if your car is older than 2001 and you don’t notify your agent of an aftermarket alarm, you are missing out on the discount.
8) Accident Records
Every company requires agents to run an M.V.R. report and a Loss History report prior to binding coverage. These reports track any claim within the past 5 years tied to; your name, address, or even a previous address or policy that you were listed on. Often times Loss History reports come back with an accident that may belong to a previous household member. Unless the agent excludes these, they are counted against you. This happens more than you think, so make sure you aren’t paying for somebody else’s mistakes!
9) Automatic Payments
Almost every company I represent offers a discount for EFT payments (Electronic Funds Transfer). This will typically reduce the rate and ensure that you don’t miss a monthly payment and get hit with a late fee. Although this historically required a checking or savings account, most companies now offer this through a credit card as well.
10) Pay it in Full
If you are in a financial position to pay for the policy in full, some companies give up to a 10% discount! This can be paid via credit card or EFT transfer.