How risky hobbies raise your insurance

9:00 AM hobbies, insurance, life insurance, raise, risky No Comments

| By Geoff Williams, U.S. News & World Report

Love skydiving or mountain climbing? Such thrill-seeking pastimes can cost you more than you think.

You think mountain climbing or sky diving is risky? Try telling your insurance agent about it.

Mitchell Fox, 30, of San Francisco, is an avid outdoorsman, a guy who rock climbs and scales mountains, but his thrill-seeking has come at a cost. Fox had life insurance, but after he left his position as a director of marketing at an online stock brokerage to become co-founder of the startup GoodApril.com, a free online tax planning service, he was no longer covered. He applied for life insurance from a company that had a listed rate of $20 a month for $350,000 of term life insurance. He was accepted—if he would pay $180 a month. Reluctantly, Fox declined to buy life insurance, and he's without it for now.

"As someone who works in finance, I understand why an insurer would charge a higher rate to a higher-risk customer—that makes good business sense. And honestly, mountaineering is a dangerous hobby. My wife took a scary fall a couple of years ago on Mount Shasta and was lucky to be mostly unhurt," says Fox.

That said, Fox feels the insurance industry as a whole isn't thinking through these rates in a fair way. "It frustrates me that the difference between paying nine times as much per month for insurance was the fact that I was honest on my application about a sport I only infrequently participate in—I've climbed three mountains in two years. Am I really nine times riskier a customer than less-active people, whose chances of heart disease are probably higher? Am I really nine times riskier than a bad driver? I don't recall the question, 'Are you a good driver?' on the application."

So if you have an active lifestyle or have been thinking your life needs more adrenaline, here are some things to consider.

You will pay for that risky hobby. And you will possibly pay quite a bit more than you expect. Joel Winston, a former deputy attorney general for the state of New Jersey, is now a New York-based attorney who founded AnnualMedicalReport.com, an organization aimed at improving privacy protections for personal medical information. There are no hard-and-fast rules on what an avid or occasional mountaineer like Fox will pay, but Winston has compiled what he says is a rough estimate of additional prices an otherwise healthy person can expect to pay if he or she is seeking $500,000 in term life insurance and engages in the following activities:

Motorcycle riding: expect to pay an additional $1,000 per year
Scuba diving: additional $2,500 per year
Skydiving/BASE jumping: additional $2,500 per year (and there's a good chance you'll simply be denied life insurance)
Hang gliding: additional $2,000 per year
Rock climbing: additional $1,500 per year
Hunting: additional $500 per year
Recreational boating/fishing: additional $750 per year

It isn't just life insurance, either. Winston says the individual health insurance market is "almost like the Wild West, depending what state you're in." In some states, companies selling individual—not group—policies have started increasing premiums based on dangerous hobbies. Again, these aren't hard-and-fast numbers, but assuming your insurer knows what you're doing in your spare time, a Mixed Martial Arts (MMA) fighter can expect to pay an additional $1,000 a year for health insurance, and a marathon runner, an extra $750. If you have an individual health plan and own a registered gun, whether it's something you hunt with or have tucked away in a drawer, you might easily spend an additional $2,000 a year, says Winston, although that practice will end when the Patient Protection and Affordable Care Act, also known as Obamacare, begins.

You can pretty much give up the idea of getting long-term disability insurance. There are probably exceptions, but if you engage in risky activities like skydiving, you won't likely get this insurance, or you'll have to pay so much that it won't be worth it. Vincent Sarullo, 45, is a co-founder of Tower Fund Services, a financial services company in Red Bank, N.J., and while he has a quiet day job, he enjoys deep sea diving. Sarullo is also a rescue diver for the fire department in Red Bank. He works in a respected industry and is trusted by his local fire department to dive. Doesn't matter. He can't get the insurance.

Ironically, he says of an industry that is all about studying the details surrounding dangers, "I think the insurance companies just don't understand the risks, or lack thereof," says Sarullo, who won't give up diving to attain long-term disability insurance: "I love it too much."

You can do something crazy every once in awhile. Wake up one day and suddenly feel the urge to learn to skydive? Watch the opening scene in the Billy Crystal comedy classic "City Slickers" and decide that you, too, should run with the bulls in Spain? If you risk death in some wild stunt and don't end up coming out okay, your life insurance will still pay out, says Laura Adams, a senior insurance analyst at InsuranceQuotes.com, an insurance comparison site.

There is one caveat, and that's whether you bought your life insurance a few weeks or days before you ran with the bulls, which would suggest you bought it because you knew there was a good chance you might be a goner. Adams says that generally with an insurance policy, "there's what's called a contestability period, usually about two years, where the insurance company is more likely to investigate a death."

Above all, be honest in your application. You might easily think it's not worth the trouble to tell an insurance company about your love for mountain climbing, and it's true that it's probably not smart to volunteer the information. But if you're asked and lie to an agent or on your application, you're taking just as much of a risk as the pastime you're engaged in.

"If they ask about your lifestyle, you've got to be honest," says Adams. "If you're a pilot or scuba diver and you lie about that, and then you die in a skydiving accident or you go spelunking and they find you underwater in a cave, the insurance company may not pay out. They can argue that it was fraud and that your beneficiaries aren't entitled to anything."

And odds are, they will find out. Insurance companies, says Winston, are well aware of "the groups you're involved in, the commentary you write on Facebook, the stuff you post on Instagram. If you have a low-value insurance policy, it won't come up, but if it's a serious policy that could bring in big numbers, they'll want more background on you."

Winston adds that even if you're quiet about your activities, someone else might not be. "Somebody might post a picture of you diving underwater and tag it to you on Facebook, and so suddenly your insurance company knows what you've been up to, and it isn't even something that you disclosed," Winston says. "But that's just the way things are interconnected now."

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Your lifetime insurance bill: $94,000

3:30 PM 94000, insurance, lifetime No Comments

| By Mark Vallet, CarInsurance.com

That’s almost two years of income for the average household. How does that stack up against other lifetime expenses?

Life is expensive.

According to the U.S. Census Bureau, a college graduate will earn $2.1 million over a lifetime. Most of us leave very little behind because groceries, cars, daycare and the mortgage consume nearly every penny.

A lot of those pennies go to car insurance.

Over a lifetime of driving -- age 16 to 78 -- the average person will spend about $94,000 on insurance, according to data gathered by CarInsurance.com. The analysis of nearly 200,000 car insurance quotes sorted customers by age, then added up average costs for 62 years on the road. Drivers with all kinds of claims, driving and credit histories were included.

If that seems like a lot -- nearly two years of income for an average household -- compare it to a lifetime of other expenses:

A child: The Center for Nutrition Policy and Promotion puts the cost of raising a child to the age of 17 at $235,000. College increases the cost significantly.

An iPhone: Using a 32GB iPhone from age 21 to 75, buying a new phone every six years, will run you about $72,000. Compulsive upgraders and heavy data users would pay even more.

A caffeine habit: Hitting Starbucks every morning for a $4 latte will cost $88,000 over 60 years. Making your coffee at home will almost cover car insurance for life.

A nicotine habit: Smoking a $5.25 pack a day for 60 years totals $115,000, not to mention the thousands of dollars more you’ll pay for life and health insurance.

Some costs are baked into your lifetime of car insurance. You will pay more when you are young. You will pay more if you continue to drive when you are very old. (If you drive to the ripe old age of 102, your lifetime of car insurance will cost you $131,000.)

Surprisingly, being a woman doesn't pay a huge dividend over a lifetime when it comes to car insurance. Women paid about $1,000 less, according to the analysis.

Ultimately, though, the choices you make as a driver and consumer shape your insurance destiny.

Where you live makes a big difference, largely because state laws and legal climates vary so much. Drivers in Arizona and Maine have the cheapest car insurance. The most expensive? Michigan and Louisiana.

You may not move for bargain car insurance, but you can choose the right neighborhood. Insurance companies look at claims in your area as they price your coverage.

"Driving safely, getting very few tickets and being involved in a minimum number of accidents over your lifetime will have a big effect on your premiums,” says Mario Morales, spokesperson for MetLife Auto & Home. “Managing your credit responsibly is also key."

Bad drivers pay a penalty for their behavior. Get a ticket every three years and you will pay a total of $102,000.

Good credit, on the other hand, can save you as much as $22,000 over your insurance lifetime.

American Family spokesperson Janet Masters reiterates the importance of your credit rating, "There is very strong statistical evidence that credit history can help an insurer accurately predict the likelihood of insurance claims. Almost every insurance company currently uses credit-based insurance scores. Maintaining a solid credit history can lead to lower insurance costs."

Both Masters and Morales advise drivers to carry the highest deductibles they can afford. Morales points out that while the standard deductible used to be $250 to $500 it has risen to $1,000 in recent years.

It’s not a bad idea to routinely double-check your savings and discounts eligibility, either.

What else could you do with that $94,000 if you spent your life walking, taking public transportation or mooching rides?

You could give a 16GB iPad to 188 of your closest friends, or an iPad Mini to 285 random strangers.You could buy a house in Niagara Falls, N.Y., where the average listing is $60,820. You would have almost $35,000 left over for furniture and improvements.You could buy yourself a Porsche 911 Cabriolet and still have a few hundred dollars left over.
But of course, without car insurance, you couldn’t drive it.

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Car insurance when you have no car

8:30 AM Car insurance, insurance, Nonowner No Comments

| By Michele Lerner, Bankrate.com

Even if you don't own a vehicle, instances will pop up when you still need insurance.

Car ownership is declining, particularly among younger Americans. Many people, especially in urban areas, now prefer to use a car-sharing service or occasionally borrow or rent a car if they need to drive somewhere.

The challenge is that drivers must always have car insurance coverage when they're behind the wheel. For some drivers, a "nonowner car insurance" policy may be the most economical way to protect themselves and their assets in case of an accident.

These policies typically offer only liability coverage, says Dan Ramsey, an independent insurance agent with Brandt, Ramsey and Associates in Alexandria, Va.

"Nonowner car insurance provides protection for an accident when you're at fault, so it covers the other driver's car, but not yours, and the other driver's injuries, but not yours," he says.

The policies generally don't include comprehensive or collision coverage for damage to the car because you don't own the vehicle. Ramsey says the insurance will cover you in any car you drive during the policy period.

People buy nonowner car insurance to make sure they're insulated from the potentially high financial hit from an at-fault accident, says Steven Visco, president of C.H. Edwards Inc., an insurance agency in Farmingdale, N.Y. "For instance, one client is a wealthy attorney who lives in Manhattan and doesn't own a car, but he has assets to protect," Visco says. "He's renting a place in the Hamptons this summer and will regularly rent a car."

"This policy offers extra liability protection and is cheaper than buying the liability policy from the rental car company," he adds. And don't expect to rely on your credit card because liability coverage is not included in the rental car insurance that cards provide.

You may want to consider nonowner car insurance if you have no car of your own and:

You rent cars often."If you pay $10 per day for a rental company's liability coverage and rent cars for 50 or 60 days or more every year, a nonowner insurance policy could be less costly," Visco says. But you'll still need to buy the other coverages sold at the rental counter.

You belong to a car-sharing service, such as Zipcar. The service will provide some insurance coverage, but, "If you hurt someone in a car accident, the liability lawsuit is likely to be against both you and the car-sharing company," says Visco. "You may want to look into protecting your assets from a lawsuit with your own liability coverage."

You borrow other people's cars often. When you borrow a car from a friend or a relative, the car owner's insurance covers you, says Ron Moore, senior product manager for MetLife Auto & Home in Minneapolis. However, if you're borrowing a car from someone you don't know well, you may not know if their liability coverage is adequate to protect you. "If you're at fault and the other driver's injuries exceed the car owner's liability, then you may be stuck paying the bill," Moore says. That's where a nonowner policy would help.

You have a problematic driving record. "In Virginia, the state mandates nonowner car insurance coverage for drivers who don't own a car but have had a major problem driving, such as a DUI or DWI, or some other major violation like driving on a suspended license," says Ramsey. He adds that the premium for this mandated liability coverage is about $600 for six months.

Nonowner car insurance typically doesn't carry a deductible, says Moore. Premiums can be very low, based on your driving record and the amount of driving you do, he says.

"Normally the minimum premium is about $250 for six months or even a year," says Visco. "The premiums are higher for drivers with a bad driving record, and they may not qualify at all."

Moore says premiums for nonowner car insurance are typically about 50 percent of normal car insurance premiums, but they vary from company to company and state to state.

If you don't own a car but still drive regularly, you may want to get a nonowner car insurance quote to find out if this coverage is appropriate and affordable for you.

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Isolated from Japan Quake insurance industry

2:18 PM industry, insurance, Isolated, Japan, Quake No Comments

Japan's massive earthquake, tsunami and nuclear disaster should not, likely, the most expensive natural catastrophe on the files, but the impact on the private insurance industry that Hurricane Katrina will exceed in 2005.

This is partly because Japanese House and apartment owners and companies heavily leave insurance system, rather than private insurance on a State-funded earthquake. As a result, only about 14 to 17 percent of the Japanese houses private earthquake have insurance, estimates the reinsurance Association of America.

The Japanese system is also a cap on total damage by the Government and private insurers paid. If total claims about above, are $60 billion payments pro-rata which means that House and apartment owners and companies would have to for a partial coverage of their losses to settle.

This is a relatively small payment for the private insurance industry, and it is distributed to more than one player.

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Nevertheless, be the total cost of the last week 9.0 magnitude quake and resulting tsunami astronomical. Estimates put total losses at $180 billion private bank, a figure which could later when leaks from a crippled nuclear power plant further damage, radiation

The figure on the files would - making Japan the most expensive natural catastrophe earthquake greater than Hurricane Katrina, the losses created $125 billion and some 1,300 people killed in the year 2005. Losses were about half of Katrina's insurance, which covers the insurance industry, in a $66 billion.

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Thanks to the limits of liability and a longtime financial attack by the Japanese Government, the cost of the quake of Sendai, the private insurance industry will be probably far lower. Most cited widely estimates of insured damage comes from AIR worldwide, insurance consultant, who provides these losses in the range of $ 15 billion to $35 billion. This figure, the tsunami damage not cover could increase according to Jayanta Guin, AIR worldwide head of research and modelling.

"It is too early in the episode;" We hundreds all geophysical data and simulation of ground motion and estimate damage based run computer simulations using this simulation, "he said." "We are working out the details to see whether we can further customize it."

Insurance premiums rose after Katrina, but are unlikely this time around say to do analysts

The insurance impacts from the Sendai Quake likely above all of the Japanese domestic non-life insurance and life insurance industries "with a healthy portion of the community together global reinsurance" absorbed, said Robert Hartwig, President of the insurance information Institute, an industry group.

The biggest wild card estimates is damage the threat to life and property by the crippled Fukushima Dai-Ichi nuclear plant, which was leaking radiation. These potential costs are recognized, but the private insurance industry is fully shielded from the financial effects.

After the Japanese nuclear Act of 1961 operators of nuclear plants for any damages liable as a result of a "severe disaster of an exceptional nature," according to the reinsurance Association. Tokyo electric power, the plant operator, has its own private property insurance for the work, but analyst at Swiss Bank Vontobel is excluded from the directive according to Stefan Schurmann damages due to earthquakes and tsunamis.

He said "These disasters by the property and casualty insurance policies are excluded,".

If insurance companies Quake purchases of large natural disasters such as the Japan and tsunami face, they are based generally on the other, larger insurers - so called "reinsurers", which serve as a backstop, when losses get too large. After raising the reinsurance industry keeps premiums after the large losses from Katrina, currently surplus capital from $50 to $70 billion, according to investment bank Credit Suisse.

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The financial hit in the reinsurance industry will be tempered by payouts on private insurers by the Japanese Government, provides a separate earthquake reinsurance attack to the Japanese insurance industry. All of this global reinsurers can be well positioned to handle what could be the most expensive natural disaster in history.

Could contribute to, another round of increases as the moderate, which followed the huge payouts from Hurricane Katrina.

Insurance premiums cause usually in cycles, increases in so-called "hard" markets, if heavy losses insurers premiums to enforce, and fall into the "soft" markets, if large cash spark competition to new customers and discount discounts pillows.

Although the cost of the coverage of the earthquake Japan can be manageable, a string of losses, the more than $50 billion, including the large payouts on damage from the recent earthquake in Chile and New Zealand and floods in Australia have total results. So even before the earthquake of Japan, the cycle was swinging again created by surpluses of accumulated post-Katrina from the "soft" market.

But while premiums rise in Japan is expected, analysts say consumers anywhere else in the world probably not see large increases - if and as long as a more major disaster hits.

© 2011 msnbc.com reprints

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The states that are dying for healthcare coverage

1:30 AM coverage, dying, healthcare, States No Comments

By Alexander E.M. Hess and Samuel Weigley, 24/7 Wall St.
The lack of medical coverage in America is a serious problem as approximately 50 million people were uninsured all through 2010. But the U.S. Supreme Court on Thursday ruled the Patient Protection and Affordable Care Act, which was passed in 2010, was constitutional. The legislation, once implemented in its entirety, is expected to cover 30 million Americans currently lacking coverage.

The lack of medical insurance has had grave consequences for individuals and the nation. In 2010 alone, 26,100 people died because they had no health insurance — that amounts to 502 preventable deaths a week. However, some states fared better than others. Based on the latest report by Families USA, a health care consumer advocacy group, 24/7 Wall St. identified the 10 states with the highest number of deaths per 100,000 people due to a lack of insurance.

Not surprisingly, nearly all of the states with the most residents dying due to a lack of insurance also had high numbers of uninsured residents. Seven of the states on the list were among the 10 states with the highest percentage of people without health coverage. Seven of the states were also in the bottom 10 for the lowest rates of private insurance coverage.

People without health insurance often forgo medical treatment for different reasons. According to Families USA, a supporter of President Obama’s health care reform law, uninsured adults are nearly four times more likely than insured adults to delay or avoid preventive care screening due to cost. Uninsured adults are also nearly seven times more likely to go without needed care due to cost than privately insured adults.

“You still see a very, very strong correlation between uninsurance and poor health-care outcomes — including mortality — and [that is] because people aren’t getting the type of care that they need,” Kim Bailey, the research director for Families USA, told 24/7 Wall St.

Many of the states with high death rates due to a lack of insurance also were among the poorest states in the country. The top seven states on this list also are among the 10 states with the highest poverty rates. Every state on this list is in the top half.

Poor health also appears to play an important role. States with high death rates due to lack of insurance had a high percentage of people with lifestyle-related risk factors for poor health. Of the states on our list, five of them have among the 10 highest percentages of smokers and among the 10 lowest percentages of people who eat vegetables at least three times a day. Four have among the 10 highest proportions of overweight or obese adults. Seven states on the list were in the bottom 10 in terms of life expectancy.

Based on Families USA’s report, “Dying for Coverage: The Deadly Consequences of Being Uninsured,” 24/7 Wall St. identified the 10 states with the highest number of deaths from being uninsured per 100,000 residents. 24/7 Wall St. reviewed the methodology used by Families USA, first developed in 2002 by the Institute of Medicine, to determine excess mortality from being uninsured. This method considers the proportion of people who are insured and uninsured, the mortality risks for the uninsured and the number of expected deaths from a hypothetical fully insured population. 24/7 Wall St. also identified poverty rates and median income by state, provided by the U.S. Census Bureau. The Kaiser Family Foundation’s website — Statehealthfacts.org — provided health-related data, including life expectancy, obesity and diabetes rate.

These are the 10 states dying for health coverage.

1. Mississippi
• Excess deaths from a lack of insurance (per 100,000): 15.82
• Percent of population uninsured: 18.2 percent (ninth highest)
• Percent living below the poverty line: 22.4 percent (tied for the highest)
• Life expectancy at birth: 74.81 years (The lowest)

Many residents of Mississippi cannot afford insurance. The state has the lowest median income in the nation and the highest percentage of residents living below the poverty line. As a result, Mississippi has the second-lowest percentage of residents with private health insurance coverage, at 56.49 percent. Exacerbating the problem, residents are especially unhealthy. Among all states, Mississippi has the second-highest obesity rate, the second-highest percentage of adults with diabetes and the fifth-highest percentage of adult smokers in the nation. Probably on account of both high uninsurance rates and poor personal health, Mississippi is the only state where life expectancy was below 75 years at birth in 2010. Mississippi’s excess death rate was the highest among all states and twice that of 28 states in 2010.

2. Louisiana
• Excess deaths from a lack of insurance (per 100,000): 14.94
• Percent of population uninsured: 17.8 percent (10th highest)
• Percent living below the poverty line: 18.7 percent (sixth highest)
• Life expectancy at birth: 75.39 years (fourth lowest)

Louisiana has one of the lowest life expectancies at birth in the U.S. at 75.4 years. Though much of this certainly can be attributed to poor health choices — the state has a higher number of smokers and its residents eat comparatively little fruit or vegetables — the inability of many residents to receive proper care due to lack of insurance is also a contributing factor. In Louisiana, 17.8 percent of the population goes without health insurance, despite the fact that 21.9 percent of the population qualifies for Medicaid — the fifth-highest proportion among all 50 states. The high uninsurance rate is partly due to the relative economic disadvantage of the state’s residents. With 18.7 percent of residents living below the poverty line — the sixth-highest rate in the nation — and a median income that is more than $5,000 lower than the U.S. average, just 58.39 percent of state residents have private insurance. That is the fourth-lowest such rate in the nation.

3. Arkansas
• Excess deaths from a lack of insurance (per 100,000): 13.49
• Percent of population uninsured: 17.5 percent (tied for 12th highest)
• Percent living below the poverty line: 18.8 percent (fifth highest)
• Life expectancy at birth: 76.09 years (sixth lowest)

According to the Council for Community and Economic Research’s ACCRA Cost of Living Index, Arkansas had the second-lowest cost of health care in the United States. However, with 18.8 percent of the population living below the poverty line and a median annual household income of just $38,307 — both among the lowest figures for any state — many Arkansans cannot afford private health coverage. As a result, just 58.78 percent of the population has private insurance, the sixth-lowest figure in the country.

4. South Carolina
• Excess deaths from a lack of insurance (per 100,000): 13.48
• Percent of population uninsured: 17.5 percent (tied for 12th highest)
• Percent living below the poverty line: 18.2 percent (seventh highest)
• Life expectancy at birth: 76.57 years (ninth lowest)

South Carolina is not a particularly healthy state: 67.4 percent of the state’s residents are either overweight or obese, just 23.3 percent eat proper amounts of fruit, only 22.9 percent eat proper amounts of vegetables and 10.7 percent are diabetic. All of these are among the highest rates in the country. Meanwhile, much of the cost of health care falls to private individuals. The state spent about $6,300 per person on health care in 2009, among the lowest levels, and just 51.9 percent of residents have employer-based health coverage. Unfortunately, South Carolinians have trouble affording insurance on their own: Median income was just $42,000 in 2010, significantly lower than the $50,000 national average, 18.2 percent of residents live below the poverty line and the cost of health care is higher than is the case in many states.

5. New Mexico
• Excess deaths from a lack of insurance (per 100,000): 12.15
• Percent of population uninsured: 19.6 percent (sixth highest)
• Percent living below the poverty line: 20.4 percent (tied for the highest)
• Life expectancy at birth: 78.21 years (20th lowest)

New Mexico has a fairly healthy population, with relatively low heart disease and obesity rates. However, just 55.8 percent of residents have private health insurance — the lowest rate of any state in the country. One possible reason is that few employers provide insurance — just 45.6 percent of the population has employer-based health coverage. The relative poverty of the state also means many residents cannot afford medical coverage. The median income in the state was just above $42,000 in 2010, far below the national median of about $50,000, while 20.4 percent of people live below the poverty line — the highest rate in the country.

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4 home insurance mistakes to avoid

8:30 AM avoid, insurance, mistakes No Comments

Business Week | By Donna Fuscaldo, Fox Business

It may be tempting if you need some cash, but it's best to leave your home insurance policies alone. Here's why.

For homeowners tight on cash, there are plenty of ways to reduce costs. But insurance isn’t the first place that should be trimmed, experts warn.

“We are all concerned with saving money and it is important to shop around when looking for insurance coverage,” says Loretta Worters, a spokeswoman for the Insurance Information Institute. “However some people are reducing their coverage or dropping important coverage plans altogether to try to save money and this can leave you dangerously underinsured in the event of a disaster.”

According to insurance experts, when it comes to homeowners insurance, people often make mistakes that leave them underinsured and holding massive bills if something goes wrong.

Navigating the insurance world to find the best coverage for your budget can be tough, but have the right coverage can prevent future financial headaches if something does go wrong.

Here’s a look at the top mistakes home owners make when it comes to their insurance.

Home owners often mistakenly insure their property for its real estate value instead of the cost to rebuild. When real estate prices go down, that enables them to reduce the amount of insurance on their home and save some money.

“You should make sure that you have enough coverage to completely rebuild your home and replace your belongings,” says Worters, noting that a better way to save is to raise the deductible. “An increase from $500 to $1,000 could save up to 25 percent on your premium payments,” she says.

Natural disasters can happen with little to no notice and can have devastating consequences. For instance, flood insurance is almost always a separate policy.

“One of the largest mistakes that homeowners make is assuming that their policy covers their home and belongings in the event of every potential risk - such as flood,” says Ben Saine, product management director, homeowners insurance at insurer USAA. “Sadly, many people find out the hard way after a major storm that they didn’t have the coverage that they truly needed.” Saine says homeowners need to check to see what natural catastrophes are common in their location and make sure they are adequately covered.

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Superstorm Sandy that barreled up the East Coast last October proved that homes not located in designated flood zones can still experience major water damage.

“Many homeowners are unaware they are at risk for flooding, but in fact, 25 percent of all flood losses occur in low risk areas,” says Worters. “Furthermore, with the significant snow fall this winter, spring related flooding may be particularly severe, thus increasing the importance of purchasing flood insurance.”

Everyone likes a deal, so it’s not surprising that many homeowners will go with the cheapest policy they can find—but that could cost them in the long run.

According to Saine, many of the lowest-priced polices only offer coverage at a depreciated amount and don’t give homeowners the best service if there is a loss. He says it’s better to choose a provider that can cover the home adequately and will be easily accessible if something goes wrong.

“You need to ensure that your policy covers all of your home and its belongings at the replacement cost, not at the actual cash value,” says Saine. “For example, if your insurance policy only covers your roof at actual cash value and it’s damaged in a storm, the insurance company would only pay the depreciated amount for your roof. This means you may be stuck paying thousands of dollars out of pocket to replace your roof.”

It’s also important to consider the financial health of the insurer to make sure the company is financial stable to cover any claims.

“It is important to choose a company with competitive prices, but also one that is financially sound and provides good customer service,” says Worters.

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11 little-known car insurance discounts

2:00 PM discounts, insurance, littleknown No Comments

Business Week | By Catey Hill, MarketWatch

This list could save some drivers hundreds of dollars a year.

Drivers with short commutes, who own their home or who don’t drive every day of the week are among the many consumers eligible to save hundreds of dollars each year on car insurance. Not that they necessarily know it.

The average American spends $762 per year on car insurance, according to a Bankrate.com survey. Depending on where you live, you’re more—or less—likely to score big discounts. Missouri residents get the most discounts (discounts are available about 33.1 percent of the time), followed by Connecticut (32.6 percent), Indiana (32.3 percent), Wisconsin (32.1 percent) and Iowa (31.7 percent), according to a survey released recently by Insure.com.

Meanwhile, residents of North Carolina tend to get the fewest discounts (discounts are available about 13.2 percent of the time), followed by Hawaii (14.5 percent), New York (20.3 percent), Massachusetts (20.5 percent) and Michigan (20.9 percent).

While it’s hard to pick up and move, the good news is that you can score car insurance discounts no matter where you live. The most common discounts—and the ones that most of us have heard about—include those for being a good student (77 percent of the insurance carriers surveyed by Insure.com offered this with an average 16 percent discount), having a home policy with the same company (68 percent offered this with a 9 percent discount), paying all of most of the bill upfront (46 percent offered this with a 9 percent discount), being married (41 percent offered this with a 14 percent discount) and taking a driver training course (41 percent offered this with a 7 percent average discount), the Insure.com survey revealed.

But there are many more discounts that, though less common, still can produce significant savings if you can get them.

“The right discount can knock hundreds of dollars off your car insurance bill,” says Insure.com editorial director Amy Danise. But many discounts aren’t advertised or automatically offered: “Often you just have to ask to start saving some money,” advises certified financial planner Joel Ohman, founder of CarInsuranceComparison.com. Danise says you should call and ask about specific discounts when you are looking for a new policy, and if you already have one, you should ask annually. People should also ask about discounts after a major life event like a divorce or a shortened work commute.

Here are 11 little-known discounts—and what they can save the average consumer.

Consumers who drive less—typically 7,000, 10,000 and 12,500 miles per year -- may be eligible for discounts (13 percent of companies surveyed offer this discount and the average savings was 11 percent, according to the Insure.com data). That means that the average customer (who spends $762 per year on car insurance, according to Bankrate.com) who scored this discount would save an average of nearly $84 per year.

People who use their car primarily for farming (someone who mainly drives his truck around the farm, for example)—as opposed to business or pleasure—will get the steepest discounts, says Danise. Roughly 40 percent of surveyed companies offered this discount with an average savings of 10 percent.

More than one in four insurance companies offers a discount to those who renew in advance, typically seven to 10 days ahead of schedule. The savings is significant—8 percent on average—which would save the average consumer nearly $61 per year.

“The industry rewards loyalty,” says Danise. In particular, companies tend to give discounts for consumers who have been customers for a year, 36 months and/or 60 months. More than one in three insurance companies surveyed offered this discount and the average savings was 6 percent.

People who own their own homes, condos or apartments can save an average of 6 percent off car insurance. Fully 21 percent of insurance companies offer this deal.

While most people know that they can get an auto insurance discount by holding a homeowner’s insurance policy with the same company, the bundling also works with life insurance. The discount in this case is usually 4 percent—and roughly 37 percent of surveyed companies offered it—which would save the average person more than $30 per year.

Because companies want to get paid in full and on time, many offer a discount to drivers who allow companies to automatically deduct payments from their bank accounts. More than one in three insurance companies surveyed offered this discount and the average consumer would save 4 percent by opting for this option.

People who commute to work for shorter distances—typically five, 10 or 15 or fewer miles—can often save money, says Danise. Fully 22 percent of surveyed insurance companies offered this discount and the average savings was 4 percent.

Eight percent of companies offer a discount for people who don’t drive every day. Typically, the discount is for those who drive one, two, three or four days per week, says Danise. The average savings is 4 percent.

People who own rather than lease their car may be able to save: Roughly 7 percent of companies offer this and the average discount is 4 percent.

Only 6 percent of companies offer this discount—some for getting a bachelor’s, master’s or Ph.D. and occasionally for completion of vocational or technical school. The average savings is 4 percent.

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5 reasons singles need life insurance, too

9:00 AM insurance, life, life insurance, Reasons, singles No Comments

| By Neda Jafarzadeh, The Fiscal Times

While singles likely need less coverage than married couples, they often have relatives who would be affected financially by their deaths.

Life insurance is something only married people need, right? As with so many personal finance questions, the answer to this one is -- it depends.

There are several reasons you might want to purchase life insurance even when you’re single, though you may need less coverage than someone who wants to provide for a surviving spouse or children. That's because there may be other family members or loved ones who could be affected financially in the event of your death.

Many single people are now pondering buying life insurance, given that more adult Americans today are single than are married and that the median age at first marriages has never been higher. (It's currently 27 for women, and 29 for men.) Young adults today are also waiting longer to buy homes or have children, milestones typically associated with the purchase of life insurance.

Life insurers are actively reaching out to millennials (who are more likely to be single) by making their offerings more web- and mobile-friendly and by marketing their policies in unexpected places like Wal-Mart and Costco. Before buying a policy, use a calculator at sites like LifeHappens.org to understand how much insurance you need.

Many consumers get a basic life policy through work, which could cover the needs of a single person without dependents. Remember, though, that if you leave your job, your coverage doesn’t come with you.

Here are five reasons to consider purchasing a policy, even if you're not married

Not every young person needs life insurance – and if you haven’t yet established an emergency fund or you’re still living on your parents’ couch, buying life insurance certainly shouldn’t be a top priority. If, however, you’re making the maximum contribution to your retirement fund and have six months of expenses stashed in a savings account, you may want to consider buying a policy.

Waiting to get coverage until you’re married or have children could make a policy much more costly. A $500,000, 30-year term policy for a healthy, non-smoking male in Chicago costs about $35 per month. The same policy for a 45-year-old runs more than $60 per month, according to calculations by Term4Sale.com.

Another reason not to wait: The older you get, the more likely you are to contract a chronic health condition, which could push up your life insurance premiums or make you ineligible for coverage at all. Buying a policy now will lock in coverage while you’re still in good health and qualify for the best rates.

If your parents (or other family member or friend) co-signed a student loan or a mortgage with you, they’ll be fully on the hook for the amount owed in the event of your passing. In addition to debt, burial costs can also be expensive – the average funeral costs more than $7,000 -- and it can set back loved ones without a significant amount of savings.

If your funeral or your debts will be a significant financial hardship for someone else, consider getting a low-cost policy to cover those expenses -- a 10-year term policy naming that person as the beneficiary could take care of such expenses. With unemployment still stubbornly high and most Americans with dangerously low savings accounts, the last burden a grieving family member needs is a loan company hounding him or her for payments.

This is probably the most important reason a single person should purchase life insurance. Nearly 16 million unmarried parents live with their children, according to the U.S. Census. Even if you don’t have kids, there may be others who depend on you financially, including elderly parents who need caretaking or special needs siblings. The right life insurance policy can serve as a financial safety net for those you care about most.

Work with a financial planner to determine how much life insurance you need on top of any other assets you have in order to insure that your dependents are properly cared for financially after you’re gone.

If you’re a small business owner with partners, a life insurance policy can allow your partners to more seamlessly purchase your portion of the business. Partners in the company would enter into a buy-sell agreement, buying policies (either as individuals or as a company) on the lives of the co-owners with the understanding that the payout would go to the deceased partner’s heirs without giving them a stake in the company itself.

If there’s a cause that you’re passionate about or you’ve got someone you’d like to take care of financially (even if they’re not dependent on you now), purchasing a life insurance policy can help meet those goals. This kind of purchase only makes sense if you can comfortably afford the policy after funding emergency and retirement savings, as well as paying down any high interest debt.

If you do buy a policy as a single, it’s important to re-evaluate your insurance coverage after life events, such as the birth of child or a marriage, to make sure you're still appropriately covered and to update your beneficiaries. If coverage purchased now becomes inadequate for your needs at a later date, you can buy supplemental coverage, rather than starting from scratch.

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What 2014 brings for Obamacare

3:26 AM brings, Obamacare No Comments

| By Jay MacDonald, Bankrate.com

Health insurance will become more affordable for many and mandatory for most this year.

The long-awaited affordability features of the Affordable Care Act are finally ready for prime time in 2014, along with the Obamacare requirement that virtually all Americans must have health insurance or face a penalty.

Major provisions of President Barack Obama's health reform law, from its subsidies for lower-income applicants to its expansion of Medicaid, finally take center stage.

"Many Americans will start to learn what tax credits and cost-sharing subsidies they're eligible for and the vast benefits of the law," predicts Dania Palanker, senior counsel for the National Women's Law Center in Washington, D.C. "Not only will they have insurance, they'll have insurance they can afford to use."

And yes, like an episode of "Downton Abbey," there are certain to be surprises along the way.

"The other side of getting health insurance at an affordable price with a pre-existing condition is, the young will pay a higher price for their good health and age," says Michael Morrisey, a professor of health economics at the University of Alabama at Birmingham. "When that sticker shock hits, it's probably going to be a big topic for the first half of 2014."

Here are the top six Obamacare plot twists sure to make headlines in 2014:

The spotlight finally shifts to the star of the Affordable Care Act: affordable health care.

If your income qualifies you for assistance, the law can help bring down the cost of your family's health coverage in two key ways:

By providing an advance tax credit to lower your monthly insurance premiums. By offering out-of-pocket subsidies to help you pay your insurance deductibles, copayments and coinsurance.

The premium tax credits are available at incomes between 100 percent and 400 percent of the federal poverty level, or roughly $11,500-$46,000 for individuals or $23,500-$94,000 for a family of four. You must purchase coverage through your state Obamacare exchange to qualify.

"These tax credit subsidies are provided on a sliding scale, meaning that those people who need help the most get the largest help," says Ron Pollack, executive director of the health care consumer group Families USA.

To qualify for the out-of-pocket subsidies, your household income must be below $59,000 for a family of four or $29,000 for individuals, and you must enroll in a silver (mid-level) health plan through your state's health exchange. The online exchange also can tell if you qualify for free or low-cost coverage under Medicaid.

Under health reform's "individual mandate," most Americans who don't have health coverage by March 31 will be assessed a penalty against their federal income tax for 2014.

The uninsured will be penalized the greater of 1 percent of their annual household income or the oft-cited $95 per person (and $47.50 per child under 18), to a family cap of $285.

Those per-person penalties jump to the greater of 2 percent of income or $325 in 2015, and the greater of 2.5 percent of income or $695 by 2016.

Morrisey says the uninsured middle class is more likely to feel the sting of the individual mandate than lower income groups.

"At $95 a year, the penalty is no big deal," he says. "But at 2.5 percent of income in 2016, if you're making $60,000 a year, the penalty is more than $100 a month. That's money that could be going toward insurance."

Douglas Hough, associate director of the Bloomberg School of Public Health at Johns Hopkins University, says the mandate's aim of herding everyone into the insurance pool is long overdue.

"It truly is revolutionary," he says.

Americans with pre-existing health conditions and women of all ages will have something momentous to toast for the New Year: equal treatment from health insurers.

Health insurance companies can no longer deny you coverage, charge you more, cancel your policy or exclude benefits because you have a life-threatening or chronic health condition. The provision applies to all but "grandfathered" plans that were in effect prior to the Affordable Care Act.

In addition, Obamacare prohibits insurance companies from charging women higher health insurance rates than men or denying them coverage because of health conditions such as pregnancy or cancer.

Don't cry for the insurers, says Morrisey. After all, they'll soon have millions of new policyholders to help absorb the added expense.

"Young, healthy people will pay a higher price to help insure the older and sicker," he says.

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Cheapest ways to insure teen drivers

10:30 AM cheapest, drivers, insure No Comments

Business Week | By Nancy Dunham, CarInsurance.com

No words can spook parents like 'your teen is getting a driver's license.' Here's how to keep insurance costs to a minimum.

Expect to pay a hefty sum to insure your teen driver.

Adding a teen driver to your car insurance policy can boost rates by 20 percent to almost 200 percent, depending on variables that include the state in which you live, the car the teen drives, his or her student status and, of course, your insurer's rules.

So should you just buy your teen driver a bus pass and let it go?

"The downside to not letting your teen drive at all is that they may rebel against you and also endure teasing from friends," says David Bakke of personal finance advisers Money Crashers, based in Atlanta.

Your tolerance for heavy sighs may help determine what you and your teen do next.

Wait. Any brand-new driver – even if he or she is 40 -- will pay more for car insurance, usually for the first three years of licensure. But a teenager also pays for being young, and the price is steep. A 16-year-old may face a surcharge as much as 100 percent. That youth surcharge goes down a bit every year, so a driver newly licensed at 18 will pay less than at 16. (See "What young drivers need to know.")

Hang on to the permit. "Instead of preventing (teens) from driving, consider having them keep their drivers' permits for a longer period of time,” Bakke suggests. Some car insurance companies don’t include the teenager in rate calculations until the new driver is fully licensed. Others do – so ask.

If your teen drives the car alone and wrecks it, you probably will be covered – and then charged premiums as if the teenager were licensed now that the child is driving alone, says CarInsurance.com consumer analyst Penny Gusner.

It’s not like they can’t use the practice with you or another adult, licensed driver in the car. Per mile driven, teen drivers ages 16 to 19 are three times more likely than drivers age 20 and older to be in a fatal crash, according to the Centers for Disease Control and Prevention.

License the teen, but don’t let him or her drive your car. It’s called a named driver exclusion, and it means the insurance company won’t consider the teen when it calculates your rates. But you are agreeing that the child won’t drive your car – and the insurance company will not pay for the damages if he or she wrecks it.

“Not every company may allow the practice,” says Gusner. “And those that do may want to charge you a fee or surcharge for doing so.”

Snag that 'good student' discount. Depending on the company and your state, a good student discount can save you as much as 20 percent, says Dan Young, spokesperson for auto-body repair experts CARSTAR and a 20-year veteran of Allstate Insurance.

In most states, a good student discount is among the biggest money-savers you’ll find, decreasing a typical full-coverage bill by an average of 12 percent, according to data gathered for CarInsurance.com by Quadrant Information Services. In some states, such as Illinois and Minnesota, the average good student discount was nearly 18 percent.

Virtually every carrier offers a good student discount; the usual qualifiers may include full-time enrollment in high school or college, average grades of at least a "B," Dean's List status, or a ranking in the top 20 percent of his or her/class. Often the discounts carry over even after the student has left school, up to a certain age.

Consider a driver safety course. Taking and passing these courses, routinely offered at area high schools, state motor vehicle departments, and elsewhere, generally qualify the teen for additional insurance discounts. The discounts cut a typical full-coverage bill by about 2.4 percent, according to the Quadrant data, but the discount was twice that amount in many states and not available at all in others.

Stay accident-free and ticket-free. You don’t want to be on the wrong side of an accident claim with a teenager on the policy. Insurance companies also can levy surcharges after accidents or major traffic violations. With a teenager on the policy, that surcharge gets multiplied again.

Let’s say your $100-a-month liability car insurance bill doubled when you added your teenager to the policy. Then you have an accident, triggering a claims surcharge of 25 percent.

On a policy by yourself, your bill would rise to $125. With the teen, it goes to $250.

Read More: Bad credit? These cards can help

To really keep your rates low, do all you can to prevent your teen from becoming involved in an accident. The National Association of Insurance Commissioners (NAIC) released a report showing that teens whose parents set rules and were engaged with their teen drivers were 50 percent less likely to become involved in a crash.

"As parents, the ultimate goal when our kids start driving is to ensure their safety and the safety of others. That starts with establishing expectations," says Jim Donelon, president of the NAIC and Louisiana insurance commissioner. "The good news is that by setting boundaries, we are making the roads safer for everyone."

Review your policy. If your teen leaves for college and won't drive your car, you may want to see if your insurer will temporarily remove him or her from your policy.

But, cautions Jim Sutton, president of James F. Sutton Agency in East Islip, N.Y., "you need to be sure the car is definitely home and not away with the student. After a period of at least six months, the young driver can elect to purchase his or her own policy with your policy or go out and get his or her own coverage without having the 'inexperienced operator' surcharge applied." Of course, the length of time varies depending on the insurer.

Lastly, no two insurance companies calculate your rates the same way. If there were ever a time to compare car insurance rates, now is it.

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Insurer's 'looking glass' into homes

7:30 AM glass, homes, Insurers, looking No Comments

| By Ed Leefeldt, Insure.com

A new insurance industry innovation -- a data recorder for homes -- is raising questions about privacy and efficiency.

Would you let your home insurance company monitor your house?

Last fall, United Services Automobile Association (USAA), the country's leading auto, home and life insurer for military personnel, received a patent for a data recorder that can be installed in a home for observation.

USAA's device will record conditions that "have led to damage or destruction of the building" or to "forecast the possibility of future damage or destruction."

The device can track the temperature, wind speed and mechanical vibrations as they affect the house, as well as humidity, which could cause mold in the walls.

Sounds like a good idea? Yes, for the insurance company, but not necessarily for the homeowner.

A home data recorder isn't a new concept. Companies like ADT and Tyco already provide sophisticated electronic sensor technologies to remotely monitor almost everything that happens in a house or office, including vibrations that could indicate a break-in. But USAA's device offers increased leverage for the folks at the insurance company by giving them a looking glass into your house.

Based in San Antonio, privately held USAA is owned by its policyholders and did not want to discuss its new product. Spokesperson Rebecca Hirsch said USAA would talk only about its innovation efforts in general, and not this patent in particular.

Neither the Property Casualty Insurers Association of America nor the American Insurance Association, both of which represent property-casualty insurers, would comment either.

Robert Hartwig, president of the Insurance Information Institute, which also represents the industry, said that even though he hadn't heard of the product, "it sounds like telematics for homes." But he did predict that "this device will aid insurers in underwriting property."

Telematics devices are plugged into cars and offered by auto insurers such as Progressive, which calls its on-board monitoring system Snapshot. This monitoring device records people's driving habits: distance driven, time of day, amount of times the brake is used and how hard. Driving at night when fewer cars are on the road usually lowers rates, as does avoiding the start-stop braking that can lead to accidents.

This invaluable information is used to price "pay as you drive" or "usage-based" auto insurance policies.

Consumer advocates agree that this could be a boon for home insurance companies. "By utilizing tools like this . . . insurers can better manage their risk exposure," says Birny Birnbaum, executive director of the Center for Economic Justice in Austin, Texas.

But insurers could also use that data to make decisions on policyholder claims and underwriting, as well as other decisions.

"The recent history of insurers' use of data mining indicates that insurers are using these new technologies to simply exclude certain risk exposure," says Birnbaum. In simple terms: If the insurer detects high winds around your house, it might cancel the policy.

Robert Hunter, the director of insurance for the Consumer Federation of America, is also suspicious. "Insurers have been using more and more black boxes [technology which is only understood by insurers] to systematically underpay claims," he says.

USAA's data recorder might have helped insurers expedite claim payouts after Hurricane Katrina in 2005. At a cost of $110 billion it is the most expensive storm in history.

There was constant wrangling between insurers and policyholders across the Southeast, from Florida to Louisiana, as to whether Katrina's 125-mile per hour winds had knocked down coastal homes or whether they had actually been flattened by the 30-foot tidal surge. If the cause was wind, then home insurers such as USAA would be responsible for claims. If the cause was water, then the federal flood insurance program would have to pay those with flood policies.

Consumer groups say that it's hard to find a benefit for homeowners who install a home-data recorder like USAA's unless, like Progressive's Snapshot program for usage-based auto insurance, the insurer offers a discount to those who accept. In which case, "this technology offers the promise of insurers moving towards a greater partnership with consumers to promote loss prevention," says Birnbaum.

For example, if a homeowner was advised to lower the humidity after an event such as a flood, he or she could save their walls, flooring and even prevent illness caused by inhaling mold spores. But this would require communication between the insurer, which needs to monitor the device regularly, and the homeowner. Otherwise, it is similar to the black box in an airplane, which can only tell investigators why the plane crashed after the fact.

Consumer advocates warn that homeowners should be wary of devices that monitor you or your property without any benefit to you.

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Obamacare vs. your employer's plan

12:30 PM employers, Obamacare No Comments

| By Susan Ladika, Bankrate.com

Even if you have health insurance through work, you might still want to explore the Obamacare exchanges.

If you already have health insurance through your job, you're probably wondering whether Obamacare will give you some new options. Will you be able to comparison-shop for a plan on the new online exchanges that might be better than your employer health insurance? The answer is a big, resounding "maybe."

Like almost everything else having to do with health care reform, there are plenty of nuances and caveats. Trying to decipher them and choose the best health insurance plan for your situation "makes homeowners insurance seem really simple," says Brian Haile, senior vice president for health policy at the tax services company Jackson Hewitt.

The exchanges are online health insurance marketplaces set up under the Affordable Care Act. In 34 states, the marketplaces operate through the federal government's HealthCare.gov website, while 16 states and the District of Columbia are running their own exchanges.

Even if your employer already offers health insurance, there's nothing to prevent you from shopping on your state's exchange. However, if you decide to leave your work-based plan and purchase coverage on the exchange, you "may not qualify for some of the benefits that the uninsured have," notes E. Denise Smith, a professor of health care management at Gardner-Webb University in Boiling Springs, N.C.

Here's the big hiccup: Unless your employer's coverage for an individual is considered unaffordable under the law (that is, if your share of the premiums costs more than 9.5 percent of your household income) or inadequate (picking up less than 60 percent of the cost of covered benefits), you aren't eligible for a government subsidy to help pay for your insurance. Subsidies are one of the things that can make plans on the new state exchanges appealing.

Subsidies in the form of tax credits are available even if you earn up to 400 percent of the federal poverty level, currently about $46,000 for an individual and $94,000 for a family of four. The subsidies vary based on income and the size of your family.

And that brings us back to the central question: If you have employer health insurance, should you check out the Obamacare exchanges anyway? There are differing opinions.

"It would generally not benefit an employee to leave their employer-sponsored plan," Smith concludes, adding that your employer would be under no obligation to help pay for an exchange plan.

Haile says you may not be able to do better than your work-based coverage. "Look at how robust your employer plan is" and the benefits it provides, such as whether it includes dental and vision care, which are not part of the essential health benefits that must be offered with plans sold in the Obamacare exchanges, he says.

Still, if your employer-sponsored health insurance seems to eat up a big chunk of your budget, you might want to explore your options on the state exchange, Haile says.

Again, one of the key criteria of whether you'd qualify for subsidized insurance through your state's exchange is if your share of the premium for an individual health plan where you work would amount to more than 9.5 percent of your household income. Whether you take more expensive family coverage doesn't matter; the benchmark is what an individual policy would cost.

The rule means that someone earning $40,000 a year and paying $3,775 for individual coverage would not be eligible for a subsidy, says Brian Poger, CEO of Benefitter, a software company that's helping employers navigate their way through health care reform. That same worker paying even more for family coverage would still not be eligible because, again, the premium for an individual is less than $3,800 (or 9.5 percent of $40,000).

The 9.5 percent-of-income threshold is one that few workers would meet, according to one recent study. The ADP Research Institute found that only 8.6 percent of employees are required to pay premium contributions that would meet the Affordable Care Act's definition of "unaffordable."

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States roll out varied Obamacare plans

12:00 PM Obamacare, plans, States, varied No Comments

| By Michelle V. Rafter, MSN Money

Nearly half of which have States decided, to their own health care Exchange set up, will have a State-run option while residents in other States.

Rocky King spent almost two years getting ready for Oct. 1.

King is executive Director of CoverOregon, which will provide coverage State, online Exchange, health care for individuals, families and businesses with fewer than 50 employees. In the past two years, he has overseen the Exchange computer infrastructure, personnel and training-community partners.

"It was incredible", says King. "We have staff who did 40 to 50 of this training in the past two months, and they are tired."

It is the latest and one of the largest stages of health care reform, health insurance through a network of State and federal marketplaces to an estimated five Americans younger than 65, who currently do not have the coverage extend.

Under the new system if you are not insured or just shopping for better insurance, depends on the type of coverage available in large part where you live.

A total of 23 States run their own exchanges or to offer a partnership with the Federal Government to State hybrid Exchange. The remaining 27 States opted out running their own programs, so residents of those States that will have possibility of registration by the State-run Exchange.

While some Republicans still fight for Obamacare defund, this scenario is considered unlikely. Instead, open registration for individuals and families in a State to start nationwide Exchange as planned and executed by March 30 for cover from 2014.

Registration for small businesses will open on Oct. 1 and will remain indefinitely, no matter where the business is located. By 2015, to provide businesses with more than 50 employees to insurance companies have or will have to pay a fee of $2,000 per employee (excluding the first 30 employees).

Own Exchange States like Oregon, Washington and New York have millions of dollars in federal funds on infrastructure run the marketplaces as well as campaigns to raise awareness, to publish it.

Introduced this week for example, in the State of Washington, chance, a fictional young girl and star of a campaign $13 million inhabitants there wanted to familiarize with its insurance online Exchange, Healthplanfinder. Washington turned more than 1,000 insurance brokers, are trained and licensed people to evaluate plans to help.

Residents of New York can buy new stock insurance through existing and new providers to the State. A new entrant is a cooperative, which plan will provide coverage plus a catastrophic, high deductible like other four levels of support, health insurance of Republic of New York. That co-op claims that their premiums among the lowest offered, ranging from an average $423,64 per month for a "Platinum" plan a single adults up to $173,54 per month for the catastrophic coverage.

Oregon CoverOregon total will offer 102 plans through 11, although most people for a much smaller number of plans into consideration. Under a standard plan, "Silver" would a family of four with an annual income of $32.499, $35.324 $81 to $118 in monthly premiums, with $10 health coverage for doctor visits and $5 pay for health coverage for generic drugs. Families with low incomes receive subsidized insurance and qualify may also for Medicaid, tax credits or other financial support.

No one expects an immediate rush of applications. King estimates that 217,000 people in CoverOregons to register commercial insurance during the first year and an another 200,000 in Medicaid. "Each State we have expected low registration in October", King says. "they go and browse and shop and find out what they are eligible for funding."

In many States, the decision was whether to create politically charged exchanges of State. In Idaho, the State operates an own Exchange despite the widespread opposition to the program. "People in Idaho don't, trust the State Government but they trust Washington, D.C., still less" Eagle, Idaho, bar owner stated in a report of Kaiser Health News/United States today.

Florida rejected extension million funds for health care because of political opposition to Obamacare. The State passed a law to create a health insurance exchange in 2008, but it has not met not open requirements for business and currently Federal Republic. State residents must want to login so the Federal Exchange to work.

Here is a list of which States have their own Exchange and be instructed the Federal Republic Exchange according to Kaiser Family Foundation:

California
Colorado
Connecticut
Hawaii
Idaho
Kentucky
Maryland
Massachusetts
Minnesota
New Mexico
New York
Nevada
Oregon
Rhode Iceland
Vermont
Washington
Washington, D.C.

Arkansas
Delaware
Illinois
Iowa
Michigan
New Hampshire
West Virginia

Alabama
Alaska
Arizona
Florida
Georgia
Indiana
Louisiana
Kansas
Maine
Mississippi
Missouri
Montana
Nebraska
New Jersey
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
South Carolina
South Dakota
Tennessee
Texas
Utah
Virginia
Wisconsin
Wyoming

To find out what options are available, read the official website, HealthCare.gov.

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The least expensive 2014 cars to insure

6:00 PM expensive, insure, least No Comments

Business Week | By Jeffrey Steele, Insure.com

Most of the cheapest cars to insure aren't actually cars, they're SUVs and minivans.

If you want to save money on auto insurance, spring for an SUV or minivan. Insure.com's annual ranking of the vehicles with the best car insurance rates is dominated by non-sedans.

A few years ago, minivans held a good grip on our "least expensive to insure" rankings. But small and mid-size SUVs have been increasingly grabbing ranking spots. This year, minivans account for just five of the top 20 places. (See the 2014 rankings for the most expensive cars to insure and car insurance rates by state.)

And Jeep grabs a remarkable seven of the 20 "least expensive to insure" spots.

The advantages that propelled the minivans to the best spots are now being seen with SUVs: Family-friendly vehicles used mainly for safely ferrying kids around to Scout meetings and soccer matches. The parent driving the kids is among the least likely to speed, crash or have a claim.

And good rates always boil down to claims: When drivers of a certain vehicle submit fewer claims and/or less expensive claims, all owners that vehicle benefit with better car insurance rates.

That brings us to the Jeep Wrangler, Patriot, Compass and Grand Cherokee. Their good insurance rates hinge on Jeep owners.

While Jeeps exude an "adventurous spirit," they're usually not used for reckless abandon.

Least expensive 2014 cars to insure

6. Chrysler Town & Country Touring

According to Karl Brauer, senior analyst for Irvine, Calif.-based Kelley Blue Book, owners of Jeeps tend to be single or married women under age 45, who display prudent driving behavior.

"While there is an 'adventuresome' image to the Jeep brand, for every Wrangler that does serious off-roading, there are dozens of Wranglers and Grand Cherokees and Compasses -- and CR-Vs, Siennas and Traverses -- that are used to carefully haul kids around suburbia at sub-50-mph speeds most of the time," he says. "This demographic and these driving conditions don't cause a lot of accidents, thankfully."

While advertising may show Jeeps on craggy rocks, it's not unusual for Jeeps to never go off-roading.

Mark Takahashi, auto editor for Edmunds.com in Santa Monica, Calif., agrees that most Jeeps are regarded as family vehicles. "If you're driving your family around, you will drive more carefully, and not take chances, because you have a vested interest in being a careful driver," he says.

Jeep Wranglers in particular are very economical to repair, which helps keep insurance rates down. If you get a dent in your door, the body shop can easily remove the door.

"It's usually bolted rather than welded together. Look at the doors of a Jeep Wrangler to this day, and they're removable, just like the old Army Jeeps," says Takahashi.

Joe Wiesenfelder, executive editor of Chicago-based Cars.com, agrees Jeep's victory on the "least expensive to insure" rankings is a reflection of both how safely Jeep owners drive their vehicles and the cost of repair and replacement of Jeeps.

"You'd certainly be able to theorize that the owners of any one on this list are less likely to have collisions, and that the vehicles are less likely to be stolen. If they're low-volume cars, that suggests less of a replacement part market" for stolen parts.

Jeeps and SUVs also likely have an advantage because of their height. "They are higher-riding than the average car," Wiesenfelder says. "So if they are in a collision with an average car, that car will have greater damage than the Jeep."

Insure.com commissioned Quadrant Information Services to provide average auto insurance rates for 2014 models. Averages were calculated using data from six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm) in 10 ZIP codes per state. Not all models were available, especially exotic cars. More than 850 models are included in the 2014 study.

Averages are based on full coverage for a single 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. This hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Average rates are for comparative purposes. Your own rate will depend on personal factors.

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Japan braces for economic aftershocks

3:34 AM aftershocks, braces, economic, Japan No Comments

The widespread damage from Japan's deadly earthquake and tsunami will create economic and financial aftershocks for dozens of specific companies and industries. But the overall impact on Japan's beleaguered economy may be relatively small.

Ironically, the influx of insurance claims to repair and rebuild could even provide a short-term economic stimulus

The human toll is still being assessed after the 8.9 magnitude earthquake triggered a deadly 23-foot tsunami that swept away people, cars, houses, boats and planes. Dozens of people were killed, hundreds more are feared dead and tens of thousands have evacuated their homes.

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The quake was centered in the northeast city of Sendai, a rice-growing region that is also home to auto and chip manufacturing plants.

The quake brought Tokyo, Japans' financial center, to a virtual standstill Friday, overloading the city's phone system and paralyzing a transit system that left millions of passengers stranded. Millions of homes across Japan were without power.

Tokyo Gas Company shut off supplies to more than 35,000 households and facilities in the Kanto area in eastern Japan. In Chiba prefecture, east of Tokyo, a major fire broke out at Cosmo Oil Company's refinery, shutting down all operations. Tokyo Disneyland was closed Saturday and was undecided about opening on Sunday. There were no initial reports of injuries to visitors or staff.

Many companies were busy assessing damages. Nestle shut down operations at its Kasumigaura factory and Nippon Paper Group suspended production in Miyagi and Fukushima prefectures. Chemical manufacturer Asahi Kasei Corp. shut down and evacuated workers due to a power outage. Drug maker GlaxoSmithKline suspended operations at its manufacturing plant. A spokeswoman said that "minor damage" to the plant would require suspension of production for "a few days."

Japan's automakers were among the hardest hit, though the damage appeared to be limited. More troubling was the closure of all of Japan's major ports, which could crimp Japanese exports to North American if they remain closed for long, analysts said.

"It's a very bad situation," said Dennis Virag, president of the Automotive Consulting Group. "Japan has excellent ports but they're going to be the focus of rescue efforts. I don't know how much (non-relief shipping) is going to be going out for while," he said.

Earlier this month, Toyota said slim inventory of its Lexus luxury brand was hurting sales in North America. All of the Lexus models sold in North America are made in Japan with the exception of the RX sport utility vehicle.

Baird analyst David Leiker said infrastructure damage from the quake could affect the shipments of parts and vehicles.

"The situation requires watching," Leiker said in a note for clients. "The Japanese supply base ships components around the world and (this) could have a ripple effect anywhere."

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Toyota reported that, after a temporary shutdown of three factories, all plants had restarted production and that the company was still assessing the impact on its suppliers. Some dealers reported damage.

Fuji Heavy Industries, makers of Subaru cars and trucks, shut down eight of its 10 factories, including all five car and car parts plants in Gunma prefecture, north of Tokyo. Fuji also suspended production at its aircraft and power products factory in Tochigi prefecture.

Honda Motor reported that a 43-year-old male worker died after a wall collapsed at its research and development center in Tochigi prefecture. Collapsing walls at other nearby Honda facilities injured some 30 employees.

Several makers of chips used in smartphones and tablets shut down, prompting some concern that prices could spike in the short run. But analysts said it would likely have only a limited impact on global supplies.

Toshiba, the world's second biggest supplier of NAND flash memory after Samsung, closed its factories.

Electronics maker Sony closed six factories in the area hit hardest by the quake, but was still assessing the extent of damage. The plants make semiconductors, batteries, optical film and other components.

Power companies nearest the epicenter were rocked by the quake In Miyagi, Tohoku Electric Power reported smoke in a turbine room at its Onagawa nuclear reactor, but said there was no sign of a radioactive leak. Three additional reactors in at its Fukushima Daiichi nuclear plant automatically shut down, and no radioactive leakage was found, although officials said pressure was rising inside Fukushima No. 1 after the cooling system failed. The U.S. Air Force delivered coolant for the plant, Secretary of State Hillary Clinton said.

Damage from the hardest-hit areas will have a devastating financial impact on individual businesses and households. But while the quake's damage tally won't be known for weeks, the long-term impact on the Japanese economy may be limited. As often occurs after natural disasters in well-insured areas, the coming influx of money to settle claims will likely provide a short-term stimulus to Japan's economy.

"This is clearly going to add complexity to Japan's challenge of economic recovery and may lead to temporary increments, ironically, to GDP as a process of rebuilding takes place," Lawrence Summers, and economist and president emeritus at Harvard University. "In the wake of the earlier Kobe earthquake, Japan actually gained some economic strength."

Despite the Japanese government's aggressive efforts to stimulate growth, Japan's economy remains mired in a period of stagnation that has lingered for decades. In the fourth quarter of last year, Japan's Gross Domestic Product shrank at an annual rate of 1.1 percent from the third quarter.

On Friday, the Bank of Japan pledged to all it it could to ensure markets remain stable, including providing liquidity to the economy, if necessary. Japan's central bank will hold a meeting Monday.

Japan's financial industries, a major engine of growth, appear to have been spared. Citigroup, for example, said it had sustained no damage to its trading facilities and was operating normally after the quake.

In the short-term, the global insurance industry will bear the brunt of the financial burden. Insurance stocks were hit hard in European trading following news of the quake. Shares of Aflac, the largest insurer in Japan in terms of individual insurance policies in force declined, fell sharply. Swiss Re, Munich Re and Hannover Re ? so-called "reinsurers" which provide backup insurance to other insurers ? were also trading lower.

"It is too early to tell what the impact will be," said Tom Armitage, a spokesman for Swiss Re. "It usually takes one to two weeks until we can tell."

As a developed country, insurance coverage is relatively widespread in Japan. Following the 1995 quake in Kobe, for example, insurance claims came to $3 billion on estimated total damages of $100 billion, according to Munich Re. The 2008 earthquake that devastated Sichuan, China, by contast, resulted in total damages of $85 billion, only $300 million of which was covered by insurance. In the U.S., roughly a third of the $45 billion in losses from the 1994 Northridge, Calif., quake was covered.

The insurance industry is still tallying up losses from the powerful earthquake that struck New Zealand last month, with total insured losses projected at between $8 billion and $12 billion from that disaster.

Oil prices, which have been a concern recently as turmoil in the Middle East has pushed prices well above $100 a barrel, fell below that number for the first time in weeks on Friday. ?

Japan is the third-largest oil importer in the world. It's unclear how much its economy will be affected by the disaster. The news helped slow down what had been a sharp, three-week rally in oil markets.

Benchmark West Texas Intermediate for April delivery tumbled $2.06 to $100.64 per barrel in morning trading on the New York Mercantile Exchange. Prices dropped as low as $99.01 per barrel earlier in electronic trading.

(CNBC, AP, and Reuters contributed.)

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6 high-priced loans and how they work

12:55 AM highpriced, loans No Comments

Business Week | By Mitchell D. Weiss, Credit.com

There are plenty of loan options available, even for low-income borrowers with iffy credit. Proceed with extreme caution, though.

There are lots of cash-strapped consumers out there who, for all practical purposes, are closed out of many traditional credit product offerings because of the high default risk they’re presumed to represent. But that doesn’t mean the financial services industry hasn’t figured out ways to profit from their plight. After all, the “unbanked” and “under-banked” demographic, as it’s known, is huge -- estimated to comprise more than a quarter of all U.S. households -- and its need for financing is acute, especially during tough times.

So the industry has created a slew of pricey specialty loan products that were designed for lower-income borrowers with poor credit. I’m talking about payday, bill-pay and refund anticipation loans, insurance-premium financing, structured settlement and private student loans.

But are the risks associated with these credit products truly so great that they justify the outsized rewards the lending institutions earn for marketing them? Let’s take a behind-the-scenes look at how these financings are structured and you can decide for yourself.

Many companies pay their employees in arrears -- this week’s paycheck is based on the previous week’s hours. They’re also likely to pay every other week or twice-monthly. So it’s not unusual for a low-income earner to feel the pinch in between payrolls, hence the creation of the payday or account advance loan.

As long as the borrower’s employer is a bona fide company that can confirm its employee’s continuing earning status, and as long as the payday lender is able to gain control over its borrower’s next payroll deposit, the lender will have effectively ensured the repayment of its loan. The borrower, however, might not fare so well. That’s because the cash-flow “hole” he’s created for himself by trading next week’s paycheck for this week’s cash is likely to provoke a recurring need; at least until he’s able to generate enough extra cash-flow to bridge the gap on his own. In fact, according to a report by the Center for Responsible Lending, the typical payday borrower remains indebted for two or more years for a loan that was intended to span one or two weeks.

And the reward for what turns out to be a very tightly-managed risk? The typical account advance lender loan charges more than 600% APR (annual percentage rate) for the service.

Consumers who live from paycheck to paycheck often run short. However, as long as the borrower’s checking account activity is consistent -- predictable payroll deposits every other week, comparable-dollar utility, cable and cellphone payments every month -- and as long as the borrower agrees to a preauthorized Automated Clearing House from that checking account, the bill-pay lender will then have virtually managed away its risk when it covers one of the borrower’s monthly cellphone payments.

The bill-pay lender’s reward? When you combine the processing fees and interest, the APRs can approach 200%.

Payroll tax over-withholding is not uncommon for low-income earners (and others) who may lack the financial literacy education that would help them to understand the math behind the process. Consequently, those who live with unforgiving budgets may be strongly tempted to take advantage of the quick cash-hit a tax refund advance represents.

From the lender’s perspective, as long as the tax return was properly prepared and filed, and provided that it can secure the refund once it’s been issued, it’ll have effectively offset the risk of nonpayment by swapping the credit of the low-income borrower for that of the U.S. Treasury -- the issuer of the tax-refund check.

The refund lender’s reward? According to the National Consumer Law Center, the APRs for these loans range from 100% to 200%.

Auto insurance premiums can be expensive, especially for those living in major urban areas. And while many insurance carriers offer payment plans for their policy premiums, some don’t. Enter the insurance-premium finance companies. The loans are typically structured with a down payment that’s at least equal to the non-refundable portion of the total annual premium: the up-front money the insurer gets to keep even if the policy is canceled right away.

The balance is then spread out over fewer months than the policy is designed to cover. That way, in the event of a payment default, the lender is able to cancel the policy before the remainder of the premium has been “earned” by the insurance carrier and pay itself back with the refund. As a result, the risk is once again very tightly managed, if not completely eliminated.

In return, the borrower pays an interest rate that’s usually much lower than for payday, bill-pay or refund anticipation loans, which seems like a pretty good deal -- that is, as long as the payments are made on time with checks or ACH drafts that are backed up with sufficient funds on deposit. Otherwise, the high fees the finance companies charge for late payments and bounced checks can easily escalate the overall cost for these nine or 10-month loans to the mid-double digits or more.

Hardly a day goes by without a structured settlement loan commercial that features a campy mini-opera or a little dog planting a money tree. The pitch is, you’re entitled to a future stream of payments -- whether from a court settlement, annuity or some other source -- but you need the money now. High risk? Not so much. That’s because the lending decision has less to do with the borrower’s creditworthiness than it does with the entity that has agreed to remit the payments in the first place.

The reward? According to a transaction sampling published by the Bankruptcy Law Network, APRs can approach the mid-double digits.

Generally speaking, students who borrow for their education don’t have payroll checks, tax refunds, prepaid insurance premiums or structured settlements to pledge as collateral in exchange for the money they need. As such, you’d probably conclude that student loans are actually the riskiest of this group of loans, right? Well, yes, unless you consider that except in extreme circumstances (as measured by the Brunner test), these loans are virtually impossible to discharge in bankruptcy. So the question becomes, what’s a fair price to charge for a loan that sticks to your personal credit like gum to the bottom of a sneaker?

According to the government, it’s 3.4% if you can demonstrate financial hardship and 6.8% otherwise. The private lenders, however, feel differently. I do a fair amount of pro bono counseling work at the university where I teach, and the students and alums I help are struggling with private student loan debts that carry interest rates as high as 15%. To give you a sense of the impact this kind of rate differential can have, borrowing $10,000 at 15% for 10 years is the same as borrowing $16,400 at 3.4% for same duration. Is it any wonder why more and more students are moving into their parents’ basements after graduating college?

Face it, the financial services industry isn’t likely to reform or discontinue these high-priced lending products on its own -- there’s just too much money at stake. Therefore, it’s up to those who need these specialty loan products to learn how to avoid the worst of the deals and limit the damage from the ones they end up selecting. A few suggestions:

Payday loans and bill-pay loans are not only very expensive but they also have the very real potential of becoming the kind of debt traps I described before. You’re actually better off taking a credit card cash-advance, even if it comes with a 25% interest rate plus a 5% fee (which is what my own credit card company charges). The APR calculates to a little less than 35%, if the loan were to be paid off in 12 months -- far less than for either of the alternatives. This simple APR calculator, courtesy of Efunda.com, can help with the math.Insurance-premium financing can make sense if you’re careful about not missing a payment or bouncing a check. Otherwise, the fees will eat you up alive. If you’re obtaining your insurance coverage through an intermediary (insurance agent or broker), double check that the carrier doesn’t offer a less costly service of its own.

Structured settlement loans can also make sense provided that the interest rate is low enough, you’re prepared to live without the monthly payments you would have otherwise received and you’re disciplined enough not to fritter away the cash once you get your hands on it. Online calculators such as this one, courtesy of Zenweaan, help you decide.When it comes to financing higher education, try to limit your borrowing to the programs the government has made available to students and parents. In addition to lower rates of interest, the feds also offer the most repayment flexibility -- which is particularly important in times of economic difficulty.

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