Before you begin your search for home insurance quotes, you also need to consider the following insurance tips for first-time home buyers.

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Purchasing a home for the first time can be confusing and a bit overwhelming for some people. There’s a lot of research that needs to be done to ensure you’re making the right decisions. If you’re not careful, you could end up in a long-term commitment that you’re not completely satisfied with.

Aside from securing a loan for your new home, you also have to consider the insurance. You can find home insurance quotes online, along with cheap motorcycle insurance and yacht insurance rates. If you own a business, you should consider looking into commercial liability insurance as well.

Homeowners insurance is something you don’t want to overlook. Bad things happen all the time, and since we can’t prevent them, we might as well prepare for them. Having adequate coverage will ensure that you’re financially backed for events like flooding, fires, vandalism and burglaries. Additional coverage may be needed if you live in an area where there are hurricanes and earthquakes.

It’s important to factor in the insurance rate into your monthly home-buying budget. This will give you an idea of what you can afford each month. But before you begin your search for home insurance quotes, you also need to consider the following tips.

1. Your Credit Does Matter

If you are still facing challenges due to financial pitfalls from your past, then it’s time to straighten things out. It’s easier for individuals with bad credit to obtain a mortgage loan these days then during the height of the recession, but this doesn’t mean it’ll be the same for insurance. Insurers still review your credit history when determining your quote. You should reconsider working on your credit score before buying a home if you won’t be able to handle the higher-than-average insurance policies.

2. Make Sure You’re Completely Covered

Buying a home is expensive, but this isn’t the time to skimp out on important things like comprehensive insurance coverage. There are many different types of insurance packages you can opt for, so pay close attention to the fine print. You want to ensure that you’re getting sufficient coverage for you and your family. Protection you want to secure include weather damage, fires and burglaries. If something you need isn’t offered, inquire about obtaining additional coverage.

If you’re worried about the cost of purchasing multiple policies, consider bundling them together. Some insurers offer cheap motorcycle insurance and yacht insurance rates, which can be tied together into one monthly payment. This will make everything more convenient and affordable on your end.

3. Identify Potential Risks Before You Buy

Sure, buying a home on the beach sounds nice, but the reality of living in an area where there are high and low tides, tsunamis and hurricanes will paint another picture during stormy seasons. Don’t be naive about where you decide to nest. Identify all possible risks associated with the area the home is situated in. Floods, forest fires and crime rates are all factors you want to keep in mind during your search for a new house. The more dangerous the area, the higher your insurance premium will be. Even lesser-known risk factors can hike up your rates, such as swimming pools and trampolines. So don’t get blindsided by these hiccups.

4. Research at Least Three Different Providers

You never want to settle for the first offer you receive, so strive to get at least three home insurance quotes. It’s always great to have options, especially when it comes to serious matters like coverage for the home you’re about to buy. This isn’t something you will be able to hold off until later, because most lenders require you to have insurance before you’re approved for a mortgage loan. You’ll also need to factor in additional coverage, such as for floods and high winds. As you’re searching around, look for quality coverage, not rock bottom rates.

5. Look for Inflation Guarantee

Gas prices have given us all a dose of what inflation is all about. Inflation affects everything, including insurance policies. If you’re comfortable where the rates are at at the time you buy your premium, then you should opt for a policy that has an inflation guarantee. This means that your premium will remain the same even during times of inflation.

Ready to get into your first home? Make sure you keep these tips in mind as you’re shopping around for homeowners insurance!

Before you purchase small business liability insurance for your company, you need to consider the following five factors.

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You wouldn’t drive across the nation without proper auto coverage, so why would you attempt to run a small business without liability insurance? Imagine building up a successful company only to have it wiped off the map because of a personal injury lawsuit. Accidents can happen at anytime, and the best way to safeguard your company is by obtaining commercial liability insurance.

The first place you can begin your search is online. While you’re at it, make sure your house is also covered by finding and obtaining home insurance quotes. But before you purchase commercial liability insurance for your small company, you need to consider the following five factors.

1. Identify and Assess Your Risks

This is what insurance companies are going to look at before providing a quote for a policy. The term for this process is called underwriting. Everything will be decided as the underwriter is reviewing your application. It will then be determined whether or not the insurer will cover all or some of your coverage and how much you will be responsible for paying for your premium and deductible.

Total costs and benefits will vary from company to company. The higher your deductible, then typically the lower your premium is likely to be. But before taking on a higher deductible, make sure you can handle such a financial risk.

2. The First Quote Isn’t Always the Best Quote

You don’t want to settle for the first quote you come across. There are many providers for obtaining insurance coverage, whether it’s for cheap motorcycle insurance or yacht insurance rates. Some providers will even allow you to shop for and bundle home, business and auto insurance policies.

When you do find a quote you’re considering, make sure to read the fine print as there are a lot of legalities that you don’t want to overlook. A broker can help guide you through the terms and conditions and ensure you understand everything and find a policy that works best for you. Never purchase a policy before reading and understanding the contract you’re about to sign. The last thing you want to happen is for your business to end up in hot water with no financial safety net, so make sure you’re properly covered!

3. Consider Buying a BOP

A BOP is a business owners’ policy, which is a bit different than a regular insurance policy. BOPs are packages that bundle together different types of coverage relevant to a small business owner. This helps to reduce the cost of what you’d normally pay for the coverage separately. These packages consist of coverage for vehicles, property, general liability and business interruption, among other things essential to ensuring the longevity of your company. But do note that not all coverage is included in BOPs, so you’ll need to supplement as needed with other policies.

4. Hire a Broker

It’s a good idea to work with a professional insurance broker because they are well-versed in the ins and outs of the insurance industry as a whole, not just a particular company. But you shouldn’t just hire any ol’ insurance broker – you need someone who is also familiar with your business industry and, of course, is licensed. This way, he or she can find a policy that is suitable for your specific needs.

This process should be treated with the same diligence as hiring a financial advisor. The broker you hire will likely work with you for a very long time, so you’ll want someone who is interested in learning about your company and your future success. The more the broker knows, the better the recommendations they can offer you.

5. Insurance Isn’t Set-It-And-Forget-It

A lot of things happen over the course of a year that can cause your business to outgrow your policy. This is why you should assess your coverage annually before automatically renewing it. You may learn that you need more coverage or less coverage than you already had. Your insurance broker or provider can help you with the process of reviewing your commercial liability insurance coverage and make recommendations as needed.

Purchasing liability insurance for your business is a smart decision, but only when you take the proper steps. You want to get coverage as soon as possible, but don’t risk purchasing a policy with insufficient coverage. Buying insurance for your small business is a bit different than buying auto insurance, so take the time to learn the industry. Don’t hesitate to work with a broker if you’re iffy about your ability to decipher a policy.

There's a million life insurance plans on the market and only one plan for you! Read on to learn how to pick the right life insurance plan.

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There’s a million life insurance plans on the market and only one plan for you! Read on to learn how to pick the right life insurance plan.

As much as we hate to talk about death, it’s important to not kid ourselves – one day we’re going to die. Now, hopefully that didn’t catch you off guard because that’s the truth and we shouldn’t hide from it. When people talk about death, a common question that occurs is what will happen to my loved ones? Many people answer this question by investing in a life insurance plan.

Oh life insurance, you always seem to be in the news. You may be bombarded with insurance commercials all day long, but how can a person know if they are choosing the right policy? Read on to learn tips on hoe to choose the right life insurance plan.

Choose Your Policy

Most people think that all life insurance is the same, but they couldn’t be further from the truth! While there are many different types of life insurance, the most common types that the majority of people look at are term and whole life insurance.

Term life insurance is insurance that you purchase for a term or a set of time. Oftentimes people will buy term life insurance in 10, 20 and 30 year plans! When the term is over, the insurance policy is over, and the policy holder will have to buy new insurance.

Whole life insurance is insurance that covers you until the day that you die; it covers your WHOLE life.

As a consumer, your best bet is to reach out to an insurance agent to learn about any and all life insurance policies – this will ensure you are informed.

Choose Your Coverage

When you are the bread winner for your family, your family depends on your income to survive! That being said, you want to make sure that you have enough coverage on your insurance policy to ensure that your family will not struggle financially when you pass on. I recommend buying 10 times your yearly salary – this allow your family to maintain their lifestyle as they adjust to their new life.

Shop Around

The truth is the more you shop around, the more you will learn about life insurance and you can determine on your own what the best policy is for you. Knowledge is power, especially when buying insurance. I recommend making a list of the top insurance companies and doing research on the policy and the company. The more information you gather, the more you’ll be able to make an informed decision.

If you want to avoid making a mistake when purchasing your term life insurance, learn more about these five errors so you can be better prepared.

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Insurance, insurance, insurance – my oh my can you ever be confusing! Between shopping for term life insurance, commercial vehicle insurance, skimming motorcycle insurance quotes, and simply looking at car insurance rates; sometimes it can seem as if there is an insurance for everything!

Each day we are bombarded with ads from insurance companies; ironically, each insurance company claims that they are the best and you NEED their insurance to survive. How’s a consumer to know if they are making a mistake when they purchase insurance? Just as you know to compare car insurance terms before purchasing a policy, you’ll want to ensure you don’t make a mistake when purchasing term life insurance, too. Read below to learn about the 5 mistakes to avoid when purchasing term life insurance.

1. Buying Too Little Insurance

It’s inevitable that one day we will wake up and it will be our final day on Earth. When we go, we’ll be leaving our loved ones behind to fend for themselves. The best thing we can do to protect out loved ones is to purchase a large term life insurance policy.

Most people have term life insurance but their policy is low – it often times it matches their yearly salary. I recommend purchasing an insurance plan that is at minimum 10 times your salary in order to provide for your family.

This is especially important if you are the primary bread winner for your family. Your family has gotten used to living on your income and after you’re gone they will have to adapt to a new way of life. A large term life insurance policy will become your final gift to help your family adjust during these trying times.

2. Buying Insurance Without Shopping Around

As you already know there are A LOT of insurance companies that claim they have the lowest rates. If you took the time to compare car insurance quotes when selecting car insurance, then you know the benefit of evaluating all possible policies. Well, as an informed shopper, I think you owe it to yourself to find out which company has the best deals!

A common mistake many people make when purchasing term life insurance is purchasing without shopping around. Sometimes people will buy insurance from a family friend or take the first offer they see. The simple fact of the matter is that you do have options and, if you take the time to meet with different companies, it’s inevitable you’ll find a company that offers everything you are looking for at a price you can afford.

Don’t fall into the trap of buying without shopping; that’s a sure fire way to invite regret into your life.

3. Procrastinating Buying Insurance

Procrastinating is the bane of practically every red-blooded person. Everyone procrastinates – heck if you’re reading this article, I’m sure there’s something you’re putting off doing right now! Unfortunately, procrastinating the purchase of term life insurance is a problem that affects many people.

The truth is, the longer you wait, the more you leave your family exposed to the unknown. Now I don’t say this to get you to stop what you’re doing and buy the next insurance policy you set your eyes on, see the second tip above; I say this to make you aware. Accidents do happen and sometimes good people die without any warning.

The other reason this is a mistake is because your premiums typically become more expensive the older you get. When you purchase term life insurance when you are younger, chances are you’re going to be healthier and pay lower premiums.

4. Buying Too Short of a Term

While buying shorter terms can save you pennies in the bank, it does this only in the short term. When you step back and examine what the purpose of life insurance really is for, you ‘ll see that it benefits you to buy longer terms.

Let’s say you bought a small term, a 10-year policy and you contract an illness on the 10th year. If this happens, you’ll definitely be paying more for insurance when you update your plan or worse – have trouble buying a plan at all!

It is recommended to buy a plan that will last the length until your kids graduate from college. This will keep your family covered in case of the unthinkable.

5. Assigning a Minor as a Beneficiary

While its only natural for a parent to look after the well being of their child – sometimes parents will assign a minor as the beneficiary of their insurance plan.

This is a mistake because, in case you do pass on before your minor is an adult, the court system will have to get involved to sort through the clutter. This can cause your headaches and added bills – nobody wants that.

If you don't read the fine print or know what questions to ask, you could find some surprising facts about your homeowners insurance policy after the fact.

Posted by & filed under Homeowners Insurance.

Maintaining a homeowners insurance policy when you purchase real estate is not only advisable, but for a time you may not have a choice in the matter. Many mortgage loans hinge on your willingness to protect your investment with proper insurance coverage.

Of course, you benefit from this arrangement, as well. In the event of damages or loss due to a number of circumstances, your insurance will cover the tab for repair and replacement. Some liability coverage is also included.

However, if you fail to read the fine print or you don’t know what questions to ask, you could discover some surprising facts about your homeowners insurance policy after the fact. Here are a few things you should know up front.

1. Discounts are Available

You may not realize it, but your credit rating can play a role in how much you pay for homeowners insurance. Top tier credit ratings will bring you the best premium rates, but lower scores could cost you significantly more.

Obviously you want to get that score up before you buy a home, for multiple reasons. However, you can also secure discounts with safe behavior. Many providers offer discounts to homeowners that install security features like a home alarm system.

You may also pay less for insurance if you live near a fire station, especially one that is highly rated. In other words, it’s always best to ask your provider what discounts are offered.

2. Old Claims Could Affect Your Cost

Did you know that insurers have a database called Comprehensive Loss Underwriting Exchange (CLUE) that features claims made on properties over the last seven years? If your property had claims before you moved in, you could be paying the price for increased risk.

Insurance agents can also enter notes in CLUE for claims that are denied or if you call to ask if a claim will be covered (even if you never file). These notes can raise your risk factor and rates. If you’re curious about coverage, tell your agent the questions are not related to potential claims.

3. Renovations May Not Be Covered

You might need extra insurance to cover pricy home repair projects and workers in your home, so call your insurance provider in advance to find out if renovations are covered or not.

4. Natural Disasters May Not Be Covered

Fires and certain types of weather damage are often covered by your homeowners insurance policy, but earthquakes, tornadoes, and other natural disasters may require an additional policy. Unfortunately, floods (including internal leaks) are almost always excluded unless you purchase additional coverage.

5. You Can Refile Claims

If a claim is closed but you’re still experiencing related, ongoing costs, you can refile for additional compensation. However, the time frame in which claims can be filed (and refiled) depends on the laws of your state. Generally, a year is about all you get.

Homeowners insurance can be an expensive proposition, but it's necessary. Bear these five things in mind when shopping around for insurance and a policy.

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Any major investment brings with it the need for a type of insurance. Homeowners are expected to carry some amount of coverage to protect the value of their home from calamity and a valid policy is considered mandatory for obtaining a mortgage from any reputable lender. Like pretty much anything that comes with owning a home, homeowners insurance can be an expensive proposition. But a necessary expenditure nonetheless, as the alternative could be far more devastating to your wallet if something catastrophic like a fire or flood should impact the stability of your home.

Although there are more components involved in selecting a homeowners insurance policy, think of it the same as owning a motor vehicle. The law requires you to have coverage on that car in the event something happens to it. You can’t use it to make repairs on the vehicle, but it will certainly come in handy when an accident has totaled the vehicle beyond repair. Much like when you bought that insurance, you have a whole range of factors to consider before choosing the right homeowners policy and here are the five things to keep in mind when you sign on that dotted line.

Shop Around

You’ve no doubt heard this advice before when it comes to buying any product, but with homeowners insurance the product you’re buying is a company’s reputation. You’re going to be investing a considerable amount of your hard-earned cash into this insurance organization for a lengthy period of time. You will expect that organization to step up and process your claim thoroughly if something should happen. You are also going to need (and want) certain kinds of coverage, so do some comparison shopping to find the best rates, the most coverage for the price, and highest customer satisfaction.

Determine Your Coverage Needs

Before choosing a policy, decide on the level of coverage you require. Some policies are designed to cover the common calamities that might arise such as fire, earthquake, flood, theft, and other risks that are expressly mentioned in the policy. There are some policies that cover older homes and more comprehensive policies that are suited for new homes. By deciding on the particular necessities inherent with your home, you can avoid paying for more policy than you might require.

Lowering Your Costs

Once you know the type of policy coverage you’re going to need, you can take some steps to lowering those monthly premiums. Luckily these precautions won’t just help you save money, they might just save your life as well. Homeowners who install ample smoke and CO2 alarms in their home can see their premiums fall between 5-10% a year on average. The same goes for security systems that come with central monitoring; this layer of safety will also save you a few bucks each month. You might also check to see if your company offers other types of coverage such as automobile and health insurance, this way you can save some cash on a multiple policy discount.

Pay Ahead of Time

Some companies offer discounts when you pay for six or twelve months at a time instead of making monthly payments. Think of it as their (small) way of thanking you for paying for the whole year of coverage in one transaction. Monthly payments might cost a little extra because they have to process each one separately and there’s also the risk of you missing a payment. Another way to lower the cost of your premium is by paying off your mortgage as quickly as possible. The insurance company feels that if you no longer have any payments left and you own the home free and clear, you’ll be more likely to maintain it properly.

Stay Informed

Once you’ve had your policy for a full year, review it. Take a look at the cost of a similar policy in today’s climate and see how it stacks up. Are you paying too much for certain items now that time has passed? Is your coverage still adequate for what is necessary for your home or are you carrying too much? Maybe you’re not carrying enough due to policy changes or other mandates beyond your control. Stay informed on any alterations to your coverage and it’s never too early to compare rates with other companies again.

Becoming a home owner is a complicated process and insurance rates can vary greatly. Keep these tips in mind when shopping for a new homeowner's policy.

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Becoming a home owner is a long complicated process and the mortgage you likely have to take on is a big responsibility. Although your lender will often require you to take out an insurance policy on your new investment, it’s a detail that many first-time home buyers overlook. Homeowners insurance rates can vary greatly depending on the carrier and your situation. Factors such as home age and location, your personal insurance claim history and credit history all play a part in determining your rate, so it pays to do your homework before selecting a policy.

First, keep in mind that a home insurance policy usually covers the structure itself, your belongings, liability in the event of a lawsuit, and expenses if repairs force you to live elsewhere temporarily. Your base policy generally doesn’t cover natural disasters like earthquakes and floods, which are available for purchase as separate policies. Now that you know the basics, here are a few tips to keep in mind when shopping for a new homeowner’s policy.

1. Compare Your Options

While it sounds obvious and the process can take up some free time, assessing your options really can save you a lot of money. Find out which carriers your friends and neighbors use and compare rates online; you can even reach out to the National Association of Insurance Commissioners or the insurance department in your state for additional background information such as if a carrier has a history of consumer complaints. You can also talk to an insurance agent or broker to get an idea of the pricing available to you. When selecting a policy, don’t forget that you should take quality of coverage and customer service into account as you shouldn’t sacrifice those things just to save some money.

2. Bundle Policies

Many carriers will lower their homeowners’ premiums for customers who purchase other types of insurance – such as life or auto insurance – through them as well. However, remember that even if bundling saves you 15% on your homeowners policy, you still need to compare the whole package against other bundled options to make sure you’re really saving money.

3. Take Advantage of Discounts

Upgrades to your home such as improved security, new smoke detectors or a new roof can qualify you for additional discounts on your policy. For many of these improvements your insurer may have preferred products that will provide a larger discount, so be sure to ask for their recommendations.

4. Mind Your Credit

It’s a basic, but very important step, so it bears repeating. It’s easy to forget that your credit affects the insurance rates available to you. However, carriers have found that there is general correlation between poor credit scores and increased claim activity so they take credit into account when pricing your policy. This extra benefit should provide additional incentive to pay down debt and practice responsible financial habits.

5. Select a Higher Deductible

If you raise the amount of a loss you have to cover before the insurance company begins providing benefits, your carrier will generally offer a discounted rate. Depending on where you live, increasing your deductible from $500 to $1,000 could drop your monthly premium by 25 percent in some cases. Just remember that while this and other money saving methods are effective, it’s still important to maintain adequate coverage that will provide enough assistance should disaster strike.

An insurance broker can save you a lot of stress and aggravation as well as help you come out of the claims process with the best outcome possible.

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A lot of people view shopping for insurance as a necessary chore that takes up a lot of time and money that they would rather apply to other things. However, many still devote their resources to shopping for insurance directly from their preferred insurance company because they believe that cutting out the middleman saves them money. While the evolution of e-commerce has made many things simpler and less expensive, however, in some cases it still pays to work directly with a live human being who is also an expert their field and has your best interests in mind.

Modern thinking paints middlemen as needless additions to a two-party transaction and it’s reasonable to presume that removing a redundant party from a transaction should improve efficiency and lower costs. However, when it comes to insurance brokers and carriers, the opposite is often true.

Better Pricing

The reality is that in many cases brokers receive more favorable pricing from carriers than customer that buy direct. This is because brokers present a lower risk to insurance companies than ordinary consumers. As trained professionals, they are better equipped to assess individual insurance needs to ensure their clients are not under-covered. This produces much more efficient policies for carriers by helping minimize avoidable claim activity.

Insurance Market Expertise

Another counterintuitive aspect of insurance brokers is that their addition to the consumer-carrier relationship actually simplifies the insurance transaction for both primary parties. As trusted experts in their field, brokers know the ins and outs of the market and can advise you on the best coverage and pricing options available to you. They can also assist in navigating less common specialty insurance policies, potentially saving you hours of research. Carriers save time in this scenario as well since their frequent interactions with a broker help them to streamline their transactions.

Fewer Fees

In fact, this improved operational efficiency is the reason carriers offer brokers commission on the insurance products they sell and why you shouldn’t have to pay for a broker’s services. This is a great deal for you considering that it sets you up to receive insurance coverage that will better fit your needs. Since details vary across different insurance plans, the broker’s familiarity with each product can help you put together a coverage package that has the right options to tailor for your situation. This especially comes in handy if you’ve recently relocated. Different states have different insurance requirements, and it can be hard to figure out what you do and don’t need. Fortunately, wherever you go you can find a local insurance broker California to Maine, or Washington to Florida who can help you out.

Client Advocate

In addition, remember that insurance brokers are on your side and want to find you the best coverage deals out there. They are also there to advocate for their clients, and will help you through any claim situation that may arise. This can save you a lot of stress and aggravation as well as help you come out of the claims process with the best outcome possible.

When taking out a life insurance policy, these are some things to watch out for when you're in the market.

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The objective when purchasing life insurance is to provide your dependents with some financial protection if something happens to you. Whether you want the money to go towards paying some bills, contributing to your partner’s retirement or setting up a college fund for your kids, it’s important that the money serves its intended purpose. By failing to do your research before choosing a policy, you may end up doing more harm than good when taking out a life insurance policy. Here are a few things to watch out for when you’re in the market for life insurance.

1. Selecting the Wrong Beneficiary

Depending on the laws where you live, the beneficiary you name could come back to haunt you. If you name your estate as your beneficiary, you will be subject to inheritance taxes in certain states. Additionally, creditors can gain access to these same funds after you’re gone because they’re not payable directly to separate beneficiaries like a partner, offspring or other relatives. Discuss the best choice of beneficiary with your insurance provider to protect your loved ones.

2. Forgetting a Backup

Furthermore, even if you do name a beneficiary, if you fail to supplement that with backup beneficiaries – in case your first choice passes away early – you can find yourself in a similar situation as any money will automatically revert to your estate where it is exposed to unnecessary expenses and exposure.

3. Wrong Policy Choice

Permanent and term are the two primary forms of life insurance. Like their names suggest, permanent remains in effect until you die, while term will expire after a preset amount of time – generally anywhere from five to 30 years. There are also different types of permanent life insurance – such as whole, variable and universal – and it’s important to understand what each type does to ensure it will fulfill your needs. Knowing your goals will help dictate what type of policy is best for you; if it’s just to pay off smaller bills then a term policy should suit you, but if you’re willing to invest more money and looking for better returns on that investment then a permanent policy may be the way to go.

4. Going With the Least Expensive Option

You shouldn’t make major purchases without evaluating the market and looking for the best deal, and buying life insurance is no different. Assess each carrier’s pricing as well as what they’re offering to make sure you’re comparing apples to apples. However, do not let the sticker price scare you away or steer you towards a policy with insufficient coverage. You get what you pay for, and in situations like this you can actually lose significant value in the long run by going for the discounted option now.

5. Purchasing Insufficient Coverage

Sitting down and mapping out all of the expenses you’re hoping to cover with your policy is vital to selecting the proper amount of coverage to select. Remember that this money may need to last a long time.  For instance, if you have young children then you need to calculate how much it will cost to raise them until they are roughly 18-21. Also, when mapping out their plan, most people will take into account debt and taxes, but some will neglect to account for potential fluctuations in cost of living. This is where it helps to consult a local professional. Ask any insurance broker Florida to Washington, California to Maine; each will likely have very different economic outlooks and you don’t want to end up with insufficient coverage if something unexpected happens.

What is SR 22 and what effect will it have on your auto insurance? Here are a few basics as well as information on what you can do to avoid penalties.

Posted by & filed under Auto Insurance.

If you don’t know what SR 22 is, then you’ve probably never been arrested for a DUI. In the state of California, those who are found to be driving under the influence of alcohol or drugs may be subject to a number of penalties.

First and foremost, you could have your license suspended or revoked. If this happens, you will be required to obtain an SR 22 form.

What is SR 22 and what effect will it have on your auto insurance? Here are a few basics pertaining to SR 22, as well as some information on what you can do to avoid insurance penalties.

What is SR 22?

SR 22 is a certificate of insurance. It is used to prove that your insurance coverage meets California’s requirements for minimum auto insurance coverage. Every state has different requirements when it comes to coverage. In California, minimum liability coverage that meets state standards is referred to as 15/30/5.

What this means is that your liability for personal injury or death for a single person involved in any given accident is $15,000, while your total injury and death liability for all persons involved in any given accident is $30,000. In addition, your liability must cover $5,000 in property damage for any given accident.

These figures, of course, pertain to accidents for which you are determined to be at fault. When you obtain an SR 22 form from your insurance provider, you can prove to the state of California that you meet these requirements and avoid further penalties. Unfortunately, this notifies your insurance provider that you’ve been arrested for a DUI and had your license suspended or revoked as a result.

Why is SR 22 required?

When your license is suspended or revoked following a DUI arrest, the Department of Motor Vehicles (DMV) requires you to submit an SR 22 form before your driving privileges are reinstated. The only way to obtain this form is to get it from your insurance provider, who must forward it to the DMV.

While DUI isn’t the only reason an SR 22 may be required (it could also relate to negligent driving charges or having an accident while uninsured or improperly insured), your insurance provider will want to know why you need the form. Regardless, requesting this form signals that you have done something illegal, which is bound to influence how your insurance provider treats you in the future.

How will SR 22 affect my auto insurance?

In the state of California, there are laws in place to protect drivers from immediate action by insurance companies in the event of traffic citatations. In the case of SR 22, your insurance provider cannot raise your premiums or discontinue your policy midterm.

However, they can take such action when your renewal rolls around. If you are able to fight your DUI charge and you’re not convicted, you may see no penalties where your insurance is concerned. Even if you are convicted of a DUI, your insurance provider may choose not to bump up your premiums or drop you. This is pretty unlikely, though.

A DUI conviction puts you in a high-risk category and most insurance providers will act accordingly. At the very least, you may not be eligible for a safe driver discount for several years following a DUI conviction.

The best advice, then, is not to get a DUI. Driving under the influence is NEVER worth it. In addition to potential penalties like criminal charges, losing your license, and seeing insurance rates go through the roof, driving under the influence could lead to accident, injury, and even death, and you might not be the only one affected.