Auto safety and small overlap crash test results.

We buy cars because we need them.  Cars are a necessity, but decisions that go into buying a car have developed far beyond that.  Naturally, for most, buying a car is a financial decision, but image seems just as important.  

However you explain yourself why you bought a car, car’s safety should be an important part of that function.  You might be an excellent driver but what goes on the road is never just about you.

Below are links to some scary looking crash tests.  (Small overlap crash test to be exact.)

Out of 4 door sedans the car that tested the best: Honda Civic; the worst Kia Forte.  Out of small SUV’s Subaru Forester was the safest.

Kia Forte

http://www.youtube.com/watch?v=KirGcMaBp5Q

Honda Civic

http://www.youtube.com/watch?v=qlo77euKkCI

Toyota Corolla

http://www.youtube.com/watch?v=9AnNSfVds9M

Subaru Forester

http://www.youtube.com/watch?v=ThtOh6_AvfQ

Mercedes C Class

http://www.youtube.com/watch?v=pG9h4XMJv6Y

BMW 3 Series

http://www.youtube.com/watch?v=IcSDBrlHbCo

To see more test results visit Insurance Institute for Highway Safety Youtube page. http://www.youtube.com/user/iihs?feature=watch

Wood stove safety

Growing up in Bosnia the only heat source in our home were two wood stoves.  I remember chopping and stacking wood being hard work, but even then and still I romanticize about wood stoves and everything they represent.  We all know that as useful and romantic wood stoves are, they are primarily and inherently dangerous.  And whether you own a wood stove out of a luxury or a necessity, always first think safety. 

Before you start burning wood through another Vermont winter click to a link below and remind yourself of the practical and life saving safety tips.  (Some of the tips below are about fire in general.)

http://www.usfa.fema.gov/citizens/home_fire_prev/heating/fireplace.shtm

This is one of the wood stoves from my home.  Great for heat, cooking and baking.  Is there an app for that?

What is uninsured and underinsured motorist bodily injury?

Part of your auto insurance liability is coverage called uninsured and underinsured liability.  

According to Insurance Research Council 1 in 7 vehicles on the road today is uninsured.  If you are hit by one of these uninsured vehicles you have liability coverage under your auto policy.

Examples of what uninsured motorists bodily injury covers:

• medical expenses
• lost wages
• pain and suffering
• and more…

Also this limit also covers you if at fault party (person that hit you) does have insurance but not enough insurance.  

What does not enough insurance mean?  Every state has a minimum state requirements for bodily injury coverage.  Vermont minimum state requirements for bodily injury is $25,000 per person and $50,000 per accident.  If at fault party has low liability limits your underinsured liability will cover your losses.

For example.  At fault party only has limit of liability insurance of $25,000 per person.  They hit you, but your medical expenses, physical therapy and lost wages amount to $75,000.  Other party’s insurance will cover $25,000, your insurance will cover $50,000.

Uninsured and underinsured bodily injury coverage also covers you if you get hit by uninsured or underinsured vehicle while you walk, ride your bike etc.

If you have any questions or you want to know more about this coverage e-mail or call me.

Irfan Sehic

Insurance Agent

Green Insurance Agency

PO Box 640

Burlington, VT 05402

www.green-insurance-agency.com

Irfan@green-insurance-agency.com

Tel: (802) 505-1054

Auto insurance-How to keep a low premium even with youthful drivers.

So, you have a kid that just got their drivers license.  This is great, you finally don’t have to chauffeur them around, but wait!  My insurance will cost how much?

High insurance cost goes hand to hand with youthful drivers.  To help keep insurance cost down consider the following:

• Good grades discount- it can be as much as 20%.  Most auto insurance carriers 3.0 GPA is good enough for good grades.  Good grades can save you hundreds of dollars a year.
  
  
• Drivers education class is a must.  Even if a kid is 18, they still should go through drivers ed class.
  
  
• Young driver should drive an inexpensive car, so you can only have liability only coverage.
  
  
• Keep in mind if a driver in their 30’s-60’s gets a speeding ticket, insurance premium will most likely stay the same.  If a teenager gets a speeding ticket, insurance will increase by several hundred dollars, maybe couple of thousands of dollars.  Young drivers that understand this and understand the value of a $ are more likely to be careful drivers.
  
  
• Make them pay for their share of insurance cost, it will help them be a careful driver.
  
  
  
• Adding a new driver on a policy is a good time to re-quote your insurance.  Different insurance companies have different rates and underwriting guidelines.  Insurance company that was the best option for you, might not be the best option once you add the youthful operator.

Insurance Institute for Highway Safety video about young drivers

Irfan Sehic
Insurance Agent 
Green Insurance Agency 

www.green-insurance-agency.com
Irfan@green-insurance-agency.com

Tel: (802) 505-1054 

Homeowners insurance- Your dearest belongings are not covered.

You know homeowners insurance provides personal property coverage, but do you know that some of your most valuable and dearest belongings only have limited coverage?  Different insurance companies provide different amounts of insurance, but all of them have limited coverage on the following categories:

•          Jewelry
•          Firearms
•          Musical Instruments
•          Silverware and coins
•          Personal Computers
•          Stamps and other collectibles
•          Art, works of fine art and other related items
•          (other categories of personal property might be limited as well)

To ensure your valuables are covered, a simple and relatively inexpensive endorsement can provide FULL and COMPLETE coverage.  Just ask your agent to schedule any item above on your policy.  For more expensive items insurance company will require an appraisal and most likely you will have to re-appraise your property every 3 years.

Scheduled property is insured for all perils including mysterious
 disappearance and losses are not subject to a deductible.

If you have any questions or need more information please contact me.

Irfan Sehic
Insurance Agent 
Green Insurance Agency 
PO Box 640
Burlington, VT 05402

www.green-insurance-agency.com
Irfan@green-insurance-agency.com

Tel: (802) 505-1054 

How much should my home be insured for?

⅔ of American homes are under insured!  That means that 2 out of 3 homeowners reading this is in a financial peril.

So, how do you make sure you are not a part of this frightening statistic?  Easy: you insure your home for 100% replacement cost value.  

How do you know if you are insured to 100% replacement cost value?

Only think about three things:

• debris removal
• cost of labor
• cost of material

Forget about market price of your home. How much you bought the home for and how much is worth now means absolutely nothing.

Ask yourself: If my house burns down, how much would debris removal, a contractor, and new material cost?

You might or might not know the answer.  If you don’t know ask an agent to provide you with a replacement cost estimator for your home, or you can go online do one yourself.

Use this as a general guide: most homes should be insured for $150 per square foot (finished space).  Unfinished space is less, maybe $80 per square foot.  $150 is used for standard building materials; for custom/luxury materials and intricate designs used a detailed replacement cost estimator done by a trusted insurance professional.

***This blog post is meant only as a simple guide for general public and because of that I have skipped the scary part of the story which is: what happens if your home is not insured to a full 100% replacement cost?

Short answer is that you are left with a BIG bill to pay, even if you only have a partial loss.

If you need examples or more information feel free to call at 802-505-1054 or e-mail at Irfan@green-insurance-agency.com.

Insurance score- what is it?

Insurance score is one of the most important factors used by insurance company when determining your rate for home and auto insurance.  You should know about it because a great insurance score will save you hundreds on your auto and home insurance.  

Insurance score is a numeric system similar to a credit score.  Some variables used to calculate insurance score are: credit score, paying history, # of open accounts, your financial habits and choices.

Why does the home and auto insurance company care for the above mentioned factors?  Insurance companies have found direct correlation between high insurance scores and probability of future claims.   High insurance score=low probability of future claims.  Low probability of future claims=low insurance premium.

I have seen cases where clients have saved $700 a year for having an excellent insurance score.  Unfortunately, I have also seen cases where client was charged extra $700 a year for having a poor insurance score.  

What can you do to maximize your insurance score?  Having a high credit score helps, but people that regularly make conservative financial decisions always have the highest insurance score.  Also, always pay your insurance bill on time, and if you can, pay in full.  If you choose to pay in installments try to budget for the billing plan that has the least # of installments.

Let me place you on a brief hold.

A potential client with several auto insurance claims before signing the application says: Geico's rate was lower, and they promised it would go way down after six months. 

Me: They probably have not considered your claims history; you should call them, it's always good to know. 

So she calls.  After going through all the claims, Geico ended up not being able to provide coverage due to frequency of claims and second part of their conversation  (almost word for word) went something like this:

Geico representative:  Let me place you on a brief hold.

Potential client: OK.

(after a brief hold)

Geico representative: Yes, ma'am, sorry about that.  Yes, I am sorry, but at this time we are unable to provide you with a quote.

Potential client: But I have an MBA, great credit, almost none of the claims are my fault.  I can increase my deductibles; I didn't know that frequent small not-at-fault claims would create such a problem, if I knew I would of paid this out of my pocket.  I have never missed a payment, and I am def. done with claims.  I haven't had a claim in the past 16 months.

Geico representative:  Yes I understand.  Unfortunately there is nothing I can do.  I would suggest you call a local insurance agent.  They work with many different insurance companies, I only work for Geico.  Local agent has access to many different options and they will be able to shop for the best possible rate and will be able to find a company that can insure you.  Again, sorry we can't help you.

My client: OK, thank you.

How is auto insurance rate calculated?

Your kid starts dating, and it looks like it might be serious.  But you don't know this person.  You trust your kid, but you are curious so you ask: where do you go to school, what do you do, what do you want to do, where are you from, where are your parents from, what do your folks do for work, do you have any brothers and sisters, how did you two meet...?  You do this because you worry and you want the best for your kid, and you think that more information and more historical data the better, because this will help you know the person and it will help you predict their future actions/choices.  And while most of this information and historical data will not affect the relationship between your kid and this person, you ask anyway, because you feel that more information= an educated guess instead of just a guess.

Well, insurance companies go through the similar process when determining your auto insurance rate, and there are two major things  insurance companies really care for: probability of future losses, and paying behavior.  Many factors are taken into consideration, some obvious but some might surprise you.

•           Age
•           Sex-female drivers receive more favorable rate compare to male drivers
•           Marital Status-married drivers receive lower rate
•           Driving violations
•           Whether you rent or own-if you own you will get a better rate
•           Accidents
•           Severity of accidents
•           Frequency of accidents- having ten small accidents that amount to total insurance payout of $10,000 is worse than having one $10,000 accident
•           Education- higher education=lower rate
•           Occupation
•           Type of vehicle you drive- new car vs. old car, expensive car vs. what I drive
•           Physical location- insurance companies divide states into many territories and they use statistical data, like crime rate, traffic info, etc. to determine the risk levels associated with your physical location.  So, even if you stay in the same zip, and only move a mile down the road, your premium can and probably will change
•           Type of coverage
•           Amount of coverage
•           Prior insurance
•           Prior limits
•           Gaps in coverage
•           Insurance score

Do I need an umbrella or excess liability policy?

I hope, you hope, we hope that the unthinkable never happens. 

Insurance is meant to cover sudden and incidental-often unthinkable losses.

No matter how careful we are, sudden and incidental is always hiding and waiting.  A disaster can happen at any time.

Umbrella policy or excess liability policy provides additional coverage for when the unthinkable happens.  A devastating loss can take an emotional toll on all involved, but it doesn't have to be a financial burden.  Whether you are a recent college graduate protecting future earnings or a retiree protecting life savings an umbrella policy is for you.  

For many people an umbrella or excess liability policy can be as inexpensive as $170 a year; so next time you talk to your agent ask him about umbrella or excess liability policy.

What to look for when buying auto liability insurance.

Whether you are buying auto insurance for the very first time, or you have been insured for many years, my tips on buying liability insurance should be useful and keep you properly insured.

Before you think about price and coverage you should have an idea of where you want to buy insurance.  You have two choices: go online and do it yourself or go through a local agent.  I strongly suggest you find a local agent.  Ill talk about why some other time.  This blog post is only regarding auto liability coverage.

Most states require you to have auto liability insurance and most states have set minimum requirements.

A minimum requirement might look like this:

$25,000 per person/ $50,000 per accident.

States don't have maximum limit on how much you can buy, but insurance companies do.  Most auto liability insurance insurance company will sell you are $500,000 combined single limit.  Some companies can sell limits of $1,000,000 per person/$1,000,000 per accident.

How much liability insurance do you need?  The answer is: the more the better.

After reading the above line some of you might dismiss the article; and after meeting with thousands of people I know why.  You probably are $ conscious and don't want to waste $ especially not on insurance.  

But when you get your auto insurance quote ask the insurance professional to provide you with 3-5 quotes.

First quote- state minimum limits

Second quote-$100,000 per person/$300,000 per accident

Third quote-$300,000 CSL

Fourth quote-$500,000 CSL

If $1,000,000 liability limits are available ask for that quote as well.

What most of you will realize it this: 

1.  State minimum limits, although cheap, are not enough coverage and they keep you in exposed to a great financial peril.  You should NEVER, and I do mean NEVER buy lower than $100,000 per person and $300,000 per accident.

2.  Difference in premium between $100,000 per person $300,000 per accident and $500,000 combined single limit is insignificant.  For me difference in premium was about $80 a year.  

So next time you look for auto insurance check to see how inexpensive increasing your auto liability limits it really is.  It might be the most important decision of your life.