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This article has been reviewed by licensed insurance industry expert, Moshe Fishman on July 10, 2024.

For many people, homeownership has been a part of the foundation of the American Dream. Buying a home is considered to be a good financial investment while renting a home is seen as throwing away good money. However, this is no longer the case.

For some people, buying isn’t necessarily the better choice. When considering whether to buy or rent, it’s important to consider not only your financial situation and goals but which is best suited to your lifestyle.

Renting vs. buying a home: The Pros and Cons

Investment

Purchasing a home is a great long-term investment. But the keyword here is “long-term.”  Building equity in a home takes time.

If you’re buying with the expectation that home prices and values will rise sharply and quickly, don’t hold your breath. A good rule to follow is that if you don’t plan to own your home for more than 5 years, don’t buy.

When you sell your home, you’re responsible for fewer fees than you were as a buyer. The buyer usually pays for the bulk of the closing costs, and they also pay 5 to 6% of the sale price in real estate agent commissions. As you can imagine, these costs add up quickly.

Depending on the market, selling a home after five years of ownership doesn’t necessarily mean a homeowner will profit or break even. Aside from normal housing costs, factors beyond your control can cause house values to plummet such as a recession, inflation, interest rates, location, and supply and demand. Even rent vs buy calculators can't factor in all those contingencies.

In certain markets, the only affordable option may be a condominium as compared to a single-family home. Condominiums don’t appreciate at the same rate as single-family homes and because of this, mortgage lenders will set the mortgage interest rate for a fixed-rate mortgage to be slightly higher for a condominium as compared to a single-family home.

Although renters won’t reap the benefits that can come from a long-term investment such as a home, renters have the freedom to invest in other areas such as stocks, bonds, and mutual funds. They can also choose to contribute more to their retirement accounts.

Tax Benefits

There are numerous tax benefits for homeowners and virtually none for renters. As a homeowner, your biggest tax benefit is the mortgage interest deduction which allows you to deduct the interest paid on your mortgage. For married couples filing jointly, this deduction is available on loans up to $750,000 and for a single person, up to $350,000.

Other tax benefits available to homeowners include home equity loan interest, discount points, property taxes, home office expenses, mortgage insurance premiums, capital gains, and medically necessary home improvements.

Mortgage vs. Rent

The advantage to a mortgage monthly payment compared to a monthly rent payment is that a mortgage payment tends to stay the same over the course of the loan, especially for a fixed-rate loan. Mortgage applicants with a low credit score will likely pay a higher interest rate, owing to the lender's perception of increased risk.

An increase in property taxes can make a payment amount increase. Adjustable-rate mortgages (ARM) are home loans where the interest rate changes after a specific period. Depending on current interest rates, the mortgage payment will either increase or decrease.

Homebuyers can guard against fluctuating interest rates by choosing a fixed-rate loan. Buyers who put down less than 20% for a down payment may have to pay mortgage interest insurance. But this expense will eventually become unnecessary when enough equity is established.

The disadvantage to rent is that it almost always goes up and never goes down. Rental rates are dependent on the housing market and although some rentals are in areas with rent-control measures or rental-rate caps, not all renters can take advantage of these protections.

As the demand for housing continues to increase, it’s likely rents will continue to rise as well. Some exceptions to this are renters who are on good terms with their landlords and have reached agreements where the landlord doesn’t raise the rent based on market values. However, if the property owner decides to sell the rental property, the tenant will be forced to start over again.

Maintenance

Maintaining a home can be expensive and time-consuming. Unexpected costs can occur at any time. The general rule to follow is to assume that as a homeowner, each year you’ll pay between 1% and 4% of your home’s value for home maintenance costs.

For example, if your house is worth $300,000, you can assume you’ll spend $3K to $12K on home maintenance every year. In addition, if you have a mortgage on your home, you will almost certainly carry homeowners insurance. Aside from protecting you, it covers losses your "partner," the mortgage lender, wants to avoid.

Purchasing a home in a community with a Homeowner’s Association (HOA) usually means the HOA takes care of routine maintenance such as landscaping and potential big expenses like new roofs and painting. However, monthly HOA dues can be very steep. If a major repair is needed, and the HOA is poorly funded, a special assessment may be levied on homeowners. When purchasing a home with an HOA, ask how about the reserves and if they are well funded.

One of the biggest benefits of being a renter is that your landlord is responsible for anything that goes wrong with your home. The cost of renting includes maintenance services.

Not only are you spared the hassle of home maintenance, but you’re also spared the high expense. Although the repairs might not be done as quickly as you’d like, if anything goes wrong in your home, you won’t be responsible for what can be a considerable cost.

As a renter, you don’t have to worry about the time-consuming tasks involved with home maintenance. People who value their free time and those who work long hours or travel frequently will appreciate the freedom that comes from being a renter. However, you’re also not able to personalize your home in any way. Painting the walls, changing the flooring, planting a garden, or making any type of improvement to your home is not possible.

Geography

Once you buy a home, you’re tied to the location. If you’re transferred to an office that’s an hour away, you don’t have the ability to move closer unless you sell your home. Renters have the freedom to move if they don’t like where they live or if a lucrative job opportunity comes up in another city or state. Renting allows a level of personal freedom that will always be appealing to certain individuals.

The Decision is Yours

Whether you choose to rent or buy your home is up to you. Examining your long-term goals—not just for your home but for your life—will help you make the decision that best suits your definition of the American Dream.

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on 6/26/2024.

As the country transitions from a pandemic phase to an endemic phase, one thing that hasn’t changed is the demand for used cars. The automobile industry is still recovering from supply chain challenges and the demand for used cars is through the sunroof. With many companies allowing their employees to continue to telecommute, if you own a car that you’re not using much, now’s an excellent time to sell or trade your car online to ensure you get top dollar. 

Low Inventory

Anyone who rented a car in the past couple of years has experienced the sticker shock of rental car prices. Due to quarantines and workplace closures, the situation forced many auto dealerships and factories to close completely. Demand for rental cars plummeted, causing rental companies to offload inventory. Car manufacturers assumed that the demand for new cars would fall significantly and canceled their orders for microchips. 

As the demand for cell phones and laptops skyrocketed, manufacturers shifted production to keep up with demand. When car manufacturers were ready to ramp up production, they couldn’t get the components they needed due to supply chain issues. With new car production stymied, the demand for used cars shot up. 

High Demand

As restrictions loosened, people were ready to hit the road for some much-needed vacation time. With foreign travel off the table, road trips surged in popularity along with the demand for used recreational vehicles, trucks, and SUVs. Rental companies were desperate to increase their inventory to meet demand and began buying up used cars. The demand hasn’t waned and if anything, the market is hotter than it’s ever been.

When To Sell

In this seller’s market, any time is a good time to sell. But if you want to get top dollar for your used car, the ideal time to sell is between the months of March and August. That’s when increased temperatures, longer days, and summer vacations fuel the demand for used cars. The worst time to sell is January and February when consumer spending usually plummets after the holiday shopping season.

Selling a Used Car: The Basics

While the thought of selling your vehicle on your own might seem intimidating, it’s actually a fairly simple process. Follow these steps to ensure a hassle-free sale for both you and the buyer.

Gather Paperwork

Who Should You Sell To?

There are three options when deciding who to sell to a dealership, a private party, or through an Instant Cash Offer. 

The idea that a car dealership won’t pay what your car’s worth doesn’t necessarily apply in this market. Call several dealerships to compare prices. The advantage of selling to a car dealership is that the process is simple and straightforward, and you won’t have to deal with the annoyances that might accompany selling to a private party. 

Also, dealers aren’t as concerned about small repairs that can be easily fixed in their service shops. Lastly, if you don’t own your car outright, a dealership is familiar with the process of paying off the loan and obtaining the title.

Sell to a private party by placing an ad on websites and apps such as Craigslist, OfferUp, eBay, and Facebook Marketplace. Although dealing with potential buyers can be a hassle, you’re most likely to get top dollar this way. 

Be wary of potential scammers and use common sense when meeting with prospective buyers. Through texts and phone calls, you’ll be able to determine which buyers are legitimately interested in purchasing your vehicle. When the sale takes place provide the buyer a bill of sale, using an approved motor vehicle bill of sale form.

This no-fee option through the trusted company Kelley Blue Book is an easy, hassle-free way to sell your car. Visit the website, enter the details of your car, and get multiple offers from participating dealers. Your offer will be good for 7 days. Bring your car and the offer to the dealer and once they verify the info you entered is accurate, you’ll be good to go.

The Right Price

There are many tools you can use to determine the fair market value of your car. Make an honest assessment of your car’s overall condition. A website such as Kelley Blue Book’s Condition Quiz will tell you if it’s in excellent, fine, very good, good, or poor condition. Once you’ve determined the condition, use Kelley Blue Book’s valuation tools

There are a few additional factors to consider when choosing your asking price. Do some research to see if you can find previous sales for your car’s make and model, particularly in your local market. Also, a car that’s still under warranty or that has new brakes and tires will usually warrant a bump in price.

Prepare Your Car for Sale

You want your car to make a great impression on potential buyers. Have the interior and exterior of your car detailed to get it looking its absolute best. If you plan to list your car on a site such as Craigslist or OfferUp, take the time to create a listing that’ll make a positive impression on potential buyers. The more pictures you include of both the car’s interior and exterior, the better. 

Also include the basic info such as make, model, and mileage, and be honest when describing your car’s condition. Be upfront about the car’s Kelley Blue Book Value and if you’re asking for more, include your justification for your price.

Complete The Paperwork

Once you’ve sold your car, complete the necessary paperwork to ensure the title is transferred to the new owner. While the specific rules vary from state to state, you’ll generally need to:  

As the country continues to transition back to normal, demand for used cars will eventually go down. Consider if now might be the best time for you to sell.

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on 6/10/2024.

“An ounce of prevention is worth a pound of cure.” These are important words to live by, especially if you own or rent a home. The Boy Scouts summed up this sentiment even more succinctly with their motto, “Be Prepared.” if you own a car that you’re not using much, now’s an excellent time to sell or trade your car online to ensure you get top dollar. By following the tips below, you can help prevent common fire, electrical, and plumbing hazards in your home. 

Smoke Detectors

In the event of a fire in your home, every second counts. Smoke detectors are essential for alerting your family to the hazard and giving them time to escape. However, not every home has enough working smoke detectors. When installing them in your home, a good rule of thumb to follow is to have an alarm on every level of your home, one in every bedroom, and one in every room where people sleep. Don’t place them next to vents or ceiling fans as this could reduce their effectiveness.

Evaluate your smoke alarms biannually to ensure they’re working properly and replace the batteries. A simple way to remember when it’s time to check your alarms is during daylight saving time. Also, consider investing in smart-technology options like Google Nest Protect which provides real-time monitoring of potential hazards.

Fire Extinguishers

Fire extinguishers are your first line of defense against keeping a fire from spreading in your home. As with smoke alarms, you should have one on each level of your house. Place them in easily accessible areas where household fires commonly start: the kitchen, near heat sources, and the garage. Know how to use a fire extinguisher and replace them every ten years.

Carbon Monoxide Detectors

Carbon monoxide is known as the “silent killer.” This odorless, poisonous gas isn’t usually detected until a person begins experiencing symptoms of carbon monoxide poisoning. Carbon monoxide leaks come from fuel-burning appliances and sources such as appliances, furnaces, boilers, fireplaces, wood stoves, vehicles, and more.

Unlike smoke detectors, carbon monoxide detectors should be placed on walls about five feet above the floor so they can measure the air at the height where people breathe it. Placement of CO alarms is the same as smoke alarms: on every level of the home, the garage, in each bedroom, and near fuel-burning appliances. Test them often and replace them every five to seven years.

Maintain Appliances

Did you know that clothes dryers account for 90% of appliance fires? This is because lint is highly flammable. Be sure to empty the lint filter after each laundry load. Because lint tends to accumulate in areas that aren’t easily accessible such as the filter trap and in the ductwork, have your dryer vent serviced by an air duct and vent cleaning professional once a year. For homes where the dryer is used more frequently, twice a year vent cleaning is recommended. DIY vent cleaning kits can also be bought at home improvement stores.

Use Appliances When Home

No one wants to listen to noisy appliances when they’re relaxing at home. But it’s a good idea to only run appliances when you are home. That way, if your washing machine springs a leak or if your dryer sparks a fire, you’ll be able to mitigate these hazards before they cause excessive damage.

Water Leak Detectors

While most homeowners know about smoke and CO alarms, not as many know about water leak alarms. These smart-technology detectors sound an alert when water leaks are detected, lessening the impact of potential water damage whether you’re at home or away. With built-in temperature monitors, they can even detect if your pipes are about to freeze. Check out the Flo by Moen Smart Water Detector and the Proetus Aquo Wi-Fi Water Sensor which is also compatible with Amazon Alexa.

Home Heating Equipment

Another common cause of fires in the home is home heating equipment such as space heaters and fireplaces. In fact, home heating equipment accounts for half the number of home fires in December, January, and February. To avoid a home fire caused by a fireplace or chimney, have these inspected and cleaned annually by a professional maintenance company. Be sure to use an appropriately sized glass or metal screen with your fireplace to keep sparks from igniting a fire.

With all heating equipment, keep all flammable materials a minimum of three feet away from space heaters, furnaces, fireplaces, and wood stoves. Don’t plug more than one piece of heating equipment into a single outlet. Inspect heating sources such as space heaters regularly to ensure they’re in proper working order. And unplug space heaters when not in use and don’t leave them unattended. 

Inspect Electrical Outlets 

Although inspecting electrical outlets can seem like a daunting item on your home maintenance checklist, it doesn’t have to be. For example, if you plug in a device and notice that it falls out easily or isn’t secure, this is a sign that your outlet contacts need to be replaced.

Another warning sign that calls for an inspection is if your outlets ever emit a spark. While the occasional blown circuit isn’t a cause for alarm, if it happens often, this is a sign that an inspection is due.

When should you call in the professionals for an electrical outlet inspection? The Electrical Safety Foundation recommends an inspection for houses that are more than 40 years old, those that have undergone renovations, and for new homeowners who’ve purchased a previously owned home.

Garages, Basements, and Backyards

These overlooked areas can sometimes become the places where items accumulate and clutter. As such, they have the potential to be hazardous. Be sure to keep any flammable items far away from your furnace, heater, boiler, and water heater. Keep flammable materials such as gasoline, propane, motor oil, paint, paint thinner, and turpentine tightly sealed and in their original containers. Also, keep them away from heat sources. 

Have An Escape Plan

Should disaster strike, make sure that all family members are familiar with your family’s escape plan. Come up with an escape route for every room in your home. Choose someone to aid a family member who might need extra help in the event of an emergency.

If you have a home with upstairs bedrooms, equip each bedroom with escape ladders. Once you have a plan set up, practice it twice a year with family members. 

Be Prepared

You can never be too cautious as a homeowner. When it comes to protecting your biggest investments–your home and your family. Homeowners who adhere to the “Be Prepared” motto are best equipped to prevent common household hazards. The bonus is that you may also receive discounts from some home insurance companies for the installation of security and fire prevention systems. Be sure to check with your insurer for more information.

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on 5/30/2024.

Customer loyalty is a familiar concept to consumers. It’s the idea that customers who are happy with the goods and services a company provides will tend to stay with that company, even though a better price may be available. Loyal customers would rather pay a bit more for excellent service and quality products. The concept of customer loyalty is at the heart of what is called price optimization, which is unfamiliar to most car insurance buyers. 

What is Price Optimization?

When it relates to auto insurance, price optimization occurs when insurance companies raise the premiums of “loyal” customers because they are less likely to shop around for lower rates. Using personal data compiled on its customers, complicated algorithms crunch the data to figure out the likelihood that a person will stay with their current insurance company—even if their premium increases.

In a nutshell, price optimization is a way for insurance companies to analyze a different type of risk assessment. While it sounds like a nefarious practice, price optimization is fairly common and widespread across various industries.

What data is analyzed?

Every auto insurance company looks at a specific set of factors to figure out policy premiums based on risk assessment. These factors include the insured’s age, gender, driving history, length of commute, zip code, type of car they drive, whether it’s kept in a garage or parked on the street, and more.

Insurance companies that practice price optimization still take these parameters into consideration, but they also factor in an entirely different set of unrelated, personal data. This data includes things like your web browsing history, how often you buy a new cell phone, which items you purchase at the grocery store, which cable provider you use, and much, much more. After evaluating this personal data, an algorithm determines the likelihood you’ll switch to a new insurance company if your current insurance company raises your rate. 

Who is affected?

If you’re wondering how widespread the practice is, the North America Auto Insurance Pricing Benchmark Survey in 2013 found that 45% of insurance companies with more than 1 billion in annual premiums utilized price optimization. In addition, a 2019 lawsuit in California against one company, awarded a whopping 40-million-dollar settlement to customers who were affected by price optimization strategies.

Twenty states have made price optimization illegal, and the Consumer Federation of America (CFA) has advised all other states to follow suit. The states where it is illegal include Alaska, California, Colorado, Connecticut, Delaware, Florida, Indiana, Maine, Maryland, Minnesota, Missouri, Montana, Nevada, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and Washington, D.C. 

Unfortunately, price optimization is more likely to target low-income people. According to a Consumer Federation of America press release, research shows that lower-income insurance customers do not tend to compare quotes. Higher-income consumers, however, do make it a point to compare rates. Market analysis is used to incorporate and segment customers based on price elasticity flexibility and resistance, making poor insurance buyers “immediate targets for unnecessary rate hikes.”

But using market analysis is something that many companies and industries generally use to set pricing of products and services. And the insurance industry is no exception.

Insurance company outlook

The idea that price optimization is widespread is a controversial one, even within the industry itself. Insurance assessors and regulators tend to disagree on whether the practice is used, and to what extent. Whether an insurance company utilizes price optimization can be difficult to discern. The Insurance Information Institute, says that using price optimization tactics isn’t wrong and that few consumers have raised concerns about it.

Insurance companies insist there are legitimate reasons to raise premiums or to charge one customer more than the next guy. Many insurance companies claim that what may seem like unwarranted premium increases are caused by the need to offset risks and recoup costs. These costs include discounts that are offered to new policyholders and the expense of underwriting policies annually to existing policyholders. In addition, many companies insist that they value, appreciate, and reward their loyal customers.

Don’t blindly trust pricing

Consumer Reports refers the practice of price optimization as the “schmo tax.” The reason: “It exploits consumers who are either unable to shop around or blindly trust the myth that insurance companies reward long-term customer loyalty with discounts.” So how can you protect yourself against this practice?

Shop and compare car insurance

Although spending hours comparing auto insurance rates isn’t anyone’s idea of a good time, the mere act of comparing rates will automatically guard you against price optimization. Your insurance company will get the hint that if they raise your rates, you’re likely to go elsewhere.

Shop and compare online.

Fortunately, new technologies and insurance platforms like the 5 Minute Insure website now save customers an enormous amount of time and help them to make better-informed choices. You’re able to see price comparisons side by side from top-rated insurance companies. This process helps car insurance buyers choose better coverage options and many times will help them save on premiums.

So, exactly how often should you compare rates? When it comes to guarding against price optimization, the sweet spot is to price shop before your initial renewal period. After that, compare prices every two years. 

In addition to price comparing, here are some additional things you can do to minimize the risk of price optimization.

Not just about insurance costs

Cost shouldn’t be the only factor that determines which insurance company you choose. The company’s reputation and customer service speak volumes and are factors that will contribute to your satisfaction level as a customer. And in the unfortunate event that you need to use your insurance, a company that makes the claims process easier on you during a stressful time is worth paying a little extra.

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on 5/6/2024.

You’ve undoubtedly noticed that the price of everything is going up. From tangible items such as groceries and household goods to things like electricity and rent, anyone who shops or pays bills has felt the pain of rising prices.

But have you ever considered how inflation affects homeownership? Whether you’re a prospective homeowner, a seller, currently own your home or are an investor, you’ll want to be a smart homeowner in this period of record-high inflation.

What is Inflation?

Inflation is the rate at which goods increase in price over a given period. An important component of inflation is that while the value of currency stays the same when the prices of goods go up, this results in your dollar having less purchasing power.

When you consider that for most people, a home is the largest purchase they’ll make in their lifetime, the decision to buy a home in a period of high inflation should include doing some research.

But what if you bought your home during a period of relative stability and are considering selling? What if you’re an investor? We’ll review the various scenarios and how you may be affected.

Consider the Market

Currently, the housing market in the United States is considered a “seller’s market.” In a seller’s market, demand exceeds supply. When demand is high and supply is low, what happens next is obvious: house values skyrocket.

The pandemic has also affected housing values in the last two years. With the ability to work from home, many new home buyers don’t need to worry about commuting. This has resulted in a surge of interest and purchases in rural areas that were previously off many buyers’ radars.

This scenario has also caused mortgage rates to drop to record lows. Usually, when inflation rises, so do interest rates, but not so with the unusual circumstances within the last couple of years. With the stability of mortgage rates and the current seller’s market, first-time homebuyers are put in a tenuous position.

How it Affects Homeowners

Before making any big financial decisions, be aware of the pros and cons of buying and selling during a high inflationary period.


Existing Homeowners

For existing homeowners, a high inflationary period has both pros and cons. The advantage is that property values tend to rise when inflation is high. Current homeowners can sit back and watch their property values go up while their principal goes down.

Although an existing homeowner can sell high in a period of high inflation, if they’re planning to buy another home, this works against them because their purchasing power is much lower. They’re simply not going to get as much bang for their buck. For people who haven’t owned their homes for long, staying put may be a wise choice when inflation is high.

For those who have owned their home for a significant period or people who are looking to downsize, this isn’t necessarily a bad thing. The same applies to people who live in an area where the cost of living is high and are looking to purchase in an area where the cost of living is much lower.

New and Prospective Homeowners

You’ve heard the phrase, “getting priced out of the market.” Unfortunately, this is what’s happening to prospective home buyers. New homeowners will have the most difficulty making sound investments when inflation is high.

With high demand, low supply, and less purchasing power, buying a new home when inflation is high is not ideal. However, when you consider that rent prices also rise when inflation is high, and that mortgage rates are low, a fixed house payment is one thing you can count on to stay the same. Investing in a home will pay off for new buyers who intend on staying in their new homes indefinitely.

Real Estate Flippers

The same cannot be said for real estate “flippers,” or investors who are looking to turn over properties quickly for a high return. When you consider that inflation affects the cost of building materials, lumber, and appliances, there’s an inherent risk with short-term property investments when inflation is high.

Long-term Investors

Long-term investors can look forward to reaping the same benefits as long-term buyers. Also, considering that rents tend to rise during periods of high inflation, this means that properties bought as rentals should eventually result in higher rents.

Sellers

Sellers who need to do repairs and remodels to put their homes on the market should keep in mind that these costs will be much higher than they would be when inflation is low. However, sellers are also likely to get multiple competing bids and even cash offers.

In a seller’s market and when inflation is high, sellers are likely to get top-dollar for their homes. They also have the advantage of bargaining power and can pick and choose from the offers they receive. This can mean getting away with doing fewer repairs in order to sell.

How Inflation Affects Your Home Insurance

Your homeowner insurance is also affected by inflation as construction-related expenses rise. This may be a good time to review your current home insurance policy and compare insurance company rates to add additional coverage.

Being Underinsured Due to Inflation

No one likes to think about worst-case scenarios, but it’s important to consider what would happen if your home is damaged or destroyed because of an unexpected event. Due to the fact that the cost of building materials and labor has skyrocketed due to inflation, the cost to rebuild your home will be significantly higher than it would when inflation is low.

It’s important to check your homeowner's insurance policy to be sure you’re sufficiently insured. Although it’s likely to increase your premium, adding guaranteed replacement cost coverage to your policy will ensure peace of mind if a worst-case scenario occurs. You should also check if your policy includes an inflation guard and add this option if available.

Need help with homeowners insurance?

Compare quotes with 5 Minute Insure today.

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on 4/28/2024.

There’s a lot of information out there about car insurance rates, especially car accident insurance rates, after you submit a claim. Most people believe that car accidents automatically raise car insurance rates, but this is not always the case.

Read on to learn more about which types of accidents raise your insurance premiums and what you can do about it if it happens to you.

What Types of Car Accidents Raise Your Rate?

While not all types of car accidents impact your rates equally, a few varieties will nearly always result in an increased insurance premium.

Each of these types of accidents has one thing in common: The insurance company was required to pay money to cover damages that were determined to be your fault. Whenever this happens, your insurance rates will potentially increase.

What Car Accidents Do Not Impact My Rate?

Accidents are much less likely to impact your insurance rates when you are not at fault. These include:

Be sure to obtain a police report if you are involved in either of these types of accidents. The police report should clearly state that you are not at fault for the accident.

How Do Car Accidents Raise Your Rate?

Car accidents result in increased premiums in a few ways. Your premium will never increase instantly after an accident. Instead, you will see an increase in your premium when you receive your renewal statement at the end of your policy period.

Premium Surcharge

After an at-fault accident, an insurance company can add a surcharge to your policy for 3-5 years. The length of time a surcharge stays on your policy varies by company and state restrictions. For example, NY required insurance companies to drop accident surcharges after three years.

Surcharges are not only in play after an accident. You can also see a surcharge on your policy after being convicted of moving violations, DUIs, or other incidents. You can check your motor vehicle report at your state DMV website to see what can lead to surcharges on your policy.

Loss of Discounts

Another way that an accident can impact your insurance premium is by leading to the loss of policy discounts for safe driving.

Many major companies offer some variation of an accident-free discount, giving you a reduced premium based on how long you have been accident-free. After an accident, this discount will fall off your policy, raising your premium cost.

You can find out which discounts you have on your policy by reviewing your car insurance declarations page or speaking with your insurance agent/broker. It is always a good idea to check on your discounts regularly to be aware of which you have and which you may be in danger of losing.

New Drivers

Suppose your vehicle was involved in an accident while driven by someone not listed on your policy. In that case, your insurance company might then require you to add them to your policy as a regular driver. Depending on who the driver is, this can increase a premium.

The most common example of this situation is a teenage driver being involved in an at-fault accident while driving their parent’s car. The insurance company might require the parent to then list their teenager as a regular driver of the vehicle, resulting in a higher premium because of the additional risks that come with new drivers.

How Can You Avoid Accident-Related Cost Increases?

There are a few ways to avoid an increase based on car accidents.

Choose a Policy with Accident Forgiveness

This one won’t help you if you already have an accident-related premium increase. However, it can still help you choose a policy that allows for accidents without penalty in the future.

When you set out to purchase car insurance, look for a policy that includes accident forgiveness. This will allow you to have one at-fault accident without your premiums going up. Keep in mind that this might not apply to keeping your “accident-free” discounts but will stop you from getting an accident surcharge.

Always ask your car insurance broker/agent if they offer an accident-free discount before purchasing a policy.

Ask for Additional Discounts

If you notice your premium increases at your renewal, whether it is due to an accident or not, call your company and ask for additional discounts on your premium.

While this will not work 100% of the time, you’d be surprised how often there are available discounts you can access. For example, some companies may allow you to complete a defensive driving course to offset the cost of an accident. Others might have discounts for organizations you are part of.

It never hurts to ask about discounts, especially if your premium has recently increased.

Show Alternative Insurance for New Drivers

If your premium increased because you had to list a new driver after an accident, you could resolve this problem by proving that they have their own insurance.

By providing the insurance declarations page of the driver, you can assure them that the driver will no longer be a risk on your policy. Their own insurance policy would cover any future accidents, rather than yours.

Always Get a Police Report

If you are involved in an accident that is not your fault, always get a police report. Without a police report, the insurance company might not believe the damages were not your fault.

This is especially important if you are involved in a multi-car accident that you are not at fault for. Without a police report, it will be your word against the other driver’s.

Wrapping Up

Accidents in which you are at fault often raise your premium by adding surcharges, removing discounts, or requiring you to add risky drivers to your policy. You can avoid these surcharges by choosing policies with accident forgiveness, asking for additional discounts, and always getting a police report when you are not at fault.

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on 4/5/2024.

If you’re driving an eco-friendly car or plan to in the near future, you might consider green auto insurance. But there are other reasons to think about green coverage. For example, if you choose to reduce the miles you drive, or use more sustainable transportation options like car-sharing or park and ride. So, if you’re hearing about this type of insurance for the first time, this article will provide useful information about what it offers and how it helps to protect the environment.

As you know, there are different types of auto insurance. Green car insurance is yet another type of coverage that typically applies to electric or hybrid vehicles. There are varying types of green auto coverage, and the rates can vary depending on your car, coverage amounts, and other factors. But the advantages of this insurance go beyond the individual car owner by helping our environment.

By offering green insurance, a small part of insurers’ profits may go to “offset some of the carbon footprint made by automobiles.”  For example, they may use a fraction of your premium to donate to organizations dedicated to planting trees in rainforests.

But drivers are also rewarded with discounts by some insurance companies for their purchase of a green car and/or driving less. Shopping around for the best coverage and rates for your fuel-efficient car is typically the same as gasoline-operated cars. Ideally, it’s best to compare as many insurers and options as possible.

Types of Green Car Insurance

Green auto insurance can take several forms depending on the insurance provider. With the increased popularity of cars that are eco-friendly, it makes sense that green car insurance is also on the rise. By purchasing green coverage, you can help improve your own ecological footprint and save you money. Let’s review some of the eco-friendly types of insurance.

Electric/hybrid car coverage

You’ve made a conscious decision to purchase a green vehicle that is designed to be more sustainable and reduce carbon emissions. Hybrid cars reduce the need for gasoline, allowing you to drive further distances on a tank of gas while electric cars eliminate gasoline dependency altogether.

Although the insurance coverages are similar to traditional auto policies, there are some additional coverages that address differences in your vehicle’s operation. For example, parts and repairs for electric vehicles are generally higher. There may also be battery coverages and power cable risks.

Usage based auto insurance

If you're a mindful driver who drives safely and drives less, usage-based auto insurance can offer lower premiums. According to the United States Environmental Protection Agency, driving less helps to reduce pollution. To take advantage of this type of policy, your driving will be tracked through a device that is plugged into your car. Or you may be tracked via your smartphone or through GPS technology.

Driving less also reduces wear and tear on your car as well as the potential for auto-related accidents. A similar type of insurance that may work for you may be pay-per-mile insurance. But be sure to track your mileage first to be sure it’s a good fit.

Electric/hybrid replacement coverage

If you are driving a gas-powered vehicle, you may consider getting green replacement coverage to help confirm your decision to want to protect the environment. This optional insurance will cover costs for a comparable eco-friendly car if your current vehicle is totaled in an accident.

Car sharing coverage

Some insurance companies now offer car sharing coverage that includes liability and property damage if you damage the vehicle or are involved in an accident. Car sharing is similar to renting a car but is usually member based and is typically for short-term usage. It allows drivers to use vehicles by the hour or on a daily basis and only pay for time and miles driven.

The Benefits of Green Auto Insurance

Driving an eco-friendly car is the best way to help reduce gas emissions. These fuel-efficient vehicles include electric, plug-in hybrids, hydrogen, and cleaner-burning gasoline vehicles. Green insurance provides coverages for these vehicles and other eco-friendly options to help reduce fossil fuel and its effect on climate change and the environment. The beauty of this coverage is that it not only benefits the environment, but also provides advantages to consumers as well as the insurance companies. Here are some noteworthy advantages:

For the environment

It takes all of us to make a real difference in protecting our world. Driving a hybrid vehicle is a good start in reducing carbon emissions. By owning a fuel-efficient car, you become energy independent, reduce fuel costs, lower emissions and environmental impact, and reduce vehicle maintenance.

To help in this movement, insurance companies offer “green” insurance incentives for eco-friendly cars that operate with alternative energy resources. Of course, this type of coverage may cost more due to the higher cost of repair and replacement costs. However, insurance companies help to benefit the environment by purchasing carbon offsets or donating a fraction of profits to environmental causes.

For consumers

Green insurance can offer potential discounts for drivers who own an eco-friendly vehicle, which helps the overall effort to reduce fuel exhaust. Depending on the insurance company, you may even benefit from lower rates. For example, usage-based coverage for your vehicle can lower your premium. In addition, there are other discounts like alternative fuel discounts if you use cleaner burning fuel like hydrogen, biodiesel, natural gas, or ethanol. In addition, Bankrate.com suggests researching government programs “that offer rebates or tax credits” for owning an electric vehicle.

If you are still looking for ways to save the planet and your money, try opting for other modes of transportation, public options, carpooling, and other ways to reduce your mileage and insurance. You can also opt for paperless billing that may get you a discount with some insurers.

Do You Need Green Car Insurance?

If you are wondering if you need green insurance and don’t yet own an eco-friendly vehicle, it may be wise to consider green insurance options. Look at your current vehicle and situation to determine what insurance coverages may be best to meet your needs and your budget.

On the other hand, if you own an electric or hybrid vehicle, you should consider a green auto insurance policy. Start with your current insurance company for their offerings. You should also shop around to find providers who offer this coverage.

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on March 29, 2024.

Have you recently opened a new small business? If so, you’re not alone. Entrepreneurs have been increasing steadily over the past few years. In fact, 2021 proved to be a record year for small business startups with over 5 million new business applications. Technology has made it possible for more people to venture out on their own to start small businesses without having to make a big investment. But as you start your business, you may find it difficult to separate your professional life from your personal one.

Entrepreneurs may find it difficult to balance work and home life.

Dealing with so many details and plans on a daily basis can be overwhelming. Technology has made it easier to overlap business with personal activities including finance and social media, not to mention your time. Especially if you work from home. You can easily find yourself overworked and stressed out as you try to get through each day.

With that in mind, it’s important to keep yourself healthy, your business growing, and customers happy! Keeping things separate can help you achieve a more organized approach and help you to succeed in both your life and your work. So, how do you set boundaries?

Look at Your Finances and Resources

The most important thing you can do when setting up your business is to separate it from your personal assets. If not, you leave yourself susceptible to losing everything should your business become liable for damages or injury. According to the U.S. Chamber of Commerce, co-mingling is never a good idea, especially when it comes to money. But the lines between business and personal don’t just blur with finances. Think computers, phones, insurance, vehicles, and your property!

Bank account

Handling business finances is difficult if you are mixing them with your personal affairs. If you don’t know that now, you may find out at tax time that your revenue, expenses, and assets will need to be reported separately. Mingling funds and expenses in the same bank account could prove to be a big headache. Turbo Tax warns, that “Tax season requires some planning and organization for everyone, and that’s especially true when you’re self-employed.” 

This recommendation of separating accounts also goes for cash apps like PayPal, Venmo, and others. Mixing your business and personal income that you receive from cash apps could end up costing you more in taxes. For example, starting in 2022, cash apps are required to report any income you receive over $600 to the IRS. That means, if you receive a $100 birthday gift on the same app that you receive business income, the gift will be reported along with your business revenue.

The same is true for credit cards as it’s easy to tangle up revenue and costs. And according to American Express, it doesn’t matter what type of business you own.

Vehicles

Is your personal car doubling as a business vehicle? Maybe you have a delivery service, or you travel for business. If so, you will need to purchase a commercial auto policy to protect your assets. Because if you are involved in a work-related crash using your personal vehicle, your personal auto insurance will not cover it. Ideally, using a separate vehicle with a commercial auto policy will provide the best form of protection.

As a small business owner, if your business relies on drivers to use their own cars to deliver goods or services, your drivers should have commercial auto coverage on their vehicles. Otherwise, you could find yourself liable if your driver causes an accident.

Property

Many entrepreneurs find that working out of their home is a cheaper option. You can skip the need to rent a space, buy furniture, phones, computers, etc. In addition, you may benefit from tax benefits. Check tax laws regarding the business use of your home to see if you can deduct some of your home expenses to offset your business income. Some deductions may include interest on your mortgage, utilities, property taxes, and maintenance on your home. Of course, you would need to dedicate a certain part of your home to operate your business.

But there are downsides to making your home your business headquarters. One issue would be having enough space for employees or to see clients. (Not to mention sharing your home and family with strangers.) And as your business grows, so will your need for additional space.

You should also check with your insurance agent for recommendations on home insurance coverages to protect your home and assets.

Disentangle Your Digital Activities

There’s no question that businesses today benefit from technology. Innovations have made online goods and services easy for customers to access businesses from anywhere. In fact, according to Intuit, 88% of small businesses say online sales will play a key role in generating revenue in 2022. And a whopping 97% agree that digital technology will be key to their business in the coming year. But here again, combining your business's digital activities and equipment with your personal ones can be a problem.

Computers and devices

There are benefits to purchasing computers and other devices for business. The biggest advantage is that you can deduct the costs of these purchases on your taxes if you use the device for business over 50% of the time. Of course, you would have to keep track of the percentage of time and resources used for business versus personal. On the flip side of this, you won’t be able to apply this deduction if you convert a personal computer for business use.

Phone numbers

Use a dedicated smartphone for your business to help automate customer communications. Doing so will provide better security and ensure privacy and might even get you a tax deduction. A separate phone will also help you look more professional than using your personal cell phone.

Social media

Some entrepreneurs mix their business and personal accounts as a successful marketing tactic. And this may work well for solopreneurs who have lots of followers. Problems could surface, however, when your customers decide they are tired of looking at your kids and vacations.

On the other hand, having a business social media account with very few followers and comments/shares could be construed as a negative. This explains why some businesses decide to remove their social media icons from their website. You should weigh both sides of the benefits of combining or separating your social channels as each situation is unique.

Prioritize Work-Life Balance

Without your health, it’s difficult to function on a day-to-day basis. This is especially true if you are juggling a business/personal home life. That’s why it’s so important to maintain a healthy work-life balance—especially if you’re dealing with difficult circumstances. Unfortunately, many entrepreneurs struggle to keep this healthy balance, which is key to the overall well-being of both you and your business.

Identify priorities

Start by identifying the priorities in both your business and personal activities. It’s difficult to run with all engines firing at once all of the time. Start by making separate lists for your life, family, and work.

Set work hours

Designate work hours to help organize your priorities and stay on track towards balancing your precious time. This is critical if you are working in your home. And just like a regular employee, as an entrepreneur, you need time away from work!

Delegate

As your to-do lists get longer, you’ll dig more time into your personal life. So, when you find yourself having more work than the time allotted to do them, it’s time to think about delegating business tasks to other people.

Don’t worry if you haven’t yet separated your business from your personal life. You can start now with these steps. Because it’s never too late to gain control of your life (and business)!

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on March 11, 2024.

Teenagers Wait to Get their Driver's Licenses

Remember when you were 16 and couldn’t wait to get your driver’s license? Or are you a teenager waiting to drive? You might be surprised to learn that more teenagers over the past few decades are deciding to delay getting their driver’s licenses. What used to be a highly anticipated event and pass to freedom is being delayed by U.S. teens 16 to 19 years old.

According to Insurance Journal, Green Car Congress noted this trend while analyzing Federal Highway Administration data showing a noticeable decrease of teen drivers. This research shows only 61% of U.S. 18 year-olds in 2018 got their license “down from 80% in 1983.” During the same time period, 16-year-olds with a driver’s license also dropped from 46% to 25%.

Reasons why some may be delaying this rite of passage, especially in recent years, include not having a car, expensive gas prices, rideshares, not being interested, and even stress. However, a Yale study points to additional reasons including “minority race/ethnicity, socioeconomic status, urbanicity, and parenting factors.” Unfortunately, they’re missing out on the benefits of graduated driver licensing (GDL) as this is reserved for those under 18 years of age.

With stats on high teenage accident rates and being more easily distracted with cell phones and friends, delaying could be the right choice. Or maybe not. Some researchers point to GDL limits for the delay, which results in older teens (19+) “having less driving experience and higher crash risk” than younger teens.

So, should you get your license as a young teen or wait? Here’s some information to help teens and their families decide when the time is right.

The Pros and Cons of Driving as a Teenager

Once you become 16, getting your license is possible. But if you’re a teenager, your sixteenth birthday may not mean you feel ready to take on the responsibility of driving. Ready or not, there are advantages and disadvantages to consider.

Pros:

Cons:

The Pros and Cons of Waiting Until Adulthood to Drive

So, is waiting to drive over the age of 18 a better decision? There are many discussions around why waiting may be a good idea. But not everyone agrees. Here is a list of benefits and drawbacks that could help you decide.

Pros:

Cons:

Making the Choice

Getting your driver’s license is a big decision. There are many factors to consider based on your own situation. Be sure to take your time deciding and weighing out the benefits and disadvantages based on your readiness to get on the road. Discuss the decision with your parents to determine when driving may be best for you.

This article has been reviewed by licensed insurance industry expert, Moshe Fishman on 2/23/2024.

Recent years have put the spotlight on our physical and mental health. And it’s not surprising. A traumatic event like a pandemic can put your mental health in a tailspin and affect your physical health. According to the American Psychological Association, trauma is “an emotional response to a terrible event” like an accident or natural disaster.

Because your mental and physical health is “closely connected,” experiencing a traumatic event can wreak havoc on your overall well-being. Not only can it create problems for your health, but it can also put strains on other areas of your life including relationships.

Understanding trauma and recognizing the effects of such an event on you is key to your recovery. Every situation is unique and yours is no exception. So, if you have encountered a traumatic event in your life, you should take steps to identify the harm it may be causing you and how to cope with it.

Examples of Traumatic Events

A traumatic event can take many forms and the impact of such events on individuals can vary from one person to the next. The Centers for Disease Control (CDC) says these events are the cause of immense stress and are “marked by a sense of horror, helplessness, serious injury, or the threat of serious injury or death.”

Yet, some of these events are considered common as many people experience them during their lifetime. Here is a short list of common traumatic events:

There are, of course, many more forms of traumatic events. Others include incidents like rape, terrorism, war, mugging, physical assault, etc. Unfortunately, what these events have in common is the negative impact they cause on those who experience it such as “physical, emotional, spiritual, or psychological harm.” But the harm they cause may not always be obvious to the sufferer.

Signs and Symptoms to Look Out For

Not everyone will react to something traumatic the exact same way. Some of the initial reactions can include confusion, anxiety, agitation, sadness, and exhaustion. Some people might go into shock or denial. Most of these reactions may be expected or even normal.

The pain and suffering after a distressing experience may be noticeable to some people. But this is not true for everyone. For although some people may have serious emotional reactions, there may not be any visible signs they need help.

Fortunately, there are signs and various symptoms to watch for following the event. These will alert you that you or your loved one is struggling and should seek assistance to help you cope. Here are some of the signs and symptoms that indicate you or someone you know may be struggling due to a traumatic event.

Physical: The physical symptoms you might suffer following a traumatic event are a red flag. They can alert the victim just as any other illness or injury. Some of these can include:

Emotional: Emotions can run high after experiencing trauma and affect loved ones with emotional outbursts and other post-traumatic signs including:

Behavioral: Changing behaviors can be a detriment to your health and signal your struggle to deal with your emotions. These can include:

Of course, how someone reacts to traumatic events can vary greatly. And it’s normal for people to respond with a variety of reactions following the event. According to the U.S. National Institute of Mental Health, “most will recover from their symptoms over time.”

In addition, some symptoms may be short-term while others may be longer-term. However, if your symptoms continue, you “may be diagnosed with PTSD (Post-Traumatic Stress Disorder)” and should seek help to handle your stress levels.

How to Start Healing

Identifying that you have symptoms related to trauma is just the first step in the recovery process. But healing may require professional assistance, especially if the symptoms persist. If you are unable to function or find yourself having suicidal thoughts, it’s time to seek the help of a professional.

Here are some things you can do for yourself or someone you know who might be suffering from a traumatic event:

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