The problem with insurance is nothing in life is ever completely certain. One day the housing market can be rolling along, everyone certain prices can only ever go up. The next day, we’re pitched into a recession, major banks are in trouble and the housing market has collapsed. Because insurance is based on the concept of good faith, there’s supposed to be give and take on both sides of the relationship. An insurer cannot physically inspect every property it agrees to cover. To some extent, it must always rely on the honesty of the home owner to get proper estimates for the cost of rebuilding. After all, if the owner innocently underinsures, he or she will have to pay the additional costs out of savings. The insurer will not be at risk. If there was fraud, the insurer has the right to cancel the policy and avoid any payment. This protection for the insurer is fairly comprehensive. Hence, to offer better balance, most insurers offer guaranteed or extended replacement cover cover.

The point of this cover is simple. No matter how hard you try, no pre-estimate of the cost of rebuilding is ever absolute. It’s only when you get on the ground and start work you find out what all the problems are going to be. Costs have an unfortunate habit of rising and it’s relatively common for owners to have to sacrifice features of their old home to get the building work finished within budget. But, if you’re prepared to pay about 10% more on the premium rate, you can buy guaranteed cover, i.e. the insurer will pay the actual cost.

Let’s go back to the beginning again. Many insurance policies have a cap, i.e. the insurer places an upper limit on the amount you can claim. This may be a limit for all standard policyholders, or the cap may vary depending on the amount of premium you pay. The only way you can avoid the cap is by buying the extended cover. Why might costs go up significantly more than you expect? Suppose you bought an older home. It was picturesque with a wooden frame and shingles. If you now come to rebuild it, you can find reproducing the traditional building methods are expensive when you face compliance with the current building code. Everything may need to be redesigned including the electrical and plumbing systems. Once you are talking in hundreds of thousands for rebuilding, paying an extra 10% in premium can be very good value to get guaranteed completion.

Stepping outside the scope of the homeowners insurance policy, some insurers are now offering Home Value Protection policies to safeguard against a fall in the resale value of your property. In reality, this is slightly closer to a bet than most insurance policies and you need to read the terms carefully. Most have a high deductible if you claim during the first two years. Since most experts believe the housing market will begin to pick up again within the next two years, you may conclude such policies are not good value for money. Nevertheless, the next time you’re reviewing your insurance portfolio, it may be interesting to get additional quotes for Home Value Protection when you get your homeowners insurance quotes.

There’s a reason why most sites like this talk about discounts as the best way of saving money. It happens to be true but, to take advantage of the discounts safely, you need to think carefully. Let’s start with the most commonly mentioned. All you have to do to make big savings is to increase your deductible. Indeed, the theory is often proved correct that an increase from $500 to $1000 can save you up to 25% of the annual premium. But there are two issues to think about.

Many insurance companies are already increasing the deductible whether you asked for it or not. The reason for this is the rise in the number of claims from bad weather. No matter what your view on global warming or climate change, the last two years have seen record-breaking claims for damage caused by snow, flooding, tornadoes and hurricanes. This year is ending on another unusual note with unexpected snowfall disrupting the northeast in late October, early November. The amount of snow and disruption to more than 2 million homes has broken new records for October for West Virginia through to Maine. All these additional claims mean premium rates will be going up again next year, and the deductibles are being adjusted on a take-it-or-leave-it basis. Don’t be caught out. Before you raise the deductible yourself, find out what your insurer has done. Second, if you do increase the deductible, can you afford to self-insure all the small accidental losses around the home? If not, resist rises in the deductible.

Now on to the other discounts. In the good old days before the internet, people used to rely on the agent to claim all the discounts. These people knew you and your home. They understood the inner working of the insurers. They used to protect you (well, they were supposed to protect you). Now you have moved online, you are the only one who can look out for your own interests. There are a range of monitors and sensors you can fit to your home that will save you money. The details will vary from company to company so, before you spend any money, get a list of the approved devices and cost their installation. Never fit anything unless you can recover the cost in savings within a reasonable period of time. These include central station alarm systems for both unauthorized entry and temperature rises, smoke, water and gas leaks, and so on. Whenever you renovate, ensure your rebuilding cover is increased and that you gain access to the discounts.

Finally, revisit the question of bundling policies together with the same insurer. Almost all companies will give you a discount if you give them more business. So if you have one or two family cars, giving the same company both the auto and homeowners insurance policies can represent at least 10% in savings. This needs quite careful research to confirm. Get as many quotes as possible for individual cover with different companies, and then look at what savings you will get if you bundle with any one of them. Never assume one of your existing companies will give you the best deal. Always shop around and get as many car and homeowners insurance quotes as possible.

The problem can be stated simply. If you take your eyes off the road, you will not see the other vehicle coming toward you. This makes you a danger to other road users. The group most likely to fall into this trap are young drivers. Not only are they the least experienced behind the wheel. They are also the ones with the most peer pressure to reply to the text message or answer the cell phone call immediately. The evidence cannot be more clear. Looking at all the different ways in which teens die through disease and accidents, crashes in motor-vehicles are the leading cause of death. The government estimates that, in 2009, about 5,500 people were killed and more than half-a-million injured because one of the drivers was distracted.

In a perfect world, this would be resolved by a discussion at home. As a parent, you would sit down with your children and explain the risks. The statistics are available on the internet to back up your warnings. Your children would nod their heads wisely and swear by all they hold holy not to continue this dangerous practice. Except this would not work in most families. What teens say to their parents is not how they act when they are outside the home. So now comes the hard choice. Do you sit back and rely on prayer every time they drive off into the wild blue yonder, or do you take positive steps? First, a little law: it’s a criminal offense to operate any transmitter that will block or jam wireless communications. So you would face big fines if you were found jamming mobile phone signals. But it’s probably not an offense if you instal equipment in your vehicle that acts as a passive block to the signal. The reason for the distinction is that if you created a cone of silence around your vehicle by transmitting a signal to jam all the cell towers, you would cut off all the other users in your area. While this might make the roads safer, it would seriously inconvenience everyone else. More importantly, it might interfere with emergency calls for the police and ambulance. So passive shielding is probably legal because it does not interfere with any other vehicle or person on the sidewalk. Taking this simple step means you no longer have trust issues with your teen (until he or she works out how to turn it off or get round the shielding, e.g. by putting an antenna outside the vehicle).

More intrusive are the camera systems now offered by some insurers. In return for allowing active monitoring of the way in which your teens drive, they get cheaper premium rates. So if your teen signs up for a policy and agrees not to text or use the cell phone, enforcement just became easier. Similarly, if there’s agreement limiting the number of passengers, you have it on disk. Yes this is cheap car insurance for your teen courtesy of Big Brother, but it’s also helping to keep him or her alive. Statistics show a remarkable improvement in driving when teens know the cameras are watching. So this all comes back to your door the next time you are looking for car insurance quotes. How far do you want to go?

In those good old, bad old days of driving, you just passed the test, got your licence, and answered the call of the roads. Never mind singing “key of the door… never been twenty-one before”, having a licence was opening the door to freedom and throwing away the key. You could go anywhere, anytime and, except for pesky laws about speeding and not crashing into things, there were no parents, no authority figures looking over your shoulder and telling you what to do. Bliss! Then came the first signs of change. To protect lorry drivers against excessively long hours (and to protect other road users who were being mown down by sleeping lorry drivers), the tachograph was announced. Suddenly, all drivers were united in their opposition to this “spy in the cab”. We threw up barricades to defend our rights. Ah, such happy days of demonstrations without the police kettling you into confined spaces and beating you to death with their batons. And it all came to naught. The tachograph with its easily forged paper disk was duly installed and life went on. Now, it’s standard for a tamperproof digital tachograph to be fitted in all new vehicles and there are spying cameras at traffic lights, on motorways and most other roads with a bad accident record, waiting to take pictures of us as we duck and weave through traffic.

Well, innovation never stops and what was a good idea for LGV drivers could be a black box coming to your car. It’s all the fault of the Norwich Union which introduced the pay-as-you-drive policy back in 2007. Little did they dream of the volume of business. In fact, they were caught short without enough black boxes to fit. So how does it work? Well, back in the days when insurers worked out your premium in pencil on the back of an old envelope, everyone guessed when, where and far how you were going to drive. Now technology answers all the questions without any actuary having to lick a pencil to get it to write. This inconspicuous box records the time of day, where you drive and how far you drive. This data is sent to the insurer who works out whether you “did good” and sends you an itemised bill, i.e. you decide the amount you pay by your actual driving record. There’s a sliding scale depending on the time of day and the type of road with you paying more to drive long distances in heavy traffic conditions when the risks of an accident are highest.

The good news for UK car insurance policy holders is: the less you drive, the more you save. This really could be your route to really cheap car insurance. All you have to do is sacrifice your right to privacy. The Big Brother sitting in the insurance office will know exactly where you drive. Naturally, the data will be protected and no-one should tell your partner of those trips to that “friend” of yours or that you were the getaway driver in that bank robbery last Tuesday. You know the risks. If this is for you, get car insurance quotes for pay-as-you-drive.

Having a car involves many responsibilities, some of which may be not as pleasant as driving a car and involve additional costs. Yes, we are talking about vehicle insurance. It’s definitely one of the most irritating aspects of owning a car and a cash-consuming one. Ask any driver and he will tell you that his or her insurance could be less expensive, since it takes a good bite off the family budget. If you are in the same situations as millions of drivers in the country and want your car to be not as expensive to insure as it is now the following money saving tips will definitely help you optimize your costs effectively:

Modify your policy

Vehicle insurance comes in many forms and delivers many options to choose from. When there are many different coverage options included into your policy it becomes very expensive. So your aim when optimizing your insurance costs is to strip off all the unnecessary coverage features and leave only those that are really needed. In fact, the only type of coverage that is legally required is the third party liability whereas all others are optional. Sure, it doesn’t mean that you have to strip down your policy to the bare minimums. But make sure to take some time and think about the things you really need with your policy and things you can leave behind. This will certainly cut your insurance costs effectively.

Adjust the deductible

As you may already know, deductible is the amount of money to be paid by you before the coverage actually starts to apply. It is used to prevent insurance claims due to minor damage to your car. And the higher you set the amount of deductible the lower is the premium. You can set the deductible up to $1000, however make sure that you can actually afford such an amount. Otherwise it doesn’t make any sense decreasing the premium and not being able to get any coverage when needed since you can’t meet the deductible.

Shop around

Comparison shopping is the best way to get the lowest price no matter what type of product or service you’re looking for and auto insurance isn’t an exception. With so many quote comparison sites on the web it’s really easy to shop around for vehicle insurance since it takes only a few minutes and you get plenty of quotes to compare. Try to get as many quotes from different providers as possible – this will raise your chance of finding a very good policy with plenty of coverage and reasonable premiums that will save your money.

Switch the car

Many car owners tend to forget that the most important factor contributing to the cost of auto insurance is the car they actually drive. Some cars are less costly to insure while others will automatically give you higher premiums even if you shop around a bit. In general sports, muscle, luxury and large cars are more expensive to insure. So if you feel that your auto insurance costs are unbearable consider buying a car that is less costly to insure in the first place.

The world would be a better place if everyone was trustworthy and honest. Sadly, human nature seems to have come with a selfish gene. We want what we haven’t got. We don’t want to pay for what we need. There was a recent piece of research which staged accidents at intersections involving a bus. The point of the study was to discover how many of the innocent people on the sidewalks would run on to the bus and claim to have been injured. Needless to say, the results did not show city dwellers in a good light. So, when people were first working through the basic statistics of assessing risks, it was obvious there was less risk if people drove only a few miles a week. But if they were commuting long distances on busy interstates, the risk of accidents grew high. The insurers reasoned it would be good to pitch the premium rates to reflect the risks. Except how could they trust the drivers to make an honest declaration of how many miles a week they drove? The answer, sadly, was that no one was trustworthy if allowed to self-certify mileage. When insurers ran a trial, asking drivers to bring in their vehicles for their odometer readings to be taken, everyone quickly learned how to wind back the count of miles.

Well, now technology has arrived that eliminates the risk of cheating – until someone learns how to hack the black boxes, that is. For now, insurers like Progressive are selling a basic policy plus monitoring equipment to plug into your vehicle. The insurer can then monitor when, where and how far you drive. Some insurers are even fitting a GPS transmitter. This is useful if your vehicle is stolen or you report a breakdown and a tow truck has to find you.

Many consider this new technology an invasion of their privacy. The question you have to answer is whether you want the discounts. As a low mileage driver, you pay a monthly premium based on how far you drive and whether you avoid driving at peak times. Before you answer, note some insurers also collect data from your vehicle showing how often you break suddenly, whether you swerve from side to side, and other features of your driving style. Should you have an accident and make a claim, the insurer has a record of how you were driving at the time. If you claimed you hit the other car because you were swerving violently to avoid a moose, the recording may show a slightly different story (ignoring the problem of explaining how there came to be a moose loose in your part of town).

Insurers are, of course, enthusiastic. They believe this new technology will encourage drivers to be more careful. If there are fewer accidents, this will result in lower auto insurance quotes for all of us. Federal government is also watching carefully because we may all be encouraged to drive more slowly. This will be good for the environment, reduce our dependence on imported oil and prevent global warming. Ironic that we might be thanking the insurance industry both for cheap auto insurance quotes and for saving the planet. Well, that’s an exaggeration, but you get the idea.

When an airplane crashes, we’ve all been brainwashed into watching the search for the black box. That’s the onboard recording device that captures what the pilots were saying as the plane fell from the sky as well as storing all the technical information from the instruments. We’re told it’s vital to be able to explain why each aircraft crashes. After all, the larger planes carry many passengers and, if one were to crash into a city center, it could do a lot of damage. We all have an interest in reducing the risk of air accidents. That’s why we’re hooked as television cameras record submarines going down to search the seabed to recover these vital boxes and as many bits of the plane as possible. Remarkably, experts rebuild as much of the plane as possible to see more clearly what damage was sustained before the plane hit the ground or fell into the sea.

Have you heard of event data recorders (EDR)? These are the little black boxes for the vehicles we drive on our roads. In 2008, a report published by the National Highway Traffic Safety Administration (NHTSA) admitted between 65 and 90% of vehicles were already fitted with EDRs. The reason for the big range in the estimate is easy to explain. Almost every new vehicle rolling off the assembly line has an EDR fitted. It’s been a standard component for many years. But it’s not entirely clear how many older vehicles are still driving around without one of these recording devices inside. All we can say is that, as we slowly throw the old vehicles away, we’ll slowly move up to 100% installation. How can you tell whether your vehicle has an EDR? Curiously, until 2011, manufacturers did not have to tell you. Now, if you look in the driver’s manual, you’ll find confirmation.

Why should you care? Well, the NHTSA lists all the information these devices are supposed to collect. It’s very comprehensive, showing exactly what you were doing in the minute or so before the accident, i.e., how fast you were driving, whether you swerved, applied the brakes, whether you were wearing your seat belt, and so on. Anyone getting hold of this information can reconstruct how the accident occurred. You’ll be pleased to know EDR data is increasingly used to prosecute cases of vehicular manslaughter. Your insurance company will be able to compare your description of the accident with the EDR data. So, if you said you had to swerve to avoid an alligator on the road as you drove through the Everglades, you’d better be sure the EDR will tell the same story of a violent maneuver while braking sharply.

The EDR holds out the possibility of being able to detect more fraud, e.g. that you weren’t driving fast enough to cause the whiplash injury you now claim. If insurance companies can filter out more dishonest claims, this will reduce the overall cost of loss and, if the insurers are honest, reduce the auto insurance rates. Across the US, it’s estimated that several billion dollars in fraudulent claims are successful. Reducing this means more affordable if not cheap auto insurance for all us honest drivers.

Sometimes acronyms work really well. They lodge in the mind we’re forever stuck with remembering them like Washington’s self-fulfilling prophesy in the the VOTER Act, i.e. Voting Opportunity and Technology Enhancement Rights Act. Other times, we wish someone had taken out a gun and shot the clever idiot who thought up these mixtures of letters. Well, here comes an organization begging for a bullet. It’s the Insurance Information Institute or III for short. Obviously it was a day when inspiration was lacking.

Anyway, this cleverly named organization has just issued a Pulse Survey in which the insurance industry discovered that slightly more than half the people who buy their policies think the amount of cover is based on the resale value of their property and not the cost of rebuilding it. Slightly more than one-third reported reducing the amount of cover because the value of their homes had fallen and their mortgages were now underwater. Forgive the confusion here. It would be reasonable to reduce cover if the household budget was so strained they could no longer afford the full premium rate. But this finding suggests many mortgagors may now be in breach of the terms of their mortgages. Why, you ask. Because all mortgages require the borrowers to carry an adequate amount of cover. In this case, the amount should cover the cost of rebuilding assuming the building was a total loss. If the borrower fails to put adequate cover in place, the lender can substitute its own policy and add the premium to the monthly payments. It’s just too bad if that makes the mortgage payments unaffordable. As far as the lender is concerned, it’s your fault for cutting down on the amount of cover.

Let’s say you avoid the lender discovering your reduction in the cover but you then have to make a claim. Now the shock is going to become very expensive. Because the cost of materials and the labor to rebuild has been rising while the resale price of the buildings have been falling, it’s quite common to discover the amount insured is not enough to pay for the rebuilding. This should emphasize the importance of reviewing the amount amount of the insurance every year. Get at least two quotes from reputable local builders as your guide. This is particularly important if you have lavished special care on the building. The more you fit custom fixtures or improve on the fabric, the more it’s going to cost to reinstate. If there’s a shortfall, the difference comes out of your pocket. Those lenders have never been the most forgiving of people, so you could end up with your home as a pile of rubble and a civil action to recover the amount of the loan not covered by the home insurance policy.

So before you decide to reduce your cover, remember the purpose of insurance. It’s supposed to protect you from financial disaster. Arbitrarily saving a few dollars on the monthly payments may turn out a false economy. Always look for alternative strategies. When you use a site like this to obtain your home insurance quotes, run the process several times to find out whether you are eligible for discounts. It’s better to save money legitimately than to hide your head in the sand.

Nobody gets something for nothing. The only way to get a benefit or save money is by investing effort. More often than not, this means a regular commitment to work. After all, we Americans hate scroungers, condemning the entitlement mentality, and promoting the idea we should all earn enough to pay our way through life. This applies just as much to insuring the vehicles we drive as to all other aspects of our lives. So let’s start with a dose of reality. It’s not often economically convenient to change the state in which we live. This is unfortunate because the average cost of a policy is $789. Actually, it’s probably higher than this but the most recent figure released by the National Association of Insurance Commissioners only comes up to 2008. Anyway, where you live can make a significant difference. The average rate in North Dakota was $500, whereas living in Florida will cost you more than $1,000. Then, depending on your personal characteristics and other factors like the make and model of the vehicle you have chosen to drive, you can find a difference of more than $1,000 in the actual premium rate you have to pay. Just as many are now looking carefully at the packages they buy on cable, this can make it worth your while to look carefully at your insurance policy.

Although the basic math is the same for all insurance companies – they all want to take in the maximum and pay out the minimum – the actual way in which they calculate and manage the risk is different. For this reason, it makes sense to get quotes from all the more reliable companies in your state. The young drivers are the ones likely to find the biggest savings. Now comes the part it seems the vast majority find so difficult. You have to change your insurer to the company offering the best cover at the most affordable price. At present, the figures show only about 10% of drivers actually take this step. This is a remarkable testament to the power of blind loyalty. It’s completely irrational to automatically renew with a company charging you more than the average premium rate. Indeed, your failure to change actively encourages insurers to keep on increasing their premium rates. If you continue to pay without complaint, the company pays no penalty for taking ever more of your money. The only way you force change in the market is by enough people changing away from the most expensive insurers and buying from the most affordable.

Think of it as being like politics. Once a year, you get to vote on how well or badly your insurer represents your interests. If enough people refuse to renew, the company’s market share drops and it loses money. This upsets the stockholders and encourages the company to change its ways. This is consumer power in a market based on free competition. The efficient companies offering a good product at a competitive price prosper. The bad companies fail. So get car insurance quotes from all the most financially reliable insurers, compare the rates and change. Over time, this simple event snowballs into a market move toward cheaper insurance for the many. Be active. Drive auto insurance rates lower.