Personal Finance Tips

Insurance can be so confusing. You get so tired and bored reading the policy that when you get to the end you tend to skim over the last parts. One of the most important parts of the insurance policy is at the end though – the endorsements section. Here is why you should pay close attention to this section.

Most policies’ basic coverage forms end with a section called endorsements. Endorsements add to, take away or change provisions contained in your basic insurance policy form. Endorsements are typically one, two, or three pages long each.

One reason insurers use endorsements is to save money. If they have new provisions or have changed provisions in their policy, using an endorsement will allow them to save on re-printing costs. The insurance company simply adds an endorsement at the end of the policy to incorporate the new or changed provisions. So be to sure to check this section when you are purchasing insurance..

Endorsements are often used to restate a policy provision after a court decision interprets the provision in question in a different way than the insurer has been interpreting it. So you can see why you need to read this section carefully after you have finished looking at the basic policy.

Most commonly, endorsements add exclusions not stated in the basic insurance policy form. For example, in home owners insurance policies these often include such things as dog bites and home daycare services performed for a profit. Also typically flood and earthquakes are excluded from most home owners polices. Separate policies can be purchased elsewhere.

Knowing what the coverage is excluded by an insurance policy is very important, especially when comparing insurance policy quotes.

Looking online for a good credit card deal can be overwhelming. One popular search is for a 0 APR credit card and there are so many to choose from you may feel like you will never find the best deal for you. But a low rate credit card is only as good as the company that stands behind it. That is why a Capital One credit card is good place to start looking. If you are a small business owner, the financial institution you sign up with has to be available for your questions and concerns and must offer a credit card solution aimed at your particular business needs.

Features of the Capital One credit card

o As a 0 APR credit card, the Capital One card for small business owners provides you with a six month period with no interest. You can charge as many purchases as you wish and pay them out over the six month period without accruing any interest. You can also transfer any outstanding balances from other credit cards to your Capital One card. During the first six months that you use your new card, the outstanding balances from other credit cards, such as American Express, MasterCard, Visa, or Discover, can be paid off without any interest. In six months, you can make a good deal of progress on your previous debt and increase your credit rating by reducing your late payment amounts.

o The Capital One credit card with an introductory interest free period also gives you an airline miles reward program. If you are a business person who does a lot of traveling, this program will be a great perk. Or if you travel a lot in your personal life, with family or to visit them in distant cities, the miles you accumulate can be used for personal travel as well. You earn miles in this way: for every dollar you spend on your Capital One credit card, you receive one mile of travel. You can redeem your miles to purchase tickets on any airline you choose. And with the small business airline miles reward program, there are no blackout dates or exclusions, making it very flexible.

o Another perk that is popular with small business owners is the retail discount you receive when you use your low rate credit card. Not only do you get the interest free period, but your rate is competitive once it kicks in. With this low rate, you also get discounts at certain retailers that partner with Capital One. When you use your card for purchases such as office supplies, office equipment, computer software and hardware, and you get an automatic discount on your purchase price. You can also apply your discount status to such items as rental cars used for business purposes.

Drawbacks

The problem with a 0 APR credit card is that it offers people a false sense of security. Too often, after the first six months is over, the interest rate goes up to one higher than an alternate low rate credit card. It is vital that you check the terms and conditions of the card before you sign up.

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For most of us purchasing a home is the biggest investment to mike during the whole lifetime. And it’s reasonable that such an important investment needs reasonable coverage. That’s why you need homeowners insurance.

What’s included in homeowners insurance?

In case you finance your house purchase through a mortgage, your lender is most likely to require you buying basic homeowners insurance. The basic homeowners insurance includes coverage against the following risks:

• Theft
• Fire and lightning
• Smoke
• Frozen pipes
• Ice and snow

Basic insurance policies also include liability coverage for cases when someone is injured in your house. In case there are legal actions taken against you it will also pay for court fees. Basic insurance will also cover your costs in case it’s impossible to live in the house due to fire or any other damage.

What’s left out of coverage?

To learn what is not included into the coverage you should read through your policy, especially the Exclusions part. Things not covered by standard policies vary from one company to another, but most likely they will include damage due to earthquake, flood, nuclear accident, war, act of terrorism and similar. Still, you can purchase additional coverage for such events to be included into your home insurance policy. Wear and tear damage is never included into the policy because it’s considered to be maintenance, which is the owner’s sole responsibility.

How much coverage do I need?

When buying a house through mortgage loan your lender will require you to purchase minimum home insurance coverage (which is usually the purchase value of your home). However, it’s usually not the amount of coverage to meet your insurance needs. Instead, try calculating how much money it would require to rebuild your house entirely and use this amount as the base for getting the right coverage amount. Speak to your agent when completing the insurance policy to calculate the exact amount, or even run a full inspection for qualified appraisal.

Typically, liability limits are around $100,000, however it’s too little to protect your assets in case of legal action. You may opt to raise your limits up to $500,000 for an additional price. Sometimes it may be useful to get umbrella coverage, which pushes your limits beyond $1 million, however such coverage is typically offered only when you have both your auto and home insurance from the same carrier.

Money saving tips

Of course homeowners insurance can be quite costly sometimes. Especially when you have many items under additional coverage. In order to keep the coverage you need while still having reasonable rates you might want to consider raising your deductibles first. Deductibles are the amount of money you will have to pay out of your own pocket for the damage before the insurance policy kicks in. and the higher is that amount the lower will be your premium. The usual deductible within standard policies is $250. Try raising it to $500 or even $1000, and your rates will go down by up to 15%.

Another good way to make your home insurance cheaper is installing security features such as alarm or video, special locks and so on. This way you protect your assets and the insurance company is likely to give you a good discount for that.

When you are looking around for a house to buy, the cost of home insurance is not always the most important thought on your mind. Even if you do think about it, the most common consideration is the state of repair and how easy it would be to repair or rebuild should there be a fire. This confidence continues when buying the insurance policy. You sign up for an all-perils policy and take the words at face value. If you are insured against all perils, that surely means you can sleep peacefully at night. Except that confidence is too often misplaced. Looking around the US right now, it’s one of the coldest winters on record with heavier snow fall than usual. When the weather warms, the melting snow will flood into the rivers… That’s a joy to come. So let’s list the most common events that damage your home: landslides, subsidence, floods, hurricanes and tornadoes. Live in the wrong states and we add earthquakes. Now take out your policy and check that exclusion clause. You will see some mysterious phrases like “surface water”. That excludes every possible source of water no matter whether it comes in as a high tide, wind surge, rain or local sewage drains backing up. When you add up everything not included, even the top-of-the-range policies from the supposedly best insurers often end up as covering rebuilding costs from fire and wind only – that’s wind and not tornadoes or hurricanes.

To protect yourself, you need to start early in the buying process. Start with simple questions: has there been any accidents in this area? Is there a heavy clay content in the soil? Is this an earthquake zone? If the answer to any of these questions is yes, you should get a geology report before going any further. Mining subsidence is a real problem in some areas. Soil that expands when wet and contracts when dry can wreck the foundations of your home – the Department of Agriculture estimates that up to 25% of properties in the US are at risk of damage. We all know about earthquakes. If your proposed property is on a slope, what’s the risk of a landslide or rock fall? When we move on to flood risks, every community is at risk – check out the addresses of potential properties through http://www.floodsmart.gov/ which is run by Homeland Security’s FEMA. It also gives you estimates of the likely premiums for areas at higher risk.

Obviously it’s not possible to avoid every peril. Because of work, family and other commitments, we cannot all choose where to live. But, if you have good information about the weather patterns and geology of your area, you can get quotes for named perils homeowners insurance. If there are policies available, this will give you real protection against the named threats, whether earthquake, flooding, subsidence, landslides, hurricanes, and so on. When you have the quoted premiums in front of you, the decision whether to buy becomes more clear cut. If you already know the insurance industry will not sell you a policy, you can decide to look in a different area. This is not to raise homeowners insurance to a make-or-break level, but if the annual costs of living in a hazardous area are going to strain your family budget, this is something you should consider carefully before buying. If you already have such a home, you can have named perils added to your existing homeowners insurance. Hopefully, you can afford the additional premiums.