Your First Insurance Policy for Your Car

Getting your first insurance policy for your car may not be a priority, but it should be. Your first car insurance policy protects one of your first investments, your car. But buying your first insurance policy for your car can be complicated and often new car insurance shoppers fail to compare car insurance rates and in turn fail to reap the financial benefits of finding the best and affordable car insurance available to them.

Shopping for Your First Insurance Policy: Who Needs Car Insurance?

The question asked by most people shopping for their first insurance policy is who needs an insurance policy and why? The answer is simple: it’s the law. The DMV (Department of Motor Vehicles) requires that you take financial responsibility for owning and operating a car in all fifty states. Car insurance protects you when you cause property damage or bodily injury to someone else when driving your car. If you are caught driving without car insurance you will be charged hefty penalties. Violators can face up to hundreds of dollars in fines for a first time offense. Also, if you are involved in an accident and do not have car insurance, your license may be suspended whether you are at fault or not.

Understand Your First Insurance Policy

Now that you know you know how important it is to get your first insurance policy for your car, you will want to understand how car insurance works before you start deciding on which company you will choose for your first insurance policy. The best place to start is Auto Insurance 101. This article will take you step by step in understanding car insurance. Once you understand how car insurance works and have an idea of what type of car insurance you need, you are on your way to the next step of finding the best and most affordable car insurance for you.

Just Because it is Your First Insurance Policy, that Does Not Mean You Have to Pay Too Much

This is often where first insurance policy buyers get sucked into paying too much for their car insurance. Don't just assume since you are purchasing your first insurance policy that you will have to pay extremely high premiums. Yes, you will pay higher premiums than people who have had car insurance for some time, but that does not mean you can not find affordable car insurance. You ask then how does one find the best and most affordable car insurance? Here is a checklist of ways to find affordable car insurance and the best first insurance for you:

Source: Personalinsure.about.com

Know How to Best Do Your Online Shopping for Term Life Insurance

Before Your Online Shopping for Term Life Insurance, Let's Define It

Term life insurance and whole life insurance often get grouped together as just life insurance but term life insurance has a major difference. Unlike whole life insurance, term life insurance is a type of life insurance that covers you for a certain period of time (the term) that is usually for 10, 15, 20 or sometimes even 30 years. At the end of the time period the policy ends unless it is renewable. If it is “renewable” you can keep it but at a rate reflecting your new (older) age and thus a higher price, sometimes substantially higher. Before you decide on an insurance choice, it is best to learn the difference between term life and whole life insurance.

When and How to Use Term Life Insurance

Term life insurance is a great financial vehicle to get the most possible insurance for the money, at least initially. It is especially useful for families that have current and future financial obligations but have not yet grown the assets to fulfill those obligations if they should die prematurely. Think of term or any life insurance as a way of replacing the income one would not be there to earn for those dependent upon them if they should die.

Online Shopping for Term Life Insurance

When shopping online for term life insurance, there are a variety of life insurance sites available. Four common types are:

1. The type that asks for your personal information which they then sell as a “lead” to insurance agents.
2. Sites that market insurance directly but ask for info about you including name and e-mail address before they'll give you a quote.
3. Insurance company sites that quote their company’s rates or refer you to one of their agents.
4. Sites that openly allow you to access the database of life insurance rates anonymously. If you find a price and policy that you like, you can then contact them.

Recommendation

It’s important if you have financial obligations to your family or business, that you have sufficient life insurance. Use the open architecture of a site that lets you search anonymously to learn and see different rates from many companies. Used right, the internet can be a great resource to research information and prices for term life insurance.

Gap Car Insurance

Getting a new car is great and making sure you have the insurance coverages you need for it is one of the most important things you can do to protect your new vehicle. Of course, you don't want to have a gap in insurance so that is why you need to have gap car insurance. Yes, you know having gap insurance coverage is important but, it is just as important to know what those coverages mean.

You Won't Have a Gap in Insurance, But What Else Will Gap Car Insurance Cover?

If you have gap insurance coverage, you won't have a gap in insurance but, if you need to use your gap car insurance will you understand the coverages? Understanding your gap car insurance coverages will not take a lot of time and it will probably save you a lot of money and time later. There are two important things to know about your gap insurance coverage: what is covered and what is excluded (or not covered). First, let's take a look at common gap car insurance coverages:

Gap Car Insurance Covers Total Losses Due to Most Any Reason Including:

Theft
Fire
Vandalism
Accident
Flood
Tornado
Hurricane

As you can see, pretty much any totaled loss your regular car comprehensive and collision insurance will cover, gap insurance will also cover. Most gap car insurance policies will also cover your insurance deductible.

Gap Car Insurance Covers Most Total Losses, But What Does it Exclude?

So, now that you know your gap car insurance will pretty much cover most any total loss that your regular car insurance company did not cover, what will gap insurance not cover? This is important to know, so here is a list of some gap car insurance exclusions:

6 Common Gap Car Insurance Exclusions:

1. Cars that Are Not Covered by Both Comprehensive and Collision Insurance

2. Any Equipment On the Car that Was Not Factory Installed

3. Money that Was "Rolled" Into the Car Loan Such as From a Trade-in or Leased Vehicle

4.Costs for Any Other Products Added to The Loan or Lease Such as Extended Warranties

5. Unpaid or Overdue Lease or Loan Payments

6. Financial Penalties or Security Deposits on Leased Vehicles

Please remember that these are only examples of common coverages and exclusions and it is important to check your own policy to see what your particular gap car insurance coverages and exclusions are.

Stop Them from Stealing Your Car

You keep your valuables under the seat, your packages in the trunk, and your doors locked at all times, but is that enough? You even try to avoid high-end extravagant SUVs and sports cars in hopes of deterring a car thief. Unfortunately, keeping your doors locked, your valuables hidden, and driving an older model car is not enough to stop a car thief from targeting your car.

According to statistics given to ABC News by Mike Siemienas, an Allstate Insurance Spokesman, and the National Crime Information Center, the most often targeted cars for theft are Hondas. And not the latest, high-end models. Early 90's and late 90's models of Hondas top the list of theft targeted vehicles. Why? Because these vehicles are long-living vehicles and often their engines outlast their body parts (fenders, doors, etc.) and accessories (seats, airbags, etc.). So when owners of these vehicles need new parts there is a shortage of extra parts at salvage yards. It is a basic supply and demand issue. Since supply of these parts is low the demand for the parts brings in big money. According to Siemienas and the National Crime Information Center, big money can equal more than $13,000 for a 1994 Honda's parts when the vehicle's actual cash value is only a few thousand.

OK, so you don't have one of these wanted vehicles. So, it doesn’t cost you anything, right? Wrong: According to information given to ABC news from Siemienas, vehicle theft is the number one property crime in the United States that carries a price tag of more than eight billion dollars a year. In many cases, auto theft costs are absorbed by all insurance consumers in the form of higher insurance rates. We all need to try and find ways to stop vehicle theft.

In addition, just because you don't have a vehicle that is at the top of the theft list doesn’t mean you can't be a target. If your vehicle is easily accessible and it shows, a thief can still make some quick cash out of it. The best way to protect your vehicle is to visually display vehicle theft deterrents. If a thief just sees theft device items used in your vehicle they will automatically seek out another car that is much easier to steal.

One of the most popular theft deterrent devices is called The Club. It simply attaches to your steering wheel and can usually be found in most variety stores at a reasonable cost. Another great visual deterrent is to buy a do-it-yourself VIN number engraving kit. These VIN number engraving kits can be bought online at many merchants and can quickly be done by anyone in a short amount of time. The VIN number is engraved in a car's window and it makes the part unusable for resale by a thief because the VIN number can be tracked back to a stolen vehicle.

So whatever vehicle you own, it is important to realize the impact of vehicle theft for everyone. By using visual theft devices like the ones above and continuing safety measures such as hiding packages and purses stored in your car along with keeping your doors locked at all times, you will keep a vehicle thief away from your car and keep down insurance costs for everyone.

Should You Buy Rental Car Insurance?

Understanding Your Car Insurance Options at the Rental Counter

On vacation, on a business trip or even moving your freshman to college—deciding whether to buy rental car insurance is a complicated road to travel. As the rental car agent hovers over the contract with a pen, you have to make the decision in a split second!

To avoid a costly mistake, use this step-by-step guide.

Step 1. Determine whether your own policy will cover your rental car.
Most companies will extend the coverage on your personal auto policy to a rental car. The important fact is whether you have purchased Comprehensive and Collision coverage on your own car. That's the coverage that pays for damages like scratches, dents and thefts, among other things. If you have this coverage on your own policy, it will generally transfer to a rental. Call your company to check—but before you do, keep reading.

Step 2. Find out if your credit card company will cover damage to the car.
Many credit cards will pay for damage to a rental car when you pay with that card, but the coverage will be secondary to your own policy if you have one. Your card may also pay for towing—but will never pay for damage or injury that you cause to another car or driver. That's covered by liability or personal injury protection—which is why having your own policy is so important.

Step 3. Are you traveling for business or pleasure?
Many employers have corporate coverage for employees who rent cars, so don't buy the extra coverage unless you've checked with your boss or the fleet department first. When you travel for pleasure, your rental car is considered a temporary substitute for the car you've left at home—and that's why your policy may provide coverage.

Step 4. Be cautious if you're leaving the state—or the country.
In the United States, insurance laws are different in every state. Policies in some states like Massachusetts may only cover travel within the state. But, in most states, you're covered as long as you drive in the US. However, many policies may limit coverage if you travel to Canada and very few will cover travel to Mexico. And if you're traveling abroad, most travel guides recommend buying the coverage with the rental car, because it's too complicated to deal with insurance in another country.

Step 5. Don't let a stranger drive your rental car.
Or your best friend, boyfriend or teenage daughter. Rental car companies are picky about who drives their car and any coverage you have on your own policy (or the rental car policy) may not cover another driver—unless they are listed on the rental contract.

This is intended only as a guideline. Ask your company about the coverage available on your own policy.

Top 10 Auto Insurance Myths

The color of my car determines my auto insurance rate. My credit score has no bearing on my insurance premium. I have auto insurance coverage so my new car is already covered… right? Maybe not! Below is a list of fallacies many car owners believe and drive by each day. The truth just might make you change course.

Myth #10: "No-fault insurance means it's not my fault!"
False. Basically, no-fault insurance means that your insurance company pays for your damages regardless of who's at fault.

Myth #9: "The color of my car affects my insurance rate."
False. The color of your car does not impact your car insurance rates. What does influence your rate is your vehicle's year, make, model, body type, and engine size, along with your credit history and driving record.

Myth #8: "If I lend my car to a friend and that friend is in an accident, his or her insurance company will pay for the damages."
False. Your car, your responsibility! However, your friend's insurance could act as excess insurance if the damages exceed your policy's limits. And guess what, even though you weren't present at the time of the accident, it will go on your insurance record and your insurance premium could go up.

Myth #7: "My insurance rate is set by the government."
False. The government does not set your car insurance rate. Your state's insurance department only regulates the rates car insurance companies are allowed to set. Where you live, your credit score, marital status and your driving record is what actually affects your premium.

Myth #6: "I recently paid my insurance premium, so the new car I just purchased is covered."
True, up to a point. Most insurance policies require that the policyholder notify the car insurance company or agent within a specified number of days after purchase.

Myth #5: "It's a fact. Males under the age of 25 pay more for auto insurance."
True and false. Males under 25 years old usually pay more for car insurance than female drivers under 25. However, across the board, teenagers and seniors pay more for auto insurance, in large part because these age groups are typically involved in more automobile accidents.

Myth #4: "My credit score has no effect on my insurance rate."
False. Your credit score really does matter! Many Insurance companies take your credit score into consideration when you want to purchase, change, or renew your auto insurance coverage.

Myth #3: "Even without comprehensive coverage, I'm still covered for theft, windstorms, hail and deer accidents."
False. Many drivers believe that if they only purchase collision insurance-which covers damage to your car resulting from driving accidents--that they will also be covered for incidents that involve vandalism, hail, animal accidents and fires. That simply is not true. You need to purchase both collision and comprehensive coverage in order to fully protect your vehicle from all of these situations.

Myth #2: "My personal auto insurance covers both my personal and business use of my car."
Be careful. It might be able to cover it, but you need to check with your car insurance company. If you occasionally use your personal car for business purposes such as transporting clients, going to and from meetings or hauling business equipment, then you will more than likely need to extend your personal car insurance to cover your business use. Plus, if your employees use their car while working for you, you will want to also obtain a separate non-owned car insurance policy.

Myth #1: "I've never had or been involved in a car accident, so I don't need automobile insurance."
False. Some drivers are lucky enough to avoid accidents. However, car insurance is the best protection you can have in the event of an auto accident. You are also legally required to have some form of auto insurance, and failing to do so can carry strict penalties.

Car Insurance for Hurricane Season

Hurricane season starts in early June and ends in late November, with its peak in September. The resulting hurricanes often cause incredible damage. What can you do to prepare?

Hurricane Preparation Tips
Preparing your car insurance for a hurricane is probably not at the top of your list. However, taking the opportunity to familiarize yourself with your car insurance policy before a disaster can save you time and trouble later.

Read your car insurance policy carefully to insure you have the coverage you need. Make sure you understand what is covered and what isn't, what your deductibles are, and what you need to do if your car is damaged. If you're not sure, speak to your insurance company to verify the details.

If your car will be in the path of a hurricane, park it indoors, if possible, or move it to higher ground away from trees and telephone poles.

Car Insurance Coverage
Comprehensive coverage is the type of car insurance that protects against damage from natural disasters, such as wind-blown objects, rain, flooding, fire, and tornadoes.

Other coverages that can help if your car is damaged in a hurricane include gap coverage and rental reimbursement. If your car is totaled due to hurricane damage, gap coverage can pay the difference between what you owe on your loan and what your car is actually worth. On the other hand, if your car is damaged and needs to be repaired, rental reimbursement coverage pays for a rental car so you have transportation after the storm.

Car Insurance Restrictions
The period directly before a natural disaster is usually not the best time to search for car insurance. In fact, some companies may not sell car insurance if they know a disaster is about to hit your area. That's because insurance doesn't work if people only purchase it when they need it immediately, and not at other times. For example, the federal government doesn't allow flood insurance policies to take effect until 30 days after the application date.

If you don't have comprehensive, gap, or rental reimbursement coverages on your car insurance and you live in or visit an area where hurricanes or other natural disasters are possible, don't wait until the last minute to add these coverages. You may find that your car insurance company will not let you add coverage to your policy until the disaster is over. This can apply to other types of insurance as well, so make sure your homeowners and other policies have the coverage you need.

Insurance and the Banking Crisis - What's the Risk to Me?

With the current financial crisis in banking, are you starting to worry about your insurance company, too? After all, taking risks is what insurance is all about, so how do you know if your company has taken on too much risk—and if they will be ready to pay for a claim when it happens?

The good news is that insurance companies have strict requirements for setting aside money today (called loss reserves) that will be used to pay claims in the future. Every insurance company is monitored by a state department of insurance and each company must report its financial status annually. States look carefully at the loss reserves each company establishes to ensure its consumers are protected.

Strict Financial Regulations
"While some insurers are owned by companies that operate a wide range of businesses, it's important to remember that the financial condition of an insurance company is closely regulated and is often not subject to the same types of risks as those in unregulated industries. With recent events, many insurance commissioners have assured consumers that they are looking closely at insurance company financials, in order to protect consumers in their state," comments Sam Belden, Insurance.com VP–Strategic Alliances.

To determine the financial stability of an insurer, check the ratings from A.M. Best Company. It's an independent rating company that assesses a company's ability to meet its future financial obligations—to make claims payments. Companies that maintain an "A" rating or better are determined to have Excellent or Superior financial stability. To check for your company, go to www.ambest.com.

“It’s important to remember that the financial condition of an insurance company is closely regulated and is often not subject to the same types of risks as those in unregulated industries.” —Sam Belden, Insurance.com VP–Strategic Alliances.

If an insurance company is in poor financial condition, state insurance regulators can take various actions to try to save the company. If they are not successful and a company becomes insolvent (which means they are basically declaring bankruptcy), the state insurance department is responsible for making sure that current and future claims are still paid on behalf of the insolvent company.

State Insurance Guaranty
There's one further safeguard for policyholders. Most states have insurance guaranty associations (known as guaranty funds) for the purpose of paying the claims of an insolvent company. Insurers are required to be members of guaranty associations as a cost of doing business in that state. When there is insolvency, the other companies are assessed based on business they do in that state, so that claims can be paid. Other states, like New York, have a pre-assessment system, which requires insurers to contribute money each year to a permanent insolvency fund. This money is then available to pay claims when a company is not able to do so. Either way, consumers are protected first.

So, is there a reason to switch insurance companies? Consider your actual experience with your company. Are you happy with them? Do they respond to service requests and claims promptly? Does their website provide access to your policy and information about the company? Do they have a solid rating with A.M. Best Company? If you've had no problems with them over the years, have seen your rates stay consistent with no major premium increases, and if you've had good experiences during the claims process, then you should seriously consider staying put.

Good Reasons to Switch
One time to consider changing companies is if you're unhappy with your current insurance company or you simply haven't checked rates for a year or so. Increasing premiums or a change in your personal circumstances might present an opportunity to check for savings (moving, getting married, or other major life events).

If you are shopping around, be certain that you keep your current policy in place until your new coverage starts. Even a lapse of a day or two can be troublesome when you look for coverage from a new company. Insurers offer their best rates to drivers who maintain "continuous insurance coverage" because drivers who keep their coverage in force have fewer losses than those who do not. While a few days may not seem like much, it can be costly in terms of the rates on your next policy. And in today's economy, saving on car insurance is a big deal.

10 Tips for Avoiding Auto Accidents

1. Avoid drinking and driving.

2. Minimize distractions such as reading newspapers or talking on the cell phone when driving.

3. Properly maintain vehicles. Tune up cars according to maintenance schedule, and especially take note monthly of tire condition.

4. Do not encourage aggressive drivers. Let other aggressive driving behavior roll off your back, or call the police. Losing your temper could worsen the situation.

5. Leave a safe distance between your cars and others. For every 10 miles per hour of speed, leave at least one car length space between your vehicle and the vehicle ahead.

6. Maintain a constant speed. Don’t continually slow down or speed up.

7. Adjust mirrors properly and check the side and rear-view mirrors every 15 seconds.

8. Take defensive driving classes to improve your ability to drive and be better prepared for the unpredictable behavior of other motorists.

9. Proceed with great caution through intersections. Intersections are the center of most accidents. When entering an intersection, look left, then right, then left again to ensure the area is clear.

10. Be sufficiently aware of road conditions and be more visible. Keep your lights on at dusk and dawn and during rain, as is the law in most states. Understand basic vehicle dynamics, such as knowing how to recover from a skid.

Source: Property Casualty Insurers Association of America (PCI), in Des Plaines, Ill.

How You Can Save on Car Insurance

Cut your car insurance rates with 10 easy tips

Before you compare rates, check out these money-saving tips for your car insurance.

1. Earn a low mileage discount. If you work from home, carpool or use public transportation, look for companies with discounts for low mileage, pay-as-you-go, or carpooling. And, tell your current insurance company if you're driving less these days; rates may be lower if you drive less than 10,000 miles each year.

2. Increase your deductibles. You may save 10 percent or more on your comprehensive and collision premiums if you increase your deductible from $250 to $500. And, if you car is really old, it may be time to drop comp and collision coverage completely—but only if you're willing to pay for repairs yourself.

3. Drive a hybrid. Some companies offer a 10% hybrid discount for cars in most states. (They also have a hybrid discount for boats and yachts!) If you're not ready for a hybrid, pick a low-profile car with high safety ratings, because your insurance will be lower, too. The Top Safety Picks from the Insurance Institute for Highway Safety is a good place to start.

4. Drop coverage you may not use. If you're paying for Roadside Assistance, Towing and Rental Car coverage, you might do without—especially if you have AAA or roadside help provided by the auto company. While these are low cost coverages, dropping them might save you an additional $50-75 a year.

5. Keep an eye on your credit report. Payment history is an important factor for most auto insurance companies. Paying your bills on time and maintaining a good credit history may qualify you for lower rates in many states. When it comes to insurance bills, using EFT (Electronic Funds Transfer) could save you monthly installment fees, which can be as much as $5 to $7 per payment.

6. Don't let your policy lapse. A short-term decision like missing a car insurance payment may result in a cancellation—and rates for a new policy that can be 25 to 50% higher than you're currently paying. If you can't pay the full amount due, ask whether a partial payment will keep your policy active.

7. Ask about student discounts. Most companies offer a 10 to 15% discount for high school and college students who maintain a B average. And, if your college student is more than 100 miles from home without a car, the rates are discounted year-round.

8. Drive safely. You may be eligible for a price break on your policy if you have a clean driving record for the past three years (five years for some companies). So, slow down, because even one or two traffic violations can increase your rate by $200-$400, depending on state laws.

9. Add an anti-theft device. While some cars have alarm systems, an aftermarket anti-theft device or tracking system, such as LoJack®, may give you a discount on comprehensive coverage, by reducing the chance of your car being stolen. If you park on the street or in urban areas, the peace of mind will be priceless.

10. Be a smart online shopper. Comparison shopping online can save you time and money. Just make sure you understand whether you're getting a "quick quote," which is just an estimate, or a bindable online auto insurance quote. There can be a big difference between an estimate and the final rate.

Racing to Find Car Insurance

What are your options in the world of drag racing?

Are race car drivers the best drivers in the world—or the worst? How about weekend racers or those who just want to experience the open road—on a track—at 100 miles per hour.

An Unexpected Use
According to most car insurance companies, they're the worst drivers. Or at least, the crashes are the worst and that's the reason your personal car insurance policy will not provide coverage at high-performance driving schools or race tracks. Participating in "track days" with your own car is simply too risky a practice, according to most auto insurance companies, because it's rare that the accidents are minor. In fact, a high-speed crash will usually result in a total loss of the car. Driving well above the street-legal speed limit was simply not what your insurance company expected when you said you drive your car "primarily for pleasure"—and your rates are based on expected driving—not racing. Any technology installed in your vehicle to track mileage-based insurance may also take into account not only your speed but any sharp acceleration and braking, which would very quickly uncover any secret street racing you might be enjoying in your spare time!

To Race or not to Race
In the past, most car insurance policies would not cover damage that resulted from drag-racing, organized racing or a timed event. But high-performance driving schools often do not time the runs and they marketed their events as driver's training—not racing. So, those events would technically have been covered by your car insurance policy. However, in the last few years, most auto insurance companies started to exclude coverage for driving at any site that's designed for racing, whether or not the events are timed, which leaves even these safety-oriented driving school opportunities at the side of the road. Drivers who had been racing for years using their own cars are now facing a dilemma—leave their car at home or take a chance that nothing will happen. To minimize their potential losses, some drivers have even stepped down from racing an expensive sports cars to a driving a "beater."

Coverage Options
Since car insurance policies vary by state, there may be states where coverage is still available on your own policy, but it's wise to check with your company first. Many tracks offer single event coverage or a policy that will cover multiple events during a year. An agent or company that specializes in auto insurance for race events can provide you with quotes before you schedule a track day or enroll in a driving school.

Protect Yourself When Renting Your Home

You absolutely have insurance issues to consider when renting out your home. As you might have guessed, rental property owners have some unique insurance needs. A standard homeowners policy isn't appropriate for rental property, because:

(1) you don't need to insure the contents of the house, unless you provide furnished accommodations;

(2) you need to be more concerned about liability issues; and

(3) you need to protect yourself against the loss of rental income. Your tenants may purchase renters insurance, but even if they do, it won't provide any coverage for you as the owner of the property.

Fortunately, there's a policy designed especially to meet the needs of rental property owners. Most insurers who deal in commercial insurance can sell you a policy specifically for rental property. However, there are many variations among rental property policies. Some provide replacement cost coverage, while others only insure property on an actual cash value basis. Some policies only provide coverage for one or two named perils (such as fire), while others provide much broader coverage. Because of these variations, you may have to shop around to find a policy that provides complete coverage. A good rental property policy should provide the following:

• Broad coverage for the physical structure of the house, on a named-peril or open-peril basis
• Coverage for other structures located on the property (garages, sheds, etc.)--this coverage is often limited to 10 percent of the coverage for the house
• Coverage for your property left on the premises (appliances, maintenance equipment, etc.)
• Coverage for loss of use, if you lose rental income as a result of a covered peril
• Liability coverage for injuries or property damage that occur on the insured property
• Medical payments coverage, for medical expenses that arise from injuries to others on the insured property

Tornadoes, Lightning etc. - Are You Covered?

Severe weather can pose a major threat to your home and property. Tornadoes, earthquakes, hurricanes, winter storms, severe thunderstorms, and flooding can damage or destroy your home in a matter of minutes. And while you can't control the weather, you can be prepared.

Specific types of severe weather tend to occur in specific regions at specific times during the year. But it is important to recognize that this is not an absolute. For example, tornadoes are not restricted to the Plains states--each of the 50 states has experienced at least one tornado in recorded history. Thunderstorms occur throughout the fall and winter months, in addition to the typical summer outbreaks. Make sure your homeowners insurance is adequate, no matter where you live.

Preparing for the worst
If disaster does strike, homeowners insurance will be important to help get you back on your feet. Check your policy now, and make sure you understand your coverage. Certain events and disasters are not covered under a standard homeowners policy. You'll have to buy separate insurance if you need to protect your property against floods or earthquakes, for example. But it's better to know that before the fact, rather than after.

Generally speaking, homeowners insurance provides three things:

• coverage for damage to your home
• coverage for damage to your personal property
• liability protection

The most common homeowners insurance policy in the United States is known as the homeowners-3 policy or HO-3. If you have this policy, you will be covered for everything except the exclusions outlined in the policy (more on that later).

What is covered

The most common perils for which you will generally be covered under an HO-3 policy include:

• fire and smoke
• lightning
• tornadoes and windstorms
• hail
• explosions
• vandalism
• theft
• damage from vehicles
• falling objects
• loss of food in your refrigerator or freezer due to power outage outside your home (usually up to $500)
• weight of ice, snow, and sleet (except to fence, pavement, patio, swimming pool, or dock)
• accidental discharge of water from plumbing system (i.e. pipe bursts) or freezing of plumbing
• accidental cracking of your hot water heating system
• accidents resulting from your negligence on or off your property (includes damages award to third party, medical bills of third party, and your legal costs--up to policy limit)
• your personal property anywhere in the world (with some exceptions)

Remember, this list is not exhaustive. If it's not in the list of exclusions, it's covered.

What is not covered

Specifically, the HO-3 policy does not generally cover:

• floods (flood insurance must be purchased separately from the federal government)
• earthquakes (can be added to policy)
• war
• nuclear accidents
• structures used for a business (separate insurance is necessary)
• wear and tear on the home, including deterioration, insect and rodent infestation, settling or cracking of foundation or pavement, and damage from domestic animals
• intentional damage
• freezing of pipes in an unoccupied or under-construction house
• theft from a house under construction
• vandalism to a house that has been vacant for more than 30 days
• cars, trucks, vans, motorcycles, aircraft, and boats with anything more than a small motor
• property belonging to tenants
• pets, birds, and fish
• losses resulting from the failure to protect property after a loss

What it all means

Listed out, these disasters and other situations can be hard to distinguish. Instead, real-life examples are often much easier to understand. (These examples relate to HO-3 policies in general. Check with your insurance company for details on your policy.)

Your house...

• Lighting strikes a power line leading into your house and starts a fire--you're covered
• A delivery truck careens off the road and smashes into your house--you're covered
• A plane blows up mid-air and part of the debris hits your house--you're covered
• A pipe bursts in your cellar and covers your downstairs playroom with water--you're covered
• Mice infest your home and chew up your insulation--you're not covered (wear and tear exception)
• The river behind your house floods and you have water damage--you're not covered (flood exception)
• The value of your home in the real estate market plummets because a prison is built on your block--you're not covered (selling cost has no direct relation to insurance, it is intended to cover the costs of rebuilding or repairing)
• A foreign army invades the United States and destroys your home in the process--you're not covered (war exclusion)
• You go on a cruise for 8 weeks and return home to discover vandals have smashed all your windows and torn apart your house--you're not covered (vandalism exclusion for house vacant more than 30 days)
• Your home is damaged for some reason and you need to upgrade it to meet the local building codes when you repair it--coverage depends on the individual policy

Your personal property...

• A wild animal gets into your house and rips apart your upholstery--you're covered, unless the animal is a rodent or your own pet, which is not covered (if the rodent or pet does something to cause a fire, you are covered for the damage caused by the fire.)
• A thief breaks into your home while you are at work, and steals your entire music collection, the family silver, and everything else portable--you're covered, up to the limits stated within your policy and any endorsements
• Your golf clubs are stolen form the trunk of your car--you're covered (without a replacement cost endorsement you will recover only their current value)
• A fire damages your computer equipment in your business over the garage--you're not covered (you need special coverage for your home-based business)

My laptop was stolen from my car. Will my homeowners insurance cover it?

Imagine how awful you would feel if someone breaks into your car and steals your laptop. If that does happen, you could take solace in knowing that your homeowner insurance policy probably would cover such a loss.

"Your homeowners policy generally includes off-premises coverage [that] would provide coverage for your laptop or other possessions you own that were stolen from your car," says Cynthia Heismeyer, assistant vice president of corporate communications for Selective Insurance, in Branchville, N.J. Heismeyer described another insurance wrinkle - "If, however, your laptop was actually 'installed' in your auto, your coverage is under your automobile policy. The amount of coverage you have would be specified in your policy."

"In all likelihood yes, subject to the deductible of course," says Bob Hartwig, chief economist of the Insurance Information Institute, in New York. "There could be homeowners policies that exclude that, so double-check your policy wording to be sure of what's covered and what's not."

Your homeowner policy covers theft. "Your policy follows your possessions around, so if you carry your laptop from your home office to your car, and someone breaks into your car and steals your computer, you'd be covered," says Eric Goldberg, assistant general counsel for the American Insurance Association, in Washington, D.C.

Goldberg offered advice on the matter of policy deductibles. "Homeowner policies have deductibles, which are amounts the insured must pay before coverage kicks in. Deductibles often run $500 or $1,000. Keep that in mind if you are thinking about filing a claim. Let's say that you have a laptop that you bought for $2,000 five years ago. That computer may only have a replacement value of $700 today. That means that if you have a $1,000 deductible, you're carrier isn't going to pay you anything."

Chubb spokesman Mark Schussel took a different approach on the subject. "The old saying of 'an ounce of prevention is worth a pound of cure' applies in this instance. By that I mean, you shouldn't leave a computer, purse, jewelry, or other personal valuables on the front or back seat of your car. Don't leave something in the car that could attract the attention of a thief. However, if you have to leave a laptop in your car, put in your trunk and lock it."

Should I Install a Home Security System?

Not so many years ago, a fail-safe home security system consisted of a good lock on the door, a large family dog, and perhaps a baseball bat propped up in the umbrella stand. Today, most locks can't keep experienced burglars out, fewer people can keep big dogs, and baseball bats provide little protection against well-armed intruders. More and more homeowners--and even apartment dwellers--are investing in home security systems to deter criminals, provide home protection, and give them peace of mind.

If you're wondering whether to install a home security system, then consider the following questions:

What are you trying to protect?

If you live alone with little more than a television and some furniture, and have little concern for your own personal safety (perhaps you have a black belt in karate), then your home security needs may be nil. If, however, you have children and/or other family to protect, you fear for your own personal well-being, and/or you own expensive antiques, art, jewelry, and other valuables, then your need for home security is probably much greater. The importance of what you are trying to protect should weigh heavily in your decision to install a home security system. You want to be able to sleep well at night knowing that both your loved ones and your valuable personal belongings are safe. If you can't do that now, then you may need some form of home security system.

Do you live in a high-crime area?

Another way to analyze your home security needs is to consider the likelihood that you will be the target of criminal activity. If you have lived in a neighborhood for a while, you probably already know whether it is safe to leave your doors unlocked at night, or whether you should barricade every window around the clock. If you live in a high-crime area, your need for home security is greater. If you are new in town, you might want to do a little research to find out about the level of crime where you live. The police station, local library, neighbors, and local real estate agents are all potential sources of information about the level of crime in your neighborhood. Use that information when making your decision.

Is your house a natural target for a burglar?

Even if you live in a low-crime area, be aware that there are certain types of homes that are more prone to burglary than others. For example, ground-level apartments are more likely to be targeted than apartments three or more stories up. Homes surrounded by thick bushes, plants, and trees are favored by prowlers because they offer plenty of places to hide. Old, weak, or cracked doors and windows are easier to break into. A house on a darkened street where the owners are seldom home is a very attractive target. In contrast, if your house has a wide-open lawn on a well-lit street that is posted with "Neighborhood Watch" signs, it is probably not the ideal spot for a burglar to ply his or her trade. Does your home invite or deter crime? The answer will help you make a decision about whether you need a home security system.

Does your homeowners insurance carrier offer discounts for home security systems?

Aside from safety, you may have a financial motive to beef up your home security. Most, if not all, insurers will give you a discount on your homeowners policy premium if you install a home security system. The available discount will vary from one insurer to another. It will also vary depending on what kind of security system you choose. Usually, insurers will give you a 5 percent discount merely for installing dead-bolt locks. A simple burglar alarm is likely to get you yet another 5 percent. If you decide to go with a more sophisticated home security system, complete with monitoring services, then you can expect a discount of up to 20 percent. (In addition to discounts for security devices, you can get discounts for installing safety devices such as smoke detectors or sprinkler systems.) Check with your insurance agent to make sure you're currently receiving any discounts you qualify for, and to see if you can save any more on premiums by installing additional security equipment.

Can you afford a system?

The price of a security system depends largely upon how sophisticated the system is. A typical higher tech solution is a full-perimeter system, which usually includes a series of sensors that, when armed, detect when a door or window is opened, broken, or tampered with. These systems typically operate on the principal that whenever one of the detectors is tripped, an alarm of some sort will sound. It may be a horn, bell, or beep and may be accompanied by flashing lights. If the system includes off-site monitoring, local police will be notified. Additionally, there are a host of other systems that can protect you if an intruder bypasses your perimeter system and succeeds in entering your home. Floor sensors can detect an intruder by the weight of his or her footsteps. Motion detectors sense any significant movements within their range.

The technology that goes into many modern systems is truly amazing, and if cost is not an object, very sophisticated systems are available. But don't let money discourage you until you have shopped around. There are many security systems to choose from, in a wide range of prices. Whatever you are trying to protect, you should be able to find something within your budget that will help you sleep better at night. Consult your local yellow pages, the Internet, or community newspapers for security system professionals and dealers.

Is there anything you can do to minimize the need for a home security system?

There may be steps you can take to minimize your need for a high-tech home security system. If you want to make your home safer and can settle for low tech, there are a number of things you can do.

* In addition to installing dead-bolt locks, replace old, cracked, or hollow doors with doors made of metal or solid hard wood.
* Don't rely on a slide chain to protect you if you are opening a door to see who's knocking. Install a wide-angle peephole device in the door.
* Make sure your sliding glass doors have keyed locks and cannot be lifted out of their frames from the outside. A pole or rod cut to the proper length and laid in the track of the door can prevent it from being slid open, even if the locks are compromised.
* Install removable pins, nails, and/or rods to prevent windows from being opened, and replace old or cracked windows and panes.
* Cut back bushes and trees that surround your house and windows.

Finally, try to create the illusion that you are well protected. Whether or not you have a home security system, purchase adhesive labels that say you do, and affix them to every door and window. Post a "Beware of Dog" sign, whether you have one or not. The illusion that you are well protected may deter a would-be burglar. If you are going to be away from your home, purchase an inexpensive timer that turns a lamp or two on at dusk, and off again at bedtime. It may create the illusion that someone is at home and deter a burglar who is waiting to make his or her move when the home is vacant.

Does Your Insurance Cover Water Damage?

During a cold snap, the pipes in your building freeze and burst. While doing a load of laundry, your washing machine overflows. A heavy rainstorm causes water to leak through the roof of your building--and you live on the top floor. Water damage occurs frequently, so it's a good idea to know what is (and isn't) covered by insurance.

Won't my landlord's insurance cover the damage?

Your landlord's insurance will provide coverage for damage to the building itself, but it won't provide coverage for damage to your personal property. And if your landlord's policy only provides coverage for damage to the exterior of the building (you can find this information in your rental agreement), it won't cover the cost of replacing pipes, carpeting, wall coverings, etc. inside your rental unit. (Depending on the circumstances, your landlord may still be liable for repairs, even if the damage is not covered by insurance.)

What about renters insurance?

A good renters policy will provide coverage for most water damage. Just make sure that it is specifically mentioned in the policy--that way both your damaged belongings and the cost to repair the rental unit itself (e.g., new pipes, carpeting, wall coverings) will be covered. One possible exception: whatever causes the water damage (e.g., dishwasher, washing machine) may not be covered by your renters policy if you failed to maintain it properly.

What if the water damage is the result of a flood?

Basic renters insurance doesn't provide coverage for water damage that is a result of a flood. If you live in a flood-prone area, you'll need to purchase a separate policy or add a rider onto your renters policy for this type of coverage.

What if I can't live in my apartment as a result of the water damage?

Most renters insurance policies will provide coverage for additional living expenses incurred if your rental unit is unlivable. In other words, the insurance company will pay for you to live at another location (at a price similar to your old apartment) while your apartment is being repaired.

My Tree Fell on My Neighbor's Porch - Whose Homeowners Policy Covers the Damage?

Sometimes, a tree falls in a forest and someone does hear it. Or, it falls onto your neighbor's property and damages something. When that happens, their homeowners insurance company will be the one to hear about it.

Dr. Robert Hartwig, President of the Insurance Information Institute (III) knows first-hand how homeowners insurance can become involved when one of your trees falls on a neighbor's property.

Whose Insurance Pays?
If one of your trees falls and damages a neighbor's property, "generally speaking, it is your neighbor's insurance policy that is called upon to pay the damage," points out Hartwig. "Since his insurance is being impacted," Hartwig continued, "you probably won't face an insurance premium increase as a result."

However, "your neighbor could come after you to cover his deductible. Matter of fact, when one of my trees fell on my neighbor's fence, it destroyed some of his fence and damaged fruit trees. In the interest of neighborly relations, I voluntarily paid for a new pear tree, so between what the insurer paid and what I paid, he didn't have any out-of-pocket expense," says Hartwig.

The upshot? "My neighbor and I are still on speaking terms, which is a good thing. I paid for the new fruit tree, because I thought it was the right thing to do, although I was not obligated to do that." Hartwig's story underlines the fact that, in general, your neighbor's insurance covers your neighbor's property. However, although you and your insurance company may not legally have to make a payment, it's usually best to maintain good relations with those around you.

Negligence Liability
The major exception to the rule of thumb that your neighbor's insurance will pay is the case of negligence on your part. If your tree was dead or diseased, and a judgment or settlement finds that you knew or should have known about that, you could be legally liable for the damages. This is especially true if your neighbor has documentation proving that he or she complained to you or the city about the state of your tree.

Section two of most homeowners insurance policies covers liability, including the cost to defend you in a lawsuit. Your neighbor could submit a claim to your insurance company if they believe you are at fault. If your neighbor sues you, claiming that you were negligent in failing to take care of your tree, your insurance company will pay to defend your case, and will pay for damages if you're responsible. The cost of legal defense is in addition to policy liability limits, although the amount of damage paid for is subject to these limits.

Prevention is the Best Cure
To avoid this situation, have your trees trimmed and inspected periodically to make sure they're not dead or falling down. If you're worried about trees on your property falling during a storm, have them trimmed or removed. If you are concerned about a neighbor's tree, write a polite letter to your neighbor and the city, but realize that it may cause a disagreement.

Other Homeowners Insurance Options
Another option under your own homeowners insurance policy is the Damage to Property of Others coverage in the Other Coverages portion of the liability section. This coverage does not have a deductible and it can be used without a judgment or admission of legal liability, which can help speed up the payment process. The amount of coverage for Damage to Property of Others, typically $1,000, is in addition to the policy's liability limits. However, remember that using your own insurance constitutes a claim against it and a possible premium increase. Therefore, only use this type of coverage if you can't afford to pay for the damage yourself.

If your tree falls on your neighbor's porch, your neighbor's homeowners insurance will usually pay for the damage. However, remember that each area has different laws, and each policy has exclusions explaining what is not covered.

My House Burned Down. Will My Homeowners Insurance Pay off the Mortgage?

If fire destroys your house, a burning question might be whether your insurance would pay off the mortgage. Chances are the answer would be yes. However, there's a lot more to it than that.

With that in mind, a hypothetical was brought up by American Insurance Association assistant general counsel Eric Goldberg. "Let's say you bought the house 20 years ago for $200,000 and at the time of purchase you obtained a homeowners insurance policy with $190,000 in limits, which is less than the property's total value because you don't buy coverage for the value of the land," Goldberg began. That house has appreciated in value considerably since the date of purchase, he said. Building costs, materials and other costs have gone up.

"Let's say you haven't increased my policy limits since the day you bought the house," Goldberg added. "If that's the case, you probably don't have sufficient coverage." What should a homeowner do to avoid facing such an unpleasant situation? "It would behoove you to meet with my insurance provider once a year to ensure you have adequate coverage," answered Goldberg.

"You don't want insurance surprises at a critical time such as in the event your house burns down," Goldberg emphasized.

Goldberg talked about how homeowners insurance for the structure itself is sold in one of two ways: replacement cost coverage and extended replacement cost coverage. At replacement cost, if you have $200,000 in coverage, you'll get the actual replacement cost up to that amount if your house burns down. "Extended replacement cost protection costs a bit more, but under that type of policy, the insurer provides you a cushion - typically 20 or 25% over coverage limits - to cover factors such as rising building costs and increasing costs of building materials."

A final point from Goldberg: "It is the policyholder's responsibility to find out what the replacement costs are."

"You are still going to have that same mortgage, but your homeowners insurance will pay to rebuild your home, and so you will be made whole," says Carolyn Gorman, vice president at the Insurance Information Institute's branch office in Washington, D.C.

Gorman's organization, the Insurance Information Institute, says you need enough insurance to cover the following:

• The structure of your home.
• Your personal possessions.
• The cost of additional living expenses if your home is damaged and you have to live elsewhere during repairs.
• Your liability to others.

Chubb spokesman Mark Schussel says your homeowners insurance policy should have adequate coverage to cover your outstanding mortgage. However, that may not be enough for you to rebuild. "What's more important is for you to purchase an extended replacement cost policy that regardless of your stated policy limits will provide you with enough insurance proceeds to replace the home in its entirety," explains Schussel.

Schussel's bottom-line point on the subject? "Most banks won't approve your loan application unless you have adequate insurance to pay off the mortgage," he said.

Says Safeco Insurance spokesman Paul Hollie: "If your house burns down due to a covered loss, homeowners insurance typically will pay to clear your property of damage and debris, rebuild your home, and replace the belongings you lost in the fire. In addition, if you can't live in your home, your homeowners insurance will pay additional living expenses as detailed in your policy. This covers the cost of temporarily renting a place to live."

Insurance Tips for Homeowners

You've unpacked your things and settled into your new home. But have you thought about how this will affect your insurance needs? Buying a home involves more than just making sure you have homeowners insurance coverage. If you've recently purchased a home, here are some types of insurance that may be impacted by your recent move.

Homeowners insurance

If you have a mortgage, your lender probably required you to obtain some level of homeowners insurance coverage. However, you'll want to make sure that the amount of coverage that you have will adequately protect you for all possible losses. Homeowners policies set coverage limits for specific items (e.g., jewelry), so you may want to look into purchasing a separate endorsement or a floater if you feel that you need to increase your coverage. You also need to know if you have "replacement cost" coverage on your personal property and if you are covered for earthquake damage.

Flood insurance

Homeowners insurance does not provide coverage for flood damage. But those living on a riverbank or near the ocean are not the only ones who warrant flood protection. Even if you live in a low-lying area (e.g., near a creek), you may want to look into purchasing flood insurance. Most companies that sell homeowners insurance also sell flood insurance, so try contacting your own insurance company for more information.

Auto insurance

If you think that there is no connection between buying a home and auto insurance, think again. If you're ever in an auto accident that is the result of your negligence, all of your assets (including your home) could be subject to liability claims if the claims exceed the liability limits of your auto insurance policy. So, you should re-evaluate the existing liability limits on your auto insurance policy to make sure that you have adequate coverage to protect your home. If you feel that you need even more coverage, you may want to look into purchasing a separate umbrella liability policy, which would pay for damages that exceed the coverage limits on your auto and/or homeowners insurance policy.

Disability insurance

Would you be able to make your monthly mortgage payments if you were unable to work due to an accident or illness? A disability insurance policy will pay you a monthly benefit to replace a portion of your income until you are able to work again. Many employers provide disability insurance for their employees. If your employer does not offer disability insurance or if you are self-employed, you can purchase an individual disability policy.

Life insurance

What if you were to die before your mortgage was paid off? Would your family be able to keep up with the remaining mortgage payments? Life insurance can provide your family with the funds to pay off their debts, as well as replace a portion of your income. While many employers offer some level of life insurance coverage to their employees, this amount of coverage may not be enough to provide financial security to your family. So, you may want to consult an insurance professional to help you assess your family's life insurance needs.

Get the Home Insurance Facts

Buying a home is one of the single largest investments that most people ever make. If you need to protect that investment, your main line of defense is homeowners insurance.

Just the basics

Most standard homeowners insurance policies will provide coverage for damage to your home (and many of the items in your home) caused by:

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

Homeowners insurance also provides coverage for liability claims, medical payments to third parties, and legal costs if a lawsuit is brought against you. The most common amount of liability coverage included in a homeowners policy is $100,000, but you may need much more, depending on your circumstances.

What's not covered?

Read your homeowners insurance policy to find out exactly what is and is not covered. Do this before you suffer a loss, so you won't be surprised. Most insurers exclude damages caused by an act of war, nuclear accident, flood, earthquake, and terrorism, although you may be able to purchase special policies or endorsements that will cover these events.

A diamond is forever. Or is it?

Most homeowners insurance policies limit coverage for certain high-priced or hard-to-replace items. Additional endorsements or floaters will be necessary to protect items like engagement rings, watches, furs, antiques, and other valuables. You'll need to have each item appraised.

How much is enough?

Mortgage lenders require that borrowers purchase a minimum amount of homeowners insurance (typically equal to the appraised value or the purchase price of the home). But this is often not the amount of coverage you truly need. Instead, find out how much it would cost to rebuild your home, and consider insuring it for that amount.

You get what you pay for

Are you willing to pay more to have damaged personal property replaced? If so, consider purchasing replacement cost coverage with your homeowners insurance. When it comes to valuing property, insurers generally use one of two methods. The first, actual cash value, pays you an amount equal to the replacement value of the property, minus depreciation for the years you owned the item. The second, replacement cost, is more expensive, but it pays you the full value of the item today, so that you can replace the old item with a new one.

How deep are your pockets?

To save money, consider choosing a deductible of $250, $500, or even $1,000. In the event of a loss (e.g., water damage from a leaky roof), you'll be required to pay this amount out of your own pocket before your homeowners insurance takes over, but in the meantime, you'll save on premium charges.

Sound the alarm

Don't forget to tell your insurer if you have a home security system (e.g., fire, burglar, emergency). Most insurers offer discounts for such safety features. You may also qualify for a lower insurance premium if you live near a fire department or hydrant, own a newer home, own a home built out of fire-resistant materials, or get your auto insurance from the same company.

Shop around

Get quotes from several insurance companies when shopping for homeowners insurance. But remember, the lowest price does not always equal the best deal. Compare the coverage each policy offers, and check with your state's department of insurance to make sure that each company you're evaluating has a good reputation in the industry.

Homeowners Insurance: Fire Prevention Week

Fire Prevention Week runs from October 5–11 this year, and focuses on preventing fires in the home. Although our residences are the place where we often feel most secure, more fire deaths occur at home than elsewhere, according to the National Fire Protection Association (NFPA). This year, the campaign has a special focus on alternate methods of heating because of current economic troubles and the high cost of heating fuel.

Preventing Home Fires
A good way to prevent a fire is to check your house or apartment for potential problems, and correct them. Some common trouble areas for cold weather include fireplace chimneys that have not been cleaned, furnaces that have not been serviced, and dryer vent hoses and lint traps that have not been cleaned and inspected regularly. Chimneys and furnace flues can become clogged during the spring and summer, introducing a fire and carbon monoxide hazard when they are first used in the fall.

Another important heating-related fire risk involves storing oil, rags, or other flammables on or near furnaces, wood-burning stoves, or portable heaters. Many people store flammables near idle heating devices during the spring and summer, forgetting that they are there when it comes time to use those devices in the fall.

Electrical fires are especially dangerous because they can burn inside the walls (invisible until it's too late) and can also present a shock hazard. To help prevent electrical problems, make sure fuses or circuits are not overloaded, and that arc-fault circuit interrupters (AFCI) or ground-fault circuit interrupters (GFCI) are used where needed. Don't use extension cords as a permanent solution, and don't overload power strips. In addition, make sure light bulbs are not touching anything flammable, such as lamp shades, curtains, or the wall.

Practice Fire Safety
Once you finish inspecting your house, make sure to practice safety when it comes to preventing fires. The NFPA reports that cooking fires are the leading cause of fires in the home. Many of these incidents are caused by leaving the stove unattended while cooking. A fire can spread alarmingly quickly, even if you're only gone for a few moments. If you have to leave the kitchen, turn off the stove. In addition, never attempt to heat your home with your oven or stove.

Fires related to smoking can also be reduced if safety becomes a focus. Make sure to keep matches and lighters away from children, and make sure to smoke outside or away from flammable materials like beds, curtains, and sofas.

Alternate Heating Warnings
With many people looking for alternate ways to heat their homes, fire safety becomes especially important this fall and winter. If you're using a portable heater, make sure it's at least 3 feet from anything flammable, such as clothing, drapes, furniture, and walls. Never leave a portable heater unattended or near children or pets, and make sure to turn it off before you go to sleep. If you're using a fireplace or wood burning stove for warmth, besides having it cleaned and serviced at least yearly, never leave anything flammable near its opening, and never leave it unattended. Ashes that look cool can remain hot for hours, so make sure to fully extinguish the fire before going to sleep.

Protecting Yourself if a Fire Starts
Despite your best efforts, a fire may start. It could be the result of an accident, someone else's carelessness, or a natural disaster. In this case, fire detection and suppression equipment and an escape plan are your safety net.

Smoke Detectors Save Lives
It may seem obvious and elementary, but working and properly-installed smoke detectors save lives. Most people know this, but investigations after fires often reveal a lack of working smoke detectors. If you don't have smoke detectors, you should get them. Install one per level of your house and one in each sleeping area. Do not remove the batteries for any reason, and make sure to change them once a year. If you hear intermittent beeping when there is no smoke, that means that either the batteries or the entire smoke detector need to be replaced. If the smoke detector keeps activating due to cooking or other nuisance smoke, either move it farther from the kitchen or get a model that can be temporarily silenced with a button.

Other Lifesaving Equipment
Simple things like fire extinguishers and automatic fire suppression canisters that can be placed over the stove can minimize damage and injury. Although fire extinguishers can be helpful for containing a small fire, always make exiting the building your first priority. If you're building or remodeling a house, consider adding fire sprinklers. The NFPA says that the combination of smoke detectors and automatic fire sprinklers can reduce the risk of death in a home fire by over 80%. Remember that even with the right equipment, a well-practiced escape plan is still your best protection.

Custom Auto Insurance for Custom Cars

With the popularity of custom car TV shows such as "Pimp My Ride," personalized cars became hotter than ever. Accessories also came a long way from simple paint jobs and fuzzy dice. Today, drivers want their cars to stand out from the crowd, and to express their personality and style. As a result, car owners are adding chrome rims and grills, customized murals, spinners, pipes, LCD monitors, DVD players, expensive stereo systems, ground effects, and hydraulics.

But what is the cost to insure these hot new accessories? And do you know if your auto insurance company will cover these often-expensive enhancements?

If you're thinking of improving your car, these are some very important questions to ask! Modifying your car can be a huge investment, and you don't want to find out after the fact that your vehicle is not covered.

Ask first, change your car later
The best course of action is to consult your insurance company before you start modifying your car. This will help you find out what your auto insurance company does and doesn't cover, if they are willing to insure your new car, and the total cost of keeping your customized auto covered.

Most insurance companies will ask if your car has "substantial customization" that you would like to insure at an additional cost. If so, you can add an endorsement to your comprehensive and collision coverage for custom parts and equipment. An endorsement is a change to your auto insurance policy, and it can extend coverage to include your modifications.

Check the amount covered under your endorsement, because it can vary for different companies. If your new parts cost more than the covered cost, you may want to consider shopping around to explore your coverage options. Keep in mind that standard insurance companies insure the actual value of the parts, meaning that they will pay you what the parts are worth, not what it costs to replace them.

Safety is key
Always make sure that your parts are installed safely by a knowledgeable professional. Many drivers attempt to do the work themselves. As a result, parts could be installed improperly.

Your best bet is to have a professional do the work for you. It will save you a lot of money in the long run, in addition to keeping you safe.

Even if you don't have a custom car, you can still get free car insurance rate quotes from multiple companies by filling out a single application. If you do have a custom car, most companies will cover you. Just make sure to select "Yes" for the question about substantial customization in the vehicle information section of the application, or call for assistance.

Save on Auto Insurance With a Hybrid

Between gas prices and the economy, American drivers are having trouble deciding what autos to buy. Many people are exploring alternatives, from bikes, to buses, to biofuels. One auto alternative is hybrid cars. But what exactly is a hybrid and why would you want one?

Gas Mileage. The reason most people want a hybrid is because of the great gas mileage they can get. How is this possible? Technology for hybrid autos varies, but higher fuel efficiency is usually accomplished with an electric motor. Batteries store energy recovered during braking and supply that energy back to the electric motor, cutting down on the amount of gas used. A 2008 Toyota Prius, for example, gets an EPA estimated 46 MPG for combined use, while a 2008 Honda Civic Hybrid gets an EPA combined rating of 42 MPG.

Hybrid Types. However, make sure you understand what type of hybrid you’re buying. Some hybrids are designed not to save gas, but to increase performance. For example, there are sports autos that take the gas engine from another model and add an electric motor to increase power. This design uses less gas than an auto with a bigger gas engine, but could actually use more gas overall than the same auto without the electric motor. A 2008 Lexus GS 450h gets an EPA estimated 23 MPG combined, while the 2008 Ford Escape Hybrid gets an EPA rated 32 MPG. Buying a hybrid doesn’t automatically mean you’ll get better mileage than a big SUV does.

Discounts. You could be eligible for discounts if you buy a hybrid. Although their numbers are dropping quickly, some hybrid models may qualify for a federal tax incentive. In addition, many states offer tax incentives, parking incentives, and other toll or driving incentives. When you add these savings into the amount you can save in gas, suddenly a hybrid auto doesn’t seem as expensive.

Auto Insurance. Another great savings opportunity could be a discount on your auto insurance rate. Some companies have started to feature discounts of up to 10% for hybrid auto insurance rates, although it depends on the type of hybrid. You’ll need to shop around and compare auto insurance rates from different companies to see who has the best rate.

8 Things You Should Know About Auto Insurance m

Trying to understand auto insurance can be as tricky and confusing as trying to untie the Gordian knot. (We hear the knotty Gordian problem can be solved with a sword.) However, some "insider" knowledge can help you understand your options and what you can do to save money and get the most out of your auto insurance.

1) Some of the most helpful coverages are the cheapest.
Auto insurance may be expensive, but if you're already spending a lot, shouldn't you get a lot? Optional coverages such as gap coverage, roadside assistance, rental reimbursement, uninsured/underinsured motorist coverage, and comprehensive coverage can provide a lot of protection for a little price increase. Comprehensive coverage is usually the most expensive of these coverages, but is still usually about half the price of collision coverage and a third the price of liability coverage.

Uninsured/underinsured motorist coverage is especially important, considering the benefits it offers and the number of uninsured drivers on the road, particularly during this period of economic hardship. Take a look at your coverage options. Paying a little more now may save you a lot in the future.

2) Many factors can affect your car insurance rate.
Auto insurance companies use many different criteria when evaluating an insurance application during a process called underwriting. Each car insurance company has many guidelines regarding which groups of drivers they want to accept and how much they will charge those groups they consider a greater risk. The guidelines are different for each company, meaning that two companies comparing the same driver can arrive at vastly different conclusions.

During the underwriting process, car insurance applicants are placed in a group based on how much money and how many claims the insurance company believes it may have to pay. Underwriting is done automatically by software behind the scenes. At this time, the insurance company will look at motor vehicle records to see how many accidents or tickets a driver has received. Many insurance companies also use an insurance history report to see if the driver has made any car insurance claims, and how much money was paid. Although accidents and violations can only affect the rates you receive for three years, many companies will look back five or more years when deciding if they want to offer you insurance. In addition, many auto insurance companies look at the credit history of the applicant. Although they use credit history to determine which group an applicant belongs to, they don't actually look at a credit report.

3) Insurance prices vary (a lot) by company.
You've probably seen commercials saying you can save money by switching to a certain car insurance company. How can so many companies make this claim? The reason is that "auto insurance is a highly competitive business and one of the most effective ways to reduce insurance costs is simply to shop around," according to Jeanne Salvatore, senior vice president of the Insurance Information Institute. "Drivers should look for an insurance company that will provide a good price along with excellent service."

Prices for the same policy from the same company, however, are set by law. They are approved by the state and can't be changed by an agent, so you can't get a better price for the same policy simply by going to a different agent or trying to negotiate the price. The best plan is to decide what coverages and options you need and comparison shop to get the best price.

4) If you let your policy lapse, you'll pay more in the long run.
Most insurance companies view drivers who are licensed but don't have insurance as risky or irresponsible. Because of this, if you let your policy lapse, you'll probably pay more when you go to buy car insurance. To avoid this, if you don't want to pay for insurance or are planning to let your policy expire because you want to switch companies, make sure to purchase car insurance before your current policy is cancelled.

5) Higher deductibles can lower your premium.
Insurance prices are based on how much money the insurance company believes it could have to pay. If you agree to pay for a larger portion of your own damages by raising your deductibles, your car insurance company automatically knows they won't have to pay as much for your claims. Because of this, they will usually give you a lower premium. If you decide to raise your deductibles to save money, be sure you can afford to pay the deductible if you have to make a claim.

6) Insurance discounts can make a difference.
Most insurance companies offer auto insurance discounts for things like a safe driving record, car safety features, anti-theft devices, electronic payments, payment in full, and more. Make sure you're getting rewarded for being a safe driver and for having a safe car by shopping around for car insurance that appreciates your record.

7) Coverage affects what you pay.
The majority of your car insurance premium generally goes toward the legally-required liability portion of your policy. It's typically not a good idea to reduce this portion in an attempt to save money, because you'll be responsible for any amount of damages above your policy limits. However, other coverages, although generally helpful, could be reduced or eliminated to lower your premium. If you have an older car that's not worth very much, or if you won't have a problem paying for a new car, collision and comprehensive coverages may not make economic sense. Talk to your car insurance company or agent about the best options for you.

8) The car you drive can affect your auto insurance rates.
The Highway Loss Data Institute compiles insurance accident statistics for most types of cars. Many insurance companies use data like this when setting prices on your insurance. For example, if the car you drive is very expensive to repair, the company is going to have to pay more if you get in an accident. Conversely, if the car you drive is extremely safe and protects occupants well, your insurance company will not have to pay as much if you're involved in a crash. If your model of car is generally less likely to be stolen, your car insurance company is less likely to have to pay to replace it. All of these car related factors can raise or lower the auto insurance quotes you receive, so it makes sense to keep insurance in mind when purchasing a car. Of course, since rates are based on much more than just the car you drive, your overall rate may be more or less than someone driving the same car.

Do You Know the Auto Insurance Basics?

You're a driver, so you know how crazy it gets on the road. Between distractions and the rush to get somewhere on time, accidents can and do happen. Fenders get bent, and sometimes people get hurt. Even if you're just parked in your driveway, a tree limb can crash through your windshield, or someone can steal your car. When the worst happens, auto insurance is there to protect you.

Why buy auto insurance?
Auto insurance can protect you against the financial risk associated with personal injuries and property damage caused by auto accidents, theft, vandalism, or natural disasters.

All states require you to purchase at least a minimum amount of liability coverage. Other types of auto insurance coverage may be optional or required, depending on state regulations. If you have a car loan or lease, the lender will also generally require that you purchase coverage for the car itself.

Liability coverage
This is the state-mandated legal coverage you'll be required to have (learn more):

• Bodily injury liability: Protects your assets if you are held liable for an auto accident in which other people are injured or killed.
• Property damage liability: Covers repairing or replacing the autos or other property of other people.

This coverage will also pay for the legal costs associated with defending you against lawsuits related to accidents. To adequately protect your assets, you probably want to purchase much more than the minimum amount of coverage required in your state.

Collision, comprehensive, uninsured and underinsured motorist, and medical payments coverages
Although these coverages are optional in most states, it often makes sense to purchase them, unless you can afford to pay for losses yourself.

• Collision: Pays to repair or replace your car if it's damaged in an accident. (Learn more.)
• Comprehensive: Insures your car against damage caused by something other than an auto accident (e.g., theft, fire, flood, vandalism). It is also called other-than-collision. (Learn more.)
• Uninsured/underinsured motorist coverage: Unless you live in a "no-fault" state (where your own insurance will cover your losses), this coverage insures you against certain losses caused by other drivers with little (underinsured) or no (uninsured) auto insurance. It can cover things like lost wages as well, and provides coverage to your passengers, and those listed on your policy while riding in other cars or as pedestrians. (Learn more.)
• Medical payments coverage or personal injury protection (PIP): Covers various medical and/or funeral expenses for you and your passengers, as well as those listed on your policy while riding in other cars or as pedestrians. (Learn more about: medical payments coverage and PIP coverage.)

Additional coverages
Most of these coverages are optional, relatively cheap, and provide a lot of protection, although they may not be helpful in all circumstances.

• Gap coverage: Pays the difference between the actual cash value of your car and the amount you owe on your loan or lease if your car is totaled in a covered accident. It is sometimes called loan/lease coverage. (Learn more.)
• Towing and labor or roadside assistance: Towing and labor usually covers the cost to tow your car to a repair facility or make minor repairs after a covered accident. Roadside assistance usually covers towing, minor repairs, and fuel delivery, even if there was no accident.
• Rental reimbursement: Pays the cost of renting a replacement car if yours is not drivable due to a covered accident. Some auto insurance companies will send you a check for part of the allowed amount if you don't rent a replacement car. (Learn more.)

And then the insurance company pays for everything, right?
That would be nice, but it's not always true. Here are some things you'll always need to cover yourself:

• Deductibles: The amount of money that you've agreed to pay out of your own pocket before your insurance coverage kicks in. You can have different deductibles for different coverages, and liability coverage never has a deductible.
• Exclusions: Events or situations your policy specifically omits from coverage, such as property damage or personal injury you intentionally cause, or damage to your own car due to mechanical failure or wear-and-tear.
• Costs above policy limits: Any expenses that exceed the caps on the dollar amounts of coverage you're entitled to receive under your policy.

Driving a good bargain
Many factors affect your auto insurance premium, including your age, the state in which you live, the make and model of your car, where your car is parked at night, and your driving record. Although you can't do much about some of these factors, here are some things you can do to help lower your premiums:

• Increase your insurance deductible.
• Eliminate optional coverages if you don't need them (e.g., rental reimbursement if you have other means of transportation).
• Eliminate collision and comprehensive coverage if you drive an older car that wouldn't cost much to replace, and if you could afford to pay for repairs if necessary.
• Ask about available discounts (e.g., low-mileage discounts, discounts for safety or antitheft devices) for your auto insurance (if applicable in your situation).
• Avoid buying a vehicle prone to theft or expensive to repair.
• Drive safely to establish a good driving record.
• Maintain good credit.

Shop around
It's important to shop around for auto insurance coverage. Insurance premiums for the same coverage on the same car can vary widely among different insurers. A particularly good time to investigate your alternatives is when your current insurance policy is up for renewal, but you can shop and change policies at any time. Get quotes from several reputable companies, but don't let price be your only consideration. Make sure the coverage offered by each insurer meets your needs, and find out if the insurer has a solid financial strength rating.