10 Things to Consider About Insurance When You Pay Off Your Car Loan

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.  Coverage and descriptions are summaries, subject to the terms and conditions and definitions in your own policy .  Talk to your agent!

PT at Prime Time Money just paid off his car, and he wrote a post about the decision he must make about what to do with the extra money.  He mentioned the possibility of changing his insurance coverage now that he no longer has a loan.  I, being me, always have something to say, and that’s especially true when insurance is a topic.

So, should you change your insurance when you pay off your car loan?

That depends.  Here are some things to consider:

Only two coverages have anything to do with the type of car you have: Comprehensive and Collision.  Those are the only two coverages that cover the car itself.    That’s why the lienholder requires it – they don’t care if you’re hurt or if you hurt someone else; they just care that their collateral is covered.

Collision covers damage to your car when your car hits or is hit by another vehicle,  or other objects.  It pays whether the incident is your fault, no one’s fault or a hit and run.  Most people carry a deductible, so the insurance pays the amount of loss after your deductible is reached (paid by you).

Comprehensive (also called Other Than Collision) covers most other things that physically happen to the car – if it’s stolen, damaged by a hurricane, flood, falling object, or animals. Most people carry a deductible, so the insurance pays the amount of loss after your deductible is reached (paid by you).

So, what should you think about doing?

  1. Find out how much you pay for each of those coverages, and determine your deductible.
  2. Get quotes for raising the deductible(s) and for eliminating the coverages altogether. Get the quotes for each individual coverage so you can see what they cost separately, for all your cars.
  3. Consider what you’d be giving up. I suspect you’ll find that you won’t save as much as you think, especially with Comprehensive coverage.  Also, keep in mind that if you remove them you will be completely out of luck if you get into an accident that is your fault, if it’s a hit and run or if the at-fault party doesn’t carry enough coverage to fix your car (Florida only requires $10000 property damage coverage.  Have you thought  about what happens if they hit more than one car, or if you drive something that $10000 wouldn’t fix?).  Also, you’d have no coverage if it’s stolen, damaged in a hurricane, etc.
  4. Figure out how much of a loss you could absorb without too much financial difficulty. Compare it to the cost of the coverage. Could you come up with the money to replace your car to fix it if the damage is $1000?  $5000?  If it is a total loss could you replace it?  Is it worth it to you to spend X dollars for that peace of mind?
  5. Figure out how much of a loss you could absorb without too much mental/emotional difficulty. Will you be able to sleep at night knowing that you’re not covered?  Is it worth it to you to spend X dollars for that peace of mind?
  6. Consider starting a Deductible Fund.  Think about increasing the deductibles on all of your insurance (including health insurance) and putting that into a fund to pay those deductibles if you incur a loss.  You might be amazed at the money you can save, and over time you’ll almost always come out ahead (well, unless you’re really unlucky). I used to write an individual health policy where the difference in premium between the $500 deductible and the $1000 deductible was  (depending on the insured approximately) $600 per year – more than the deductible difference!  If you chose the $500 deductible you started off $100 in the hole.  Ridiculous. If the patient chose the $1000 deductible they paid less, and if they didn’t get sick they could save as much as $600!  That’s what they call a no-brainer.
  7. If you decide to drop these coverages, consider keeping just Comprehensive. It doesn’t cost much at all, and in many states you can get your windshield replaced if broken without having to pay your deductible.  Many of my clients kept Comprehensive with the largest deductible just for the glass coverage.  My company actually would replace any of the glass on the car (side glass, mirrors) without requiring the insured pay their deductible, and the coverage often cost about $10 every six months.
  8. You don’t want to reduce your liability or uninsured motorist coverage. They have nothing to do with the type of car you drive – you can do just as much damage with a brand new car as an old clunker!  In fact, you may want to get quotes to increase these coverages…
  9. Consider getting quotes from other companies. Hey, as long as you’re doing the work.  And if you do, read my series on  Auto Insurance 101 to get some good tips!
  10. Don’t forget to remove the lienholder! Make sure your insurance agent removes them as the loss payee – sometimes they forget.  It’s not that the bank could actually collect the insurance money if you had a loss, but it would delay your payment at claim time while they straighten it out.

Everyone’s risk tolerance is different.  There’s a reason why “insurance” is synonymous with “risk management”.  Whatever you decide, make sure you can sleep soundly.

And to anyone who pays off their car loan, congratulations!!!!

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If you liked this post, check out these related posts:

Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have

Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart

Auto Insurance 101: Part 3 ~ What to Do With The Quotes Now That You Have Them

What you Can Expect From The New A La Carte Airlines

I wrote a few days ago about how To Explore the New World of Airline Travel You Need More Than a Map. Today I received an e-mail that shows I certainly am NOT the only one completely ever being nickel and dimed by the airlines:
NEW AIRLINE RULES

Attendant: Welcome aboard Ala Carte Air, sir. May I see your ticket?

Passenger: Sure.

Attendant: You’re in seat 12B. That will be $5, please!

Passenger: What for?

Attendant: For telling you where to sit.

Passenger: But I already knew where to sit.

Attendant: Nevertheless, we are now charging a seat locator fee of $5. It’s the airline’s new policy.

Passenger: That’s the craziest thing I ever heard. I won’t pay it.

Attendant: Sir, do you want a seat on this flight, or not?

Passenger: Yes, yes. All right, I’ll pay. But the airline is going to hear about this.

Attendant: Thank you. My goodness, your carry-on bag looks heavy. Would you like me to stow it in the overhead compartment for you?

Passenger: That would be swell, thanks.

Attendant: No problem. Up we go, and done! That will be $10, please.

Passenger: What?

Attendant: The airline now charges a $10 carry-on assistance fee.

Passenger: This is extortion. I won’t stand for it.

Attendant: Actually, you’re right, you can’t stand. You need to sit, and fasten your seat belt. We’re about to push back from the gate. But, first I need that $10.

Passenger: No way!

Attendant: Sir, if you don’t comply, I will be forced to call the air marshal. And you really don’t want me to do that.

Funny, to be sure. And I don’t really think we’re that farr off from that. Delta just announced they will be charging up to $50 per ticket as a fuel surcharge on frequent flyer award tickets.

Priceless…

To Explore the New World of Airline Travel You Need More Than a Map

Am I the only one who’d rather not be nickel and dimed by the airlines?

Even the most seasoned travelers feel like traveling neophytes as they try to keep track of all of the changing rules, regulations and fees the airline industry imposes on daily basis.

It’s a new world, folks, and things are changing minute to minute. Between fees for baggage and food and breathing their oxygen (well, not yet – but I wouldn’t be surprised if it’s coming!), it’s increasingly more confusing to do what once required no more thought than whether to bring the black shoes, the brown shoes or both.

Last week Husband drove son and I to the airport for our trip to New England, and before he got Son’s carseat out of the car I’d already experienced a problem.

I had read that Delta was not (yet) charging for a first checked bag. I had checked in online and told them we were checking two bags – 1 large suitcase and the carseat. Apparently I didn’t research enough because I thought the weight limit was 75 lbs, and I’d weighed it at home to make sure it was within limits. They weighed it right at the curb and came up with the same 54 lbs I’d gotten at home, and told me the weight limit was 50 lbs.

Greaaaaaaaaaaat.

Okay, I thought. How much is it for an oversize bag? For $15- $20, I might have just paid it. But no – they wanted to charge me $80 for four extra pounds!

As if. So, I opened the bag and took out a few things. One was my blow dryer, as I can borrow from my sister if I really need to. And it’s summer, so most days I just pull it back in a ponytail or barrette and my fifteen second hairdo is done.

I also slipped one thing into my carry-on bag, which I was loathe to do. My carry-ons were heavy enough. The one bag plus one personal item per person limits are being strictly enforced because of the new fees, so I usually have to finagle to pass muster. I have a large (but acceptable airline size) tote bag that I use so if needed I can put my handbag, laptop and camera equipment inside and still have room for more stuff. The downside is it gets heavy! I didn’t have to worry about finagling this time because there were two of us traveling, so we were allowed 4 items. But of course Son didn’t want to carry any of them…

So, adjust your travel budgets.  And try some of the following:

  1. Pack light. If you’re going somewhere you can do laundry you can really pare it down.  Mix and match wherever possible, be willing to wear your jeans twice, and use all of the space available (why not pack your socks inside your shoes?).
  2. Carry-on only. If you pack light you won’t even have to check a bag.  Just make sure the bag you take on board meets the airline’s size requirements, usually a total of 45 inches!
  3. Wear your bigger, heavier items. On this trip Son and I both wore our sneakers (even though it took an extra moment at security) and jeans and we each carried a sweater.  This makes more room in your carry-on or checked bag, and saves on the weight, too!
  4. Use lightweight luggage. My very good, sturdy suitcase weighs about ten pounds.  If I had a lighter suitcase I would have been able to bring everything I had to take out of my bag.  I’ll be looking for a large nylon duffel bag to use in the future.  And methinks luggage companies are going to be coming out with some nice new lightweight models!

It’s also good to know that they don’t count car seats,  strollers or wheelchairs as baggage for either checked baggage, and they don’t count and diaper bags as carry-on.  There are other exceptions, too, so check your airline’s baggage policy!

I also found this website, where a resourceful guy has promised to quickly update airline fees.

So today you probably won’t be able to bring both the black shoes and the brown shoes, especially if you’re going to need your sneakers, too. Choose one pair, and if the weight of y our bag isn’t a problem make them slip-ons. You’ll get through security quicker…

Why Buy Long Term Care Insurance? The Short Answer.

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.

Recently someone asked me what I knew about Long Term Care insurance, and whether or not I thought it was a good thing to buy.

The answers to that are a little, and yes.

Why buy it?

Because generally Medicare doesn’t pay for long term care. They only cover nursing home costs under very specific conditions for a very short period of time, and eventually they stop paying at all.

And most long term care isn’t as an inpatient in a nursing home, it’s at home for what they call “custodial care” or “activities of daily living” – toileting, bathing, dressing, eating, transferring (getting into and out of bed) and continence. Medicare doesn’t cover that at all.

Long Term Care Insurance (LTC) starts covering if you can’t do two out of the six activities of daily living for a period of (usually) at least 90 days. Coverage can also be triggered if you require substantial supervision because of a cognitive impairment (like Alzheimer’s). It can cover care at home, in a nursing home or in the community (i.e. Adult Day Care). You also have to be eligible and pay for services for an Elimination period (which you choose). You can also choose how long the policy will pay (usually 3 years, 5 years and lifetime).

Some people think they can just go on Medicaid. They can, but not unless they meet very specific guidelines on assets and income. Many people think they can just give their assets to their kids to protect them, but you can’t. There are HUGE penalties if you try to do this.

In my opinion LTC is very important if you want to protect your kids from having to foot the bill, and if you want to have an estate to pass on to them. Sure, you can sell your house to pay your expenses. Nursing homes cost about $150-$160 a day now, which is $55k – $58k a year. My grandmother was in a nursing home for twelve years before she passed.

Many people thing they don’t need Long Term Care because they have family that can take care of them.   But is that a burden you really want to place on them?  That’s a position I never want to put Son in.  He’ll want to, he’ll even do it, but what kind of life would that be for him?

And I never want my son to have to wipe my tushy.  Dignity is important to me, and it would already be a huge blow to mine to have someone else do that.  I would be mortified if that someone else was my son.

I want my son to live his life, not spend it taking care of me.

My Dad has LTC, thank goodness, and my Mom would qualify for Medicaid without having to divest any assets (the one advantage to her poverty). You can bet that my husband and I will get LTC, probably when we turn 55.

Either that or we’ll retire to Guam. If you have to be sick, might as well be sick in a tropical paradise.

Hospital Income Policy A Terrific Buy For My Family – How About Yours?

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. This is only a brief explanation of coverage. Modifications are applicable in some states. Coverages and programs discussed may or may not be available in your state.

Also know that I don’t work for State Farm any longer and am not being compensated in any way for this article. It’s just a good policy.

I love this policy. And them’s some strong feelings about an insurance policy. I promised you all I would tell you about it, so here it is.

I’m not sure if I’d have discovered this policy if I hadn’t been working for State Farm as an insurance agent. It’s not well publicized, but it can be a terrific part of anyone’s health insurance portfolio.

What is it?

If you’ve ever been hospitalized you know that there are expenses your primary health insurance just doesn’t cover. Additionally the inconvenience of simply being hospitalized means additional expenses for you and your family. Things like:

  • Deductibles and Co-insurance
  • Private Room and Private Duty Nursing Fees
  • Transportation
  • Child Care
  • Lawn & House Care
  • Meals Out
  • Pet Care

State Farm’s Hospital Income policy helps provide the money you’ll need to pay for those extra expenses when you’re hospitalized. It can offer you an ideal way to supplement your health insurance coverage.

If you are hospitalized for a covered injury or sickness (and really, there aren’t many exclusions) the policy pays the selected hospital income amount (mine’s $100/day*, but I wish I’d taken more!) for up to 365 days of confinement in a hospital.

One of the exclusions is for normal pregnancy and childbirth. However, complications of pregnancy and childbirth are covered. When I had Son I needed an emergency Cesarean Section, so my five day hospital stay was covered. Son had some minor complications so his stay was covered, too. He was automatically covered at birth as long as I added him to the policy (and paid the additional premium) within thirty days of his birth. It also covered his three day RSV induced hospital stay when he was 21 months old – the longest days of my life.

When Intensive Care is needed the policy pays an additional benefit equal to the hospital income amount not to exceed 14 days. So for me that means I get an additional $100 per day if I’m in ICU.

One of my former coworkers has a $200 per day policy. When her daughter was born six weeks prematurely she was in the pediatric intensive care unit for three weeks, then hospitalized another two. With her own hospital stay, her daughter’s hospital stay and the extra $200 per day she received for 14 of the 21 days her daughter was in intensive care my coworker received over five thousand dollars from her hospital income policy – enough so that she could stay home with her, unpaid, until her daughter was off a heart monitor and able to be placed in daycare so she could return to work.

Can you imagine the financial disaster she would have suffered if not for this spectacular little policy?

When Extended Care is needed the policy pays half the hospital income amount (so for me that would be $50 per day) for up to sixty days per calendar year while in a qualified Extended Care Facility. In most states extended care must begin within 14 days after at least a three day hospital confinement.

But that’s not all. And that’s not even my favorite part of the policy.

When you are injured accidentally the policy pays up to five times the hospital income amount (in my case up to $500) for x-rays or emergency first aid if received within 72 hours of the injury. If I have over $500 in emergency room or doctor costs, I get $500. If the bills are less than $500 I get whatever the bill amounts to.

I have used this portion of the policy many, many times. In the last ten years there have been at least three car accidents (none my fault!) that have ended in emergency room visits and one broken arm (on January 7th, so my $500 primary policy deductible had not yet been met). Each of those (and there may be more events I’m just not recalling right now) netted me $500.

There was also an incident, when Husband and I were trying to conceive Son, where I stepped wrong and broke a few toes. I wasn’t sure if it was just my toes or if my foot was broken, too, so I went to the ER (if I’m going to be in so much pain I may as well get paid for it!). I wouldn’t allow them to do X-rays (I could have been pregnant). The doctor assured me my foot wasn’t broken, taped my toes together and billed me $420. My primary insurance paid 90% (I’d met my yearly deductible, and my co-insurance was reduced because I went to an in-network hospital), so after paying my co-insurance I pocketed $378.

Isn’t that fab?

And if you have kids you know how often accidents happen. We’ve already collected from the policy twice for Son, including the incident last summer when he thought it would be fun to shove a rock up his nose. That sucker was wedged up there.

And there’s more.

When outpatient surgery is needed the policy pays the hospital income amount ($100 for me) for outpatient surgery not otherwise covered by outpatient benefits.

This is probably the part of the policy we’ve used most. Any outpatient surgery is covered. We’ve collected for all three of my colonoscopies and Husband’s one, his cardiac catheterization, three of my cyst removals, several mole removals, skin cancers. It even covers skin tag removal, which is so much of a nothing I’ve taken them off myself (isn’t aging sexy?).

So if I really needed some money one month I could, if I were so inclined, go to the dermatologist and pay my $25 co-payment, have her remove a skin tag or two and file a claim under my Hospital Income policy. I’d make $75 on the deal. And have fewer skin tags. Not that I’ve done that just because I’m short of money.

But I could.

Yes. I get paid to go to the doctor. Isn’t that smashing?

What else to like about this policy?

The benefits start from the first day of confinement. No waiting period!

The money is paid directly to you, unless you say otherwise. You decide how the money is spent. Use it to pay your deductible, you coinsurance or go on a trip to Tahiti. You decide!

The money isn’t taxable income. It’s insurance policy proceeds, so not counted as income (There may be some odd rule somewhere that I’ve never heard about that may make this taxable some minute fraction of the population, so please ask your tax advisor for a definitive answer. After all, if I wanted to know everything there was to know about taxes I’d have become an accountant like my father!).

Family coverage is available. You can cover just yourself, or add your spouse and kids. Remember that newborns are covered automatically as long as you notify the company and pay the premium.

It’s not expensive. We cover all three of us for about $280 for the year, and we’re oldish. The premiums will vary based on your age(s) and the policy amount chosen. I’ve not had a year yet that I didn’t collect more than I’ve paid. Of course if it was that way for everyone the company couldn’t offer it! Also know that the premiums can and do increase periodically as you age.

The policy is Guaranteed Renewable. Except in the event of fraud, material misrepresentation, nonpayment of premium, or expiration of the policy.

This policy is a great supplement to today’s high deductible plans, and also a great option for anyone with a HSA plan (State Farm also offers one of those). It should obviously not be your only coverage. If you have State Farm Auto and no other insurance with them you’ll also get a discount on your auto insurance for buying this policy.

You do have to medically qualify for the plan, and there are exclusions. The medical qualification is the only thing that keeps me from increasing our policy amount – with Husband’s diabetes and Son’s asthma we’d get denied. Dadgummit!

So call your local State Farm agent and get a quote. Even if you don’t have any other State Farm coverage. It’s definitely worth looking into.

Today I Went Shopping In My House for Tomorrow’s Garage Sale

I’m taking a break from getting ready to do another garage sale, this time at my sister-in-law’s house.

I’ve written before about how to have a successful garage sale, so I thought I’d jot down a few notes about what I’m doing today.

I had several things left over from our last sale, so all of those items have already been schlepped over to my sister-in-law’s house. That gives me a good start, but frankly much of that stuff is crapola, so if I got $20 for everything that’s already there I’d be surprised. If that was all I had to sell I wouldn’t bother schlepping.

Now you may be thinking, “But she just had a sale a few weeks ago. How much more crap can she have?”

Oh my. A lot, it turns out.

Over the past few days I’ve gone shopping in my own house. I’ve gone from room to room, selecting things I may like, but am ready to let go of. I went through the junk drawers and got rid of lots of junk, either in the trash or in a box destined for the garage sale. I also found a light bulb for our refrigerator, which was serendipitous because we just had one burn out a few days ago. I have no memory of the bulb burning out before this week, but it must have since I found a 2-pack with one missing. Good thing I looked, otherwise Husband would have made a trip to Home Depot tomorrow and I’d have two 2-packs with one missing from each.

Even though we just went through our drawers and closets a few weeks ago, we’ve done it again. I don’t know about you all, but I often am willing to let go of things on a second or third pass that I wasn’t willing to let go of on a prior pass. Ergo another pile of clothing sits ready to make the crosstown trek very, very early tomorrow.

Husband was supposed to go to my father-in-law’s airplane hanger, where we’d stored the last garage sale’s leftovers, and take them to his sister’s. Since I was already in the area I went and did that, while he went and took everything out of the closet we have under the stairs.

I hate that closet. While it’s great to have the extra storage in our closet-deprived home, Son and our dog are the only ones who can walk upright through the door or stand on anything but one’s knees. As a result it gets cleaned out only once every few years. One of the things that’s stored in there is my old PC – the one I bought less than a year before Husband moved in and declared us a MAC only household (well, at least until I got my laptop). It’s now eight years old, and though we were thinking of saving it and putting it in Son’s room when we move, at this point I think it’s time to just let it go. Sure, I didn’t get my money’s worth out of it, but you have to know when to cut your losses. Now it’s a frugal blunder AND clutter. Bub-bye!

Also going from under the stairs is a huge box of candles we’ve not opened in six years, some baskets, photo frames from my old office and crafts I’ll never do. I also cleaned out some junk boxes (methinks I have two many areas in my home whose first name is “junk”), and culled the rolls of gift wrap (which I keep in a kitchen-size garbage pail). Lots of recycling, lots of garage sale treasures. Do we know how to have fun or what?

Next I went through the drawers in all of the nightstands in the house. Heck, we may as well call them junk drawers, too. I have lots of half-used boxes of stationery, a few old hand-held games and piles of miscellaneous crap. More for the garage sale, more for the garbage.

Ahhh, I’m feeling good.

I almost forgot to look under the beds. Husband’s old drafting table lives under one, my grandmother’s antique headboard and footboard under the other. Which one do you think is going?

While I clean out my makeup and toiletry drawer (don’t we all get those great gift bags with a to-die-for eyeshadow but lipstick in such an awful color we wouldn’t even use it to write “flick me” on a sleeping drunk at a party?) I ask Husband to go through his desk. I come away with a box of treasures, he comes away with a pencil.

Sigh.

Things are well in hand. Then I take another walk through the house, my goal being to take ten more items from every room to sell at the garage sale. Our Eiffel Tower clock has chimed it’s last minuit. The kitchen was easy – I just opened the utensil drawer and removed everything I’d not touched in the last three years. Except the Mickey Mouse egg forms. Son will love them. But at least now I remember that I have them.

I have Son’s toys to go through and then I’ll call it a night. Tomorrow morning I’ll get up before the crack of dawn, go through the house and find five more things to sell and head on over. We always have such great fun, and I’ll be exhausted at the end of it. I’ve limited myself to one box coming back into the house, as I always throw a few things in the box with the disclaimer, “if I get the price I want I’ll sell, otherwise back it comes”. One box. That’s it. The rest will go to Women in Distress.

And on Sunday I’ll start collecting things for the next garage sale. We’re going to be doing a two-weekend sale at my Dad’s after he decides what he’s taking to the new condo. Whoppee!

Too Much Clutter? 20 Tips for a Successful Garage Sale

I love garage sales. I love going to them, and I love having them.

If you’re lucky enough to live in a warm climate garage sales are possible all year long. PaidTwice has told me before that she’s jealous that I can take advantage of garage sales all year long. I can understand that. The garage sale season for the rest of the country is starting soon, so it’s time to start preparing!

Our little community only allows one per year, but it’s a doozy. Ours was today, and I was ill-prepared due to illness and procrastination. That said, I made $130 on stuff I would have donated or Freecycled anyway, so it’s all good.

Here are my tips for a successful garage sale:

1. Gather goods all year. Keep a box on each floor of your house, or even in each closet. When you run across something that no longer fits, or you no longer want or need, toss it in the box. Clean or repair things first; it’s much easier to do this as you go than to try to spend the night before the sale doing it for everything! When the box is full close it up, mark it “garage sale” and store it away.

2. If it’s of value, try Craigslisting it first. Garage sale shoppers are looking for real bargains. I try Craigslist first. If I’m unsuccessful then it goes in a garage sale box.

3. Don’t assume no one will buy it. Husband had a nasty, moldy shower shelf thingy in his old house. He was sure no one would buy it and wanted to toss it. I got $2 for that sucker. I’ve sold half-burned candles, wagons with broken wheels, games missing parts, single earrings… Never underestimate the garage sale buyer.

4. Choose a date and time. Not too cold, not too hot. Make it just right. And understand that people will start coming about 1/2 hour before the time you advertise to start it, so plan accordingly.

5. Recruit friends and neighbors to join you. Being able to put multi-family or community-wide in an ad or on a sign will absolutely get more people to your location. When I’m planning my garage sale route I always choose these before I visit any single-family sales.

6. Call your city to find out if you need a permit. Getting a citation would sure eat into those profits. Also ask if there are any special ordinances or rules about putting up signs. Some municipalities dictate where/when you can and cannot post them.

7. Advertise. Placing an ad in the newspaper brings people, and if you are doing a multi-family sale and splitting the cost it’s a good investment. That said, I’ve had plenty of successful garage sales just placing signs at major intersections and placing free ads on Craigslist and other garage sale forums.

8. Put up signs, and lots of them. Put some up the week before, if possible, at least in front of your house. Use black ink on a bright background. Make sure the letters are large and thick enough to be easily read from a car. Put as little info as possible while still getting the point across. I usually just put “Garage Sale”, Sat 8-12 and a large arrow pointing the way. Put up enough signs on the route to your house so people don’t wonder if they are lost. I can’t stand it when I can’t read a sign, or all it includes is the address. Often times I’m not familiar enough with a neighborhood to find it just by the address, so I don’t go. If you like, attach balloons to the signs, but make sure they don’t block drivers’ views.

9. Get change, plastic bags and newspaper. Nothing is more frustrating than having a customer with cash in hand and not being able to make the sale because you don’t have change. I usually get $30 in singles and $20 in fives plus a roll of quarters. I don’t bother with smaller change. Also save your grocery or other shopping bags, and have newspaper on hand to wrap breakables.

10. Don’t price anything. I know, this goes against popular wisdom. Every garage sale how-to article I’ve ever read tells people to price everything. I never do. First, I don’t want to work that hard. Second, I like to be able to change my prices on a whim. Sure, it gets hectic at the sale sometimes, but they’re hectic anyway. Besides, no one pays the price marked; everyone wants to haggle. At least here in Florida. Seriously, I can count on one hand the number of times people paid the first price I quoted, and then I think I asked too little.

11. Organize your stuff. Put like things together by category; tools, toys, clothing, home decor. You can do this in advance to save time the day of the sale.

12. Have plenty of tables. People don’t like to bend. If you have everything at table height people will buy more.

13. Merchandising counts. Make your stuff look nice. Wipe off any dust and arrange as prettily as possible. If you hang clothing you’ll get more for it. Place premium items (brand new items, large tools, baby items, nice furniture, etc) close to the street so people can see them from their cars. Put most clothing on hangers and hang them from a clothesline strung from trees or from your garage ceiling near the door (or on a clothes rack if you have one). You’ll get more money for them. They’re also easier to look through, and you won’t have to worry about refolding them on the table.

14. Have giveaways. I always have little trinkets to give the children of shoppers, and I’ll often toss in some little thing for free for customers who buy a lot. I get lots of good feedback from that.

15. Set up a refreshment table. Because ours is a community sale I always sell coffee, water, sodas and some type of homemade baked goods. My banana bread is always a big hit. I’ve made a nice profit on these items. If you like you can also offer coffee and cookies free – it’s a nice touch.

16. Be an active seller. Running a garage sale is a lot like working at a retail establishment, so bring out the salesman (or saleswoman) in you. Greet your customers with a friendly smile as they arrive. You want people to feel comfortable at your sale, so greet them as you would if you were a business owner. Tout your wares proudly. Offer package deals (if a person buys a blender, for example, why shouldn’t they buy those margarita glasses as well?), and reward big buyers with bulk discounts. Don’t just hope things sell themselves.

17. Negotiate with hagglers. When asked the price of something I always say it’s more than I’m willing to sell it for. Play along; haggling can be a fun experience, and you’ll likely make a lot more sales if you’re willing to reward these bargain hunters. Don’t be afraid to decline an offer, but consider all offers. After all, you’re trying to get rid of this stuff.

18. Offer last-minute deals. If you’ve still got things left over during the final scheduled hours of your sale, go ahead and slash prices. Offer buy-one-get-one deals or bulk discounts. Do everything you can to make the sale, especially if you plan on throwing away or giving away the items anyway.

19. Don’t bring anything back into the house. Donate or give away whatever is left. If you donate the items you can get a tax deduction. If you don’t want to schlep everything somewhere put an ad on Craigslist of Freecycle telling people that everything at your curb is free, first come, first served. I have to admit that I occasionally break this rule, like today. My sister-in-law is having a garage sale in two weeks, so I’ll take what I didn’t sell today over there. But it’s still a good rule.

20. Take down your signs and clean up. Your neighbors will appreciate it.

Now you can count your money in your less-cluttered home.

Auto Insurance 101: Part 3 ~ What to Do With The Quotes Now That You Have Them

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.

This is the third installment of a series of articles about Auto Insurance. You may want to read Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have and Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart before reading this article.

Okay. You understand what you have and you’ve shopped smart. Now it’s decision time.

Here are some things to consider as you look at the quotes.

1. These are only quotes. The insurance company is under no obligation to give you the rate quoted if you aren’t eligible for it, even if you get a binder of coverage. If the agent made an error, or if you forgot to tell them something that would affect the rate, the policy could be canceled or you could be offered a policy at a higher rate.

2. Make a decision well in advance of your own policy cancellation. If you’re switching companies get the new policy written as soon as possible. Most companies will allow you to do the policy 30 days in advance of your current policy’s expiration and have it be effective on the expiration date. That gives them and you 30 days to decide if you really, really like each other.

3. Don’t tell your old company you’re not renewing until after the new policy has been issued as quoted. That way if there is a problem you can continue with your current policy and the only things you’re out is your time and aggravation. If your old company does not give a grace period make sure you don’t have a lapse in coverage.

4. Longevity counts. The longer you are with a company the more favorably they’ll look upon you, and that translates into savings. Some companies will “forgive” (not raise your rate or cancel you) for a first accident if you’ve been with them X number of years. Some will reconsider cancellations for multiple claims. I’m not suggesting you stay with your original company if you’re going to save a considerable amount of money, but decide for yourself how much of a savings is worth losing the benefits of longevity.

5. This isn’t a one shot deal. Even if you can’t save a bundle this time, try again in six months, or a year, or when it’s been three years since your last accident or ticket. Just like medical checkups keep you abreast of your physical health, insurance checkups should be a part of your financial health plan.

Another thing.  I did speak in Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart about how rates are cyclical.  I wanted to bring it up again because I cannot tell you how many times people would cancel policies with us to go to another insurer, only to come back six months later because the company had raised their rates significantly.  They didn’t always qualify for the rate they had enjoyed with us before.  Now you can’t plan for everything, but this again is another reason you have to decide the magic number that makes a switch worth the risk.  To you.

Even if you change nothing, you know more than you did. That’s almost always a good thing.

Good luck!

If you liked this article check out the rest of the Auto Insurance 101 Series, and check out ways to Stretch Your Dollar.

Auto Insurance 101: Part 2 ~ 10 Tips for Shopping Smart

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.

This is the second installment of a series of articles about Auto Insurance. You may want to read Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have before reading this article.

Now that you’ve read Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have and have spoken to or met with your insurance agent, you’re almost ready to shop.

Before you get on the phone or start surfing the web, here are some important things to remember when shopping for auto insurance:

1. Know who you’re talking to. Ask the agent you’re speaking with about their qualifications and experience. How long have they been selling insurance, and how long have they been licensed? What types of insurance are they licensed to sell? In all my years as an insurance agent no one ever asked me this, and it just shocks me. I will always ask this question of insurance agents, doctors, attorneys, etc. You want someone who knows what they’re talking about, don’t you? It takes at least a few years to become familiar enough with just about any vocation to be able to understand nuances, and to see the bigger picture of how one decision affects another. Don’t be embarrassed to ask to speak to someone with more experience.

2. Compare apples to apples, as closely as possible. This is probably the most important thing to remember. Spending our time calling around without getting the same quote for the same coverages will not help us make an accurate comparison, so it’s a massive waste of time. Sometimes companies may offer slight variations in the same type of coverage. Company A may offer Car Rental coverage of 80% of the daily rental up to $500 while company B offers $25 a day up to $400. Another example: in Florida insurers are required to waive the deductible for windshield replacement for those who carry Comprehensive coverage. My company extended the deductible waiver to any glass breakage (side windows, mirrors) while other companies did not. Make sure to ask about and note these differences.

3. They’re likely going to check your credit. No matter your feelings on the validity of the actuarial process, most insurers will factor in your credit rating when quoting insurance. People with better credit will get the batter rates, period. Another reason for fiscal responsibility. Be prepared to give your social security number, and try not to take it out on the agent. They don’t make the rules. Also know that while an insurance inquiry doesn’t have the same effect on your credit rating as a credit inquiry, it is still an inquiry. If it didn’t affect your credit rating at all, they would have told us to tell you that it had no effect. They didn’t.

4. Financial strength counts. Their fiscal responsibility counts, not just yours. A good balance sheet not only reassures you that they will be able to make claims, it also suggests that the company is managed well. Personally, I’d only go with a company rated A or better by a rating company such as AM Best.

5. Reputation counts, too. If a company has a bad reputation for either claims or customer service, don’t bother getting a quote. That’s just a headache waiting to happen. That said, no insurance company has only happy insureds. People get angry when their claims don’t get paid, even if the insurer is completely justified in not paying it. That’s another reason it’s so important to know your coverage.

6. Consider the advantages and disadvantages of the different ways you can buy insurance.

  • Captive Agents – sell policies for (usually) only one company, and usually a major insurer (State Farm, Allstate, etc.)
  • Local Insurance Brokers – sell policies for many different companies, some larger, some smaller (Progressive (also sells direct), Integon_
  • Direct Insurers – sell directly to the consumer (Geico, etc.)
  • Internet Brokers – gather your information and get quotes from several insurers at once, without having to speak to anyone (Insweb, etc.) Some captive agents’ companies and direct insurers also allow you to get quotes online.

Personally, I want an agent. I want someone I can go see if there’s a problem, and someone who can go to bat for me, if need be. Agents want to keep you happy. They only make money if you stay with them and pay the premiums. Often times an agent can get a claim paid, or get a cancellation rescinded. Last month my mother got a cancellation notice from her insurer, as she’d had 2 claims in a year. I called her agent and they were able to call the underwriter and get her another chance. Direct insurers can be great, but it’s hard to create a relationship with them. They are just a voice on the phone. That doesn’t mean you shouldn’t get a quote from them, but it’s something to keep in mind.

I’m going to do an entire article on the pros and cons of each of these, so look for it soon!

7. Know if the insurer is a stock company or a mutual company. Unlike a stock company, a mutual insurance company does not offer shares of stock on public exchanges. Rather, it is operated and maintained for the benefit of its members, or policyowners. All policyowners have the right to vote for the Company’s Board of Directors and to receive a fair share of the dividends declared by the Board each year. In a stock company, by contrast, any dividends are paid first to shareholders, and only after to policyholders. Not a huge deal, but having stockholders sure can affect a company’s policy decisions. And it’s always better to know than not to know.

7. Rates are cyclical. Even assuming nothing changes in your driving or claim record, rates go up and down. That’s because rates are also affected by what all insureds are doing, not just you. Insurance is all about sharing the risk, so if there’s lots of claims in your area you may see a spike in rates. And if they have a good year you may see the savings via rate reductions or dividends. I’ve gotten dividends on my auto policy many times from my mutual insurer.

8. Don’t assume that the big, “preferred” companies will have the more expensive policies. And don’t assume that the smaller ones do. You may be surprised.

9. If they won’t sell you the policy you want, call another agent. Some agents set “agency minimums”, setting a policy that they won’t sell any auto policy that doesn’t  have, for example, at least 100/300/100 liability limits. Whether they can/should or cannot/should not do this is a matter for someone else to debate. If you want lower limits than what they’re willing to write, ask if that’s an agency policy or a company policy. Or just call another agent.

10. Two quotes from different agents from the same company for the same coverages with the same deductibles should always be exactly the same. To the penny. If it’s not then something is wrong. Perhaps one person has mis-classified how you use the vehicle, perhaps they rated you in the wrong territory. You need to find out what.

Also, if you have a child that will be driving in the next few years you may want to get some quotes for adding them to the policy when the time comes. Few people are really prepared for the sticker shock of adding a teen driver to the policy. Sure, the rates will change, but it gives you an idea. The more time you have to prepare the better.

Okay, you’re almost ready. Before you begin, make sure you have your Declarations Page (which lists all of your current coverages) in front of you. Also have the quotes for different coverage and deductible options that you may have gotten from your current insurer, and any notes you may have taken while speaking with your agent.

Once you’ve got all the quotes, check out Auto Insurance 101: Part 3 ~ What to Do With The Quotes Now That You Have Them, to be published tomorrow. And good luck!

If you liked this article check out the rest of the Auto Insurance 101 Series, and check out ways to Stretch Your Dollar.

Auto Insurance 101: Part 1 ~ Before We Shop Let’s Understand What We Have

The following information is not advice, it’s just my thoughts and opinions. I’m just a girl on the web, not currently licensed in insurance or anything else in any state. You should absolutely seek the counsel of an insurance agent licensed in your state before taking any action at all. Coverages and programs discussed may or may not be available in your state.

I read an interesting article over at Single Guy Money about Auto Insurance. He has some great tips about making sure we’re getting all of the discounts we’re entitled to, and encouraging us to shop around for the best rates.

As a retired insurance agent, I thought I’d give my perspective. In fact, I’d been meaning to do a series on different insurance topics, but I’ve been more interested lately in talking about things like politics, conserving water and my husband’s new computer. But I digress.

This is the first installment of that three part series.

Before we shop around for auto insurance we should make sure we are being charged correctly for our current policy. We want to make sure that our current insurer is rating us correctly, both in our usage of the vehicle and the discounts we’re getting. So, let’s pull out our Declarations Page, call or visit our current insurance agent and ask the following questions:

1. What are my current coverages? Sometimes Declarations Pages aren’t so easy to understand. We not only want to know which coverages we have, we want to know what they do for us.

2. Are any of these coverages possible duplications of coverage I have elsewhere? Although they can’t really answer this question for you, they can help you figure out if you do. Do you have AAA? Then you may not need their coverage. Or their coverage may better suit your need. Have excellent, broad health insurance? Perhaps you don’t need Medical Payments coverage, or perhaps you should keep it if you often transport your friend who has none. Don’t work? Then you might not need the lost wages coverage under your Personal Injury Protection.

3. How do you show me using the vehicle? Is it rated as going to and from work, or for pleasure driving only? Most insurers only ask about your usage of the vehicle when you first take out the policy, so if you’ve had a change in your circumstances (changed jobs, stopped working) then chances are you’re not being rated correctly. Realize, though, that they could be undercharging just as easily as overcharging you.

4. What are my current discounts? Every company has their own discount programs. These discounts are applied after they’ve already given us the base rate. We need to ask them about all of the discounts they offer, and how we qualify. Some common discounts are:

  • Multiple Policy – having more than one car insured with the same company
  • Multiple Line – having more than one type (auto and homeowners, for example) insurance with the same company
  • Accident Free – not having a claim for a specified period of time with that company
  • Good Student – typically a 3.0 or higher GPA, usually as a full time student, and only up to a certain age
  • Vehicle Discounts – Airbags, alarms, VIN etching
  • Defensive Driving Discount – voluntarily taking a defensive driving class
  • Age-based discounts – Over 50 , single head of household (my company rated young single parents that lived on their own as if they were over 30 – a huge savings)

Now that we know our policy is rated correctly, let’s get quotes to make some changes. We may or may not make any changes, but let’s make sure we’re getting the most bang for our insurance buck.

1. Get quotes to raise deductibles on any coverage that has one. Find out how much can be saved by going to the next highest deductible. For example, if the current policy has a $250 deductible for Collision, get quotes for $500, and perhaps even $1000. Then weigh the savings against our ability to pay more out of pocket and our risk tolerance. I know lots of people who take high deductibles on everything, take the savings and put it in the bank in a “deductible fund” so the money is there if needed.

2.Get quotes for more and less Bodily Injury and Property Damage liability coverages. Get quotes for at least one step up and one step down from where we are now. For example, if the current liability limits are 50, 000 per person/100,000 per accident get quotes for 25,000/50,000 and 100,000/300,000. If we can double our coverage for, say, $50 more per year – and we have assets enough that we could use that additional protection, would that be worth it?

Okay. Now we’re ready to talk to other insurance companies. That’s the subject of Part 2 of the series, so look for it soon!

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