In case you are caught being drunk behind the wheel your insurance rates will increase and you will most probably learn about a thing known as SR-22 to many. And it doesn’t matter what it’s called in your state – driving while being under influence or intoxicated – the result is the same. Your insurance rates rise dramatically even before you can actually drive a vehicle again.
The laws are different
Different states have different penalties regarding drunk driving, but in all states you will be denied of the right to drive for a period of time (starting with 30 days to 12 months). And in order to get your license back and drive again most states require you to present SR-22 form proving availability of necessary auto coverage. Such form can be presented by the insurance company unless your policy is lapsed, canceled or terminated.
Premiums will rocket sky-high
When time comes for taking the SR-22 form from your insurance company, the company will automatically put you in the “high-risk driver” category, which eventually means that your rates will go up. And by “go up” we mean double or even triple according to state you’re registered in. Of course, you can shop around as there are insurance companies with “high-risk” specialty.
SR-22 policies are not that accessible
Certain companies do not provide SR-22 insurance coverage, and if you’ll require one from them after being convicted in drunk driving, they are likely to cancel your policy. It will require you to address a company that provides SR-22, however your premiums will still be higher because you will already have a history of policy cancellation. However in some states, insurance companies have no right to cancel your policy before its term expires. So check your local laws to know better.
How long will it last?
This also depends on the state you live in, but the usual picture is that you will have to pay higher premiums for at least three years after being convicted. And if you’re caught driving under the influence again there will be more serious penalties.
It also depends on the condition you’ve been in while driving. In most states there are stronger penalties for increased alcohol blood levels, passengers (especially kids) in the car, damage to property or injury to people done and other factors involved. Read the rest of this entry »
For most of us purchasing a home is the biggest investment to mike during the whole lifetime. And it’s reasonable that such an important investment needs reasonable coverage. That’s why you need homeowners insurance.
What’s included in homeowners insurance?
In case you finance your house purchase through a mortgage, your lender is most likely to require you buying basic homeowners insurance. The basic homeowners insurance includes coverage against the following risks:
- Theft
- Fire and lightning
- Smoke
- Frozen pipes
- Ice and snow
Basic insurance policies also include liability coverage for cases when someone is injured in your house. In case there are legal actions taken against you it will also pay for court fees. Basic insurance will also cover your costs in case it’s impossible to live in the house due to fire or any other damage.
What’s left out of coverage?
To learn what is not included into the coverage you should read through your policy, especially the Exclusions part. Things not covered by standard policies vary from one company to another, but most likely they will include damage due to earthquake, flood, nuclear accident, war, act of terrorism and similar. Still, you can purchase additional coverage for such events to be included into your home insurance policy. Wear and tear damage is never included into the policy because it’s considered to be maintenance, which is the owner’s sole responsibility.
How much coverage do I need?
When buying a house through mortgage loan your lender will require you to purchase minimum home insurance coverage (which is usually the purchase value of your home). However, it’s usually not the amount of coverage to meet your insurance needs. Instead, try calculating how much money it would require to rebuild your house entirely and use this amount as the base for getting the right coverage amount. Speak to your agent when completing the insurance policy to calculate the exact amount, or even run a full inspection for qualified appraisal. Read the rest of this entry »
Let’s leave the politics of healthcare reform to one side and focus on a proposal to change the law to allow free market competition between insurers in different states. A policy consistently mentioned by the Republican party is to break the state monopolies in the insurance market. Since the 1800’s, the individual states have claimed the sole right to regulate the sale of insurance within their own borders. Each state has asserted the right to license insurance companies and to set the terms on which they can conduct business. This has led to a patchwork of different sets of regulations with each state creating unique laws. In turn, this forces an insurance company to set up separate subsidiaries to trade in each state. No licensed company can sell a policy to someone who has a residence in another state. There was a brief moment in 1944 when a decision of the Supreme Court allowed the possibility of federal supervision. But the lawmakers in Washington immediately changed the law to retain state control. Why is this a bad thing? The national insurance companies have divided up the states between them and choose not to compete against each other. This keeps the number of insurance companies in each state artificially low and, because there is no real competition, premium rates are higher than they should be for weak policy terms.
You are reading this article on the internet. When online, you can buy more or less any product or service across state or national boundaries. Although there are some restrictions, e.g. some states limit your right to import drugs from foreign countries, there is an almost free market where you can search for the cheapest price and buy whatever you need. There is no possible economic justification for retaining this historical privilege for insurance companies. All it does is preserve their ability to maximize their profits at your expense. For example, in Minnesota three insurance companies dominate 80% of the market for health plans. There is no doubt that, if more companies entered the market, the premium rates would fall. During his run for President, Senator John McCain was in favor of free markets for health plans. President Obama supports it and the proposal is in both versions of the healthcare reform bills currently stalled in Washington. But because the Republican party’s only policy is to oppose everything the Democrats propose, it seems even this simple change in the law may be lost. What will the result be? The anticompetitive behavior of the insurance industry will continue and you, the consumer, will suffer. Read the rest of this entry »