Before You Buckle Up: Insurance Tips for New Drivers

For new drivers, earning that license may seem like the biggest challenge when it comes to driving. However, obtaining the right car insurance is another obstacle many drivers don’t consider. These tips will help you keep in mind all you need to know about car insurance as a new driver.

Consider Your Car Insurance Coverage

If you are driving a car that is registered in your name, you likely need car insurance. It is the law in most states. However, there are several different types of coverage. Understanding all of the coverage types is the first step in determining the type or types of insurance that will best meet your needs.

Liability insurance is the most frequently discussed type of insurance because it is required in most states. It covers the cost of both injuries to other parties and property damage in the event of an accident. 

Personal injury protection is the car insurance that will cover the cost of your medical expenses as the driver whether you are at fault for the accident or not. This coverage will also cover your passengers. 

Uninsured motorist insurance is sometimes overlooked. While most states require insurance, in the event that you are in an accident and the driver of the other vehicle does not have insurance, this coverage can cover your medical expenses and also the cost of any vehicle repair. This insurance is sometimes required, but it can vary from state to state.

Collision and comprehensive coverage is an optional coverage because it only addresses your vehicle. Collision covers the cost of repair or replacement should an accident occur. If your vehicle is damaged through other means, such as a natural disaster or vandalism, comprehensive coverage will cover those expenses. Though these types of insurance are not required by law, if you have an auto loan, you are often required to carry these types of coverage. 

Other coverage options include towing, roadside assistance and rental car coverage. With any type of coverage, it is essential each driver read the fine print to understand what is and isn’t covered.

Determine Your Coverage Needs

Your coverage needs are determined, at least in part, by the state in which you live and whether or not you own your vehicle. Researching state-by-state requirements and understanding what those requirements mean is important. For instance, if your state requires 20/40/15 coverage, that means you have to carry an insurance policy that will cover $20,000 worth of medical expenses per person, with a total coverage payout of $40,000 in medical expenses. That coverage also requires you to have $15,000 worth of property damage coverage. In addition to state minimums, if you’re still paying off your vehicle, the loan company will likely have insurance coverage minimums for you to follow. 

Beyond those requirements, your coverage needs may also depend on your risk tolerance. Many people feel that the state minimums are not enough. You can be sued for any additional expenses not covered by your policy making additional coverage a good idea. Any damages you are held liable for can come out of your bank accounts, your assets or even your paychecks through wage garnishment. 

Combat Premium Costs

Even if you choose to carry more than the minimum coverage, there are many ways to reduce your premium cost. When you establish your insurance policy, it will come with a deductible. The deductible is the amount of money you are responsible for paying out-of-pocket before your insurance coverage begins. Based on yours savings or your current income stream, you may opt for a higher or lower deductible. If you opt for a higher deductible amount, your monthly premiums will be lower. But you will feel more of a sting should you need to use your coverage. 

In addition to adjusting your deductible, there are other steps you can take as a new driver to lower the cost of your insurance premiums.

    • Shop around. As a new driver, working with a company such as SelectQuote you can get multiple quotes with one call to (855) 777-6090.  It is great way to compare rates on the same level of coverage. And you can always start by visiting us online at Www.bondinsurancegroup.com.
    • Consider how often you pay. Many insurance companies offer discounts to drivers who pay their insurance for the whole year in single or twice-yearly payments. 
    • Build your credit score. Your credit score impacts your premium costs. Establishing several lines of credit, paying your bills on time and keeping your overall utilization ratio low can go a long way to keep your credit score healthy.
    • Inquire about discounts. Insurance companies offer a variety of discounts based on everything from clean driving records and anti-theft devices to good grades and defensive driving courses. Ask specifically about all of the different discount options that an insurance company offers. 
    • Bundle your policies. If you find yourself in a position where you need to insure multiple cars or carry multiple types of insurance (renters, homeowners, etc.), you may be able to obtain a discount for bundling or purchasing all of your coverage from the same company. 

In the Driver’s Seat

Understanding all the requirements is a starting point for how much insurance each new driver needs. From maintaining a clean driving record to paying your bill yearly, there are  ways to make additional coverage more affordable. It’s peace of mind for your wallet and peace of mind as you get behind the wheel. 

 

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Questions to Ask When Financing a New Car

If you’re like most Americans, you don’t have $36,270 (the average new car price) saved up and burning a hole in your pocket. However much or little you have saved toward the purchase price, you’ll need to finance the rest. 

Once you reach a deal, it’s time to talk financing. Knowing what to ask will determine how much or how little will be added to that purchase price. 

Where Will You Get Your Financing: Bank or Dealer? 

There are pros and cons to either option, and lots of exceptions. You can’t beat dealer financing for convenience. But sometimes a bank or credit union can beat a dealer’s interest rate, especially if you’re an existing customer. Check your bank’s auto loan rates before you visit the dealer. 

How Much Will You Put Down?

This is another question to ask yourself before you start car shopping. Dealers prey on the unprepared. Put down as much as possible, ideally 10 percent to 20 percent. It will save money you over time, no matter the rate or terms (number of monthly payments) of your loan. 

What Is the Dealer’s Price?

The price on the sticker isn’t always the price you end up paying. Most dealers have a healthy profit margin built into that MSRP (manufacturer’s suggested retail price). Research and find the “invoice price” from resources like the Kelley Blue Book, Edmunds, NADA Guides or TrueCar. Find the vehicle’s identification number (VIN#) when you’re browsing the dealer’s website—again, before you visit in person. This will help you negotiate the best price final price, and the amount you’ll have to finance. Once that price is negotiated, get it in writing before you sign anything or even talk financing. 

What Is the Dealer’s Best Financing Rate?

Unlike a bank, auto dealers can negotiate interest rates, usually based on how many years you want to finance, how much you’re putting down, whether you have a trade-in, manufacturer rebates, your credit score and the agreed-upon purchase price. Sometimes it even comes down to the model of vehicle. Yes, some dealers can offer 0 percent financing on certain new vehicle models if you have good enough credit. Hard as it may be in the moment, get a written quote and shop it against other dealers for the same make and model. The extra time and effort could mean thousands of dollars in your pocket. 

Should You Get an Extended Warranty?

Most buyers don’t fall for the classic “undercarriage rust protection” gag. It has been replaced by the extended powertrain warranty pitched by most dealers, especially for used cars. This can extend the coverage above and beyond the manufacturer’s standard warranty, which is typically stated in years or miles. Check your make and model’s performance and quality history. If it is prone to engine, transmission or drivetrain issues, an extended warranty might make sense. If not, don’t fall for the “if the computer chip fails, you could be looking at $3,000 repair” line. 

Should You Buy Gap Insurance?

Be prepared to field this question right after the extended warranty discussion. Gap insurance covers the gap between what you owe on the car versus its value should you wreck the thing in the first few years. If you put down 20 percent, you’ve most likely covered the depreciated value the moment you drive it off the dealer lot. However, if you put down less than that, or rolled in debt from a previous loan, sales tax and/or insurance into the financing, gap insurance may be worth the extra cost. A lot of variables come into play. Follow these helpful guidelines. 

Should You Add Sales Tax, License and Tag Fees Into the Loan? 

If at all possible, no. Remember, every dollar you add to the final amount financed, the higher your monthly payment will be. Don’t forget to estimate these costs when determining how much you can come up with for a down payment. 

Most of these questions are ones to answer before you set foot on the car lot. The fewer questions you have to ask the salesperson or finance manager, the fewer ways they have to manipulate the answers—and the final transaction—according to their best interests rather than yours. 

Renting Cars Through an App and How It Impacts Insurance

Most cars stay parked more than they roam the road throughout most of their lifetimes. Seems like a waste. What if, simply by using an app, you could not only get additional use from your car, but also make a little money on the side? Perhaps to help finance the payments or insurance, take a trip or just to save some extra cash? Copying business models similar to those of Uber and Airbnb, peer-to-peer car-sharing services use apps to make this happen for folks across North America and the world.

What do you need to know about any rules, regulations and insurance before trying to turn your extra vehicles into cash cows?

Why Peer-to-Peer Sharing Appeals to Users

Peer-to-peer car-sharing companies such as Turo and Getaround appeal to customers for reasons of convenience, value, variety and location. Peer-to-peer renters can bypass busy airport counters and all of the paperwork processing that can lead to frustration and delays. Prices for renters can be lower substantially lower, too, in part because peer-to-peer companies require much less overhead. Obtaining a vehicle can happen without the two parties ever meeting in person. 

Customers using apps to rent cars potentially enjoy other advantages: Peer-to-peer and specialty companies can offer a more distinctive array of vehicles. Want to provide the experience of a lifetime? Rent someone your Ferrari or Rolls! Depending on how much your car is worth, renting it out could net you thousands of dollars a year. 

Peer-to-Peer Car Sharing Is Not Widely Regulated – Yet

Only a few states have begun to regulate peer-to-peer car-sharing companies. How to collect sales tax, the use of airport property to store the autos and how to safeguard with auto insurance coverage, as big car-rental companies must do by law, is still developing. But more states every day are moving to protect the interests of consumers and the established rental-car giants. States such as New York, Maryland, and California have moved more quickly to regulate peer-to-peer companies. Illinois has legislation pending, as reported in the Wall Street Journal, that would change the definition of what it means to “rent.” If passed, the effect on consumers could mean higher prices at peer-to-peer companies.

How Are Cars Insured?

Turo offers an extensive protection plan through Liberty Mutual, but hosts can substitute their own commercial insurance if they prefer. Turo’s premium plan covers $1 million in liability. It’s also possible for the renters to use their own insurance. 

If something goes wrong — from insurance claims, to accidents and breakdowns, to late returns and missing vehicles — how a host chooses to insure will change how the issues are addressed. And as this model becomes more prevalent, you can expect additional attention on how insurance works with peer-to-peer car sharing. 

In the Driver’s Seat: Understanding Auto Insurance For Business

For many companies, business depends on cars. This is true whether the business is a sole proprietorship or a corporation with hundreds of employees. When it comes to insurance needs, the type of policy can vary widely.

It all depends on the type of business, who owns the vehicles, who’s driving them, and how often. 

Coverage Needs

In most states, business vehicles require liability insurance for both bodily injury and property damage  that may result from an accident involving someone from the company. Many states also require uninsured/underinsured motorist coverage and/or personal injury protection (PIP). If the business owns or leases the vehicle, physical damage coverage is also often purchased.

The typical insurance policy that covers your business operations—a Business Owners Policy (BOP)—does not cover vehicles. A separate policy is needed for autos. In most cases, it will be a Business Auto Coverage Form (BACF).

The BACF doesn’t require the same level of coverage for every vehicle your business uses, however. You can “schedule” them separately, choosing different coverage levels for different vehicles depending on need, but all under the same policy. For example, why get the same $30,000 collision coverage for a beat-up work truck that you would for the brand-new one in your fleet?

Personal Versus Business

Depending on the type of business you own, the vehicle use required and how much the business is worth, you may be fine with your personal auto policy and the policies your employees carry. Personal policies do cover some business use. However, they won’t cover vehicles owned by the business. Personal “umbrella” policies won’t either. 

If you or your employees are driving personal vehicles for business, be sure all of you have sufficient liability coverage to protect the business in the event of a serious auto accident. If the coverage limits on each personal policy add up to less than what your business is worth, a victim’s insurance company will likely sue your business. 

A minimum of $500,000 in coverage is the recommendation for small business liability protection, which typically only a BACF can provide. Even a very small business can secure $1 million in protection for a slightly higher premium.  

Generally speaking if the business owns, rents or leases vehicles, the driver should be covered with a business policy. If no vehicles are owned/rented/leased, personal policies may suffice. It all depends on coverage limits versus the value of the business. 

There are many variables and nuances in determining the right auto coverage for your business. It’s best to talk with a Bond Insurance Group licensed insurance agent who will help you determine the coverage you need. Much depends on who will be driving the cars, whether you own, rent or lease; and if you and employees are likely to be driving their own cars for your business. The answers to these questions will ultimately indicate the exact coverage you need. 

 

10 Questions to Ask Before Hiring a Real Estate Agent to Sell Your Home

What do you need to know when it comes time to sell your house? Maybe you’re ready to downsize after the kids have grown. Or perhaps you’re family is growing and you need more space. No matter the situation, here are 10 questions to ask before hiring a real estate professional to help you sell your home.

Why Work With a Real Estate Pro in the First Place?

The idea of putting up a “For Sale, By Owner” sign has obvious appeal because there’s no commission to pay. But most buyers themselves typically use agents and a buyer’s agent might hesitate or even refuse to show your property unless another professional is helping to make a deal happen.

“There are only two reasons why I show an FSBO: Either there is no other inventory available, or the price is ridiculously low,” said Bruce Ailion, a realtor with RE/MAX Greater Atlanta. “Many experienced brokers have been burned by an FSBO transaction where the seller did not pay the full, agreed commission, or any commission at all, to the agent who brought the buyer.”

It’s within a real estate professional’s self interest to spread such opinions, but it also reveals a big risk when going the FSBO route. Being guided by a professional, especially if you are selling for the first time, makes a lot of sense.

Is Your Real Estate Professional a Licensed Agent, a Broker or a Realtor? 

There’s a difference—in qualifications required and services offered—among agents, brokers and realtors, even though the terms seem to be used interchangeably.

  • Agents, also called associates, are a starting point for real-estate professionals who have passed all required real-estate classes, along with any state-mandated licensing exams.
  • Brokers have additional qualification requirements, but can also work as agents on their own.  
  • Realtors are members of the National Association of Realtors, who abide by association standards and practices, and agree to uphold a code of ethics.

Why Is Real Estate Licensing Important?

There are other positives to using an agent. Most of the reasons have to do with saving money. Specifically, agents can help you:

  • Keep your own emotions out of the bargaining process
  • Save time; it’s often time consuming to sell and buy property
  • Find a bigger pool of buyers
  • Weed out unserious buyers who are “just looking”
  • Analyze the positives and negatives of your property
  • Protect clients from lawsuits if something goes awry

Licenses also a certain amount of protection for consumers via authorities such as the Better Business Bureau. License requirements for real-estate professionals vary from state to state. While academic degrees are not necessarily required, they still can be helpful:

Completing a degree gives agents a solid foundation in the basics of buying and selling of real estate, allowing you to make more informed decisions about properties, mortgages, interest rates, and stay on top of the latest trends in the industry.

In addition, holding a degree often makes potential agents more attractive to real-estate brokerage firms.

Here’s a recent list of real-estate agent requirementsfor each state. 

How Long Has the Agent Been in Business?

Experience matters. It’s likely the more sales an agent has completed, the more they have learned about the business—what and how to do it, and what to avoid. Inexperienced agents might have more time to concentrate on selling your house because they haven’t stockpiled clientele. But they also haven’t been around the block (literally and figuratively) as much as you might like.

What Strategy Will the Agent Use to Sell Your Home? 

With occasional exceptions, there’s more to moving property than sticking a “For Sale” sign in the front yard (although that could be part of it). What is the strategy? Where and how frequently will your agent advertise? Is it appropriate to use direct mail? What about online marketing? What steps do you need to take to prepare your home for sale? On that note: What about the house’s physical condition to improve to help its potential for sale?

How Good of a Negotiator Is Your Agent? 

Real-estate markets fluctuate. There are “buyers markets” and “sellers markets” that depend on all sorts of economic factors—interest rates, notably—but there are many variables. An agent’s list-price to sales-price ratio can be a helpful statistic to know. A strong listing agent should have a track record for negotiating sales prices close to list prices—the closer to 100 percent, the better.

Can the Agent Help Find Other Professionals Who Are Necessary to the Sale of a House? 

Mortgage brokers, home inspectors, title companies all are part of buying and selling a house. Agents should be able to supply you, in writing, with a list of vendorswith whom they work, along with reasons why they endorse these particular professionals. A word of caution: “Affiliated,” could mean the agent and their broker receive compensation for using a particular vendor, which means you could be paying a premium. 

In addition, get an advance copy of any legal documents is helpful to being better informed.

Can the Agent Produce Referrals? 

If the agent has many online reviews, this step might not be necessary, but no matter how you do it, it’s important to research an agent or agency’s references to inform your opinion. A questionnaire should give you a good start on how to go about doing this.

What Does a Real Estate Agent Cost? 

It is said that sellers typically pay the freight when it comes to real estate commissions, which tend to be 5 to 6 percent of a home’s purchase price. While it’s really a technicality based on how real-estate transactions work legally, fees split between the agents of buyers and sellers typically do come from the seller’s end, which obviously impacts what the list price will be. Therefore, knowing what a listing agent charges becomes an important consideration.

What Topics Might I Have Forgotten?

Selling a home is a process. It’s possible that during your first meeting you might not have all of your questions resolved with answers. Or, you might come up with more questions as the process unfolds. Being comfortable with an agent who listens is vital. It’s especially true if you’re in the process of selling one home and buying a new one. Will your agent be able to answer all your questions to your satisfaction?