Archive for November, 2009

Shopping and car insurance don’t exactly go together. The prospect of shopping for one can be draining even if you haven’t started yet.  It’s a fact; car insurance is expensive and given the downturn trend of the economy these days, it is important to be able to keep your car insured without paying for something so outrageous.

Check your financial situation/income

Make sure you get an auto insurance that would be just right for your income.

Look around

Each insurance company is different from one another.  It is best to have a lot of options before making a final decision on which company to choose.  Just because one company offers a low price that doesn’t mean you go for it.  Don’t cut your protection short.  You may have inexpensive car insurance but if you’re not fully covered it’s pretty useless if you had an accident.

Background of the company

Although there are dependable and reputable insurance firms, there are some who lack the capital to make good on their claims or promised that you’re going to save money.  Check on the background of the company on how long they have been in business or if they’re registered with the Securities and Exchange Commission.

Multiple policies in one company

Having one company handing all your insurance needs would definitely cut your costs.  Especially if you also have your home insured in the same company as your car’s.

Safety Features on cars

If you have safety features like seatbelts, airbags, anti-lock brakes, daytime running lights, and/or anti-theft mechanisms, most insurance companies would give you a discount because all of these mechanisms would lessen the chances of you getting serious or minor injuries in accidents or crashes.

Special Classes

Classes like defensive driving or safety driving courses would lower insurance premiums by 5%.  These classes give many good tips on driving, which would prove very helpful to you and the insurance firms in the long run.

Clean Driving record

Generally, being a good driver and having a clean driving record would keep the prices down.  It won’t matter if you’re at fault or not in a crash, it still goes on your record and that would raise insurance prices because to the insurance company you’re more of a liability to them if you keep getting yourself in trouble.  Plus it ruins one’s reputation as a driver.

Writer: Maria Reilina

California legislators have advanced their step to push the “Pay as You Drive” (PAYD) policy. This policy is popularly known today for determining the motorists’ auto insurance rate based on the number of miles they drive. This usage based auto insurance was originally proposed few months ago to help drivers save on their auto insurance costs.

Initiating PAYD in California

PAYD is no longer a new concept in the industry of auto insurance. These days, there are already several countries that have implemented this policy; among them are Japan, South Africa, United Kingdom, Australia, and Canada. Meanwhile, 30 states in United States are presently allowing carriers to propose the plan to consumers as a better option to save money.

California Department of Insurance also announced last July that it will mandate a complete adoption of the said policy. Based on its current progress, there is a great possibility that the state regulator’s plan will be fully realized in 2010.

Two weeks ago, Commissioner Steve Poizner also released a system that will allow and authorize carriers to validate the mileage for PAYD. This system does not have any dictation as to how the plan should be followed.

Prospective Benefits of PAYD

Part of the purpose why regulators are pushing the use of per-mile pricing is to encourage Californians to minimize their driving, which will lessen air pollution including its other effects on the environment. Likewise, regulators said that the policy will also help to decongest city traffic.

For now, insurers in California are said to adopt the examples set by carriers from other states. Those carriers started proposing PAYD to their policy-holders with six-month policies and with sections of covered miles that range from 100,000 to 60,000 miles. Also, those carriers stated that they are planning to make the proposal available as soon as the regulation is enacted. A number of providers in the state expressed their strong approval over the plan by pronouncing that half of policy-holders are really underserved and overcharged.

Meanwhile, some drivers expressed their opposition to mandate the policy because they do not want their driving habits to be scouted. This notion was formed when supporters of the proposition mentioned previously that the policy will change the habits of several motorists, particularly those who commonly take leisure driving.

Nonetheless, several motorists have also shown their approval, especially those who have two or more vehicles. According to them, PAYD presents them an opportunity to lessen their costs for vehicles that they rarely use. The state commissioner also affirmed that obtaining discounts while economizing gas is a great option to cope with the struggling economy in California.

Writer: Ruth P

United States House Financial Services has approved a proposed bill expediting the implementation of CARD Reform for Consumers Act of 2009, a law which overhauls the credit system that is supposed to be carried out on February 2010, on December this year.

On the other hand, the HR 3639, the Expedited CARD Reform for Consumers Act of 2009, does not apply to prepaid gift cards – which are already printed and will be out in the market soon, and small credit card issuers – which control less than 2 million cardholder accounts. The credit reform law will be effectively implemented on small market such as these on February 22, 2010.

Meanwhile, Senate Banking Committee Chairman Sen. Chris Dodd recommended the immediate termination of increased interest rates set by the card issuers.

These actions by both legislative houses were prompted by the continued increase of rates for 700 million credit card holders.

Comparing last year’s rates, cardholders complained that they have been paying four times higher in interest rates due to charges on late payment and other additional fees.

In a recent study conducted by Pew Charitable Trust, a non-government organization which is committed to serve the people by improving public policy through information dissemination, they found out that contracts for almost 400 cards, issued by banks and 12 largest credit companies, allow card issuers to raise interest rates, apply penalty fees for late payments or over-limit transactions.

These terms are the same policies prohibited under the CARD Reform Act, which was signed into law by President Barack Obama early this year. The Congress has divided the implementation of the law into two phases to give credit card companies more time to change their policies. The first phase, which was implemented last August, entitles the consumers a 45-day notice from the card companies and banks before changing their interest rates. The second and last phase, which is supposedly carried out next year, bans the card issuers to increase their interest rates on existing balances. The law also gives the consumers five years to pay the loan that has fixed interest.

However, instead of adjusting their policies to meet the reform act requirements, the banks, which control more than 90 percent of credit cards in the marker, and credit card companies have changed and rewrote contracts to their advantage. As a result, credit card issuers have free-hands in increasing their interest rates and eventually raking more profits at the expense of their consumers.

In fact, the credit card companies have started increasing the median annual rate in December 2008 and July this year by two percent or more – one of the measures that will cover the projected losses due to continued climbing of unemployment rate and the implementation of CARD Reform Act.

Other measures adopted by banks and credit card companies are re-pricing program which is forcefully employed to its existing consumers, some of them have cut their rewards programs, and applying additional charges for annual fees, between $29 to $99.

Writer: Gani