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January 19, 2016, 8:47 am

Making Sense of Online Insurance Comparison Sites

by: The Financial Blogger    Category: Insurance

 

With CNN echoing what a lot of us have long felt – that insurance premiums are seemingly getting higher with each passing year – it’s become increasingly more important to comparison shop car insurance quotes before you finally settle on a coverage. And thankfully today, it’s much easier to research car insurance costs than ever before. The Internet is packed with solid car insurance comparison websites that can help you find the right coverage at the right price – no matter your type of vehicle or situation.

 

Let’s make sense of online car insurance comparison sites below.

 

Using Insurance Comparison Websites

While shopping online for car insurance, it’s critical that you input the right information. Quotes are only as accurate as the information you provide, and so it is important that you enter your details carefully, and not just rough estimates. Once you feed in your details, you will see a number of car insurance quotes. These are mainly listed from the cheapest to the most expensive. As you review your online quotes, here are a few things you should be on the lookout for:

 

  • Does the quote include a discount for purchasing online?
  • Does the quote only apply to new clients and not existing ones? – This is especially important if you find that the cheapest quote is with your existing insurance provider as this rate may not be valid for you.
  • Does the quote have a no-claims discount?

 

Many online car insurance comparison sites offer the ‘basic’ insurance policy so it may not have provisions for no-claims benefit, legal expenses or windscreen cover. If you want to cover these risks, go for comparison websites that list offers beyond the minimum and basic policies.

 

Price isn’t Everything

It’s easy to get attracted to the cheapest coverage you see, especially when you’re comparing several car insurance quotes online. However, purchasing cheap coverage may cost you more in the long run if your policy does not provide the extent of coverage you need. Compare the quality of coverage as well as the price. Quality insurance comparison sites allow you to compare the benefits of each policy by factors such as:

 

  • Whether windshield coverage is included
  • Whether you get a discount if you pay by direct debit
  • Whether a courtesy vehicle is included

 

Car insurance shopping means striking a balance between the cost and quality of the coverage. Make sure that you consider all the benefits that are important to you, and remember that most car insurance comparison websites only acquire quotes from a small subset of insurance providers.

If you want to get the cheapest car insurance, you have to gather quotes from multiple car insurance comparison websites and compare the quotes from the insurance providers and not the comparison sites. Then you can go for the cheapest option that offers the coverage you want.

 

When you use most online comparison sites, you will click through to the insurance provider’s website to complete a purchase. However, there are other sites that offer full service purchasing within them, like CoverHound’s auto insurance quotes online comparison site. But regardless of the comparison or insurer site you use, there’s a good chance they’ll try offering you add-ons before you check out. Be weary of these add-ons. Make sure there are no other alternatives and that you actually need them before purchasing.

 

Know How the Website Makes its Money

Most comparison websites are not in the business of selling the products themselves; they will usually show you prices and details from insurance providers, and make their money either by:

 

  • Charging for advertisements that appear on their site
  • Charging for sponsored listings – some companies are likely to pay to have their insurance products appear at the top of the search results
  • Charging for click-throughs where a site will earn a commission when a website visitor clicks through to the insurance provider’s website and successfully purchases a product

 

Of course, as we mentioned above with CoverHound, this is not always the case.

 

How to Use Comparison Websites

  1. Know the type of policy and coverage you want. Use comparison websites to get insurance quotes, and not to find out the quality of a policy. Once you have an idea of the policy coverage you want, you are in a better position to find a great deal on comparison sites.
  2. Look at the pre-filled answers. Comparison websites make assumptions to make the process of finding quotes easier for you. This includes the use of pre-filled answers for a standard set of results. Always make sure that the details are right, or you may find out that you are not covered when you make a claim.
  3. No spam. It is your right to opt out of email and other marketing by ensuring that you check or uncheck related boxes. If you don’t, you are likely to get both phone calls and marketing emails, so read every page carefully.
  4. Check before your purchase. When transferred to the insurance provider’s site, always verify that all information is correct. Doing this ensures that you are purchasing the right insurance coverage.

 

 

 

Finally…

Read policy documentation before you purchase. If the documentation is not included in the car insurance website, go to the insurance provider’s website. If no information is available, don’t buy the coverage. You need to make sure that your insurance coverage does cover when you make a claim.

 

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August 22, 2012, 5:00 am

Whole Life Insurance Sucks… And The Reason Why We Have One!

by: The Financial Blogger    Category: Insurance

 

 

Whole Life Insurance… these three words don’t fit right in my head. Actually, the last two words are fine, but I would rather switch the word “whole” by “term” usually ;-). I’ve rarely spoken about my insurance structure on this blog. In fact, the last time I discussed my own life insurance structure was back in 2007! Since then, I’ve upgraded my life insurance structure according to our needs. I’m actually going to tell you more about my personal life insurance structure in another post. Today, I want to concentrate on explaining why I chose a whole life policy to cover a part of my needs.

 

Hint: if you are an entrepreneur, you want to read this post.

 

The Concept of Whole Life Insurance Policy Explained Quickly

 

A whole life insurance policy is quite easy to understand:

–          You pay X amount of premium per year to get your contract.

–          This contract insures you for X amount in the event that you pass away.

–          The contract is good for your life.

–          If you pay more than the premium, you have the possibility to invest in a tax-sheltered account (let’s say that your monthly cost is $100 and you pay $125, there is $25 being invested in a tax-sheltered account called Cash Surrender Value).

The major downside of whole life insurance is that it’s quite expensive (and brokers are making a lot of money on them! Hahaha!). This is why brokers tend to push this product down your throat based on the fact that they will make more money you need life insurance coverage for your entire life. This is definitely not the right way to get cheap life insurance if this is what you are looking for ;-)é

 

Technically, your insurance needs are a lot higher when you are younger than when you are 70. So being insured for 500K at the age of 70 is quite useless. Unless you want to play Santa Claus, nobody really needs this money. So in 90% of cases, you are much better off with term life insurance that will cover your needs for a specific period of time. For example, most of my life insurance coverage is in a term life insurance that will last for the next 20 years. After that period, I won’t need much coverage since all my kids will have finished school, my house will be almost paid off, I will have RRSPs and a pension plan big enough to cover my wife’s financial needs. So why would I pay for an expensive whole life policy that will only make my kids rich? But still, I do have a whole life insurance policy… of $250,000!

 

Okay… but Mike, why the hell have you taken a whole life insurance policy then? Are you that dumb???

 

Bear with me for a moment, you’ll understand.

 

The Problem All Entrepreneurs Face One Day – DEATH!!!

 

There are two things you can’t avoid inCanada: Death and Taxes! The problem is that both of them are quite related. In fact, if you ever pass away, you are considered to have sold all your assets the second prior to your death for tax purposes. Therefore, if you can’t roll your assets to your spouse, there will be a huge tax implication to be paid by your Estate. This is the first reason why you need life insurance if you own a company. This insurance need is there today, but will also exist in 40 years from now. This is why I need a whole life insurance policy that will cover this risk. Since I can roll my company shares to my wife without tax implications, there is another reason why I needed insurance.

 

I have a partner.

 

Having a business partner is clearly amazing. It enables the both of us to grow something much bigger in less time. But this also means that I don’t hold 100% of my company shares. If my partner would pass away tomorrow morning, his 50% of the company shares would be transferred to his wife. While I really like his wife and we are very good friends, I doubt I would like to manage “my” company with a different partner. So the easy way would be to buy her shares. But since we valued our company at $263,042 this year, I would need to spit $131,500 to buy back her shares. I obviously don’t have this liquidity!

 

Without insurance, this could create a big mess. Imagine if his wife would like to receive a dividend of $1,500 per month? Or that she would like to sell half of our sites to get a big fat check? The fact that we each hold 50% of the company would completely freeze the company and would make it very difficult to operate. On my side, I wouldn’t be able to continue growing it as I want and I would not have the liquidity to hire someone to replace my partner’s expertise (remember, I’m a techno retarded blogger, I can’t run this company by myself since I don’t even know what html and php means!). This is where the whole life insurance policy could become your best friend!

 

In order to be able to buy back my partner’s 50%, we both agreed to purchase a $250,000 whole life insurance policy. We are both insured by the same contract (which means that if I die, my partner will receive the $250K and vice-versa) and we have selected a “first-to-die” clause. The first to die clause enables us to both be covered for $250K but the payment occurs only once. Therefore, the first one to pass away will trigger the $250K payment from the life insurance company. The second to pass away won’t trigger anything more.

 

Our goal was to take an insurance policy that would enable us to buy our partner shares upon death and generate some liquidity to hire someone to cope for the loss of the partner in the daily activities. This is why the amount of $250,000 is much bigger than the actual value of the company. After paying the shares, we need a few thousand to operate the company.

 

Since this insurance need will exist until we sell the company, we couldn’t go for a term life insurance of 20 or 30 years. In 30 years, we will still need that cash to buy our partner shares. This is why the whole life insurance was the best bet for us. It guarantees us to be able to operate our company and it guarantees also that our wives receive something coming from the company.

 

It is very possible that we will have to increase the amount of coverage later on. When we started, the company wasn’t worth that much and the amount of $250k covers a company value of $500K. We are already halfway in this valuation after three years. I guess that we will hit the $500K value in a few years. At that time, we will probably take the option to invest in the cash surrender value. By increasing the payment of our premium, we will be able to not only invest in a tax-sheltered investments, but this will also grow the amount of our whole life insurance policy.

 

For example, if we pay $100/month for our $250K coverage, we could decide to invest $100 more and increase our payment to $200/month. At that time, we would be investing and additional $1,200 in the policy. Therefore, at the end of the year, we would be having coverage of $251,200 instead of the previous $250,000. The other option would be to write another whole life insurance contract for an additional amount. Depending on the cost of the insurance, the cash surrender value investment could become more interesting.

 

In the end, the most important thing is to make sure that we have enough coverage to keep the company rolling and to make sure that our wives get the part they deserve in this story. I’ve seen families being torn apart after the death of a rich individual, I won’t let this happen. All I need is a whole life insurance and this problem will never happen!

 

 

This post about insurance is linked to the Insurance Movement initiated by Jeff @ Good Financial Cents. Check out his site, he is offering cash rewards!!! Insurance is so important, but most people are not properly insured. This is why Jeff decided to raise this movement. You can read other articles about Life insurance here:

Investing and Cash Flow Strategies Through Insurances

An Overview of the Insurance Sector

Determine Your Life Insurance Needs – Thx to Excel!

Life Insurance by Age

5 Tricks to Get The Best Term Life Insurance Quotes

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November 9, 2010, 5:00 am

How you can get cheaper auto insurance

by: The Financial Blogger    Category: Insurance

When it comes to the time of the year that we have to buy auto insurance (for some of us that’s every month) our wallets certainly feel the strain.  Auto insurance can be very expensive and if you don’t check what options are available to you, then it’s even more so. You can get cheaper auto insurance if you follow some simple steps, here they are:

Identify the type of coverage you require

 

This is just something that you should think about, if you have a vehicle that’s worth not a lot of money, should you purchase full insurance cover? For example, a friend of mine recently purchased his insurance for a vehicle worth $800 and his insurance cost more than the vehicle. If you are faced with this scenario you should look to see if you think the policy is worth it, if not then get a cheaper policy.

Always look for discounts!

 

There are always tons of discounts when it comes to auto insurance, so make sure you check what options are available to you. If you have more than one vehicle, many insurance providers now offer brilliant ‘multi-car’ discounts, so if this applies to you check out your options. Also, have you considered getting your home and auto insurance from the same provider? You can make big savings by combing your insurance policies.

If you are a young driver or you are just learning to drive, you could consider choosing a policy that offers a good grades discount. If you are doing well in school, then you will get a discount on your insurance policy, it’s that simple.

Ask for higher deductibles

 

Asking for higher deductibles is very popular as it can decrease your insurance cost by up to 10%. The higher the level of deductible that you choose the more the percentage you save will be. However, you should make sure that the amount you choose is realistic should you actually wish to make a claim. If you have an accident you will have to pay the deductible amount before your policy will come into play.

Compare policies

 

Comparing as many insurance policies as possible is the best way to save on auto insurance. Use a price comparison site and compare as many policies as you can, all you have to do is enter you details as if you are filling in car insurance quotes. You should then be presented with a list of insurance options available to you. You can then identify what each policy is offering and you can choose the cheapest option that offers the best value for you.

Check the extras on your policy

 

When you receive an auto insurance policy, there are often extras that get included such as health and legal cover. If you don’t need or want these extras, ask for the insurance provider to remove them, it can result in a big drop in the cost of your insurance policy.

Monitor your credit record

 

Insurance providers often look at your credit record when you apply for a quote from them, so maintaining your credit record to the best of your ability is a good way to save some money. Maintain a good credit record by paying your bills on time and try not to get yourself in too much debt, it makes you look like a reliable purchaser and the insurer will therefore offer you a bigger discount.

Bio:

This article was written by Andreas Nicolaides, a finance and money saving author for Money Supermarket.

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March 3, 2010, 5:00 am

Extended Warranty: How You Really Contribute To A Company’s Profit!

by: The Financial Blogger    Category: Insurance

You are in the store, all excited thinking that you will see the hockey gold medal final on your brand new (not yet purchased) 58” plasma TV (since 42” is too small these days 😉 ). As you are about to tell the salesman that you will take it, he looks at you and starts his sales pitch.

The thing is that he doesn’t want/need/care to sell you a TV (he knows that you have made up your mind and that you will leave the store with a giant screen anyways!). He wants to sell his extended warranty. His whole pitch is based solely on how great the extended warranty is while your life would suck so much if you don’t buy it.

For every $100, the store gets $50 to $60 in profit!

According to Eric Arnum, chief editor of Warranty Week, here’s how $100 in extended warranty is split:

$50 in profit

$30 in administration fees (gotta love paperwork!)

$20 only is actually used towards actual claims.

I’m not surprised that $7.5MM were made from extended warranty sales in the USA in 2004 (according to Warranty Week).

When you think that an extended warranty could cost around $500 for a big TV, you can figure that the store makes as much money out of the extended warranty than from the TV itself!

What are your chances?

According to Consumer Reports, the chance of having a defective plasma screen within the first 4 years is only 3%! It jumps to 12% when you are talking about a refrigerator… Even then, the cost of an extended warranty can go as high as one third of the original cost.

So far, in my own experience, everything I bought new (tv, computers, furniture) has always lasted me more than 3 years (which is usually the longest any extended warranty period goes for). My first tv is still up and running (since 1998) and my “new” plasma TV is already 5 years old! I’ve had my washer and dryer for the past 8 years too… nothing to worry about so far!

Extended warranty‘s biggest weapon: fear!

Fear is one of the biggest motivators in life and any good salesman knows it. They will ask you what you will do if your TV breaks in 6 months. They will amplify the potential problems you will have when you will contact the manufacturer directly. He won’t forget to mention that you will be on your own, that you will have to ship your goods by Purolator and that it will take forever to repair.

By playing the fear card, he will take away the rationale behind your real chances of buying the worst item in the store. Unfortunately, it works really good in most cases…

What are your options other than extended warranty to protect your purchase?

So if you still think that you need an extended warranty (because we all think how disappointing it would be to drop $2,000 in 13 months to buy another TV!), you have a few options to explore.

When it comes to protecting major purchases such as a plasma TV, computer or refrigerator, you basically have 2 options:

–         Request to read the extended warranty contract and make sure that most of the stuff is covered.

–         Pay with a credit card with an warranty extension (usually, most good credit cards double your warranty up to 2 years additional).

I actually use the credit card option. My Platinum MasterCard (from National Bank) offers me a great protection plan (double the warranty up to 2 additional years). Therefore, I don’t have to mind much when I buy a plasma TV (this jump the warranty to 3 years). Everything is covered according to the manufacturer’s basic warranty (which includes most of the “normal” stuff that could break).

While I have never had to use this feature (I guess it’s the living proof that we don’t really need an extended warranty), the process seems quite easy: you need your original bill, your credit card statement, a formal option on the state of your “broken” good and a insurance declaration.

I am actually in the process of finding out if I can use it to get my laptop screen working perfectly again (I have pixel bars showing here and there). The problem is that I didn’t keep any of my receipts, nor my credit card bills. My latest research showed that I didn’t purchase it with my main credit card (which I think I didn’t have 2 years ago…). So I am still looking to see if my other credit card has the same extended warranty feature… more news later on!

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February 8, 2010, 5:00 am

A Car Insurance Story

by: The Financial Blogger    Category: Insurance

Picture this: a nice evening with friends, they take 2 cars to go somewhere after a nice dinner, the road is a bit slippery (it’s a real winter in Montreal after all 😉 ), the first car does a U turn since he just missed his turn, the other car follows… BANG! We have a bumper that just kissed the door of the other car.

How stupid do you feel? You just hit… your friend’s car. Of all the car accidents you could have, this is probably the best story to tell when you are with your friends around a pitcher of cold beer. Well, this is exactly what happened to 2 of my friends a few weeks ago.

We had a good laugh (nobody got hurt and they even got the nicest cop around to complete the paperwork and a guy on the street brought them coffee and donuts… I’m telling you, people from Montreal know how to live 😉 ). However, the rest of the story got me thinking about the most important thing about car insurance; filing a car insurance claim.

Car insurance cheap quotes first?

When we look for car insurance, most of us will consider only one criteria: we want the cheapest insurance quote. However, once you are pretty happy about your car insurance premium, the second factor (the one that will really determine if you have good car insurance or not) is how easy it is to file an insurance claim.

We don’t really think about this part until we get into a car accident. Even myself, I’ve been looking for the cheapest car insurance quote for the past 12 years (oh boy, that doesn’t help me stay young…). Yet, I have never made a claim from my car insurance company so far (knock on wood!) so I don’t really know how great my car insurance is…

Back to my friend’s story (and how his car insurance dealt with him!)

I’ll tell you upfront, my friend is with TD Insurance. He got a nice quote since he went to a school who has an affiliation with Meloche Monnex (who belongs to TD Insurance group). So his first criteria was no different than mine when he picked his car insurance: he wanted a cheap car insurance premium… period.

But does cheap premium means cheap service? Let me tell you that it is not the case with TD! Right after filing the paperwork with the police officer, my friend called his car insurance company to explain the situation. The next morning he drove his car to a garage (as instructed by TD) and got a courtesy vehicle right away.

Filing the car insurance claim paperwork was easy, people who served him were easy to deal with and proactive.  My friend didn’t have to wait long to get his car back. This is what we call a great service experience!

I am often the first one to step up and tell the world how bad customer service was at one place or another (remember my Roger’s Story, my friend’s fight with Bell or my Baton Rouge’s friend story?… go see them, you’ll have a good laugh 😉 ). But when it is the time to recognize a company is going above what we can reasonably expect, I will also step up and tell everyone. So here it goes:

TD CAR INSURANCE ROCKS!

(Isn’t this a great plug? Hahaha!)

But seriously folks, I wouldn’t write about it if I found they weren’t great 😉 So if you are looking to get cheap car insurance with great service, I’ve picked a few car insurance companies here:

TD Car Insurance

Enough said about them, to get a quote, just enter your postal code there in the add above, the process is easy and it doesn’t cost anything. On top of that, you don’t even have to talk to anybody or have anyone calling you… simply love it!

National Bank car Insurance

They are usually very picky in their drivers’ selection (almost no tickets, no insurance claim, etc) but they offer very cheap insurance quotes.

Royal Bank Car Insurance

What can I say besides; I love the insurance pendent of any Canadian banks? Seriously, they are solid and reliable 😀

Belairdirect Car Insurance

They seem to be pretty aggressive on their pricing too. However, they are fussy if you drive in the USA and I have not heard anything back from them with regards to filing an insurance claim…

Kanetix.ca Car Insurance Quote Service

You can search for the best car insurance quotes among the above listed companies (and many others). Great tool to make a quick (and free!) search on the web.

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