Tesla Model S, which costs $80,000 costs approximately $3,300 to insure. Depending on the state you live, you could get insurance for a gas-powered model for a third to half that rate.

Reasons Why Insurance Rates For Electric Vehicles So High

Electric vehicles are pricier, so it costs more to insure

The cost to insure is based on the price of the vehicle insured. The electric versions of cars are 25% to 75% more expensive than their gas counterparts, which leads to higher insurance rates.

Tax credits may sometimes make the vehicle cheaper to buy but when it is time to get insurance, insurance companies look at the unsubsidized price of the vehicle to quote you rates.

Electric cars are expensive to repair

In case of an accident, electric cars are more expensive to repair. Not all shops or mechanics can work on electrics.  Working on an electric vehicle is a  specialized job that costs more.

Electric vehicles also have complicated components like batteries which are expensive to replace. As electric cars become more popular, it may become easier and less expensive to repair in the future.

EVs are generally smaller and offer less protection if you are in a crash. Insurance companies tend to charge higher premiums to compensate for the higher risk.

How To Save Money On EV Insurance

Which EVs are cheaper to insure?

While Teslas are expensive to insure, some EVs don’t break the bank.  Analysis shows Kia Soul EV, Nissan Leaf, Audi-Etron, and Chevy Bolt EVs have the cheapest insurance rates among EVs.

Late models are cheaper to insure (and also to buy)

It’s should come as no surprise that older models are cheaper to buy and cheaper to insure.  So if you want to buy an EV and save money, a late model EV is a good bet.

Insurance rates vary widely across insurance companies

While insurance rates were higher for electric vehicles across the board,  the relative increase compared to gas-powered cars varies widely.  StateFarm charged 7% more whereas Geico and Allstate were 25% higher.

Shop around for best rates

Since insurance rates vary widely across insurance companies, you should always shop around.  More so than you would for gas vehicles to get the best rates.

Ensure that you are getting every possible discount you are eligible for.  Did you take a driver’s safety course? Do you drive fewer miles? Are you willing to have a device in your car that monitors your driving behaviors in exchange for a discount?

Bottom Line

Due to higher price of the vehicle and higher repair costs, insurance rates are higher for EVs.  That does not mean that you should not buy an EV.  Buying the right vehicle and shopping around to get the insurance best rates will keep your annual costs down. Buying late-model vehicles will also help you save money on insurance.

We will look at a few options available to get health insurance while you are looking for a new job.

Join your spouse’s employer-sponsored  plan

If your spouse has insurance through his or her insurance, typically you have 30 days to request enrollment in the plan.  This option is probably your best because your spouse’s employer likely subsidizes the premiums and employer-sponsored plans have lower premiums and wider networks of physicians and hospitals.

If you are currently with a doctor, you may want to check if your doctor is covered under your wife’s health insurance plan.  If your doctor is not covered, and you are flexible, consider choosing another doctor under the new plan.  That will save you money compared to seeing your regular doctor, who may be “out of network”.

Join your parent’s health insurance plan

Under the ACA (Affordable Care Act), children under 26 can join their parent’s plan even if they have a job and that job offer health insurance.  If you are unemployed, that’s still an option.  So ask your parents if you can join their plan.

COBRA

When a company terminates an employee, it must offer health coverage for 18 months following the termination. So you get to keep your old health insurance plan but you will pay both the employer and employee portions of the health care premium.  So COBRA can be very expensive.  In addition, employers also add an administrative surcharge which makes COBRA even more expensive

It is not uncommon for COBRA to cost $15,000 to $25,000.  While you may have only paid $3000 or so while you were an employee, many people don’t realize that their employer covered the rest.  Now you are responsible for both the employer and employee portion of the premium.

COBRA coverage is retroactive.  So you don’t have to sign up for COBRA right away.  You will typically have 60 days to sign up. If you have a medical emergency, you can retroactively apply for COBRA.

Shop for insurance at the government exchange (ACA)

If you lost your employer-sponsored health insurance, you get a special 60-day enrollment period to buy health insurance under the ACA through the market place.  Based on your income, you may qualify for tax credits that will lower your premiums.

Health insurance policies offered through the exchange must be compliant with ACA – they must offer some type of free preventive care, and provide some coverage for maternity and hospitalization.  These plans cannot deny you coverage if you have a pre-existing condition.

Buy insurance outside of the exchange

You can shop directly with insurance companies via their website or through brokers. You may find a cheaper plan here than in the government exchange described above but the plans are likely to be skinnier and not ACA compliant.

If you are hopeful of getting a job soon that offers health insurance, getting a policy outside of the exchange may not be a bad idea in the meantime.

Medicaid

When people lose their jobs and are looking for health insurance, Medicaid is not on top of their list. Medicaid offers health free or low-cost insurance for people with low incomes. Medicaid looks at monthly income, not annual income.  If you don’t have income and rely on unemployment benefits, you may qualify.

CHIP

Children in unemployed families may qualify for CHIP (Children’s Health Insurance Program) if your income is low enough to meet income thresholds.  As with Medicaid, you can apply anytime.

Bottom Line

Losing your income is stressful. Losing your health insurance only adds to the stress during an already uncertain time in your life.

You best option is to join your spouse’s employer sponsored plan if that is an option. You an also shop for plans on the ACA exchange where plans offered must meet certain coverage conditions, including covering pre-existing conditions. You can find cheaper options outside of the exchange but the coverage is likely to be skinny.  You can stay with your current plan through COBRA but is likely to be very expensive as you will be paying both the employer and the employee portion of the premium.

Credit Insurance

Credit insurance policies are insurance policies that will pay off a loan in the event of your death.  These policies are commonly offered with a car and home loan.  You will sometimes see these products offered with furniture and appliance purchases.

It is important to realize that these policies are very different from life insurance policies. Life insurance policies provide a cash payment to your beneficiary in the event of your death.  Life insurance is not tied to any loan.

These policies are typically requested by the lenders because they want the loan to be paid off if the borrower dies. You, the borrower will be paying for the credit insurance policy and the lender will receive what is owed at the time of your death.

Most lenders will roll the cost of credit life insurance into the loan.  Review the loan documents to ensure that you are only paying for what you agreed to.

Credit life insurance is offered by many auto dealerships. You can also buy them from your bank or credit union.

Cost of credit insurance

An average credit insurance policy costs $0.5 for every $100 borrowed per year.  If you buy a car for $30,000, the credit insurance policy will cost you around $150 per year. $150 per year may not sound like much until you consider the alternatives.

Term Life Insurance is a good alternative

Term life insurance is cheaper than credit life insurance. A 30-year old can get a $500,00 for about $15 per month.  The cash will be paid to your beneficiary who could use it to not only pay off your loans but also your funeral expenses and other obligations.

Term life insurance is a much better option to help your family pay off obligations than credit life insurance.

To get term life insurance, you will need to take a physical exam in most cases.  For credit life insurance, you do not need a physical exam.

If credit life insurance is not a good product, why does it still exist?

Some lenders require credit life insurance before lending money.  That is especially the case if you can’ t put down a downpayment.

Also, some people are unable to qualify for term insurance for many reasons.  For those folks, credit life insurance can be useful.

Bottom Line

Credit life insurance policies pay off your debt in the event of your death.  It offers protection to the lender but you will bear the cost of the policy.  The polices are expensive and cost $0.5 for every $100 borrowed. Most people are better off getting term life insurance, which is cheaper and pays cash to your beneficiary who can use it for any purpose.

But dental insurance works differently.  With annual maximum limits and limited coverage, you may wonder if you need it at all? Is dental insurance worth it for you?

Does dental insurance save you money? Or can you skip dental insurance and self-insure?

Let us take a deep dive.

How much does dental insurance cost per year?

Dental insurance costs about $350 per year.  The cost varies depending on your state.

You can buy dental insurance through your employer or on your own. In most cases, buying it through your employer will be cheaper as the policy is likely to be subsidized by your employer.

How does dental insurance work?

Most dental insurance policies cover exams, two annual cleanings and X-rays free of cost. Any procedures beyond that is split between the insurance provider and the patient on a fixed percentage basis.

Dental policies also have an annual maximum benefit.  The limit varies based on policy but is usually around $2000.  The insurance policy will not pay out more than $2000.  Once that limit is reached, you are responsible for all dental expenses.

What does dental insurance cover?

Dental insurance provides 100/80/50 coverage.  It covers the cost of certain procedures at 100%, others 80% and some others at 50%.  You are responsible for the portion that is not covered by insurance.

100% coverage – Covers preventive care such as X-rays and cleanings.  Typically, two cleanings annually are covered at no cost to you

80% coverage – fillings, restrictions, and periodontal procedure

50% coverage for major complicated procedures such as crowns, root canals, bridges or implants.

These are just broad guidelines.  Be sure to check individual policies to confirm coverage.

What the different types of dental insurance plans?

There are three common types of insurance plans.  The plans offer different benefits and vary in cost.

Dental Health Maintenance Organization (DHMO) – Limits what dentists you can see. It is usually the cheapest dental insurance policy you can get.  These plans have no annual limit on coverage.

Dental Preferred Provider Organization (DPPO) –  You will pay less if you choose dentists that are on the plan. You can choose an out-of-network dentist but you will pay more. These plans have deductibles and co-pays.

Dental Indemnity Insurance Plans – Most expensive dental plan. You have the option to see any dentist and receive full coverage. You are responsible for co-pays and deductibles.

Should you get a dental insurance policy?

Think ahead and be prepared to do some math.

If you are healthy and you only anticipate two cleanings in a year, call your dentist and ask how much it would cost.  Let’s say that your dentist quotes you $300 for those services for a year and your insurance costs $450. You are better off skipping insurance.

If you think you will need additional dental care, work with your dentist to identify what procedures you will need in the next year. Then work out the costs with and without insurance.  That will tell you whether an insurance policy is worth it for you.

Bottom Line

If you have no dental problems and all you need is an annual check and cleaning every year, you can get by without dental insurance. If you have dental problems or you anticipate major procedures in the next year, dental insurance can save you money.  Work with your dentist, identify problems early and work out the cost with and without insurance to see if an insurance policy is worth it.

The more miles you drive, the more likely you are to get into an accident.  So it makes sense that people who drive more pay more in auto insurance than someone who drives less.

Pay-per-mile insurance, as the name suggests, allows you to pay based on how much you drive.

How does pay-per-mile insurance work?

The auto insurance premium consists of two components – the base rate and the per-mile rate.

Your base rate is based on factors such as your age, gender, driving history, where you live, the type of vehicle you drive,  and your credit history.

The per-mile rate depends on how many miles you drive per year. But the per-mile rate contributes just a small part to your total premium.

Here is an example.  Let’s say that your base rate is $50 per month and your per-mile rate is $0.05  Let’s also assume that you drive 200 miles per month.  Your monthly premium will be $70 plus 200 miles times $0.05 for a total of $80 dollars.

Do you get the same coverage as traditional insurance?

Yes, with pay-per-mile insurance you will get the same coverage traditional auto insurance.

In addition, all the add-ons available from traditional insurance providers such as rental car reimbursement, roadside assistance, and no-deductible glass repair are available from pay-per-mile insurers.

Will pay-per-mile insurance save you money?

Pay-per-mile insurers advertise that you could save $500 per year.  In reality, your savings vary based on the number of miles you drive.  The more you drive, the more you will pay.

There are just too many variables to say that it will save money for everyone. But in general, if you drive infrequently you can save money.

Are there any disadvantages?

With traditional auto insurance, you pay a fixed premium for six months or a year.  With pay-per-mile, your auto insurance payment varies depending on how many miles you drive.  If you underestimate the miles you expect to drive, expect to pay more.  This makes budgeting for insurance payments very difficult.

Many pay-per-mile insurers charge you per mile for a maximum number of miles per day, usually 150 to 250 miles. So you can take an occasional long driving trip without worrying about the number of miles you drive.

For whom does pay-per-mile work best?

Pay-per-mile works well for people who drive less and fall into one of these groups:

• You take public transportation to work and only rarely use your car except for long trips
• You take a vanpool or carpool to work
• You work from home
• You own multiple cars but you drive one car only occasionally

Which insurers offer pay-per-mile auto insurance?

There are a number of companies that offer pay-per-mile insurance.  Here are a few that are well known.

• Root
• Metromile
• Milewise (part of Allstate)
• SmartMiles (part of Nationwide)
• Esurance

Bottom Line

If you are an infrequent driver, pay-per-mile insurance can save you money.  But the downside is that your payment changes every month based on how many miles you drive. If your driving record is not very good or if you can’t estimate how many miles you expect to drive, stick with a traditional insurance policy.

Initial costs include the cost of towing, bail, legal fees, court fines and expenses for alcohol education.  Perhaps the greatest expense of a DUI is the higher auto insurance premiums.  Insurance companies find drivers with a DUI record to be risky and raise premiums.  Your current insurance provider may even drop you after a DUI.

What is a DUI?

DUI stands for Driving Under the Influence of substances that impair your driving.  These may include:

• Alcohol
• Prescription drugs
• Cocaine, marijuana, methamphetamine, morphine, heroin, LSD, etc.

If your blood alcohol concentration (BAC) is above a certain level (0.08 percent or higher), it is illegal in all 50 states.  Even if your BAC was below the allowable threshold, you could be charged if it can be proved that your driving was impaired due to a combination of two or more of the substances mentioned above.

If you were driving drunk and were involved in an accident, will the insurer cover the damages?

If you are in an accident because you are drunk or under the influence of drugs, you will be covered up to the limits of the policy even if you are at fault.  This includes damage to your vehicle, damage to someone else’s vehicle and property, and any injuries that occurred as a result of the accident.

How long does a DUI have an effect on your auto insurance rates?

A DUI will affect your auto insurance premiums as long as it stays on your driving record.  How long it stays on your driving record varies from state to state – it may be anywhere from three to seven years.  Typically, your insurance rates will return to normal after the DUI drops off your record.

It is important to remember that the DUI will remain on your criminal records even after it drops off your driving record.  That could have an impact on you when you are trying to get a job. Some states allow you to get the DUI removed from your criminal record.

How much do insurance premiums go up after a DUI?

The increase in rates varies widely across insurers.  The average increase is between 30-125% and Progressive says that its rate go up only 6% on average after the first DUI.   The average dollar increase is around $1100 nationally. Your rates are influenced by other factors such as your age, accidents and speeding tickets on your record.

How can you get a cheap rate after DUI?

Expect your rates to go up after a DUI.  But shop around.  You should shop around even under normal circumstances.  Consider using an agent to get quotes from multiple insurers.  Agents may have experience working with DUI drivers and may have knowledge of companies that offer reasonable rates.

What if you are denied coverage due to DUI?

Many states offer high-risk insurance pools to cover drivers who have too many accidents or a very poor driving recorded.  Eligibility varies by state, so review the criteria for your state.  Usually, in order to qualify,  you will need to be turned down at least once by traditional insurance companies.

Do you need an SR 22?

Not all states require SR 22, so check your state requirements.  But many states require SR22, which is a certificate of insurance that proves that you have car insurance. Your insurance provider will file these forms with the DMV for a small fee on your behalf.

SR22 is mandated by these states after a DUI or DWI conviction, reckless driving, driving with a suspended license or too many points on your license or driving without insurance coverage.

Bottom Line

Dealing with a DUI can be financially quite difficult.  Your current insurance company may raise rates significantly or even drop you.  Shop around for the best rates and consider using an agent. Over time, your rates will return to normal as the DUI drops off your driving record.  Many states have high-risk pools for drivers who are denied insurance by traditional carriers.

Only those who purchased insurance before the “cut off” date set by their insurer have coverage assuming that the policy covers epidemics and pandemics.  Although the cut off date varies across insurers, it is around late January.  That’s when the coronavirus outbreak started spreading.  This applies to third party policies purchased from insurers and the coverage that comes with your credit card.

Trip insurance provides coverage for unforeseen events.  Coronavirus has been around several weeks now and is considered a foreseen event and is excluded from coverage.  Note that many standard policies exclude pandemics and epidemics in any case. Other policies have language that limits claims for epidemics.

If you are booking a trip now, what are your options?

Even if a standard travel insurance policy won’t cover coronavirus, you have other options.  The “Cancel for Any Reason” policy allows you to cancel, as the name implies, for any reason.  These policies have to be purchased within 14 to 21 days from the date of the first payment for the trip.

Cancel For Any Reason policies cost about 40% more than a standard travel insurance policy.  It covers 75% of the cost of the trip. It typically costs about 12% of the cost of your trip.  These policies require you to cancel your trip at least two days before your departure date.

What are your options if you have a trip booked already?

Most airlines are now allowing passengers to cancel or change their tickets for any reason without fees.  Call your airlines and see if this an option for you.

Additionally, if you had purchased travel insurance and had to cancel a trip, file a claim as insurers look at some claims on a case by case basis. You want to be sure to get a refund for portions of the travel that are covered by the policy.

Staycation

Canceling your vacation and staying home is not fun.  Given the global nature and complexity of the coronavirus outbreak, it’s not a bad decision to spend time at home.

But there are places you can fly for cheap at this time for those who are willing to take a risk.

Bottom Line

If you purchased travel insurance after the cut off date (late January time frame), you will not be covered for any coronavirus related delays and cancellations. Consider getting a Cancel For Any Reason policy if you are planning your trip now.  Though these policies are 40% more expensive than a standard policy and will provide 75% coverage of your trip costs.

Let’s take a look at a few scenarios.

Your contract with the cable company ends.  Your cable company jacks up your price by 20% even if you are willing to sign another contract.

Your electricity plan has expired.  You have been a loyal customer but your provider shows no love when it’s time to renew.

Your home and auto insurance companies have no problems increasing your premiums 10-20% even though you have made no claims on the policies.  To make things worse, these companies will raise premiums by 30%, and then offer you a 5% loyalty discount.

A few years ago, I wanted to refinance my mortgage.  I called my current mortgage company and asked for rates.  The rates I got were high, so I decided to shop around by contacting a mortgage broker.  The broker shopped around for me, and the best rate he found was offered by my mortgage company.  I found it odd that my mortgage company wouldn’t offer that rate to me when I called.

The story applies to cell phone companies, home security companies and any other company you have been using for a long time.

Why does no one value loyalty anymore?  Shouldn’t the loyal customers get the best deals?  Sometimes, it feels like only new customers get good deals, and loyal customers are profit centers for big companies.

Why do companies think they can raise prices on their loyal customers and get away with it?

Price Optimization

Price optimization is the practice of raising prices based on the likelihood that loyal customers will not shop around with competitors for a better price. Companies use sophisticated systems to identify customers who are unlikely to shop around.

Price optimization algorithms can identify loyal customers for a price increase based on customers’ loyalty to other service providers, magazine subscriptions, browsing history, and the products they buy.  This is in addition to other factors that go into rates such as age, gender, type of car and your neighborhood.

In 20 states price optimization for insurance rates is illegal but many companies employ the practice anyway.  Insurance premiums are determined based on many factors such as your claim history, credit scores, your neighborhood and payment history. It is hard to prove that a  particular company is discriminatory in its pricing practices.

What can you do to get the best rates?

Shop around every year. Whether it’s insurance, cable, internet or phone service, make it a point to get multiple offers before you sign up.  It can be a time-consuming process to do research and compare offers.  But the savings are worth it.

Prices are important but don’t overlook other factors such as reliability of service and good customer service.  Some services and products are cheap for a reason, and you want to stay away from them.

Bottom Line

Companies no longer reward customers for being loyal.  In fact, companies use pricing algorithms to identify customers who are unlikely to shop around for price increases.  Shop around at least once a year to get the best rates.  Keep in mind that price is important but so is good service.

]]> https://mymoneyplanet.com/loyalty-is-dead-shop-around-for-best-deals/feed/ 0 https://mymoneyplanet.com/top-factors-that-affect-life-insurance-premiums/ https://mymoneyplanet.com/top-factors-that-affect-life-insurance-premiums/#respond Wed, 04 Mar 2020 02:11:20 +0000 https://mymoneyplanet.com/?p=302 Top Factors That Affect Life Insurance Premiums Read More »

If your personal items such as a laptop or iPad, clothes or furniture get stolen, it will cost you at least $5,000 to replace them.

Do you know that if you leave your faucet open in your apartment, and it causes water damage to the property, you will be held liable for the damages because you were negligent?

Do you also know that many apartments now require renter’s insurance before they will lease the property to protect themselves?

Renter’s insurance provides coverage for your personal belongings and gives you peace of mind. It doesn’t cost much but most tenants overlook rental insurance?

What is rental insurance?

As the name implies, renters insurance provides insurance coverage for renters. Rental insurance covers:

1. Personal Property
2. Loss of Use
3. Liability Coverage

Personal Property

Rental insurance provides coverage for your personal belongings if they are lost or damaged due to fire, smoke, theft or other events specified in your policy.

Loss of Use

If you are unable to live in your rented home or apartment for some reason, the insurance policy will pay for hotel, food and other living expenses while your place is repaired.

Liability Coverage

Renter’s insurance also provides liability coverage.  If your kid gets in a fight and injures another kid, the policy will cover your damages subject to the limits of the policy. It will also protect you against lawsuits if you are sued or if your dog bites a guest.

If your guests are injured on your property, that will also be covered by the policy.

How much rental coverage do you need?

The coverage you need depends on the value of your personal belongings. The best way to determine the coverage you need is to inventory all your personal items, and furniture and find out what it costs to replace them.

There are two types of policies – cash value policies will compensate you for the depreciated value of your belongings, and replacement value policies will compensate you for the replacement value of the belongings.

Typically, you will need $30,000 to $50,000 coverage if you are renting an apartment and around $100,000 if you are renting a home.

How much does renter’s insurance cost?

Renter’s insurance is very affordable.  It only costs $10 to $15 per month. If you combine it with your auto insurance, you will get a discount, which will lower the cost even further.  If your discount is substantial, you may actually get the renter’s insurance for free.

How do I keep track of what’s in my house in case something goes wrong?

The best way to keep track of all the items in your house is to take a video of the things in your home and store the video either in a bank locker or in the cloud.  If something unfortunate happens to your home, and you have to submit a claim, you will have proof that you owned all the items in the video.

Bottom Line

Renter’s insurance is very affordable and costs only $10 to $15.  For that small cost, it will protect your personal items that cost thousands of dollars. In addition, it will pay for hotels if your home is damaged.  Most landlords now expect renters to have renters insurance.  If you a tenant, consider getting rental insurance for peace of mind.