Car sharing increases in popularity.

What is Peer Car Sharing?

Studies show that most people leave their cars idle for the bulk of each day – perhaps up to as many as 22 hours in each day.  With cars sitting for that much time, some have taken to renting out their cars to others by the hour.  Typically, you pay an hourly or daily rate and, through the use of keyless entry, can borrow the car from the owner.  Using GPS systems, they can track mileage and location for pricing purposes. While this has become increasingly popular, the one drawback has been insurance.

Insurance and Peer Car Sharing

In most cases, the driver’s own insurance will cover them. Most insurance companies are not liable for what happens when the driver is not using the car.  However, in most states insurance companies may also cancel or refuse to renew coverage to drivers who rent out their cars to others.  This poses a pretty enormous risk for car sharers.

Usage Based

Historically, insurance companies have been very resistant to these types of endeavors, which fall along the lines of “usage based” rental.  Though the public is increasingly demanding such measures, insurers have been slow to comply.  The increased risk for the insurer has not been something that they’ve been willing to shoulder.  But as trends continue, and state governments become interested in fostering those trends, will the reluctance to insure peer-to-peer program participants continue to be the case?

State Actions

With states like California and Oregon already passing laws that protect peer-to-peer car sharing programs, and Washington looking to follow soon, insurers are getting more and more pressure not only to provide for these types of programs, but to offer mileage-based insurance programs in general.  In Oregon, you can’t earn more annually than your car costs to operate (that would require commercial rental agreements) but you can deduct the standard IRS tax rate and in effect, get hidden tax breaks through peer-to-peer rental programs.   Other states have similar laws in various stages of legislation.

Understand the Issues

This may be good news for peer-to-peer car sharing.  With insurance companies slowly becoming more willing to play ball, and state governments protecting the rights of peer-to-peer car sharers, it seems as though these types of programs will escalate in popularity.  But, if you’re looking into either sharing your car, here are a few things that you should be aware of:

• Greater Risk – car sharing exposes your car to greater risk from traffic, weather conditions, and drivers who may not be familiar with operating your car.  These things increase the likelihood that your car may sustain damage, and therefore can increase your insurance rates.
• Liability – if you don’t maintain your car well and an accident occurs that is caused by poor maintenance or condition of the car, you may be held liable rather than the person who was actually driving at the time.
• Depreciation – not only the value of the car as it gets more use, but if there is an accident that the driver takes care of, you may suffer the insurance depreciation anyway.

The bottom line is that this trend will continue to grow in popularity, and while you should be aware of the risks, it’s a pretty safe bet that the rewards will outweigh the potential liabilities, making peer-to-peer car sharing an increasingly lucrative way to put your car to good use. Be sure to check with your insurance agent before you begin peer-to-peer car sharing, or shop for the right auto insurance policy to support that endeavor.

Now you can be proactive about your vehicle recalls.

If the manufacturer of your car thinks that your transmission might go flying out of your car soon, or that your gas tank may catch on fire, it’s definitely better to be aware of that sooner rather than later.  No one wants to be responsible for putting their family, friends, or loved ones in danger when they could have easily kept updated with important recall notices.

Of course, in addition to the safety benefits of complying with recall instructions, complying with the recall prevents you from falling out of compliance with your auto insurance policy and makes sure your policy remains as affordable as possible.

NHTSA Initiates Email Service

As a driver, it’s your responsibility to stay up-to-date with the latest information about automotive recalls, particularly when it concerns your own vehicle.  Now, the National Highway Traffic Safety Administration has made this easier by allowing you to sign up to receive emails about such recall notices.  By visiting the NHTSA website, you can sign up for information about recalls on vehicles, making sure that you know if something has been issued by the manufacturer of your car.  You can also sign up for notices about specific non-automotive parts such as tires or child safety seats.

Select your Automobile

You can even choose to receive notifications about specific make and model years, allowing you to stay in the loop about specific automobiles that you’re interested in.  This can come in handy for car collectors, mechanics, or automotive service centers.  If you operate a business that provides some type of automotive service to consumers, wouldn’t it be great if you were aware of what was going on with your loyal customers, so that you could make sure that they stay safe and don’t shoulder unnecessary risk?  Now that can be a reality.

Other Vehicles

Depending on what you do or which specific vehicles you come into contact with, you may even be interested to know that you can get information about motorcycles, motorcycle helmets and equipment, and even school buses.  No matter what you drive, it’s easier and easier to stay on top of important safety notices so that you don’t put yourself or other drivers in danger by driving an unsafe vehicle after it has been recalled.

Large Number of Recalls

Some of the more recent statistics provided by the NHTSA indicate that they receive about 600 vehicle recalls each year on average.  They receive an additional 45 motorcycle recall notices each year and 35 school bus recalls each year on average.  Furthermore, the NHTSA reports that it gets about 8 child restraint recalls each year and about 20 tire recalls.  It’s important to keep track of all of these, particularly if you have children.  Nothing is more important than the safety of your child, and the ability to stay on top of such notifications could save your child’s life.

The best part is that it’s easy to stay informed.  Simply go to the NHTSA website, enter the information that you’re interested in receiving and your email address, and presto – you’re on the list!  The NHTSA states that they do not give out or sell emails to any parties for any purpose.

Some simple steps can prevent most accidents.

Basics

Probably the two most important things to remember are these: don’t drive drunk, and don’t speed.  You’ve heard both before, but here’s why each of these are so dangerous.  More than 30% of automobile accident fatalities involve a driver who has been drinking, and more than 30% of fatal crashes involve a driver who was speeding.  Drinking while you drive reduces your reaction time, can limit your coordination, and can lower your inhibitions, causing you to make foolish decisions that could be costly.

Going an extra few miles an hour may seem like a good idea when you’re running late, and most of the time, you’ll get away with it.  But did you know that for every mile per hour you drive, you increase your likelihood of having an accident by perhaps four or five percent? This means that, although you’ll probably save a few minutes by going ten miles per hour over the speed limit, you increase the chance that you’ll be in an accident by as much as 50%.

Awareness

Other things you can do to decrease the risk of accident, thereby keeping yourself and others safe, and keeping your insurance costs lower include avoiding distractions, keeping your eyes on the road and on what’s going on around you, and making sure you’re not too sleepy when you drive.  Cell phones are a huge distraction and taking/making calls or texts is illegal in many states or communities for that very reason.  Driving with your music too loud and giving too much attention to conversations with others in the car are two very dangerous activities that can cause just enough distraction to put you in an accident.  Another easy way to increase your risk for accident is to drive when you’re too tired.  If this happens, pull over to the side or the road or have someone else drive.  It’s not worth the risk.

Safety Features

Some other general rules that will keep you safer should be common sense:  wear your seat-belt, use your turn signals, adjust your mirrors and seats so that you have a proper view of the road and can easily steer and reach the pedals, and keep your vehicle safe.  Make sure you get regular inspections done to ensure that your vehicle is safe, and make sure that all fluid levels remain where they should be.  It’s a good idea to check your oil and fluid levels when you stop for gas, particularly if you drive often.

The safety features are there for a reason!

Keep your Distance

Don’t follow too closely.  This is another big cause of accidents, because of the reduction in reaction time.  A good general rule is to allow a few seconds between you and the car in front of you.  This is easily tested by measuring against a stationary marker like a road sign or telephone pole.  Be especially careful in bad weather.  If you’re inexperienced driving in rain, snow, or ice, you might want to have someone else drive for you.

Defense

Finally, drive defensively.  Assume that other drivers are going to make mistakes, and protect yourself from these mistakes.  Don’t assume someone’s going to stop; make sure that you’re ready if they don’t stop in time.  Always wait to make sure someone is really turning and doesn’t have their signal on by mistake.  Be prepared to stop at any time if someone cuts you off. Other drivers will often not drive responsibly; if you want to be safe and to keep your insurance costs low, make sure that you do.

Pests and your Homeowners Insurance Coverage

Your homeowners policy won't cover this; best to prevent it!

Many people look to their insurance agent and their homeowners insurance policy for help in covering the costs to eradicate the invaders and any damage they have caused. These people are operating  under the false impression that their homeowners insurance policy provides coverage against damage done by infestation, but that isn’t the case. In fact, most homeowners insurance policies have a very explicit clause that excludes damage from pests and infestation. Damage from infestation is generally considered to be a long-term problem that should be prevented by home maintenance. Damage that can be prevented by taking appropriate action is generally not covered by a homeowners insurance policy.

There are some, very limited policies that do cover damage from insects, infestation and pests, but this coverage is specifically called out within the policy and the cost for such coverage is not insignificant. If you have a specific need for this type of coverage check with your insurance agent on pricing and availability. The most affordable action that you can take to guard against damage from pests and infestation is preventative and regular maintenance.

Some damage is covered by a standard homeowners policy, but it is generally limited to collateral damage associated with the infestation (or infestation as collateral to a sudden event). For instance, if termites destroy a central pillar to the home’s frame and the roof caves in, the damage associated with the falling roof will likely be covered, but the damage to the home’s frame will not be. Similarly, if a storm blows a door off your garage and a family of raccoons turn the garage into their home before you are able to get the damaged door replaced, then the insurance company may cover the damage caused by the raccoons (since it is directly related to the storm damage). The differentiation is that gradual damage is not covered, but sudden, unexpected damage is.

Don’t rely on your understanding of the policy though, speak with your insurance agent about the specifics of your policy to try to eliminate any misunderstanding before you have reason to file a claim.

Common Pests

Pests come in all shapes and sizes, and some seem fairly benign while others can be downright vicious. You may know about or have heard of some of the more common pests, like termites, mice, or rats, but there are also other pests that can start to take over your home if you are not careful. Some unexpected rodents include moles, ants, spiders, and fleas. Each animal has its own unique warning signs, but often, common types of pets give off specific sets of signals to make their presence known.

Warning Signs

Termites and ants pose different hazards to humans, but both can release a negative odor to alert you to their presence. However, keeping an eye out for mud nests, tunnels, hollowed out wooden structure, and the ants or termites themselves is the best way to check for the pests. Experts say that if you see winged termites especially, that is a dangerous sign. You should call a professional exterminator immediately if you find large ants or termites in your home, because chances are, they are already nesting in the wooden surfaces of your home. The longer you wait, the more expensive removal will be, and your home will be devalued as well.

Warning signs for rodents, including mice, moles, and rats, will usually include an odor as well. Keeping an eye on any old food, books, or storage in your garage or basement especially, and opening stored boxes with a fair amount of frequency will often help you detect, but not prevent rodents. If you see paper that looks like it has been chewed, find small fecal droppings, or smell urine in corners, and amongst storage piles, those are all warning signs that you might have a rodent infestation, or at least one rodent living in the house. Rats and moles both can make very large holes in your yard, which can become a tripping hazard for small children and animals, and these rodents also carry diseases.

If you have a bed bug or flea infestation, you will likely know because of marks on your skin or finding the bugs on your pets. With bed bugs, you will need to call pest control, because the entire room will need to be either frozen or heated to an extreme temperature.

Serious Issue

Most pests not only do significant damage to the structure of your home by eating and nesting in the wood and base of your home, but they also pose very serious health hazards to humans. Keeping your home clean is one way to deter pests from nesting, although it will not prevent all infestations. Having a clean living space will also help you more easily detect the odor that many pest infestations bring with them. A sour or putrid smell is a warning sign for rodents, and termites and ants bring a sickeningly sweet and sour smell when their numbers grow, especially when their larvae are hatching.

Pest Control

When is the right time to call pest control? At the first sign of any drywall damage or structural infestation, you should call pest control. You also should call pest control if you see large numbers or the animal or bug in your home, or if the numbers seem to be multiplying. The more you see, the more likely it is that your home has been infested, and that the pests are laying nests and making the problem even worse.

Other Preventative Measures

Beyond keeping a clean house and calling pest control at the first sign of an issue, there are some other preventative measures that you can take. Cut back tree-limbs so that they aren’t you’re your house, ensure that grates, screens or other (appropriate) barriers are in place to prevent access to crawl spaces and attics and move wood and other debris away from the house.

Protect your home and make it your own. Don’t allow pests to take over and make it uninhabitable.

Your love doesn't end when you die.

As with all things related to life insurance, choosing beneficiaries is also challenging because it speaks to our own mortality. While it may not be pleasant to think about your passing, and you may be tempted to rush through the beneficiary process, or to short-cut it thinking that your survivors will figure it out, it’s important that you take the time to make your wishes known (and legally binding).

While there is no single formula that works for everyone, following are some things to keep in mind when identifying your beneficiaries:

1. Give yourself time. When deciding how to choose your life insurance beneficiaries, there are quite a few factors to consider. Because it is such an important choice, you will want to make sure to take as much time as needed to think about your beneficiaries. To give yourself an extra cushion of time, you should start considering possible options before you even receive your benefits folder. If you are working in an office, you should also request some extra time from your Human Resources manager to let your lawyer or spouse look over the forms with you so that you can fully inform yourself of the insurance benefits and what rights you and your family have in terms of life insurance.
2. Decide whether you want your beneficiaries to be individuals or trusts. A revocable living trust, or irrevocable life insurance trust, if you have that option, have different purposes. Trusts should be considered as beneficial, because if you give money directly to individuals named as beneficiaries, they may not pay tax on your estate if needed, and this could cause problems for them and others later on. However, even though that is not always the case, trusts should be considered.
3. Consider the pros and cons of each beneficiary. This will be a very personal and individual step in selecting your beneficiaries, but it is very important. You may want to consider factors such as personality and financial need. You should choose someone close to you, whom you trust to make sound and well-considered decisions, to be your primary beneficiary. Many people choose their spouses or parents, but some people also choose friends, siblings, or colleagues who they know will either need to money or be most responsible with it.
4. Double check your choices by imagining the worst case scenario. If you think of the most horrible thing that could happen, who would be left the most vulnerable. Does your primary beneficiary need more time to grieve? Will the person you have chosen share the money with the appropriate parties, or do you need to consider someone else or a different type of trust as your primary beneficiary?

Even though choosing the right path for you or your family can seem quite daunting, you will have mastered peace of mind when you are able to choose trustworthy beneficiaries that will protect your assets and help your beneficiaries. After you choose your beneficiaries, keep in contact with your life insurance company so that you can be on the same page as them, have updated forms, and make changes to your plan when needed.

Carefree traveling - the beauty of knowing your covered.

Understand your Existing Policy

First, you should know what your current car insurance covers. Perhaps you are covered for other vehicles as well, or you might only be covered for your own vehicle. If you are covered well, you will often find supplemental rental vehicle insurance to be an unnecessary extra cost. Credit card companies sometimes cover rental cars as well, depending on your card agreement and preferred rental plans. Checking with both your credit card and insurance companies before you will rent a car is a smart way to avoid paying extra if you are already fully covered. Extra coverage never really hurt anyone, and it is always better to be safe than sorry. If you need a last minute rental car, and do not have time to check with your provider, you may just want to opt for the extra insurance.

You should definitely buy insurance for your rental car if you do not have car insurance coverage, or if your insurance coverage is minimal. It is also possible to get non-owner single driver insurance for around 100-300 dollars a year that will help you when you rent a car. If you will need to be renting cars fairly frequently, you may want to look into this option. When you are driving a car, a mundane yet risky activity, you need insurance coverage.

Where are you Traveling?

If you are going to be driving the car in dangerous locations, or in high risk parts of town, it is a good idea to buy supplemental insurance. It is also important to buy rental insurance when you are in another country, as your car insurance might not transfer internationally, and you are likely to encounter unfamiliar driving conditions. You may also have a higher risk of accidents if you are in a country where the driving side is opposite to what you are used to, or if you have not studied the signage in the area before renting your vehicle. With an increased risk comes an increased need for insurance.

Extent of your Travel

When you are renting a car for longer than a few hours, or will be driving the car for long distances like on a road trip, it is very important to get supplemental insurance. The longer you are driving the car, the more likely you are to damage the car in some way, and renters’ insurance will protect you from paying large amounts out of pocket for potential damage.

When you decide to rent a car, it is often more likely that you will want the rental insurance than not. Accidents are possible at any time, and having extra rental insurance can be a buffer against claims of damage from the rental company after you return the car. It can save most people quite a bit of money in case of an accident as well. However, knowing where you will be driving, how long you will keep the car for, and your own current insurance coverage will help make your rental insurance decision easier. Individuals with comprehensive auto insurance plans may not need the additional coverage; therefore it is important to understand your existing auto insurance policy before you make the final decision.

Before you host hundreds, consider whether your insurance is adequate.

What is it?

Special event insurance coverage offers extra support and liability for high risk events, such as concerts and firework shows, but also smaller events where danger is probable, high value items are around, temporary structures are being placed, and large amounts of people are going to congregate. There are many different levels of special event coverage, and with most plans you are able to choose what you want to have covered. Are you worried about children hurting themselves on a “bouncy house” and wanting to cover bodily injuries? Are you worried about weather damage to the tents? Cancellation and the loss of funds from having to call the whole thing off? These are all clauses and considerations that are available with different special event insurance plans.

Not Always Necessary

While not everyone who is planning an event or party will need special event insurance coverage, it can be a really smart choice for some planners. If your party or special event will have large crowds of people, if they are likely to be very rowdy, or if there may be some dangerous occurrence at the event, you should probably consider it more.

Also, the event itself may involve high-value property (higher than is normally on the premise), such as would be the case with an art show, wine tasting or a fundraising event. If this is the case, ask the individuals assisting with the event (e.g. if an art gallery is bringing the art) whether they carry a special insurance policy for such events. The personal property owners (e.g. the art owners) may hold you responsible if someone knocks over a $50,000 glass sculpture, or they could already have really stellar insurance coverage that includes liability for third party events. If you don’t ask, you could find yourself having to purchase something that you cannot afford, or asking your guest to.

 Instances where you May not Need Coverage

There are many types of events and parties that do not require special event insurance coverage, even for large parties. You probably do not need to worry about getting coverage for most smaller events, or more personal events, such as weddings, funerals, and birthday parties. If you have fewer than 100 guests at your event, it is not usually likely that you will need special event insurance. Unless you are spending thousands of dollars and have a high risk for liability and damages to property, it might not be worth it. In addition, if there are no rowdy crowds or breakables, and if you know all of the guests personally, there is less need for special event coverage.

However, for large and very expensive parties, large crowds, physically involved events, and events with a lot of liability hazards, special event coverage can be the best choice. When guests to the event are putting themselves at risk, or if there is a large chance of cancellation or weather concern, special event coverage can put a helpful financial buffer in place for planners so that they are not responsible for dealing with the fallout of a disaster or cancellation on their own. If you are planning a large event, consider different worst case scenarios, and talk to your attorney and other planners about options surrounding special event insurance coverage. For maximum peace of mind, special event coverage should be considered.

Initial Underwriting Period

Avoid insurance policy cancellation if at all possible!

Most insurance policies cannot be cancelled by the insurance company during the policy’s term after the first 60 days of coverage (the “initial underwriting period” or “binding period”), unless certain events occur. This rule is in place to help protect consumers and to prevent insurance companies from revoking coverage from consumers at will. Consumers purchase insurance for the protection that it offers and they need to know that their policies won’t be revoked at any time. Therefore, insurance companies are prevented from cancelling policies once the contract is in place.

However, policyholders can cancel the policy at will. Certainly they can notify the insurance company of their intent to cancel the policy and work through the standard process, or at the most basic, they simply stop paying their premiums.

In order to give the insurance companies some protection and ability to withdraw from an insurance contract, most jurisdictions allow insurance providers to cancel the contract during the first 60 days for any reason, other than those prohibited by State or Federal laws. For instance, insurance companies cannot cancel the policy due to age or gender, as this would be considered discrimination under Federal (and most State) laws.

After the initial underwriting period, an insurance company that wants to terminate the contract during the term of the policy needs to cancel the policy in compliance with State and Federal guidelines.

Cancellation

Termination of a policy takes place immediately (or very shortly after notification of the intent to cancel has been delivered). While the exact rules vary from State to State, most insurance policies can only be cancelled due to certain events. In regards to auto insurance, policies can normally be terminated as a result of non-payment of the premium, suspension of a driver’s license, fraud or the misrepresentation of facts by the policyholder and other non-compliance with the contractual terms of the policy.

Property insurance policies can be cancelled if facts and circumstances change which make the property much more susceptible to damage, such as leaving the property (e.g. a house) vacant.

Non-renewal

Non-renewal of an insurance policy is different from cancellation. Non-renewals don’t take effect immediately. Rather, the insurance company notifies the policyholder of their intent to non-renew the policy at the end of the current policy’s term. The insurance company is required to provide the reasons for non-renewal, which may include (for an auto insurance policy): multiple traffic violations, conviction of driving under the influence, conviction for operating a vehicle without a license and being convicted of fleeing the scene of an accident. Non-renewal also happens because of an increase in your perceived risk profile (e.g. filing too many claims).

State laws normally create the distinction between non-renewal and cancellation, so be sure to check with your respective State’s department of insurance if you have questions about the cancellation or non-renewal process.

Non-renewal often has nothing to do with policyholder, such as delinquent premium payments or fraudulent actions and misrepresentation of facts. Non-renewal often is the result of a change in the insurance provider’s policies. Examples of policy changes can be an insurance provider’s decision to offer fewer insurance policies in a certain region or state, or something similar.

Higher Premiums

Generally, even if a person being insured has done something that would put them at risk for cancellation, it will usually just result in a higher premium charge – unless it is a very serious violation of the insurance policy. Also, a non-renewal decision from an insurance provider does not automatically result in higher premium costs from another insurance policy taken out afterwards – although it can in some cases.

Insurance providers must also provide the person being insured with a detailed explanation of the reasons for a non-renewal decision. A cancellation of a policy does not require a detailed explanation, though the insurer does have to support their position. Non-renewals can also be challenged, and usually are, while cancellations tend to be straightforward. However, if you think you have been subject to an inappropriate cancellation, contact your respective State insurance department for assistance.

Effects on Insurability

A cancellation of an insurance policy will make it much more difficult for you to find insurance from another insurance provider, because the reasons for policy cancellation are much more severe than non-renewal. It is best to avoid insurance cancellation wherever possible. If your insurance is cancelled, be prepared to pay a significant price for the next insurance contract.

While the two terms (cancellation and non-renewal) may seem the same, they are in fact worlds apart. Sure, they essentially end in the same fashion: a loss of an insurance policy, but the ramifications and the ease of being insured again are what make the two terms so different.

If your insurance policy has been cancelled or you’ve been notified of non-renewal, make sure to compare insurance quotes to find the most affordable alternative. Premiums are likely going to be higher than you’ve paid in the past, but by shopping across multiple insurance companies you’ll find the most affordable contract for your specific situation.

SR-22 insurance gets you back on the road!

If you have had multiple problems with traffic violations, driving under the influence or were involved in an accident without car insurance, you may be required to get SR-22 insurance. Technically, SR-22 is not actually insurance but refers to a form that is required by the State from your insurer for you to be able to drive legally. This insurance form is required by law and it will need to be filed with the State you live in before you are allowed behind the wheel back on the public roadways.

Who Is Required to have SR-22 Insurance?

An SR-22 is frequently required of those who have been charged with a DUI or some other alcohol or drug related traffic violation. When an SR22 is required by the court, it allows the offending driver to have his or her license reinstated as long as they have proof that they keep their car insurance policy in force.

What is the Purpose?

The purpose of the SR-22 form is that it acts as an agreement between the State and the insurance company and establishes that if the insured’s coverage stops for any reason, that the company will immediately notify the State’s licensing agency, and the driver’s license will be immediately suspended. Even a one day lapse in the policy coverage will be reported to the department of motor vehicles and the license will be cancelled.

Fees for SR-22

A fee (or fees) is usually required by the department of motor vehicles to get your license reinstated. If you have had your driver’s license cancelled due to outstanding parking tickets or tickets for moving violations, they will need to be paid in full before being allowed to get an SR-22. Also, if your license is revoked because of a lapse of coverage, any necessary fees will need to be paid again.

High Premiums

Because SR-22 auto insurance is for individuals who are considered to be high-risk, the auto insurance premiums are going to be considerably higher than it would be for a driver who does not have a similar record. That’s more of a by-product of the underlying driving violations than it is the actual form itself. This insurance is also available for those who do not own the car they are going to be driving, and that is called non-owner SR-22 insurance filing. However, if a court has required that you have an ignition interlock device installed on your car, then this option is not available to you.

States Requiring SR-22 Insurance

Get back in the game!

Every State has different laws that need to be observed when filing your SR-22 insurance. The insurer may notify the department of motor vehicles directly (possibly even the same day), or it may give the forms to the person seeking the SR-22 to take to the department of motor vehicles themselves. At present, there are eight States that do not use the SR22 system. These States include: Pennsylvania, Oklahoma, Minnesota, Kentucky, Delaware, North Carolina, New York and New Mexico.

Duration of an SR-22

An SR-22 requirement will typically last for a period of one to three years, but some States, such as Alaska, may require that it be in place for up to five years. If the insured’s policy lapses during that period, most States require that the probation period start over again, meaning that the driver will need to keep on paying high risk rates during that time.

Compare Car Insurance Quotes

If you have been required by your State to file the form SR-22, you certainly do not want to go out and buy the first policy offered to you. Car insurance companies offer high risk coverage at a wide range of cost – if they offer it at all. This means that by simply taking a little time to shop around, compare car insurance quotes, you can find the most affordable auto insurance policy for your specific situation.

Statistical Probabilities of Life Insurance Policies

Life insurance providers use mathematical equations to determine the lowest cost life insurance policy.

In order to establish statistical probabilities, historic data about life spans and health factors is compiled for large populations of people. Actuaries both compile this information and then use it to generate equations to calculate probability. These equations are represented in Actuarial Mortality Tables (sometimes referred to as “Life Tables”), which are essentially tabular or graphical representation of life expectancy. These tables can be generated based on age, gender, socio-economic status, lifestyle choices, general state of health and veritable plethora of other factors.

Period Life Table and the Cohort Life Table

There are two main types of Actuarial Mortality Tables used by insurance companies: A Period Life Table and a Cohort Life Table. A Period Life Table only concerns the life expectancy of the current year, while a Cohort Life Table takes into consideration the current year of life expectancy and projections into future years, because life expectancy will fluctuate slightly from year to year depending on medical advancements and other factors.

Classifying the Population

Actuarial Mortality Tables are separated between males and females because on average females tend to live longer than males. After those two classifications, the next major one is age. Obviously, the younger you are the longer you will live. After those two classifications, percentages are given under the headings of death probability, number of lives and life expectancy.

Common Terms of Actuarial Mortality Tables

Actuarial mortality tables are one of the most important factors in the life insurance rate calculation,

When reading an Actuarial Mortality table there are several standard terms:

• Death Probability
• Number of Lives
• Life Expectancy

Death probability measures the odds that a person will pass away in the next year and is represented as a percentage.

Number of lives represents how many people out of a population of 100,000 will remain at the end of that year. For example, a new born male’s number of lives is 100,000 (virtually no one-year-olds die), while a 111 year old male’s number of lives is 1 because, on average 1 out of every 100,000 people will live to be 111. (This is according to an Actuarial Mortality Table done in 2007 by the United States Social Security Office.)

Life expectancy is the age a person is expected to live to. According to the 2007 Actuarial Mortality Table, a newborn male is expected to live to the age of 75.38, while a newborn female is expected to live until the age of 80.43.

Use of the Actuarial Mortality Tables

Private insurance companies use the factors in these tables to price life insurance policies. Each insurance company leverages its own historic data as well to tweak public information. However, public information is extraordinarily valuable, as federal regulations require insurance companies to share their data with the government. In addition to using this information to regulate the industry, government agencies, such as the United States Social Security Administration, use this information to model government insurance plans, including social security. Each year, information is presented to the United States Congress to estimate future income and expenditures of the Old-Age, Survivors and Disability Insurance program. Actuarial Mortality Tables underlie these projections.

By understanding the Actuarial Mortality Tables, we hope that you have better insight into how the insurance companies use the information contained therein to price the insurance policy offered to you. You can also use this information to identify where the probability of mortality increases for your demographic. You may be able to alter you policy requirements, such as opting for a 10-year policy rather than a 20-year policy, and investing the difference in premiums to “self-insure” the second decade.

Find a Life Insurance Policy Online

Knowledge is power, and insurance is peace of mind. Educating yourself about the intricacies of insurance policies will help you maximize your peace of mind while minimizing your cost. Use this knowledge and our free online servicesto find the right life insurance policy for you and your beneficiaries.

Use our services, and your knowledge, to find a low cost life insurance policy online!