Insurance Quotes & Advice

Last Thursday Florida Governor Charlie Crist signed into law a bill requiring drivers to once again carry personal injury protection from their insurance carriers starting January 1, 2008.  Florida’s old no-fault system expired earlier this month on October 1st. 

The Florida State Legislature moved quickly to reenact the law with the State Senate voting unanimously 37-0 and the State House of Representative voting 105-4.  However in the intervening time period, hundreds of thousands of drivers that had suspended licenses because they were without PIP coverage have gained a reprieve during this window and are once again able to take to the streets which have some motorists concerned.

“No-fault” insurance basically means that your insurance carrier will pay for your claims up to the limit of your policy, regardless of who was at fault in an accident but that you are restricted in your ability to bring litigation against the other drivers involved unless your injuries are particularly severe.  The other type of insurance system is commonly referred to as the “tort” liability system where insurance claims are not paid out until litigation determines who was negligent in an accident. 

The advantages of the no-fault system are that claims are paid out quickly without having to wait for lengthy legal battles but on the flip side bad and reckless drivers are not punished as under the “tort” system.  No-fault systems have been particularly popular in areas with high accident rates with proponents arguing that this type of system helps curb the rampant fraud cases that have plagued the auto insurance industry. 

Currently there are 11 states with no-fault systems Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah with Florida rejoining this group at the beginning of next year.

There are two basic types of life insurance you can purchase, term life insurance or permanent life insurance.  Term life insurance covers you for a set period of time.  Permanent life insurance covers you for the rest of your life. 

Term life insurance has considerably lower premiums but when your term expires renewing it will usually be more expensive as you will be much older and hence a greater risk of death than when you first bought the policy.  Permanent life insurance also known as cash value life insurance has much more expensive premiums but also give the chance for the policy to increase in value with a investment component tied into it. 

There are also many types of permanent insurance to choose ranging from whole life, variable life, universal life, and variable universal life.  The key differences being in the ranges of flexibility in the premiums and the amount of control you have over the investments. 

Many financial experts will have widely differing viewpoints on which type is best but it will mostly depend on each individual’s financial situation.  The savings on premiums by choosing term life insurance may yield you a higher rate of return if you invest those savings wisely. 

On the flip side while returns on the cash value portion of permanent life insurance tend to be lower than average stock market returns they have very attractive tax shelter implications depending on how the death benefits are paid out.  With uncertainty over estate tax legislation in the upcoming years this becomes a very important consideration to the decision on which type to choose.  The best advice is to sit down with your financial advisor so that you can make an informed decision on the best way to take care of your dependents needs.

This topic has received a lot of attention in the news recently as this program expired on Semptember 30, 2007 and is currently under legislation to reauthorize the program. John K. Iglehart wrote this interesting article about this current political battle on September 6, 2007 in the New England Journal of Medicine.

Last week President Bush vetoed the House portion of the reauthoriztion releasing this statement. A few days later Senate Majority Leader Harry Reid of Nevada fired back with a statement of his own. Along with the war in Iraq, health care is one of the more hotly debated topics in our country today. You can learn more about the actual legislation here.

Census Data released last year showed that nearly 47 million Americans, with over 8 million of them being children, are without health care coverage. These are some disturbing numbers and with the government’s failure to act, these numbers can only be expected to rise as a number of states are facing shortfalls in their federally funded health care programs with the new fiscal year starting at the beginning of this month.

This becomes even more alarming with recent statistics showing that employer health insurance premiums are rising at double the current rate of inflation. So while relief might not be in sight for those 47 million Americans at least they will be able to say welcome to the club.