Insurance Quotes & Advice

If your policy goes up for some inexplicable reason it may be your credit score to blame.  The use of credit ratings to calculate premiums has been a sore point of contention between insurance carriers and their customers for a few years now.

In the auto and property insurance industries especially, some companies have determined that there is a statistical correlation between a bad credit score and a higher frequency of claims.  While on the surface it may seem unfair, people need to accept the reality of the situation because most states allow it’s use and the courts have ruled in favor of the carriers when litigation over the subject has arisen.

There are a few things everyone can do to help themselves.  It is always important to check your credit report. The three main credit reporting agencies all offer you one free report annually.

Discrepancies may show up from time to time that you may not even be aware of.  Also, be sure to visit our debt management section from time to time for important tips on keeping your credit score high and for ways to rehabilitate it, if your score is not so good.

Shop around, different companies have different methods of calculating premiums. So, even if you do have bad credit, another company may give less weight to your credit score than your current carrier.

On the bright side a good credit rating supposedly helps lower your premiums, at least that’s what they claim.

Insurance companies don’t like it when you file a claim. Some may even take the extreme measure of canceling your policy all together once it lapses. Since insurance isn’t regulated at the federal level, whether this is allowed or not can vary from state to state.

In Delaware, the Superior Court ruled for the insurance industry against the state’s insurance regulator concerning this type of scenario.

“A Delaware Superior Court has ruled that the state’s insurance regulator overstepped his authority when he prohibited property insurers from refusing to renew a homeowner policy based solely on whether the insured had filed a recent claim or made an inquiry.”

The regulator in this case issued a regulation calling this type of act an unfair trade practice when that state’s legislature was unable to pass a law that would have made it illegal. It remains to be seen if they will rectify that or not.

This is nothing new however. The industry has always been looking for ways to minimize its risk exposure, much the dismay of their customers. Companies have even left entire regions that they deemed too costly to do business. For this reason there has been much more scrutiny lately over their recent profit levels.

Nonetheless it can be quite disconcerting to have your insurance carrier drop you for actually needing the policy you paid for. Be sure to inquire with your state’s insurance commission to determine what course of action might be open to you.

There may come a day when you can no longer take care of yourself and will require long term care.  It’s not something any person really wants to think about because it can be a frightening prospect.  That’s not even taking the costs into consideration because it’s expensive and can eat away at your assets fast.

The current average annual cost of a nursing home stay is over $70,000, the cost for assisted living is about half that,  and like regular healthcare, it’s rising at a faster rate than inflation.  And don’t think that you can just rely on Medicare or Medicaid either because even if your lucky at the most they might cover about 50% of the cost and if you’ve read some of my previous articles then you know by now that those two programs aren’t exactly financially stable.

When planning for your retirement nowadays, you need to consider long term care insurance.  While most people will have health insurance not all of them will purchase long term care insurance.  It’s something you need to think about sooner rather than later because the older you get, the more expensive the premiums will become.

A healthy individual in their 50’s can expect to pay somewhere between $2,000-$3,000 a year in premiums with prices almost doubling every decade after that.  Also keep in mind that costs can vary from state to state since insurance isn’t regulated at the federal level.

Even though the insurance isn’t exactly cheap, it’s a lot less than if you had to pay for long term care out of your own pocket. Also with the huge influx of baby boomers about to hit retirement age, who knows what that will due to the future cost of long term care.