High Value Home Insurance: 3 Ways High Value Homeowners Overpay

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While standard mass-market insurance companies do a great job of insuring the standard American home–someone with a custom home, needs a custom policy.

But these specialized, customized high value home policies, with enhanced coverages, typically cost much more, right?

Not necessarily.

High value homeowners can often pay less, for much more in coverage when switching from a standard insurance company to a specialized high value home carrier.

Recently ACE Insurance Group, an insurance carrier who specializes in high value homes, did a survey of 600 high net worth insurance agents. Agents were surveyed about clients who were previously insured with a standard insurance carrier. Asking if those clients were likely to be overinsured or underinsured in 21 different types of coverages.

Overall, there were 3 main coverages where high value homeowners commonly overpaid.  In addition, 7 other coverages stood out among the 600 agents as additional saving opportunities.

# 1 – Deductibles

The # 1 way affluent homeowners overpay for insurance is with their choice of deductible, which 81% of agents agreed on.

Ironically, I’ve seen many high net worth individuals carry deductibles of $250, $500, or even $1,000. Yet, when a small claim does occur they don’t file because they don’t want any claims impacting their  premium.

A philosophy we believe in at Weiss Insurance is insurance is for catastrophic events. If you can afford to self insure a risk, then do it. Therefore, we encourage customers who have the means to raise their deductibles, as the premiums savings can be substantial overtime.

# 2 – Package Discounts

62% Of agents agreed that package discounts were often missed among high value homeowners. It’s easy to see why. Auto insurance companies spend billions on advertising each year, promising one thing–savings. This leads to many high net worth families splitting their home and auto insurance among different insurers.

However, it’s important to keep an eye on overall insurance cost.

By combining your home and auto insurance, high value insurance companies offer discounts up to 10% or more.

Next, insuring your home with one company and cars with another increases the potential for gaps in coverage.

Additionally, by combining policies with one company who specializes in high net worth, a policy can be written as one package with common term dates and one consolidated bill, saving you time as well as money.

# 3 – Loss Prevention Credits

According to 50% of agents, high value homeowners with standard insurance companies often failed to apply basic credits to their home and auto policies.

When combined, the credits for various loss prevention systems, which often are the norm for high value homes and cars, can reduce homeowner premium by 30% or more.

Furthermore, having these loss prevention devices in place can often allow homeowners to raise their deductible. Potentially, by combining the two strategies homeowners can save up to 50%.

Below is a list of the common credits high value homeowners often miss:

Home Insurance Credits

  • Burglar alarms
  • Fire alarms and sprinkler systems
  • Electrical backup, lightning protection
  • Temperature monitoring
  • Water leak detection with auto valve cut-off
  • Gas leak detection

Auto Insurance Credits

  • Theft alarms
  • Fuel cut-off switches
  • Hood locks
  • Steering locks
  • Ignition cut-off switches
  • Location transponders

7 Additional Saving Opportunities For High Value Homeowners

While raising deductibles, applying package discounts, and taking advantage of safety credits were the three main areas where high value homeowners overpaid, there were an additional 7 saving opportunities that were often missed.

  1. Paying low collector car rates for a collector car – 31%
  2. New or rehabilitated home credit – 22%
  3. Storing infrequently worn jewelry in a bank vault – 20%
  4. Good student discount – 11%
  5. Credit rating – 10%
  6. Accident-free credit – 9%
  7. Accident prevention course credit – 9%

High Value Home Insurance in Illinois

While most agencies offer one market for high-end home insurance, Weiss Insurance Agencies is contracted with multiple different companies who specialize only in high value home insurance.

So, why have some of the most respected names in insurance like Chubb, ACE, Crestbrook, Encompass, and AIG’s Private Client Group partnered with Weiss Insurance Agencies?

We offer you a “Concierge Insurance Department” whose sole purpose is to provide insurance services for the affluent.

What will we do for you?

  • From the day you call or come into our office (we’re located in Wayne, IL), you get a  trained insurance specialists in high net worth insurance. From quoting out your current insurance to adding on jewelry, art, or other collectibles once the policy is effective, you’ll get to build a trusting relationship with one person.
  • You’ll have access to important loss prevention services. For example, one of our affluent insurance providers uses cutting edge, infrared camera technology to help identify moisture problems and potential fire hazards in your home. All at no cost.
  • Our Concierge Insurance Department will review every aspect of your luxury home insurance portfolio to make sure there are no gaps in your program. We do this upon becoming a customer and every year at renewal, to guarantee your home and assets are covered properly for the best possible price.

To learn more about what we can do for you, complete the quote form on our Illinois High Value Home Insurance Quote page.

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Best Illinois High Value Home Insurance Companies

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Best Illinois high value home insurance companies

If you drive a BMW, Mercedes, or Audi would you buy “Chevy” insurance?

Of course not.

If you live in a custom built home high value home, would you buy “manufactured” home insurance?

Again, of course not.

If you own a high value home (which we will define as any home worth over $750,000), you want to find a company that specializes in high value home insurance.

The goal of insurance is to protect yourself against financial catastrophe. In order to have this protection, you’ll need to find a company that can truly protect you. Furthermore, you’ll need to know how to compare for yourself two different insurance companies to determine the best fit for you.

As you’ll learn, there is no single best insurance company for every high value homeowner.  Instead, there’s one insurance company that’s best for you.

This is the third and final post in a series on high net worth home insurance. If you haven’t read posts # 1 and # 2 of this guide, they lay the framework for allowing you to choose the best insurance company for you.

To wrap up this series, we will review the top high value home insurance companies in Illinois and their coverage differences.

Here’s an overview:

  1. Part # 1: 6 Common home insurance mistakes high value homeowners make
  2. Part # 2: 3 Ways high value homeowners overpay for insurance
  3. Part # 3: Best Illinois high value home insurance companies

I wrote this guide to help high net worth homeowners like yourself make the best possible choice when it comes to personal insurance.

So next time you review your insurance, no matter who it’s with, you can make an informed intelligent decision. More importantly, you won’t be surprised when you go to file a claim and there’s no coverage.

Best Illinois High Value Home Insurance Companies

To make the best decision possible for the protection of one of your largest assets, it’s important you understand the coverage differences between two different insurance companies.

There are insurance companies that specialize in insuring main street America. Then, there are insurance companies that specialize in the affluent.

What is the difference?

There are many.

Below, you’ll see how typical, Standard “Main Street America” Insurance Companies compare to a high end High Value Home Insurance company.

# 1 – Risk Covered

  • Standard Insurance – You are only covered for loss or damage by specific causes, e.g. theft, fire, storm or water damage. If a cause is not explicitly listed – it’s not covered.
  • High Value Home Insurance – You are covered for loss or damage by any cause. Unless your policy specifically excludes something – you are covered.
  • Why does it matter? – When a loss does occur, you don’t have to go about “proving” the cause to the insurance company

# 2 – Extended Replacement Cost

  • Standard Insurance – Not offered
  • High Value Home Insurance – Guaranteed to repair building, no matter the final cost.
  • Why does it matter? – You won’t be left with $820,000 to rebuild a $1,000,000 home, as 67% of homeowners are underinsured by an average of 18%.

# 3  – Water/Sewer Back Up

  • Standard Insurance – Excluded or a limit of $5,000 additional added
  • High Value Home Insurance – Unlimited coverage
  • Why does it matter? – You’ll have appropriate for this common exclusion coverage at the time of claim.

# 4 – Claims Service

  • Standard Insurance – Little experience in protecting custom built homes
  • High Value Home Insurance – Expert claim service staff who deals exclusively with high value homeowners
  • Why does it matter? – You deal with someone who understands the process of replacing the valuable assets you own

# 5 – Contents Replacement Cost

  • Standard Insurance – Not offered
  • High Value Home Insurance – Offered
  • Why does it matter? – You’re reimbursed for what the contents cost to replace, not their depreciated value.

# 6 – Replacement Cost Cash Out Option

  • Standard Insurance – Not offered
  • High Value Home Insurance – Offered
  • Why does it matter? – If you suffer a total loss, you have the option to rebuild or take a cash payment up to the policy limit.

# 7 – Agreed Value

  • Standard Insurance – Regardless of any sums in your policy schedule, your payment for valuables will be based on the ‘trade price’ at the time of loss, less the deduction of an ‘excess’.
  • High Value Home Insurance – We agree with you at the outset the exact sum and in turn, the insurance company pays for all specified valuables.
  • Why does it matter? – There are no surprises or disagreements as to what something is worth

It’s easy to see the value between a a standard insurance company and a specialty high value home insurance company.

The next step is to know the difference between two high value home insurance companies, which are more subtle. Just because an insurance company can insure your high value home, doesn’t mean it can protect you from financial catastrophe.

Best Illinois High Value Home Insurance Companies

When looking at the entire sector of insurance companies who write multi-million dollar homes, it’s best to categorize them into three different categories.

  • Class A+
  • Class A 
  • Class A-

One of the key themes of this article is there’s not one best high value home insurance company, instead there’s a company that’s best for you.

An affluent homeowner with a million dollar home and a $250,000 art collection, will need different coverage than an affluent homeowner with a million dollar home and no collection.

Another key theme of this series is the purpose of insurance–to protect you against financial catastrophe.

By knowing the goal, you can then determine your risks, which will allow you to determine the company that best protects those risks.

After reviewing the coverage options, you may find that a company like Hanover can properly protect you. While another high value homeowner may find only a company like Chubb or AIG can truly protect them.

Again, it all comes down to what’s unique about you and your situation.

Let’s first look at the best high value home insurance companies. Then we will review what’s different about them.

Class A+ | 

  • AIG Private Client Group
  • Chubb Insurance (Now owned by ACE. Will keep the Chubb name)

Class A  |

  • AIG Premier – AIG’s branch focused on mass affluent.
  • Crestbrook – Rebranding to Nationwide Private Client
  • Encompass Insurance  – Owned by Allstate

Class A- | 

  • Hanover Platinum Protect
  • MetLife Grand Protect

Comparing The Best Illinois High Value Home Insurance Companies

The 7 companies listed above all offer superior coverage than standard insurance companies. They all insure high value homes in Illinois.

But there is still quite a difference.

Here’s a breakdown of 4 of the most important coverage options high value homeowners should look for and how they compare:

Building Replacement Cost Coverage Contents Replacement Cost Cash Out Option Backup of Sewers or Drains
– Class A+
AIG Guaranteed replacement cost Included Yes Unlimited
Chubb Guaranteed replacement cost Included Yes Unlimited
– Class A
AIG Premier Extra 100% of the dwelling’s coverage limit Included No Starts at $25,000 with additional offerred
Crestbrook Guaranteed replacement cost Included Yes Unlimited
Encompass Deluxe Extra 200% percent of the dwelling’s coverage limit Included No Unlimited
– Class A-
Hanover Platinum Select Premium Extended dwelling replacement cost at 150% of coverage limit Included No Up to $25,000
MetLife Grand Protect Guaranteed replacement cost Included No Starts at $10,000

How to Properly Insure Your Home for the Best Possible Price

So insurance that acts as insurance should, costs more, right?

It depends…

Most insurance is sold today because someone saves money. Turn on the TV and you’re going to see a commercial from one of the large insurance companies who “guarantees to save you money.”

And high-value insurance is no different…it still saves you money. Just in a different way.

At first, if you’re moving from a standard home insurance policy, you can typically expect to pay 15% more upfront when switching to an affluent provider of insurance.

However, as you now know, you’re not paying for the same protection. Which is why a few dollars a day spread out over a year for not only better peace of mind but better insurance is a sound investment.

However, over a ten year period, the 15% more investment upfront usually ends up paying for itself many times over.

But what about saving money today, while still be properly insured. Can it be done?

For many, the surprising answer is still YES.

Believe it or not because of our unique process at Weiss Insurance, we’ve helped many clients increase their coverage, all while saving money.

Insurance protects the assets you’ve spent years building. It’s important you make an informed intelligent decision about your insurance protection with someone you can trust.

What’s Next?

Why have some of the most respected names in insurance partnered with Weiss Insurance?

Weiss Insurance offers a “Concierge Insurance Department” whose sole purpose is to provide insurance services for the custom homeowners.

What will we do for you?

  1. You get a small team of trained high value home insurance specialists. From quoting out your current insurance to adding on a piece of jewelry once your policy is effective, you build a trusting relationship with a small team who understands your needs.
  2. Review every aspect of your home insurance portfolio to make sure there are no gaps. We do this upon becoming a customer and every year at renewal.

Here’s How it Works:

To start is simple, just visit our high value home insurance to request a coverage review and quote comparison or simply call our office at (630)584-1717.

We know your time is valuable, that’s why we have specific procedures and processes to make sure your time investment is minimal throughout the entire process.

You’ll also like to know that we’re licensed throughout the U.S. to protect our clients who own property in multiple states.

As a high value homeowner, you’ve worked hard to get to where you’re at. You deserve not only peace of mind but true protection from the best Illinois high value home insurance companies. Just as important, an agent who has protected the affluent in Illinois since 1905.

Get started now by visiting our high value home insurance page or call our office at (630)584-1717 to speak to a specialist today.

How to Build your Credit: The Definitive Guide for College Students

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How to Build Your Credit

It’s safe to say, understanding how to build your credit can save you over a hundred thousand dollars over your lifetime.

Don’t believe me?

Let’s say in a few years you obtain a $250,000 home loan on a 30 year mortgage. With a 4% fixed mortgage, you will make total payments over 30 years of $429,674 or $1,193.54 a month for 360 months.

If your interest rate was instead 6% due to your credit history, your total payments over 30 years will be $539,596 or $1,499 per month for 360 months. A difference of $109,922!

Do I have your attention now?

The savings doesn’t stop. Your credit score is factored into how much you pay for renters,  home and auto insurance also…

…And it’s not a few dollars a year difference.

You can save hundreds of dollars a year on home and auto insurance by optimizing your credit score.

Other benefits include:

  • Other loans such as private student loans, car loans, and others will have a lower interest rate. You’ll also have more negotiating power as banks love to deal with clients with a high credit score.
  • When renting an apartment, even long-term vacation rentals, it’s easier to do so with good credit history.
  • Employers now check credit history to see if you’re financially responsible
  • You’ll get better credit card offers and interest rates
  • And much more…

In the post, you’ll learn:

  • What exactly is your credit score, where to find it (for free), and how to improve it
  • The difference between your credit score and credit report
  • How to build your credit by applying for your first credit card

How to Build your Credit

To build and optimize your credit score, there are two things you need to understand:

  • Your Credit Score
  • Your Credit Report

First, let’s look at your credit score also known as your FICO (named so after the Fair Isaac Corporation) score. Your credit score is a simple number between 300 and 850. The higher the number, the better your credit history.

The number was originally created to make it easier for lenders to determine if you’re worthy of a loan or not. Just by looking at your credit score, a bank can decide if they will lend you money and at what rate.

However, your credit score now impacts many areas of your finances.

Note: There are other services now maintaining your credit score. I used FICO because it’s the most well known. All the scoring services (TransUnion, Vantage, Experian, and Equifax) have a different formula; however, all are similar.

What Makes Up Your Credit Score?

FICO hasn’t released the exact formula for calculating your credit score, but it has released what your credit score is based on. Here is the formula from their website:

Here’s what you need to know about each factor…

Payment History – 35%

Your payment history takes in account the timing of your past payments on accounts such as your credit card, retail accounts, and your mortgage. It also takes into account any bills that have gone to collection.

In college I was in a car accident. Wasn’t my fault but the other driver didn’t have insurance. He was going to pay me out of pocket. I had the bill sent to my dorm room. However, I switched dorm rooms over semesters and didn’t receive the bill.

Turns out the bill ended up going to collections. This one mistake cost me when I went to apply for a mortgage six years later.

It’s not rocket science, if you want to improve your credit score, pay your bills on time. It’s the #1 thing you can do.

Amounts Owed – 30%

The amount owed is the next biggest weight on your credit score. It’s also commonly referred to as, your credit utilization rate.

This is a ratio of the amount you owe and the amount available. It also takes into account the number of accounts you have with balances.

This perfect credit utilization rate isn’t known. However, we do know some basic facts:

  • Don’t max or come close to maxing out your available. A good rule of thumb is to not go beyond 33% of your available credit.
  • You want to use at least some credit. Therefore, a utilization rate of 0% could actually hurt your credit score.

Length of Credit History – 15%

15% of your credit score is based upon how long you have had credit. The longer your credit history, the better.

This is why it’s a good idea to apply for a card when you’re in college and keep that card for life.

It’s also why it’s a bad idea to cancel your oldest card.

Although it’s not my primary card, I still have my first card for this reason. I use it to pay my cable bill, which is automatically billed each month.

I keep this card active because you want to always have some activity on your credit. Like I mentioned before, applying for a credit card and then never using it, can actually hurt your credit card.

New Credit – 10%

Would you lend $100 to a friend who just borrowed $100 from three other friends? Of course not.

Which is why lenders, don’t like to see a lot of new activity, including credit inquiries, on your credit history.

Types of Credit Used – 10%

Lenders prefer to see a variety of credit on your credit score. For example, it’s better to have a student loan, one credit card, and a car loan then three credit cards.

This is only 10% of your score, so don’t go out and buy or car just to get variety. The most common mistake made here is carrying too many credit cards.

What It All Comes Down To

Many people try to crack the FICO equation, to determine their exact credit score. FICO has never and will never release the exact equation.

It all comes down to common sense. Pay your bills on time, don’t use all of your credit available, and don’t close your oldest account.

How to Get Your Credit Score

So now that you know 99% of what there is to know about credit scores, you probably want to see what your score is.

Option # 1 – Mint.com

Mint.com is an all in one personal finance tool.

You can track your account balances, get notifications of bills, create budgets and more.

I use Mint to track my finances and have recommended the software to many others.

They have a feature which allows you to view your credit score. The score is pulled from Equifax, one of the big three credit scoring agencies.

Option # 2 – Credit Karma

Another free option is to use CreditKarma.com.

I love the service but there are a few things you should know to get the most out of it.

  • Your score at Credit Karma can be different from your score at Mint. As mentioned, there are many different credit score reporting services and Credit Karma doesn’t use FICO. For more, read their FAQ.
  • Sign up the alerts. This will let you know of any new activities.
  • Use the Report Card to identify strengths and weaknesses

Personally, I login to Credit Karma a few times a year just to make sure there’s nothing unexpected. Plus, I’ve signed up for their alerts.

It’s a convenient way to monitor if you are on the right path.

Note: Both Mint and Credit Karma are free sites that earn money through affiliate commissions from credit card companies. Their recommendations are not always was it’s in your best interest.

How to Build Your Credit – The Credit Report

Your credit report is a more detailed report of your past credit history. It provides a future lender with just about financial transaction from your past. A little scary, but true.

Getting your credit report is simple and free.

Go to annualcreditreport.com.

You’re entitled to a free copy of your credit report from each of the report agencies once a year. You can get these all at once or over a period of a year.

I prefer to spread it out, just in case someone requests a copy (most landlords will) of my credit report, I don’t have to pay to get one.

Once you get your credit report, review it!

You want to double check everything.

Even basic information such as your name, social security number, address, etc.  You won’t believe how many stories I have heard of this information being incorrect, and consequently, negatively affecting someone’s credit without them knowing it.

Besides your basic information, you need to review everything on your credit history. Start from the first page and work your way toward the end.

To show you what you should be looking for, I’m going to take you through a recent copy of my credit report. (The report varies depending on what credit bureau you obtain it from, so don’t worry if yours isn’t the same).

Potentially Negative Items or Items for Further Review

If you have any unpaid bills that were sent to collections, this is where they’re listed.

Worth mentioning is that, Chapter 7, 11, and 12 bankruptcies and unpaid tax liens will remain up to ten years.

Accounts in Good Standing

The next section gives my accounts that are paid up to date, along with a balance history. Mine include three credit cards and one mortgage. All accounts status currently list “Open/Never late”, a great sign.

On one of my credit card accounts, I’m listed as an authorized user.

Meaning it’s not responsibility to pay the bill. Even though this isn’t my credit card, being an authorized user still affects my credit rating.

A bit of history on the authorized user because this has been a back and forth issue. One of the ways you used to be able to increase your credit score was to add yourself as an authorized user to an account in good standing. For example, if your parents had good credit, you can ask for them to add you as an authorized user and their credit history would go on your credit history.

FICO figured out this trick quickly and decided to eliminate authorized user status from the credit score equation for a short time. About two months after, the reversed their decision after the changed reversed their decision stating:

“After consulting with the Federal Reserve Board and the Federal Trade Commission earlier this year, Fair Isaac has decided to include consideration of authorized user trade lines present on the credit report in the FICO 08 model.” – Tom Quinn, Vice President of Global Scoring Solutions for Fair Isaac Corporation

I don’t know this for a fact, but from reading in between the lines I’m guessing that there is no way being an authorized user helps your credit. If the account holder is in good standing and has a good history of paying its bills, it will have no effect at all.

If the account is in bad standing, it will negatively affect your score. Therefore, if you’re an authorized user on an account with a bad credit history, ask to be removed immediately. =

Record of Requests for Your Credit History (Hard Inquiries)

Hard inquiries are done when you’re taking on additional financial obligation. Unfortunately, many businesses don’t come right out and tell you that they are performing a hard inquiry on your credit. However, it does make its way into the fine print.

The most common hard inquiries you will find on your credit report include:

  • Banks & Credit Unions
  • Credit Card Companies
  • Car Dealers
  • Insurance Companies – They’re required by law to ask.
  • Property Management Companies & Landlords
  • Phone & Cable Companies
  • Utility Companies

Here’s the statement from Experian on my credit report:

“We make your credit history available to your current and prospective creditors and employers as allowed by law. Experian may list these inquiries for two years so that you will have a record of the companies that accessed your credit information. 

The section below lists all of the companies that have reviews your credit history as a result of action you took, such as applying for credit or financing or as a result of a collection. The inquires in this section are shared with companies that view your credit history.”

Each hard inquiry on your credit report will lower your anywhere between 5 and 10 points. If you’re worried about your credit score, anytime before you open a new account just ask if they perform a hard pull on their credit.

Other Ways to Limit Hard Inquires include:

  • Ask – Anytime you’re opening a new account, ask if they are pulling your credit, when they are pulling your credit, how many times they are going to pull your credit, and how you can get that removed.
  • Don’t Rate Chase – A common, but damaging trend is to chase low introductory rates on credit cards. The more accounts you open, the more hard inquiries you will see on your credit.
  • Avoid Applying to Receive 10% Discount – When you’re checking out at a popular retail store they will ask you if you want to save 10% today by applying for a store card. The same “trick” is done by issuing free T-Shirts at sporting events. Every time you fill out an application, they pull a hard inquiry.
  • Don’t Do Business With Companies That Routinely Check Your Credit – A lot of businesses will make it a habit to pull your credit on a regular basis. Unfortunately, this is legal because they put it on the 22nd page of their terms and conditions that you had agreed to.
  • Avoid A Sharp Increase in Inquiries – This isn’t exactly a tip to eliminate a hard inquiry, but it’s still important. Many people, who want to get a credit card, will go out and apply for 4 or even ten credit cards at once. Please avoid doing this. It shows you’re in desperate need for credit, which isn’t what a future lender wants to see.

Getting Rid of Hard Inquiries

There used to be a common technique to get rid of hard inquires, that if you did a soft inquiry on yourself once a day, hard inquires would eventually get bumped. Credit reporting agencies are smart and quickly caught onto this.

If you don’t recognize or don’t remember giving authority for a hard inquiry on your credit, you have the right to get it removed by mailing or faxing a request to the creditor. You want to do this immediately, before they make another unauthorized inquiry.

The contact information for the creditor should be on your credit report. If it’s not, visit the company’s website and search for a contact number. Then call the creditor, and ask for either a fax line of mailing address to submit your formal letter. (Note: I wouldn’t ask for it to be removed over the phone because there is no paper trail)

Below is a copy sample letter you send via fax or certified mail to each creditor.

 

Your Name

Your Address

Your Phone Number

 

RE: Unauthorized Credit Inquiry

 

I was recently going over my credit report from (Insert Creditor’s Name), and I happened to see a hard inquiry listed from your company. 

The details of the inquiry are below. 

Date of Request: (Insert Date of Request)

Creditor Name: (Insert Creditor Name)

In which I am aware of, I have never approved your company for this inquiry. Under the Fair Credit Reporting Act, it is stated that you must have my authorization to perform a hard inquiry on my credit. 

Unless you can provide me a written proof of authorization signed by me, I’m asking you to contact each credit reporting agency to have your illegal inquiries removed, immediately. I also ask that you remove any personal information of mine from your records.

I’m sending this letter through certified mail, to ensure it’s delivery. 

Thank you for your attention to this matter,

Your Name

Your Signature

Removing a hard inquiry on your credit report, can give your credit rating a slight boost. The biggest benefit to doing so is less information in the hands of careless organization. The less personal information about you is circulating around, the less chance you have of getting your identity stolen. (More on this to come)

Inquiries Share Only With You (Soft Inquiries)

Soft inquiries are inquiries that you’re not even aware of. For example, the companies that send you pre-approved credit card applications through the mail perform a soft inquiry before sending you that application. When it comes to learning how to build your credit, soft inquiries have no bearing on your credit score.

On my credit report from Experian it states in bold letters:

“We offer credit information about you to those with a permissible purpose, for example to:

  • Other creditors who want to offer you pre approved credit
  • An employer who wished to extend an offer of employment
  • A potential investor is assessing the risk of a current obligation
  • Experian Consumer assistance to process a report for you
  • Your current creditors to monitor your accounts
  • A static copy of your credit report provided to a subsequent user necessary to complete your mortgage loan application

These inquiries do not affect your credit score.”

Although they don’t have any bearing on your credit score, it’s still interesting to take a look at what companies are looking up your credit history each year.

Common Questions about Credit Reports

What do I do if there is an Error on my Credit Report?

If something is wrong on your credit report, you want to immediately contact the reporting agency that issued the report.

The FTC has great instructions on what to do if there are any errors.  Follow their steps, including using their template. Make sure to copy anything you send, for your own records and record dates of everything you send.

What is Revolving Credit?

Revolving credit is a term used for credit that has no expiration. For example, a car payment, student loans, or a mortgage isn’t considered revolving because you eventually pay these types of loans off. Otherwise known as installment credit.

A credit card is a revolving payment because the credit is always available. As long as you pay it off each month, it’s always there for you.

Your FICO score looks at the amount of revolving credit you have compared to installment credit. The less revolving credit the better, in the eyes of FICO. If you’re looking for a quick increase in your credit score, a great way to achieve this is by paying off your revolving credit.

Does Applying for a Credit Card Hurt Your Credit Score?

Yes, applying for a credit card is a hard inquiry, which can negatively affect your credit score in the short-term. You can expect your credit score to go down around 5 points for six months any times a hard pull is done.

Keep this in mind, if you’re applying for a loan in the near future. For example, don’t apply for a new credit card right before applying for a car loan, to increase your credit utilization rate.

Opting Out of Credit Card Offers

Once I moved into a home, the amount of credit card offers I received was startling. Every day, I would receive at least one and sometimes more of the following applications in the mail; credit card, home equity line of credit, and mortgage insurance.

Luckily, I discovered OptOutPrescreen.com, where I can stop this junk mail from filling up my mailbox. The site was created as a result of Fair Credit Reporting Act and a link to the site can be found on the Federal Trade Commission’s website.

There are many advantages to stopping junk mail:

  • No chance of someone stealing your credit card applications through the mail.
  • Out of sight, out of mind. You willn’t be tempted to sign up for any credit card offers that you don’t need.
  • Save paper.
  • The fewer the amount of companies with your social security number the better.

You can choose to either opt out electronically or permanently by mail. If you choose electronically, you will be opted out for only 5 years. If you choose to opt out by mail, you will never receive a credit card offer again.

I wasn’t tracking the days to the exact date, but I would estimate that around four weeks after opting out, I was no longer receiving any prescreened offers through the mail.

Another tip, if you’re also tired of receiving catalogs, there is a free service Catalog Choice that can help you reduce your junk mail even more. It’s pretty simple; you just enter in your address and the catalog number of the catalog you want to eliminate.

Applying For Your First Credit Card

Applying for your first credit card is a big financial decision. When it comes to learning how to build your credit, it is the decision.

As you learned, length of credit history makes up 15% of your total credit score. Therefore, it’s possible you may keep this card open for the rest of your life.

The Credit Card Act of 2009 requires anyone under 21 to either have a co-signer or show proof of income.

A co-signer simply means that someone with income, typically your parents, have to personally guarantee you’ll pay the balance. If not, the credit card company has the right to go after the co-signer to pay.

If you do have proof of income, you’re able to apply for a card without a co-signer.

Credit card companies have designed specific cards marketed towards college students.

There are two types of cards:

  1. Secured
  2. Unsecured

With a secured card, you put down a cash deposit with the bank and that cash deposit is your limit.

What you’re doing here is giving the bank a lump sum of money (you get it back once you close the account) that they make available to you each month.

Why would you want to give a bank money, that if you don’t pay back you would get charged interest?

First of all, it builds financial responsibility. Second, secured cards are easier to obtain as you don’t need a cosigner.

Next are unsecured cards. As the name implies, with an unsecured card you’re not putting up a balance upfront. This is the biggest advantage here but there are downsides as well.

The biggest downside is the need for financial willpower on your end.

Credit cards make spending money easy. This is both an advantage and disadvantage.

An advantage because you don’t have to walk around with cash to pay for goods and services.

A disadvantage because it makes it very easy to spend money you don’t have. When you spend money you don’t have, you’re charged interest and it’s not a small amount of interest either.

So if there’s a unsecured credit card offer that interests you, it’s important that you’re able to pay in full every month the balance.

If you have the cash to put down a deposit on a secured card, my opinion is that this is the way to go as it promotes better individual financial responsibility.

What to Look For In Credit Card Offers

The first decision you’ll make is whether or not to apply for a secured or unsecured card.

There’s no right or wrong answer. There are both good and bad secured and unsecured cards.

Once that decision is made, you can then look at different card offers.

What do you need to look for?

Here are 3 tips to choosing your first credit card.

  • Review All Potential Fees – Each credit card has a different fee schedule. There’s the APY, which is the interest rate you’ll pay on any balances. There are late payment fees, which are flat one-time fees for missing payment. Unfortunately, the list goes on. The amount of fees credit card companies collect each year is startling. Know the fees ahead of time.
  • Bonus Offers – Don’t worry about rewards and sign up bonuses for now. The goal here is establishing and building your credit. If you do that, there will be opportunities to earn lucrative rewards down the road.
  • Automatic Payments – When you get your card, set up automatic payments through your checking account. Missing payments result in not only fees but a potential ding to your credit. Even if it’s just the minimum amount, setting up your automatic payments will help you avoid these nasty fees.

Now I’ve got a Question for You…

Was this guide on how to build your credit helpful?

Let me know in the comments.

The goal was to create the guide I wish someone handed me in college.

I had no idea how much of an impact credit had on my future.

You now do.

Good luck!

Life Insurance for Parents: An Insider’s Guide To Saving Money

By | Life Insurance | No Comments

PersonalInsuranceYou may be expecting. You may have a newborn. You may be on your third.

As a parent,  the question now is not if you need life insurance, but rather which type to buy, what company to buy it from, and how to get it for the best price.

When developing a life insurance plan for a client, I’ve seen my share of mistakes and misconceptions.

Most common are:

  • Buying the wrong type of insurance for a lot more money
  • Not understanding exactly what it is that they’re buying
  • Not understanding where fees and commissions come from
  • Overestimating the amount of money life insurance for parents costs
  • Underestimating the amount of insurance they need

That’s why I decided to write a post dedicated to life insurance for parents.

In this comprehensive post, you’ll learn:

  1. How to decide what type of life insurance is best for you
  2. How to decide how much insurance you need
  3. How to buy the right type, with the right amount, for the lowest possible price
  4. 8 Steps to buying life insurance

What Type Of Life Insurance Should Parents Buy?

Your first step in purchasing life insurance is to decide what type of insurance you need.

There are two basic choices:

  1. Term life insurance
  2. Whole life insurance.

Then, there are choices within these types.

Let’s start with term life insurance.

Option # 1 – Term Life Insurance for Parents

Term life insurance offers guaranteed protection, for the length of the contract, which ranges from 1 to 30 years.

The most common type of term life insurance bought is level guaranteed term life insurance.

In a level guaranteed term life insurance policy, premiums stay the same for the duration of the contract. At the end of the contract, you have the ability to continue the contract, but, at an increased premium.

If you don’t want to pay the new premium, which goes up a lot, the contract ends.

You no longer have any life insurance, nor is any premium paid returned.

While some see this as a negative, remember, the benefit is term life insurance is much less expensive. Thus, you’re saving a lot of money on premiums.

Option # 2 – Whole Life Insurance for Parents

Whole life insurance is a combination of term life insurance and an investment. Every time you pay your premium, part goes to the life insurance and part to the investment.

What makes whole life insurance different?

Whole life insurance is permanent.

While term life insurance lasts for a certain period of time (e.g. term), whole life insurance lasts as long as you pay.

Most whole life insurance endow when you reach the age of 100. Meaning, on your 100th birthday, you receive the death benefit. (Keep in mind; you’ve been paying premiums on it each year).

The advantage of permanent is in its name…it’s permanent. There’s no guaranteed time of the contract. As long as you pay, your contract remains in-force.

The disadvantage is the cost. Whole life insurance is more expensive than term.

Which Is Better, Term vs. Whole Life Insurance?

In most cases, term life insurance is better for new couples. (I say “almost” because whole life does provide benefits in specific situations like estate planning and maximizing investments).

As a CERTIFIED FINANCIAL PLANNER®, who works a lot of couples, I look at a their entire financial situation.

When I first sit down with clients to discuss life insurance, one of the things I go over is their “balance sheet”. Meaning, identifying which assets are in what type of account.

In the past, I’ve seen couples not contributing to tax advantaged investments like a 401(k), when they have an employer match. Or, have no strategy for paying off their student loans with high interest rates.

Yet, they’re considering buying permanent insurance.

This makes no sense to me and for a good reason, the numbers don’t add up.

The goal is to invest in the account which is going to give you the highest after tax returns.

A 401(K) with an employer match and paying off high interest debt, are two of the best after tax returns available.

While whole life insurance, can provide a great after tax return in the right circumstances, it’s typically not the highest and best use for parents.

If you’ve taken care paying off high interest debt and maximizing your 401(K) with an employer match…whole life insurance can make sense.

If you’re still unsure what’s best for you, look into a convertible term policy. A convertible term let’s you buy term now, than convert it into an investment down the road.

If you’re in a career where you’ll be earning more down the road, this option makes a lot of sense.

Step # 2 – How Much Life Insurance Should You Buy?

Have you heard the phrase, “If all you have is a hammer, everything looks like a nail”?

This is how many inexperienced life insurance advisers approach a sale

Their only tool is life insurance.

Whether it’s right for you or not, it doesn’t matter.

This is when life insurance gets complex. It’s when couples buy a policy they don’t understand, for far too much money.

Or, there’s the opposite approach where advisers insist on using rules of thumb to calculate your needs.

Using rules of thumb, as I’ll explain, is over simplification.

So, when calculating the amount of life insurance to buy, where do you start?

The best place is to remind yourself of the purpose of life insurance, which is income replacement.

For a short while think about…

  • What would life be like without you or your spouse?
  • What would your income look like?
  • Who would raise the children, full-time?
  • Would you move?
  • What extra costs would you have?
  • What costs would go down?

Yea I know, not fun. But, important.

And now that it’s over and you’ve thought a bit how life would be like, we can get into calculating the amount you need.

Let’s start by examining the rule of thumb for calculating your life insurance needs that’s widespread on the Internet.

I’ve seen finance sites recommend to buy anywhere between 5-20 times your income in life insurance.

While simplifying can be good, this rule of thumb leaves much at your digression.

To start, who needs to buy 5 X their income in life insurance and who needs 20 X?

That’s quite a difference.

Next, if you’re a one income household, does that mean the spouse that doesn’t work, doesn’t need life insurance?

Adding on, what about children?

Shouldn’t a couple with three kids own more life insurance than a couple with one?

Get the idea?

For one of the biggest purchases of your life, a rule of thumb isn’t the best way to go.

What about online calculators?

Should You Trust Online Life Insurance Calculators

Since a generic rule of thumb isn’t helpful in calculating your needs, the next place to turn is an online calculator.

That’s simple, right?

Just enter a few numbers in and out comes a number.

Well…A Google Search brings up 38,500,000 different calculators.

If you used 5 different calculators, you’d get 5 different results.

Often, much different.

So, we’re back to the same problem of using 5-20 X your income. Results vary.

The best place to start is not with a Google search but knowing, what makes up a good life insurance calculator.

When it comes to life insurance calculators, I’ve found one thing to be true.

Typically, the more questions it asks the better.

You want to make sure the calculator is at least asking you about the following:

  • Estimated final expenses
  • Mortgage debts
  • Your student loans
  • How many children you have
  • Your children’s college funding
  • Your current savings and investments
  • The amount of current life insurance you own
  • Your current income

Last, read the fine print for the estimated inflation and after-tax investment yield.

What should you be looking for?

  • An inflation rate should be between 3-4%.
  • After-tax investment yield between 4-7%

If the calculator doesn’t tell you what these numbers are, I wouldn’t use it.

Of course, make sure it’s from a trusted site.

There is one life insurance needs calculator I recommend. The calculator from the non-profit, Life Happens.org

It easy to use and asks the right questions.

Go over to LifeHappens.org right now to discover how much life insurance you need. 

While no calculator is perfect, including my favorite, a good one like the one above will get you close to your number.

Step # 3 – Start With Your Group Insurance Plan

You need life insurance. Your employer has a group life insurance plan.

You’re thinking, “Hey. Maybe I can wrap this life insurance thing up with one email to HR. Just tell them I need some coverage and I’m all set.

Well… it’s not that simple.

Yes. When shopping for life insurance, your group insurance is the first place to look.

But, as you’ll discover, it’s a bit more complex. There are advantages to group life insurance and there are disadvantages.

Let’s start with the advantages.

The Advantages of Group Life Insurance for Parents

  • Guaranteed Issue – Most group life insurance plans come guaranteed issued. Meaning, there’s no medical underwriting to bind coverage. There’s no physical, no blood draw, no waiting for coverage. For someone with a poor health history, this is a huge advantage.
  • It’s Free (Sometimes) – Many employers pay 100% of the contribution for group life insurance. Then, if you want extra coverage, you have the option to buy up. For example, your employer may provide you $50,000 of coverage at no cost. Then, you have the option to buy up to $200,000 more in coverage.
  • Convenient – If you’re one to put something off, group life insurance plans are convenient. Unlike buying coverage on your own, it’s a much shorter and simpler process buying group life insurance.

The Disadvantages of Group Life Insurance for Parents

  • Low Limits – Group life insurance plans limit the amount of coverage you can buy. For new couples, this limit is usually below the amount that’s needed.
  • Portability – If you leave your job, what happens to your insurance? A scarier thought, if you leave your job due to health issues, what happens to your insurance? Many group life insurance plans are not portable. Meaning, you can’t transfer your coverage to an individual policy if you’re no longer employed.
  • Cost – For healthy individuals, cost is the biggest disadvantage to buying group life insurance. Why is group life insurance more expensive? The reason is adverse selection. Remember, most group health insurance plans come without medical underwriting. Thus, those who have trouble finding coverage as an individual, buy as much group insurance as they can. So, the pool of people who buy group insurance isn’t as healthy as the pool of people who buy individual coverage.
  • Term Only – Most group life insurance plans offer only term life insurance. It’s rare to find an employer that offers whole insurance for parents. If yours does and you’ve determined that whole life insurance is best for you, you still have the problem of high costs due to adverse selection.

Summary of Group Life Insurance for Parents

If your employer offers to pay for life insurance, take it. If it cost you nothing, there’s no reason not to.

If your employer doesn’t contribute, buying insurance through your employer is likely more expensive. If that’s the case, you’re better off shopping the individual market (if healthy).

The important thing to keep in mind is your employer’s plan is only the beginning. You not only need to buy life insurance, you need to buy the right amount.

Last, most group plans offer low limits at a higher cost. Thus, it’s in your best interest to shop the individual market regardless of what your employer offers.

Step # 4 – Comparing Life Insurance Quotes

You know what type of life insurance you want to buy. You know how much life insurance to buy.

And, you’ve reviewed your group life insurance plan.

In step # 4, you’ll learn how to buy individual life insurance at the lowest possible price.

As I discussed in Part # 1, the majority of couples should buy term life insurance. So, I’ll be taking you step-by-step through buying a term policy.

Phase # 1 – Buying Life Insurance for Parents – Know The Company – Inside & Out

The most important decision you’ll make when comparing life insurance is deciding what company to buy from.

When buying life insurance, you’re entering into a long-term contract.

Unlike auto insurance or home insurance, this isn’t a one year contract. This is a long-term contract. For younger couples, this contract could last up to 30-years.

Why does this matter?

Well…imagine you uphold your end of the contract by paying your premiums for 17 years. But, the insurance company files for bankruptcy in year 17.

You’re 17 years older now. You have a few health issues. And, you still have a need for life insurance.

Or, here’s another common scenario.

You compare quotes, choose the cheapest one, and apply for coverage.

But little did you know, the company you choose has the tendency to change your rate class.

So, instead of getting a preferred plus rate, you’re now paying 60% more with their standard rate.

Why Use An Independent Life Insurance Agent

Life insurance is a complex, long-term contract.

If you overlook one “small” part of this contract, you could be making a serious financial mistake.

A GOOD life insurance agent – one that has your best interests in mind – can guide you through the process, can make sure you understand 100% of what you’re buying,  and can make sure you’re buying the right type of life insurance, for the best price, from a quality company.

In the end, a good life insurance agent will save you not only money but time.

Here are 3 more reasons for choosing an independent agent:

  1. Independent life insurance agents don’t charge fees. Instead, they’re paid from the insurance company after you’ve purchased.
  2. You don’t save any money shopping at a rate comparison site. The insurance companies set the same rates for agents as they do for a comparison site.
  3. You get to compare quotes from different insurance companies. (Tip: Find out beforehand what companies your agent represents.)

Not All Independent Agents Are Equal

You want to find an independent agent who has your best interests in mind.

How do you tell?

The easiest way to tell…make sure your agent is asking you questions.

If they’re quick to recommend a solution, without making a diagnosis of what’s best for you, find another agent.

As I mention above, it’s important you work with a professional. Someone that will ask the right questions and listen to your needs. Someone you can trust.

Summary – Life Insurance for Parents

Congratulations on your family.

When it comes to life insurance for parents, you now know enough to protect your family properly for years to come.

Car Insurance for Teens | How To Save Money

By | Auto Insurance | One Comment

Teen Driver Insurance

Do you know how to properly title your car for maximum savings?

Do you know which cars are assigned to which drivers on your policy and how that impacts your premium?

These are just two of the mistakes we see parents with teen or young adult drivers on their policy make.

But they’re all small potatoes compared to the most common mistake of all–not taking advantage of the 17 different discounts offered to families with teen and young adult drivers.

If you’re a parent with teen or young adult drivers on your policy, there are 7 common mistakes you may be making right now…

…and they might be costing you a lot of money.

The good news is, fixing these mistakes can save you some serious cash.

Mistake # 1 – Not Assigning Drivers to Specific Cars

Some insurance carriers allow you to assign a car to a specific driver. This prevents the teen, generally the most expensive driver to insure, from being assigned to the most expensive car to insure.

For example, say you had three cars:

  1. 2012 Audi A6 – Your Car
  2. 2009 BMW X1 – Spouse’s SUV
  3. 2007 Honda Civic – Teen’s Car

If you don’t assign a driver to a specific car, the insurance company may assume your teen is driving the Audi A6, the most expensive to insure vehicle (especially if you just bought the Audi and handed down the Civic to your teen). Knowing teens cost more to insure than experienced drivers with a good driving record, this would cause a huge increase in premiums.

It’s important to know not all companies assign drivers to specific cars. Some insurance companies will lump all household drivers and cars. Therefore, there is no assigning of drivers. This could benefit households where teens have higher value cars.

In contrast, going with a company who assigns a specific driver to a specific car, allows families where the teen is driving a lower value car, a better chance to save.

Mistake # 2 – Going Umbrellaless

The assumption is that umbrella insurance is only for high value homeowners.

But, if you never considered an umbrella insurance before, it’s a good time with the addition of teenage drivers. If you do have an umbrella, it’s time to reevaluate how much you actually need.

According to the Highway for Motor Safety:

“Young people ages 15-24 represent only 14% of the U.S. population. However, they account for 30% ($19 billion) of the total costs of motor vehicle injuries among males and 28% ($7 billion) of the total costs of motor vehicle injuries among females.”

Here’s how an umbrella helps. Say you’re sued and settle for $1,000,000. You pay a deductible of $1,000 then your auto coverage pays up to its limit, which say is $300,000, pays $299,000.

If you don’t have an umbrella, you’re responsible for the $700,000 left. If you don’t have the money, your wages could be garnished until you can pay it off.

If you do have an umbrella, the umbrella insurance kicks in once the auto limits have been used up and pays the remaining $700,000.

The purpose of insurance is to protect yourself from low risk, catastrophic events which could completely destroy all you’ve worked hard to achieve. While a bad accident with multiple injuries is unlikely, it’s not impossible.

The good news is an investment in umbrella insurance isn’t going to break the bank. While you do pay more than most because you have teenage drivers, $1,000,000 of insurance could be had for $30-40 a month.

Mistake # 3 – Not Taking Advantage of the Discounts Available for Teens

Yes, teens are expensive to insure. But this doesn’t mean they don’t qualify for discounts. You can save a lot of money if you know how to ask the right questions.

Here are the three most popular discounts for teen drivers:

  • Good Grades – If your child has better than a B average or better, you may be eligible for a discount from an insurer. Some companies go as high as 35%! Let your agent or insurer know about these grades, to see if you can save. (Tip: Update your insurance company on a yearly basis on your child’s status or else the discount could be removed without notice).
  • Driver Safety Classes – Discounts and programs vary widely but some insurance companies offer discounts if your teen passes an approved driver safety course.
  • Living more than > 100 miles from home – If your teen is in college more than 100 miles away without a car, let your insurer know, as most companies will give you a discount.
  • Home Insurance Bundle – The biggest discount available by far is by combining your auto and home insurance.  Discounts get up to 20%.

Another tip, when it comes to car insurance for teens is to make sure you’re comparing quotes with all the discounts applied. Often, company B will be more expensive than company A, but when you apply the 20% good grades discount of company B, compared to only a 10% discount of company A, company B’s premiums are less expensive.

For a complete list, visit our post: 17 Discounts for Teen Drivers.

Mistake # 4 – Going without Uninsured Motorists and Underinsured Motorists 

According to the Insurance Industry Research Council, as many as 25% of cars on the road carry no insurance in some states.

Unfortunately, many more cars just purchase the bare minimum, which in Illinois are:

  • $20,000 – injury or death of one person in an accident
  • $40,000 – injury or death of more than one person in an accident
  • $15,000 – damage to property of another person

Say your car is totaled in an accident from someone who has insurance but the lowest limits. If your car is worth over $15,000 at the time of accident, you won’t even get fully reimbursed from the other insurer.

More importantly, $20,000 in medical bills and rehabilitation cost doesn’t go far with today’s medical costs. Leaving you to pay out of pocket for an accident you haven’t even caused.

Another reason why this coverage is so important is if you’re the primary wage earner in your family, and you end up missing an extended time at work because of an accident. Having this coverage allows you and your family to stay financially afloat while you get back to 100%.

How much Uninsured Motorists and Underinsured Motorists (commonly referred to as UM/UIM) do you need?

A good recommendation is you’ll want the same amount of UM/UIM you do bodily injury on your own policy. For example, if you have $300,000, get $300,000 of UM/UIM.

Mistake # 5 – Keeping Low Liability Limits

As you know by now, teens get in accidents.

Out of any age group, studies show 16 year-olds have the highest chance of getting in a crash. More bad news, the crash rate per mile driven is twice as high for 16-year olds as it is for 18-19 year-olds.

In other words, when a teen gets in a crash, it’s usually not pretty. Unlike adults, they’re usually driving with friends. The more people in the car, the more liability the driver has.

The minimum liability limits in the state are obviously not enough.

But what is?

This is where it helps to speak with a local agent who understands your situation. Who knows the right questions to ask you.

Mistake # 6 – Titling the Car in the Wrong Name

Should you title the car in the teens name, therefore, making them purchase their own insurance?

Should you title the car in your name, paying the insurance, and taking on the risk?

There are a lot of different options here. Again, this is why it’s important to talk to an insurance agent who understands the carriers they represent, local laws, and car insurance for teens.

Here’s what we typically find at Weiss Insurance Agencies:

  • For anyone under the age of 18, they’re likely to see a better rate if they’re added on to their parents policies. There’s obviously, some exceptions, but this has stayed true with our carriers for some time.
  • For kids over 18, depending on your situation, it’s worth to look titling the car in the child’s name and getting a separate policy. Sometimes it’s cheaper, sometimes it’s more expensive but it’s worth a look.

This is a big gray area because there’s a lot involved with this decision.

For example, an 18 year old child who goes to college full time in Chicago, would be more expensive to insure on their own because of the location (the greater the population, the more accidents). Compared to a child who goes to college full-time in Champaign and has his own insurance (rural area has cheaper rates).

Mistake # 7 – Get Multiple Quotes

Here’s the last mistake I see parents making when shopping car insurance for teens…

…Not comparing quotes from multiple auto insurance companies who insure teen drivers.

As mentioned, the way the carrier assigns cars to household drivers has a huge impact on your premiums.

Next, if one carrier gives a good grades discount of 10% vs. another carrier of 20%, this again would have a huge impact on your premiums.

Next, what if one carrier is cheaper on just the auto insurance but more expensive on the umbrella?

There are dozens of variables in play.

That’s why it’s important to compare auto insurance quotes from multiple carriers.

Car Insurance for Teens | Summary

As you can see, when it comes to car insurance for teens, there are a lot of variables at play.  If all you do is add on your teen driver to your existing policy, chances are you’re not getting the best rate.

The # 1 thing you can do as a parent is to compare multiple quotes, from a variety of insurance companies. If you’re looking to save money, there’s no better way.

Enjoy this post? Then, you’ll enjoy reading a followup post we wrote on the 17 auto discounts young drivers are eligible for

A Common Church Auto Insurance Mistake

By | Business Insurance | No Comments

church insuranceWhen it comes to church auto insurance, whether your church owns a vehicle or not, here’s three common claim scenarios:

  • After service, a member drives their own vehicle to pick up  coffee to bring back to the church. There’s an accident…
  • A member volunteers to drive their own minivan to take youths to a weekend camp. There’s an accident…
  • The church rents a van or bus to drive members to visit another church. There’s an accident…

In all three of these instances, the church may be held liable for damages. Keep in mind, not one of the accidents involved a car, van, or bus owned by the church. However, in each instance, the church could be held liable for loss without a certain endorsement.

Church Auto Insurance – Hired & Non-Owned Auto

Fortunately, there’s a very inexpensive endorsement churches can add to their policy for coverage.

For coverage against accidents caused by vehicles you hire or vehicles owned by others, your church can purchase non-owned and hired auto insurance. Also known as hired/non-owned auto.

Typical non-owned and hired church auto insurance coverage protects your church against liability and defense cost which arise from vehicles you hire or vehicles owned by others.

Hired non-owned church auto insurance doesn’t cover the physical damage of the vehicle. Physical damage is covered under the insurance of the vehicle involved. This is important for churches who rent vehicles like vans and busses. 

A church who carries hired/non-owned auto coverage has no coverage for physical damage to the vehicle. Thus, it makes sense to purchase the rental agency’s physical damage coverage.

Hired/non-owned auto coverage is available to both churches who have church auto insurance (whether it’s a car, van, or bus) and those churches who carry no vehicle insurance.

Hired/non-owned auto coverage a very inexpensive endorsement typically added to the general liability portion of a church’s insurance policy and is very affordable coverage.

Learn more about how Weiss Insurance Agencies offers affordable coverage for churches, at our church insurance quote page. Or get a quote by visiting our sister website, ChurchProtect.com

Cyber Security Statistics

By | Business Insurance | No Comments

Business InsuranceFor ten years, IBM has sponsored an annual Cost of Data Breach Study.

I referenced the study in blog posts on the definition of cyber liability and cyber liability claim scenarios. But there’s more good cyber security statistics contained inside the study for business owners.

Today, I wanted to give you a 10,000 foot overview on the current trends occurring in data breaches.

If you want to dive in more, you can download the report for free (registration required).

  • The United States had the 2nd highest cost of data breach among the 10 countries participating. On average, a data breach cost from a malicious and criminal attack cost a company in the U.S. $230 per record.
  • The United States was home to the third largest quantity of data breaches. Compromised or exposed records totaled 28,070
  • The three factors that increased the cost of the data breach were: 1) Cyber attacks have increased in frequency and in the cost to remediate the consequences, 2) The consequences of lost business are having a greater impact on the cost of data breach, 3) Data breach costs associated with detection and escalation increased.
  • Cyber security statistics say that the risk of a U.S. business incurring a data breach was the third lowest at 2%. India and Brazil were the highest at 30%.

For the complete statistical analysis, download it for free at IBM’s website.

For a free, no obligation cyber liability insurance quote, complete the quote form on our cyber liability insurance page

Illinois Change of Address Checklist

By | Personal | No Comments

While moving is exciting, it’s also stressful. Very stressful.

Of course it helps to have a change of address checklist but at the end of the days, Woman Doing Calculationsthere’s always more to do. More to pack. There’s more junk laying around than you thought. There’s another phone call to make. Another estimate to get.

It’s important throughout all this chaos, to stay as organized as possible. There are dozens of small, but very important tasks to take care of. Forgetting one can be costly.

I learned when moving within Chicago, that PeoplesGas needs A LOT of time to simply turn on your gas. Calling a week ahead wasn’t enough.

When juggling multiple projects, it’s easy to forget logging into a few accounts to change your address, can save you a lot of time in the future.

In these situations, it helps to work with a checklist…

…A checklist you can simply run down to make sure you’re not forgetting anything.

The focus of this change of address checklist isn’t the moving itself (hiring movers, packing, etc…) but it’s a checklist of what you need to do to keep your personal and financial life organized during and after the move.

So you’ll avoid the late fee on the credit card statement because you didn’t get the bill. Avoid a bank statement going to your previous address. Avoid a package shipping to your old address.

Change of Address Checklist

Banking – Change addresses

  • Checking & savings accounts

  • Credit card providers

  • Loans – Student loans, car loans, personal loans, and others.

Bills & Utilities – Stop service, Start service, change address

  • Gas

  • Electric

  • Trash

  • Water

  • Phone

  • Internet

Employer/Work – Change of address

  • Notify HR – Ask about who is responsible for changing the address for each benefit provider (health, dental, vision, life insurance, 401K, etc…)

  • Notify any professional groups or associations of address change.

Investment Accounts – Change of address checklist

  • 401K (old and new)

  • IRAs

  • Individual investment accounts

Insurance – Cancel, purchase, update, and change address

  • Home and Auto (See how to save money below)

  • Health

  • Life – (If you’re buying a home, do you need to update the amount of life insurance you need?)

  • Any other insurance (disability, dental, etc…)

Medical – Change address for billing or ask for recommendations for a new provider

  • Doctor

  • Dentist

  • Veterinarian

  • Or any other medical professional you see often

Post Office & State of Illinois

Subscriptions, Services, and Shipping – Change address or cancel

  • Magazines

  • Newspaper

  • Lawn maintenance

  • Pest control

  • Anywhere online you order from frequently such as Amazon, Netflix, and eBay

Taxes

  • Keep all your receipts for moving expenses, as they may be tax deductible

Save Time, Save Money

30+ items…

…and that’s not even including the physical act of packing and organizing the move itself!

Moving is costly and time intensive. Of course, a change of address checklists helps but when a shortcut (a way to save both time and money) presents itself, it makes sense to take advantage, right?

At Weiss Insurance, since 1905, we’ve been Illinois’ shortcut to saving money on home, auto, and renters insurance.

Normally, to get the best rate on insurance you have to call multiple insurance companies, go through a tedious application process, then, call them all but one back to explain that you went with someone else.

But when you work with an independent agent like Weiss Insurance, we provide you quotes from over ten different home and auto insurance companies.

There’s one application, one person to talk to, and it’s absolutely free.If you’re looking to find the best possible coverage, at the lowest possible price, there’s no easier way.

Even if your move is weeks ahead, I invite you to complete our instant quote request form on our personal insurance page today.  One of our local, personal insurance consultants will then reach out to collect the necessary information to provide comparisons from over ten different top rated insurance carriers.

Online Illinois Home Insurance Quotes

By | Home Insurance | No Comments

Mature couple with consultantIn 2011, the average home insurance premium rose by 7.6%! In 2012, the average premium rose by 5%. In 2013, it increased by 5.1%*. This according to a 2015 study by The Insurance Information Institute. 

To put this in perspective, a homeowner paying $1,000 at the beginning of 2011, was paying $1,187 at the end of 2013. A difference of $187 . Equal to a new car payment or a nice dinner or two out with the family.

While the III hasn’t released the data for 2014 and 2015 , it looks as if rates here in early 2016 are finally starting to stabilize.

But the damage has been done and most homeowners have simply absorbed these increases over the past few years into their monthly budget.

Partly because shopping your home insurance is time consuming.

The approach many use to shop their home insurance is calling around to a couple of local agents, completing applications with each agent. Then, they compare the coverage and prices by themselves.

Not exactly the highlight of their day.

Or, to try to save money on home insurance you can shop and buy online. But again, you still have to go to multiple websites and fill out multiple applications to do so.

Yet, for the DIYers who prefer to shop online, without a local agent to guide them in their decision making, many homeowners end up making costly mistakes. A recent survey by Marshall Swift/Boeckh reported 67% of homeowners are underinsured by an average of 18%.

When it comes to shopping home insurance, how can you:

  1. Compare multiple quotes, without multiple phone calls and applications?
  2. Compare quotes instantly online with A-Rated insurers?
  3. Have a local agent help you compare policies? So, you don’t have to end up underinsured like 67% of homeowners.

Online Illinois Home Insurance Quotes | Compare & Save

Weiss Insurance Agencies, Illinois’ trusted agent since 1905, is excited to launch its new online quoting system.

As an independent agent, we give you access to over 10 quotes from different home insurance companies. And now, you can discover how much money you can save, instantly using our new online quoting system.

Our online quoting system allows you to easily compare over 10 home and auto insurance quotes instantly.

All you have to do is enter some basic information about your home and you get instant access to 10 different insurers.

Best of all, one of our local agents (we’re located in Wayne on Army Trail Rd.) will follow up with you to make sure your information is accurate and you completely understand your coverage options.

Don’t settle for a home insurance increase, double the rate of inflation. Quote your insurance today.

Click Here: Discover How Much You Can Save Now.

“After suffering a major casualty loss insured by a major insurance company with little compensation. A close friend recommended I check out Weiss Insurance Agencies. It was the best suggestion ever given me. The agent spent countless hours finding the best fit for my circumstances and in the end saved me more than a thousand dollars bundling all my personal insurance needs. Weiss has found a lifetime customer in me.”

– Walter J. – Home Insurance

*Data gathered from The Insurance Information Institute and Perr&Knight.

Methods of Fire Prevention

By | Home Insurance | No Comments

Methods of Fire Prevention | Match BurningFires, in both the home and workplace, account for around 9 billion dollars in losses each year. Many of these fires could be prevented with the proper methods of fire prevention.

Here are ten simple and practical ways to eliminate the most common causes of fires in both your home and office.

10 Methods of Fire Prevention

  1. Install a smoke alarm on every level. Change the batteries at least once a year. Better yet, grab a pack of whatever batteries your smoke alarm requires at a warehouse store like Costco or Sam’s Club. Therefore, when they beep to be changed, your default reaction isn’t to take out the battery but to replace the battery.
  2. Keep anything that’s flammable away from stove, including pot holders, drapes, paper towels and kitchen towels.
  3. Keep clutter away from your heater or furnace. For example, never store newspapers or family photos around a furnace. One loose spark could start a large fire in minutes.
  4. The number one causes of fire are clothes dryers. The # 1 way to prevent fires starting is to clean the lint trap after every use.
  5. Install carbon monoxide detectors throughout home, especially in bedrooms. Carbon monoxide is odorless and colorless, and very combustible.
  6. Any outdoor cooking such as grilling or deep frying should be done at least ten feet from the house.
  7. Hide any matches and lighters away from children.
  8. Never overload an extension cord or outlet. In addition, make sure all cords don’t contain any frayed wiring.
  9. Turn space heaters off when leaving the room or going to bed
  10. Always blow candles out. And never use a candle on a Christmas tree. Very few things burn faster.

As you can see, many methods of fire prevention cost little money and or just minutes of your time.

Whenever a fire damage claim is filed, whether it’s home insurance or business insurance, the total monetary damage adds up fast. Fires cause both direct and indirect (e.g. a couch in a separate room has to be thrown away due to smoke damage) losses.  Therefore, not only will you experience short-term financial and emotional stress from a fire, the long-term impacts on the amount you pay for insurance can really add up.

The time to think about prevention is today. Use the 10 methods of fire prevention above to better protect yourself, your family, and your employees.

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