Most insurance companies bill their customers every six months when the new insurance rates reset. But, for many Americans and especially young people just starting their independent financial lives, a large auto or life insurance premium can be a daunting expenditure to tackle every six months if you do not prepare for it ahead of time. Here are a few budgeting tips that you can use to ensure that your insurance bill does not hit you hard when you are least prepared for it.
Pay a Little Bit of Your Premium Every Month
While it is your right as the customer to pay your insurance bill when it is technically due every six months, paying such a large bill infrequently can have serious consequences on your monthly budget if you are not prepared for it.
Many insurers allow you to pay your insurance premium every month breaking up the larger payment into six easy smaller payments that you can accurately budget for each month with your written household budget. You simply have to ask to join the program if your insurer offers it, and your insurance company might even offer a discount for participating in the program.
Set Money Aside Every Month for Your Premium
If you are adamant about not paying your insurance bill every month and waiting until it is due in six months, you can set up a separate savings account in preparation for the bill when it comes due that is dedicated to paying for your insurance. You can then deposit one sixth of your insurance premium in the savings account every month until it is time to pay.
You may even be able to earn small amount of interest during the time your money sits in the account before it is paid to the insurance company. Consumers run the risk of using that savings for another purpose or as an emergency fund with this type of savings plan which could eventually leave you short of funds when your insurance bill is due resulting in a possible lapse of coverage.
Sign Up For Automatic Payment Of Your Premium
One of the best features that you can sign up for is your insurance company’s automatic payment plan. Most insurance companies have an automatic bill paying service that drafts the payment out of a linked bank account. The automatic payments also work well in conjunction with the feature of splitting your bill into six equal payments. Automatic insurance payments can ensure that you never miss a due date for your insurance premium and possibly letting your coverage lapse or expire.
Budgeting for your insurance premiums is not an easy task especially when they are technically due every six months. But, with a little prior planning, you can ensure that you never miss a premium payment and never bust your budget. Paying a set portion your insurance bill every month and making it an automatic withdraw from your banking account are the best ways to
ensure that you are successful in managing your money and budgeting for your insurance premiums.
Health Insurers Agree to 60-Day Rate Hike Delay
Several California health insurance companies announced that they will agree to delay planned rate hikes for 60 days. The delays come after state Insurance Commissioner Dave Jones asked the companies for time to review the increases.
People with Individual Policies Avoid Hikes for Now
Aetna, Anthem Blue Cross and PacifiCare have all agreed to delay their hike increases for people with individual policies while the commissioner takes time for review them.
Anthem had planned to increase rates on April 1 by an average of 9.8 percent for 683,000 individual policyholders in California. Aetna Inc., also planning to increase rates on April 1, said policyholders would have seen an average increase of 20.7 percent.
PacifiCare, a division of UnitedHealth Group of Minnetonka, Minn., planned to raise premiums by 2 to 9 percent as of Jan. 1.
However, all have decided to wait for the commissioner to review the increases, even though he has limited power to stop them. His only real power is blocking rate hikes when companies spend less than 70 percent of premiums on healthcare expenses.
All Policyholders Are Not So Lucky
In contrast to what the three companies have agreed, at least one, Blue Shield of California, announced its decision to increase rates by 59 percent earlier in January, whether the commissioner disapproved or not.
In response to this announcement, Jones said that Blue Shield policyholders “will not have the benefit of this additional review period to ensure compliance with the law, but I will do what is within my power to determine whether Blue Shield’s proposed rates are in compliance with the law and to enforce that law.”
Policyholders carrying coverage with Blue Shield will ultimately see three rate increases from the company. Of the 194,000 individual policyholders insured with Blue Shield, numerous have already received notification that they would see all three increases at once.
If you fear rate increases that Blue Shield customers have seen, it could be a good idea to shop around for new health insurance coverage. While many companies have made a point to increase their rates, with a little searching, you may find low-cost health insurance options that you need.
Survey Shows 10 Largest Home Insurers Offer Discounts for Burglar Alarms
Posted in Home Insurance , Home Insurance Companies
February 23rd, 2011
Ten large home insurance companies are offering discounts to homeowners who install monitored security systems, says a new survey released by Electronic Security Association. The survey revealed these companies are offering premium discounts of up to 20 percent for homes equipped with burglar alarms.
Discounts Could Pay Portion of Installation Costs
As noted in a press release by Dom D’Ascoli, president of the Electronic Security Association, the 10 largest insurance companies reviewed offer significant enough homeowners insurance premium discounts to save policyholders up to 20 percent on their coverage.
This, he says, “can be substantial enough to pay a portion of the monitoring costs or installation of the system.”
The survey did not list the specific companies offering discounts, but according to the company, most people insured with large organizations–and some insured with smaller companies–have access to security system discounts.
Burglar Alarms Reduce the Need to File Insurance Claims
A study released by Dr. Simon Hakim of Temple University revealed single-family homes equipped with burglar alarm systems are 60 percent less likely to be burglarized than single homes without alarms.
This means that the need to file a home insurance claim is also going to decrease. And, of course, the fewer claims you file with your insurance company, the lower your premiums are likely to remain.
Since many home insurance companies are now offering discounts for burglar alarms, inquire with yours to see if you could receive up to 20 percent off of your premium amount. You’ll not only reduce the cost of your premium amount–or the system itself–you could also significantly reduce the chances of becoming the victim of a burglary.