Should I Borrow Money from My Life Insurance

We’re living in tough times right now. With unemployment hovering dangerously close to double digits and credit harder and harder to come by, many are wondering just what they’re going to do for extra cash, especially with the holiday season upon us. Some may be considering borrowing money from sources such as their cash value life insurance policies. Of course, those with term life insurance don’t have that option, but in most cases, it’s just as well.

Generally speaking, it just isn’t a good idea to borrow money against your life insurance policy’s cash value, even if you are able to do so. Here’s why:

• You have to pay the money back. Even though it’s your cash value you’re borrowing against, you  like any other loan: with interest. And, like any other loan, the interest rate you will pay for your loan is going to be higher than the interest rate the insurance company pays you on the cash value.
• Any money you haven’t paid back comes out of the death benefit. If you were to die before you paid back the loan, the insurance company will take the balance of the loan out of the death benefit paid to your beneficiary. Most people really don’t have enough life insurance as it is, and if something happens to you, your family will need that money to handle final expenses.
• The loan doesn’t help your credit rating in most cases. While you may find that you don’t have many other options if your credit is poor, you should at least look into all of your other options first. If you have to pay high interest rates anyway, you may as well have it reported so it can benefit your credit rating.

While insurance companies can’t cancel your insurance for failing to pay back a loan (unless the amount owed exceeds the face value of the policy), you can put yourself into a really bad position by borrowing against your life insurance policy. If you’re that hard up for money, you’d be better off simply cashing out your whole life insurance policy and buying term life insurance instead. It may not build cash value, but the premiums are a lot cheaper, and we’re sure you have better purposes for the rest of the money.

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Requirements for education and training for insurance sales agents

For jobs in insurance sales agent , most companies and independent agencies prefer to hire college graduates - especially those that specialize in business or economics . Graduates of the school are sometimes hired if they have proven sales ability or have been successful in other types of work . In fact, many participants in the insurance sales job transfer agent other occupations. In selling commercial insurance , technical expertise in a particular field can help sell policies to those of the same profession. As a result , new agents tend to be older than participants in many other occupations.

The formation of the university can help agents understand the technical aspects of insurance policies and the fundamentals and procedures of selling insurance . Many colleges and universities offer courses in insurance, and some schools offer a bachelor's degree in the field. University courses in finance, mathematics, accounting, economics, business law , marketing, and business administration enable insurance sales agents to understand how social and economic conditions related to the insurance industry . Courses in psychology , sociology, and public speaking can prove useful in improving sales techniques . Furthermore, given that computers provide instant information on a variety of financial products and greatly improve the efficiency of the agents , familiarity with computers and popular software packages has become very important.

The insurance sales agents must be licensed in States where they plan to make the sale. Separate agents who sell life and health insurance and property and casualty insurance license required. In most States , licenses are issued only to applicants who complete courses established ALS and pass the state exams covering insurance fundamentals and State insurance laws. As a result of the Gramm- Leach- Bliley Act of 1999 , the industry is moving increasingly towards uniform rules for granting state licenses and reciprocal licensing, allowing agents who earn a license in one state to obtain a license another State where there passed the appropriate examinations and courses .

Several organizations offer professional designation programs that certify an experience in specialties such as life , health and property and casualty insurance and financial consulting . Although voluntary , such programs assure clients and employers that an agent has a thorough understanding of the specialty . Agents are usually required to complete a certain number of hours of continuing education to maintain their designation.

Employers are also placing greater emphasis on continuing professional education as the diversity of financial products sold by insurance agents increases. It is important for insurance agents to keep abreast of issues with customers. Changes in tax laws , government benefit programs , and other state and federal regulations can affect the insurance needs of customers and how agents conduct business. Agents can enhance their selling skills and expand their knowledge of insurance and other financial services, taking courses at universities and by attending institutes , conferences and sponsored by insurance organizations seminars. Most authorities state licensing also have mandatory continuing education requirements focusing on insurance laws , consumer protection , and technical details of various insurance policies .

As the demand for financial products and financial planning increases , many insurance agents are choosing to earn obtaining certification to sell securities and other financial products and licenses . Doing so , however , requires substantial study and passing an additional examination, whether the Series 6 or Series 7 licensing exam , which is administered by the National Association of Securities Dealers ( NASD). The Series 6 exam is for people who want to sell only mutual funds and variable annuities , whereas the Series 7 exam is the main NASD series license that qualifies agents as sales representatives of general values ??. In addition , to further demonstrate competence in the field of financial planning , many agents find it valuable to earn the designation "Certified Financial Planner" or " financial consultant . "

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Pakistan Insurance info

JS Group is the second-largest shareholder in the EFU Insurance Group, Pakistan’s largest insurance group.

EFU Insurance Group was established in 1932 as the Eastern Federal Union Insurance Company and grew to become the largest life assurance company in Asia (ex-Japan) from 1961.  In 1972, the life assurance business was nationalized but EFU continued as a general insurance company.  Today, it is Pakistan’s second-largest general insurer.

In 1992, the private sector was again permitted to carry out life assurance and EFU Life Assurance was launched by EFU General in conjunction with the JS Group.  Today, this company is the largest private sector life assurance company in Pakistan with a sales force of over 1,500 people and over 50% share of the life insurance business.

EFU General Insurance

EFU General is engaged in the general insurance business comprising of fire, marine, motor and engineering insurance.

The shares of the company are quoted on the Karachi and Lahore Stock Exchanges. The principal place of business is located at EFU House-Karachi with over 72 branches throughout the country.

EFU Insurance Group is one of the few Pakistani insurance organisations run entirely by professional management and with a highly-motivated field force. EFU General has obtained Insurer Financial Strength Rating of ‘AA Stable Outlook’ by the rating agency JCR-VIS.

A unique feature of EFU Insurance Group is its voluntary review mechanism by professionals of international repute. The independent reviews by these professionals enable the company to keep abreast of international changes in the industry as well as ensure that management adopts the best international practices.

Another pillar of EFU Insurance Group’s strength is its very close and long-term (over 50 years) relationship with its main reinsurer, ‘Munich Re’, one of the largest reinsurance companies in the world.

EFU Life

In 1992, the Government of Pakistan reopened life insurance business to the private sector organizations and EFU Life Assurance Ltd was incorporated as the first private sector life insurance company. In early 1993, EFU Life commenced writing group life insurance business and, by March 1994, the company began writing  individual life business.

The company has a growing network of 72 branches throughout the country with employee strength of over 1,600 in its sales force and around 150 at its main offices in Karachi and Lahore. The company employs 5 full-time actuaries and also engages one of the leading actuarial firms in the country.

EFU Life is the first life insurance company in Pakistan to be awarded the ISO 9001:2000 certification. Today, EFU Life continues to be the largest private sector life insurance company in Pakistan. EFU Life was the pioneer in introducing the following products and features in Pakistan:

Unit-linked products
Critical illness products
Education planning product
Inflation protection benefit
Tax qualified pension plans
Extended critical illness product (covering 379 medical conditions)

Allianz-EFU Health Insurance

In 2000, EFU Insurance Group formed a joint venture with Allianz AG to incorporate Allianz-EFU Health Insurance, Pakistan’s only specialized health insurer. Allianz EFU Health is a joint venture between the leading insurer in the world, Allianz Group, and the most experienced local insurer, EFU Insurance Group. It was the first company in Pakistan to offer health insurance to individuals and families, and companies with as few as five employees. To ensure quality, Allianz-EFU is implementing an Integrated HealthCare delivery system.

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Best Way To Spend Your Holiday At The Beach

If you have been working hard all year, then perhaps a little bit of time off will help you rest and relax from your labors. A holiday at the beach is a great way to spend some time with your family and all of those in your life hat you care about. Beach holidays are fun and enjoyed by everyone in the family.
Be sure to wear plenty of sunscreen when you are in the sun. A minimum SPF of 15 is recommended to prevent sunburn. Sunscreen acts as a physical barrier between the sun and your skin, keeping it protected from the harsh rays.

Your time at the beach won’t be fun when your stomach is growling with the pains of hunger. Bring a few snacks with you to make sure that you don’t get hungry while you are playing in the sand or swimming. It’s also fun to have something to eat while you are on the beach.

Be sure to bring a portable MP3 player. In the past, people would bring entire sound systems to the beach and play their music for everyone to hear. Now, it’s much easier to bring something that you can put into your ears and listen to whenever or wherever you are. Load it up with some fun beach tunes, and you will certainly be in a great mood.

It’s also not a bad idea to try and build a sand castle. Even if you’re not a kid, you can still pretend to be one. It’s great fun to stack sand up and see what results after your attempts at building something fun and easy to enjoy. Sand castles are designed to be playful and are perfect for kids or those with a kid-at-heart attitude.
Otherwise, just sit back and relax. This is the best part about going to the beach – the chance to forget about everything you were working so hard on and do something fun for once in your life.

Perhaps you don’t want to risk getting sunburned, or the beach is simply too cold for you? Considering that London has the world’s greatest theater scene, the beach holiday doesn't sound so fun after all. Beach holidays are great, but being able to see plays such as Les Miserable at the Queen’s Theater is just as good. Threat is a rare art that captures the imagination and draws your attention with it’s majesty and grandeur. If that’s the case, then head to your nearest Box office London and look for your theater tickets today. You can have much more fun at Box office London than the beach!

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5 Life Insurance Questions You Should Ask

if you're in the market for life insurance, you might have been tempted by those ads claiming that "for just a few dollars a day, you can protect your family with $1 million in life insurance!" It sounds like a great deal, doesn't it?These ads typically refer to term life insurance. As its name implies, term life insurance provides protection for a limited amount of time - or a specific "term" of years, such as 10, 20 or even 30 years.It's fairly simple; if you die while your policy is active, your family will receive a death benefit, but the many types of term insurance and options can be confusing. Is term life insurance likely to pay off for you? Start by asking yourself the following five questions.

1. What am I trying to accomplish?Before you buy any kind of life insurance, think about why you're buying it. Are you protecting your family in case of an early death? Have you taken on additional debt that requires you to provide coverage? Are you looking to leave an inherent to a charity?Understand that in most cases, term insurance policies do not pay a claim - most people who buy term insurance "outlive" their policy's term. As a result, if you're shopping for insurance to protect financial obligations you may have for a very long time - possibly for the rest of your life - consider exploring another type of policy, called Preachment Insurance. If you're in a cash crunch and have immediate obligations to your family, business partners, or lenders, term insurance can provide you with a quick, simple, short-term solution. 2. What's available?Most people will have access to at least one of the two types of term insurance policies: group or individual.

• Group - Most companies offer their employees some form of term life insurance as an employee benefit. This is called group term insurance, because you're getting protection as part of a larger group. Usually it's deducted right from your paycheck and the only requirement for coverage is to complete a brief questionnaire with details of your health history. Here are some of the advantages of group term insurance:
  • It's easy - You can usually sign up for a policy when you take a new job and enroll in your company's benefits program. You may also have an opportunity to sign up during the annual enrollment period at your company; when you may sign up for other benefits, such as medical, dental, .
  • No medical - Most group plans don't require a physical exam. A statement of good health, along with a medical history, is usually all that's required to secure coverage.
  • Automatic payments - Through payroll deduction, you'll hardly feel the financial hit of paying premiums every month. 
• Individual - As its name implies, an individual policy is one in which you apply for coverage on your own. You - or typically a family member - will own the actual policy. In order to obtain an individual policy, you'll probably have to undergo a medical exam of some sort, provide a detailed medical history, and give the insurance company permission to look into your medical records and perform a background check on any driving offenses and criminal activities. This might sound a little invasive, but there are some great benefits to owning an individual life insurance policy.
  • It's portable - If you take a new job at a different company, you don't have to worry about losing your life insurance protection.
  • Level Premimus - Generally, individual policies can be structured to have level premiums for the duration of the policy; typically this is a 10-, 20- or 30-year period.
  • Flexibility - If you ever want to upgrade or convert your term policy to a permanent policy, you might have more options available with an individual policy than you would with a group plan.

3. What if I don't die?Ironically, some people who buy term life insurance get upset when they find out that if they don't die, they don't get anything back. If this is a concern for you, it's important to get an understanding of what will happen to your policy as you near the end of the term. 

• Premiums go up - Many term policies offer level premiums for several years (10, 20 and even 30 years, for example). As you approach the end of that term, you may have the option of keeping your policy. If you do, you can expect a hefty jump in your premium.
• Might need a new policy - If you are still healthy at this time in your life and you want to keep the coverage, it may be best to apply for a new policy.
• Drop in coverage - Perhaps you only wanted your policy to cover you as long as you had a mortgage, or until your children's college education was paid for. If that's the case and you have no other obligations to protect, you might want to let the coverage expire.
• Upgrade the policy - Most term policies come with a "conversion privilege". This allows you to essentially trade in your old term policy for a new permanent policy.

4. How can I upgrade this policy?As mentioned previously, most term policies allow you to convert from a term policy to a permanent one. This is a great feature that provides future flexibility but because some policies have limitations, you should familiarize yourself with the conversion rules of any policy you're considering. When can I convert?
The conversion privilege might have a time limitation on it, to age 70, for example. Some policies allow conversion during the entire term of the policy. 
What can I convert to?
The most generous term policies allow you to convert to any type of permanent policy available, such as whole life, universial life, or variable universal life. Some term policies may force you to convert specifically to just one type, and some companies may not offer all types, which can also limit your options down the road. 

5. Where do I buy a policy?Chances are you'll probably hit the major internet search engines first when looking for information about buying a policy. A number of online distributors can provide you with a term insurance policy. These distributors typically focus on finding the lowest cost policy, given the personal information you provide.For a more personalized experience, you might consider finding a professional. An insurance agent will help you understand all the different variations of insurance - both term and permanent - and should be able to answer any questions you might have. You can find one by visiting any of the major company websites or combing through your local phone books, but probably the best way to find a representative is to ask around for a referral from a friend or business associate.Finally, for group coverage, you can check with your employer. If you're self-employed, you may have access to a group plan through a professional association, or you may even be able to put a group plan in place for yourself and your employees. 

Million-Dollar DreamsAfter going through these five questions, you will be able to decide for yourself if that million-dollar coverage ad is really what you need to provide for you and your family. If it's not, don't be afraid to pass it by - there are hundreds of policies waiting to provide you with the peace of mind you're looking for.

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Charity Bank and Charity Loan

Charity Bank is Associate in Nursing freelance moral bank with a social purpose. It operates across the united kingdom, with offices in Ton bridge, London, Cardiff and dynasty. Charity Bank provides loans to charities and social enterprises with the support of non-public and organisational depositors.

Charity Loan:.
Charity Bank provides low price loans to not-for-private-profit organisations sanctification charitable or social enterprise activities to be pursued, usually wherever business lenders area unit unwilling to lend. In 2012 Charity Bank rumored a loan write-off rate, of but zero.5% of its total disposition. As well as assessing the trustworthiness of organisations, Charity Bank proprieties organisations and comes that give robust social advantages. Charity Bank measures the anticipated social impact of every application as a part of its disposition call. In 2013 Charity Bank rumored that it had season over £177 million to quite one,000 charities and social enterprises that support individuals and communities across the united kingdom.

Ethical ISA and Savings:.
Savers will open term and spot savings accounts, like AN moral money ISA, ANd area unit sent an annual portfolio of all the loans the bank has created. this fashion savers will see specifically however their cash is employed. All savers area unit invited to fulfill charities from their area people that are supported by Charity Bank, as an on the spot approach of sharing the distinction their savings build. Savers are invited to attend AN annual Open Day wherever they'll hear from the organisations supported and speak with Charity Bank employees and administrators. Charity Bank's moral ISA is stratified high of moral Consumer's buyers' guide for moral ISA's.The bank's moral ISA is additionally listed as 'most moral ISA' by MoneySavingExpert.com.

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Life Insurance

 Life insurance (or ordinarily life insurance, particularly within the Commonwealth) could be a contract between AN insured (insurance policy holder) ANd an insurance company or assure, wherever the insurance company guarantees to pay a chosen beneficiary a total of cash (the \"benefits\") in exchange for a premium, upon the death of the somebody. betting on the contract, different events like terminal sickness or vital sickness may additionally  trigger payment. The policy holder usually pays a premium, either often or as a payment. different expenses (such as ceremony expenses) also are generally enclosed within the edges. Life policies square measure legal contracts and therefore the terms of the contract describe the restrictions of the insured events. Specific exclusions square measure typically written into the contract to limit the liability of the insurer; common examples square measure claims regarding suicide, fraud, war, riot, and civil commotion. Life-based contracts tend to comprise 2 major categories: Protection policies – designed to produce a profit within the event of mere event, usually a payment payment. a standard kind of this style is insurance. Investment policies – wherever the most objective is to facilitate the expansion of capital by regular or single premiums. Common forms (in the US) square measure whole life, universal life, and variable life policies.

Terms of  Life Insurance:.
Special exclusions may apply, like suicide clauses, whereby the policy becomes null and void if the insured commits suicide within a hard and fast time (usually a pair of years once the acquisition date; some states provide a statutory annual suicide clause). Any misrepresentations by the insured on the appliance might to boot be grounds for nullification. Most America states specify a most contest-ability quantity, usually no quite a pair of years. providing the insured dies within this era will the insurer have a right to contest the claim on the thought of deception and request additional information before deciding whether or not or to not pay or deny the claim. The face amount of the policy is that the initial amount that the policy pays at the death of the insured or once the policy matures, tho\' the actual profit can provide for larger or lesser than the face amount. The policy matures once the insured dies or reaches a hard and fast age (such as 100 years old).

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Online Education & Online Degree Course

An online degree could be a tutorial degree (usually a university degree, but generally the term includes high school diplomas associate degrees non-degree certificate programs) which is able to be earned primarily or entirely through the use of AN Internet-connected laptop, rather than attending college in an exceedingly} very ancient field setting. enhancements in technology, the increasing use of the net worldwide, and additionally the would really like for people to possess versatile school schedules whereas they are operative have diode to a proliferation of on-line colleges that award associate, bachelor\'s, master\'s, and student degrees.

Accreditation:.
The goal of educational certification, according to the North American nation Department of Education, is to form positive that programs provided by institutions of higher education meet acceptable levels of quality. ENEMA, the European Association for Quality Assurance in teaching, describes the role of external quality assurance in education conjointly that \"combines every responsibility for the support of the final public associate degrees AN objective and biological process role for enhancing quality in institutions\". at intervals the area of on-line education, it is necessary to avoid unauthorized certification mills that offer faux degrees, as these ar sadly common. Students seeking valid on-line degrees have to be compelled to acquire proof of certification from associate applicable national or regional accrediting body. In the us, on-line faculties that ar all licensed have earned  a wide best-known quite university certification from one in all six regional certification boards.[3] each of six geographic regions of the North American nation has one in all these boards, a non-governmental agency that oversees and accredits degree-granting institutions headquartered in their areas. The U.S. Department of Education and thus the Council for teaching certification (CHEA) acknowledge the area Education and training Council (DETC) as a result of the accrediting organization for distance learning institutions and teaching programs that offer on-line degrees. However, DETC certification is usually (though not universally) viewed as inferior to regional certification, and regionally licensed faculties may refuse to easily settle for transfer credit from DETC-accredited faculties plenty of typically than they could refuse credit from different regionally-accredited faculties. Outside of the North American nation, different national and regional standards of certification hold, and can be very substantiation of, distance education. as AN example, the University Oberta Delaware Catalina, or university of dominion, has been licensed by AQU, the Agency for Quality Assurance at intervals the Catalan University System (a full member of ENQA ), since its origination in 1995, and has been called a \"significant success story\" as \"the world\'s initial continuous, and property, virtual university\".[5]Similarly, in Ireland, the higher Education and training Awards Council (HETAC) has licensed form of on-line faculties and degrees, e.g. Sextant school.

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Auto Insurance Quotes

Vehicle & motorcar Insurance:.
Vehicle insurance, among the u. s. et al., is meant to cover risk of financial liability or the loss of a auto the owner may face if their vehicle is bothered throughout a collision resulting in property or physical damages. Some states want a auto owner to carry some minimum level of insurance. States that do not want the vehicle owner to carry insurance embody Virginia, where academic degree uninstallable auto fee is additionally paid to the state; New Hampshire, and Mississippi that gives vehicle homeowners the selection to post cash bonds (see below). The privileges and immensities clause of Article IV of the U.S. Constitution protects the rights of voters in each many state once traveling to a special. A auto owner sometimes pays insurers a monthly fee, sometimes called academic degree premium. The premium a auto owner pays is often determined by a variety of things along side the type of lined vehicle, the age and gender of any lined drivers, their driving history, and thus the placement where the vehicle is primarily driven and keep. many insurance companies offer premium discounts supported these factors. Insurance companies provide a auto owner with academic degree insurance card for the particular coverage term that\'s to be unbroken among the vehicle among the event of a traffic collision as proof of insurance. Recently, states have started passing laws that electronic versions of proof of insurance can presently be accepted by the authorities.

Public Policy of motorcar Insurance:.
In the us, automotive insurance covering liability for injuries and property damage is obligatory in most states, but fully totally different states enforce the insurance demand otherwise. In Virginia, where insurance is not obligatory, residents ought to pay the state a $500 annual fee per vehicle if they decide on to not acquire insurance. Penalties for not shopping for insurance vary by state, but sometimes embody a substantial fine, license and/or registration suspension or revocation, and potential jail time. Usually, the minimum required by law is third party insurance to defend third parties against the financial consequences of loss, damage or injury caused by a vehicle. Golden State and New Jersey have enacted \"Personal Responsibility Acts\" that place a lot of pressure on all drivers to carry insurance by preventing uninsured  drivers from sick non economic damages (e.g. compensation for \"pain and suffering\") if they are slashed in any approach whereas operative a motorcar. Some states, like North realm, want that a driver hold insurance before a license are issued. Some states want that proof of insurance be motorcar driven among the automotive in any respect times, whereas others do not. for example, North realm does not specify that proof of insurance ought to be carried among the vehicle; it\'ll, however, want that a driver have that information to trade with A alternative driver among the event of AN accident. Arizona Department of Transportation analysis Manager John Siemens has prompt that automotive insurers issue license plates and be command accountable for the full worth of injuries and property damage caused by their licensees below the funfair model. Plates would expire at the highest of the total of cash quantity, and licensees would need to return their plates to their insurance work to receive a refund on their premiums. Vehicles driving whereas not insurance would thus be straightforward to spot as a results of they may not have license plates, or the plates would be past the marked expiration date.

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Pay-As-You-Drive Insurance: How Americans Could Save More

Most large, nationwide auto insurers offer customers an interesting way to save on premiums: let them track how you drive.  But a new survey shows many Americans miss out on these discounts because they don’t know much about these programs.

An insuranceQuotes.com survey found that 58 percent of consumers have never heard of pay-as-you-drive insurance programs, such as Snapshot® from Progressive, Drivewise® from Allstate and Drive Safe & Save™ from State Farm.

These programs, also known as pay-how-you-drive insurance or usage based insurance, use telematics (technology that allows insurers to track vehicles) to gather data about driving habits and ultimately offer lower premiums to safe drivers.

But despite a general lack of knowledge about pay-as-you-drive insurance, many consumers say no way. Thirty-seven percent of people surveyed said they would never sign up. And another 35 percent would only do so for a discount of 25 percent or more.

Experts say this reluctance stems from a range of concerns, including legitimate worries about privacy to misconceptions about what insurers track. The operations director for Allstate’s Drivewise® program, Sarah Inciong, says, “There are still a lot of myths we have to dispel because this is so new.”

Many consumers are confused about pay-as-you-drive insurance

The survey of 1,000 U.S. adults, conducted for insuranceQuotes.com by Princeton Survey Research Associates International in October 2013 found that 68 percent of consumers who’ve heard of pay-as-you drive insurance do know that you pay less for auto insurance if you drive well.

But the survey found that many consumers are confused about the specifics. For example, consumers aren’t clear about the four major metrics most pay-as-you-drive programs track:

• The speed you drive. About 41 percent of those surveyed either incorrectly said the programs don’t track how fast you drive, or they weren’t sure. Most programs do track speed, but you probably won’t get dinged for going a few miles over the limit now and then, experts say. For example, Allstate’s Drivewise® program looks for “excessive speed,” like how often you go over 80 miles per hour, Inciong says.

• The time of day you drive. About 58 percent of consumers either incorrectly said pay-as-you-drive programs don’t track when you drive, or weren’t sure. In fact, experts say that when you drive can tell an insurer a lot. For example, a driver who battles daily rush hour traffic on the highway is riskier to insure than one who works from home, says Scott McCormick, president of the Connected Vehicle Trade Association.

• The miles you drive.  Sixty-two percent correctly answered that pay-as-you-drive programs track the number of miles driven. But 25 percent answered incorrectly and 13 percent weren’t sure.

• How hard you brake. And 63 percent of consumers either incorrectly said that pay-as-you-drive programs don’t measure how hard you brake, or didn’t know. In fact, how you brake is a major indicator of the safety of your driving, Inciong says.

And some consumers think that insurers are gathering information that they’re not. About 50 percent of those who know about pay-as-you-drive mistakenly said it tracks whether you drink and drive.

“It’s not a breathalyzer machine,” says Sonja Larkin-Thorne, a National Association of Insurance Commissioners consumer representative. She adds that the telematics device can give your insurer the general location of your car, but probably won’t tip them off that your car was parked at a restaurant for three hours on Friday night and you might have had a drink at the bar.

She says, “It’s designed to look at your driving habits and vehicle usage, not whether you’ve had a glass of wine.”

Pay as you drive insurance and privacy

Many consumers say they’d be reluctant to sign up for pay-as-you-drive insurance for privacy reasons. In fact, 25 percent of consumers said they’re concerned about their personal information being shared, while 20 percent said they don’t want their insurer to know that much about them.

Privacy is a legitimate concern with pay-as-you-drive insurance. “Consumers aren’t going to know the full story until there’s full and complete disclosure,” Larkin-Thorne says. Right now, not a lot is known about how these programs work because insurers guard many of the details, she says.

But others say privacy concerns are overblown. For example, McCormick says insurers are more concerned about gathering and analyzing the data as a whole to help set better rates than they are about any one driver.

Some consumers do have reason to worry – but it might be because they have something to hide that has nothing to do with their driving, he says.

For example, some consumers might be nervous about their insurers tracking their movements, he says. The Hartford’s TrueLane program, for example, uses GPS to collect location information – mostly to show consumers where certain driving events happened, according to its website.  Other programs, such as Progressive’s Snapshot, don’t have that feature – possibly to help put nervous consumers at ease.

“There will always be people who are having an affair, moonlighting when not supposed to, or partying too much and don’t want to get caught,” McCormick says.

Should you enroll in pay-as-you-drive insurance?

Most insurers offer usage-based insurance programs only in certain states because of differences in state law. Each state has different rules on what information insurers can track, how they can use that data, how they can set rates and what they must disclose to consumers. In California, for example, programs that track only mileage are available while programs that track how you drive are not.

Shopping for car insurance? Get your free car insurance quotes here. 

If you do have a program available to you, here are five tips to help you know if pay-as-you-drive insurance is right for you:

1. Assess your driving skills.  

The survey found that 63 percent said they’re either much better or somewhat better drivers than others. And only one percent said they’re worse.

Obviously, everyone can’t be above average so experts say it’s important to be honest about how well you drive. One big clue is your past driving record. If you have a history of accidents and speeding tickets you might not want to sign up, says Pat Speer, property and casualty insurance analyst for the Aite Group, who conducts research on telematics.

2. Ask a lot of questions.

Consumers should make sure they fully understand a program before signing up, Larkin-Thorne says. Here are some questions experts say you should ask:

• What information do you track? Some companies, such as National General Insurance, track only mileage while others track how you drive and even where you go.
• Will I get a discount and how much? Many programs advertise discounts for low mileage, good driving or both. But some simply collect your information without offering a discount.
• How is the discount calculated? Ask for specifics about how the company decides who saves and how much. “Each company has a different approach,” Speer says.
• Could I be penalized in any way? You should ask whether you might face any negative consequences – such as higher rates or getting dropped by your insurer – because of your driving, McCormick says.  For example, with Allstate’s Drivewise® program, Inciong, says, “The worst that could happen, if you’re a very unsafe driver, is you wouldn’t (get) any savings.” Most insurers say they won’t raise program participants’ rates for unsafe driving. However, McCormick says some companies might raise rates in the future or refuse to renew policies for bad drivers.
• How long will the device stay on my car? Some programs require policyholders to use the device for, say, six months to get a discount while others require consumers to use it indefinitely, Larkin-Thorne says. Some track your information through an existing onboard service like OnStar.

3. Get the policy in writing.

Don’t just rely on what your insurance company or agent tells you, Larkin-Thorne warns.  Your policy should tell you exactly what is tracked, how the information will be used and whether it will be shared with a third party and, if so, whether that includes information that would identify you. “Find out what rights you’re giving up or signing away,” she says.

4. Don’t plan to game the system.

Think you can let up on your lead foot or stop partying until 2 a.m. while you’re being tracked, then revert to your old ways? Don’t count on it, Larkin-Thorne says. You might be able to drive more carefully for a little while, but it probably won’t last for the six months or longer the device is on your car. Some programs, such as Allstate’s require you to leave the device on as long as you’re in the program. “People tend to go back to their old ways eventually, so the company is going to be able to measure your real driving habits,” she says.

5. Make sure the program pays off. If you do sign up for a pay-as-you-drive program, take a hard look at the actual savings you get and see if it’s worthwhile. “You won’t really know until you see your bill,” Larkin-Thorne says.

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Auto Insurance Rate Increase After One Claim By State (Map)

map below you can find your state and see how much your rates may increase if you make one auto insurance claim - and how your state stacks up against other states in the U.S. Click on the map to enlarge it. 

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Making One Auto Insurance Claim Can Increase Your Rate By Up To 67%

Many consumers realize that filing an auto insurance claim will likely result in a raised annual premium. What may be shocking to some, however, is just how significant that premium increase may be.

A December 2013 Quadrant study, commissioned byinsuranceQuotes.com, examined the average economic impact of filing various claims on your auto insurance policy. Using a hypothetical 45 year-old married female driver who is employed, has an excellent credit score, no lapse in coverage and has filed no prior auto insurance claims, the study looked at how much annual premiums can go up after filing one of three different types of claims: 

• Bodily injury.
• Property damage.
• Comprehensive.

The study not only looked at the impact of these three different types of claims but also the impact of the claim's dollar amount ($500, $750, $1,000 and $2,000 or more) and compared the average premium increases for all 50 states and Washington, D.C. The results were intriguing to insurance analysts and experts.

Auto insurance rate increases after a claim by state

The study found that if you make one auto insurance claim, the average increase nationally is 38 percent. According to the National Association of Insurance Commissioners, the average cost of an auto insurance premium in the U.S. is $791, so an increase of 38 percent would result in a $301 increase. It's important for consumers to note that rate increases only apply to bodily injury and property damage claims where you are at fault. If you are rear-ended by another driver, their insurance or your uninsured motorist coverage will cover your claim and your rates won't be affected.

Click here to see more great videos at the insuranceQuotes.com Youtube page. 

The study found that rate increases varied widely by state. For instance, results showed that Massachusetts drivers who file any kind of auto claim of $2,000 or more may see their annual premiums increase by an average of 67 percent. According to a 2010 report by the National Association of Insurance Commissioners (NAIC), Massachusetts drivers paid an average auto insurance premium of $890.83 in 2010, meaning a single auto insurance claim in that state could result in a $597 annual increase.

However in Maryland, where the average premium is $948, one $2,000 auto insurance claim will only raise residents’ annual premium by 20 percent (or about $190, according to NAIC figures).

The following five states showed the greatest average premium increase as a result of filing any type of claim of $2,000 or more:

1. Massachusetts — 67 percent increase

2. California — 62 percent increase

3. New Jersey — 59 percent increase

4. North Carolina — 47 percent increase

5. Minnesota — 45 percent increase

Meanwhile, the following five states, on average, showed the smallest percentage premium increase as a result of filing any type of claim of $2,000 or more:

1. Maryland — 20 percent increase

2. Alabama — 22 percent increase

3. Michigan — 23 percent increase

4. Wyoming — 23 percent increase

5. Oklahoma — 25 percent increase

According to Robert Hartwig, president and chief economist for the nonprofit Insurance Information Institute (III), it's no surprise that insurance premiums increase after filing a claim. The reason is because insurers know that filing one claim makes you more likely to file another one in the future, thus making you a more risky and expensive customer  to insure.

"People shouldn't view an increased premium as a penalty, but rather as an assessment of your risk moving forward," Hartwig says. "(After making a claim) you’re now that much more likely to be involved in an accident in the future. But I’m very surprised by the magnitude of these numbers."

According to California Department of Insurance commissioner Dave Jones, policyholders should consider these average premium increases as just one possible outcome of filing a single auto insurance claim.

“Good drivers in California receive a significant premium discount while those whose driving record indicates they present a higher risk typically pay much higher rates,” Jones says. “However, the bottom line is that the overall rate levels in California have been kept in check by our rate regulation process which has saved our consumers billions of dollars.”

Auto insurance rate increases for bodily injury claims

In 49 states and the District of Columbia, drivers are required by law to obtain a minimum amount of liability coverage that insures the policyholder against damage to property and injuries caused to individuals in an accident (New Hampshire, which doesn’t require minimum liability coverage, is the only exception). These are known as bodily injury claims, and they're often the most expensive.

According to the III, the average auto liability claim for bodily injury in 2012 was $14,653.

"Most people probably think the majority of auto insurance claims go toward repairing vehicles, but in reality they go towards repairing people," Hartwig says. "And it's usually a lot more expensive to repair a person than it is to repair a vehicle."

According to the insuranceQuotes.com study, filing one bodily injury claim of $2,000 or more will result in a national average premium increase of 41.6 percent (or about $330) per year. However, there are several states that buck the national average.

The following five states showed the greatest average premium increase as a result of filing one bodily injury claim of $2,000 or more:

1. Massachusetts — 73 percent increase

2. California — 68 percent increase

3. New Jersey — 63 percent increase

4. North Carolina — 52 percent increase

5. Minnesota — 49 percent increase

The reasons for so much disparity from state to state are varied and nuanced, says Pete Moraga, spokesman for the Insurance Information Network of California. According to Moraga, rate swings between states come from several factors, including the nature and severity of claims filed in a given state, as well as the different ways in which insurance is regulated from state to state.

"State regulations give insurers a certain amount of leeway in how they can apply claims history to premium increases," Moraga says. 

Depending on what the state allows, Moraga says some insurers will charge more, and others will charge less for previous claims history. What’s more, some insurers will sell policies that include perks like accident forgiveness, which keeps premiums down even if you’ve filed a previous claim 

Dan Weedin, a Seattle-based insurance and risk management consultant, says he isn't surprised to see that bodily injury claims result in the largest overall premium increase compared to property damage and comprehensive.

"Liability claims are more concerning to insurers and will always cost more," Weedin says. "And the bigger the threat to the insurer, the higher the premium and the consequences. 

Auto insurance rate increases for property damage claims

When you're involved in an accident that results in damage to your vehicle, someone else's or other types of property, like mailboxes or buildings, you’re likely to file a property damage claim. In general, these are far less expensive than bodily injury claims.

According to the III, the average auto claim for property damage in 2012 was $3,073.

According to the insuranceQuotes.com study, filing one property damage claim of $2,000 or more will result in a national average premium increase of 41.11 percent (or about $325) per year. However, as with bodily injury claims, several states fall above and below this average.

The following five states showed the greatest average premium increase as a result of filing one property damage claim of $2,000 or more 

1. Massachusetts — 73 percent increase

2. New Jersey — 71 percent increase

3. California — 63 percent increase

4. Minnesota — 50 percent increase

5. Arizona — 49 percent increase

Meanwhile, the following five states, on average, showed the smallest percentage premium increase as a result of filing one property damage claim of $2,000 or more 

1. Connecticut — 22 percent increase

2. Michigan — 24 percent increase

3. Alabama — 24 percent increase

4. Wyoming — 25 percent increase

5. Maryland — 25 percent increase

And while the average bodily injury claim is nearly five times more expensive than a property damage claim, the premium increases are similar because the factors used to determine those increases are the same.

“It’s all about the way a previous claim makes you riskier to insure moving forward,” Hartwig says. “The cost of the claim isn’t what’s most important, but rather the statistical likelihood of filing another claim in the future. And that’s more or less the same for bodily injury and property damage.”

Considering the possible rate increase, Hartwig says policyholders need to do the math when faced with a potential property damage claim.

"Because these can be much smaller claims, the decision to file a property damage claim is going to depend a lot on your deductible," Hartwig says. "For instance, if you have a $500 deductible and you caused $500 worth of damage, it probably doesn't make sense to file a claim."

Auto insurance rate increases for comprehensive claims

Comprehensive coverage pays for vehicle damage that comes from something other than a collision, such as fire, hail or theft. According to the III, the average cost of a comprehensive claim in 2012 was $1,585.

Since comprehensive claims are the result of situations beyond the policyholder's control, premiums are affected far less drastically than for bodily injury or property damage claims (if they're affected at all).

"Comprehensive claims are a different animal altogether, because they’re not the result of anything the driver did," Hartwig says. "If a tree falls on your car while it's parked overnight, that's not related to how you drive." 

As a result, the national average premium increase for these types of claims is fairly negligible. According to the insuranceQuotes.com study, filing one comprehensive claim of $2,000 or more will result in a national average premium increase of just 1.74 percent (or about $14) per year. However, a few states fall above this average. 

The following five states showed the greatest average premium increase as a result of filing one comprehensive claim of $2,000 or more:

1. Nebraska — 10 percent increase

2. Iowa — 9 percent increase

3. South Dakota — 8 percent increase

4. Louisiana — 7 percent increase

5. Connecticut — 6 percent increase

Meanwhile, 20 states showed a premium increase of less than 1 percent, and 11 of those showed no increase at all.

When will your premium go back down?

The good news is that increased premiums don't last forever. Rate increases typically last three years, as long as you don't make another claim during this period.

"In most cases, traffic convictions and at-fault accidents are used as part of your driving record for three years," says Nancy Kincaid, spokeswoman for the California Department of Insurance. "That being said, in many states, including California, major convictions like driving under the influence can stay on your record for as long as 10 years, along with their corresponding premium charges."

Hartwig says that even if you’ve filed a claim and are looking at a higher premium for auto insurance, it's always a good idea to shop around for a less expensive policy.

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