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this is about how to ensure
things in your life first homes and cars
second your wife
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so let's jump right in to buying
insurance on
your home or your car and since a lot
more people have cars that have homes
i'm going to start with cars
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car insurance is something that is very
confusing
often because insurance is regulated by
the states
so the rules vary somewhat from state to
state
but there are things you need to know
about
insuring a car that
is very important to me you think
of car insurance is something that you
don't use for a run of the mill thing
if you make a smaller claim the claim
counts and you're penalized for it
potentially for years to come and then
to add insult to injury
he says you know i've been shopping
around nobody wants me because i have
this claim i said right
and by the way some of this applies to
homeowners
is that with insurance on a car
you want to take as high a deductible as
you're allowed to
if you have a loan on your car which
will usually be a thousand dollars and
if you have a claim that is like
under 1500 bucks you're not going to
make that claim
you're just going to fix it yourself if
you back into a poll period
and then you're going to have this
completely clear
insurance report which is important
for your premiums and for shopping
around get
quotes that are the same from company to
company what do i mean by the same
the same coverage limits the same
deductibles
you want to make sure you're comparing
apples to apples or
company to company so that you can
really see
where the dollars lay out and you need
to
call companies you know there are a lot
of people trying to push you to shop
online for auto insurance
but generally those online outlets are
just what's known as lead generation
sources they're selling your information
to others
to try to sell you auto insurance
as for what coverages you should have
in addition to having a thousand dollar
deductible typically
once you think about going past state
minimums for liability
unless you don't have anything i mean
you have no assets you rent and all that
you want to go uh what are called state
minimums
go for it on the other hand
if you own your own home you have a
variety
of assets money you've gotten savings
things like that
you do not want to do state minimums for
liability because
you know one time you hit a car in your
blind spot or whatever
you could have serious
exposure for liability and not really
for the person's car
liability risk for repairing somebody's
car that's the little money
the big money is when somebody is
injured or says they're injured
this is part of the roulette wheel of
driving
is that if you do have an oops you make
a mistake
that you're going to get hit with the
big liability exposure
so make sure you have liability coverage
enough to support
your life now collision comprehensive
which covers the damage of the car from
a driving event or something else
you know with that if you are driving an
old old car
you can probably skip that stuff if you
have an older vehicle which so many
of us have now you may have one that you
don't want to ensure the vehicle itself
collision and comprehensive covering if
something happens
that vehicle where you're essentially
your own insurance company
usually once a car hits about 10 years
old or older
you want to dump collision and
comprehensive so what you do is you
figure out
how much that vehicle is still worth if
the premiums for
collision comprehensive per year or more
than
10 percent of the remaining value of the
vehicle
just become your own insurance company
for the vehicle itself
if you're driving a newer car you need
to have it but again
with the higher deductible if you're
buying
a fancy car that's a newer car
and you can't afford the thousand dollar
deductible
you can't afford the car you bought in
the first place
not nice for me to say but it really is
true
and as far as who you're insured by
you need to call around or shop around
online
or use an independent agent and get use
his or her
shopping ability to find
an insurer for yourself and i have a big
bias
towards the two companies that
historically have rated the highest
for how they treat their customers
they're actually members in both cases
amica mutual amica mutual
that when i mention amica to somebody
they look at me with a blank stare never
heard of them
and the other many people have heard of
usaa
that's for military personnel retirees
and
their families you should always get a
quote from them
and then make a decision if you're going
somewhere else
now let's move to homeowners
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by the way those two companies rate the
highest for homeowners as well
homeowners insurance the deductible you
take
as long as your mortgage company will
permit it go as high
as you can in the many thousands of
dollars
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because with homeowners insurance you do
not want to use it
unless it is a catastrophe because
homeowners insurers
if you make a claim for who knows what
they often will can you
you know use it and lose it as it's
sometimes referred to in the
homeowner's insurance business you
should be insuring it
only for a massive loss
never for a little one and there's a
double benefit
to that you're going to likely go claims
free for a long long time
and you'll have lower premiums because
you never make claims
you know you have an insurance score
that insurers look at when you're
considering
using an insurer and mine is
i think 950 is the highest you can be on
that
and i have a 950 for both auto and for
homeowners
insurance because i just
avoid making claims like the plague
for homeowners insurance the biggest
mistake
people make is they don't have enough
coverage in the event their home had a
catastrophic
loss so here i am wanting you to have a
high deductible
but when you get past it i want you to
make sure that your home is valued at a
level
that if it has to be rebuilt you have
enough coverage for it
adequate coverage if you don't have it
you get into a fight with your insurer
if it costs more to rebuild
whatever the damage is or if it's a
total loss then what you stated is the
value
you could end up with enormous out of
pocket exposure
on a rebuild of your home or a repair of
your home
so please make sure that you have the
adequate coverage
liability same issue is with auto
if you have a lot of assets you need a
lot of liability coverage
if you have a lot a lot of assets you
need to buy an umbrella policy
that sits on top of your auto and
homeowners insurance
and covers you for a catastrophic claim
coming your way by somebody who's able
to prove
that you're at fault for whatever and
umbrella policies are sold in multiples
starting at 1 million dollars
the risk to the insurer is very low
because
they're very infrequently claimed
against
so there are a couple hundred dollars
for
an initial one with each additional
million dollars in coverage cheaper
than the prior one so i strongly
recommend
it as a success tax if you have
done a good job through your life
developing wealth and assets
you need a liability policy
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and now i want to talk about life
insurance
life insurance is something that is a
very hard thing to get people to buy now
dealing with someone doing a traditional
sales thing
just not your thing and so a lot of
people who
need life insurance just don't get
around to it
like people with young kids as a primary
example
or in a two income couple
you need life insurance on each of you
the great news is you can buy life
insurance
online you can can and buy the right
kind
for almost everybody the best insurance
is
term life insurance all it is
is you die it pays if you live it
doesn't
so it's really really cheap my favorite
for you to look at is level term
where you buy for the number of years
you have something you're worried about
in terms of providing replacement income
you have young kids
you want to have enough insurance to get
them into adulthood
and then having insurance where you
protect
your spouse or significant other
for the core of your working years so
level term is sold
generally in cycles of 15 20 or 30 years
for different needs in life there are
even companies now
that will sell you a level term
insurance policy
and guarantee issue without a medical
exam
they use algorithms and databases
to decide your level of risk and they'll
write the insurance
the first out of the block was one
called haven life
then there's ladder ladd er
and so far the people that do all the
student loans
and so i love this because again
a lot of people will never follow
through on the process of buying it
unless it's really easy
and so these companies have done that
and they'll bring the insurance industry
kicking and screaming
so i get a lot of questions from people
about
what are called permanent policies
universal life variable
universal life and whole life
variable universal life and universal
life
are two variations of plans you should
never ever buy under any
circumstances no matter what
they are snake oil they are junk
they are terrible and they have blown up
on so many people
not literally but in the wallet because
they are
garbage they push these things so hard
because the commissions on them
are gigantic but the problem is
all the promises made in the
illustrations
are made up lies
ask anybody to show you the guaranteed
illustration not the one
that soft state regulators allow
the insurers and their sales people
to lie to you about how unbelievable
these policies are going to be
but what actually happens is almost
always they end up with capital calls
where the promises they made were not
guaranteed
and you have to pay extra money or all
the money you paid in prior
vanishes and on top of it you can get
hit
with a massive tax bill
whole life which is also
sold by insurance agents is not
a crooked deal but it is only
a good choice typically if you are an
ultra high income earner generally when
you're above four hundred thousand
dollars a year
in income that applies to very very few
people
ultra high income earners can benefit
from some of the tax advantages
that come with a whole life policy
otherwise stick with term stick with
companies that are rated
a plus plus by am best
that is the measurement how likely they
are to be able to pay a claim
someday but one thing if you have others
that depend on you on income i want to
hit you
over the head with a baseball bat of
guilt
that you need to take care of your loved
ones and you need to
buy level term life insurance to protect
them
for the number of years that you need to
provide that protection to them the
future eventually does show up
so you better be prepared for it
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