Insurance - A Good Thing to Have

It's easy to see why you would insure something of value. Insurance protects you against potential loss. So, why not insure everything? Hmmm ...

If you insure your car, and nothing bad happens to it ... you've still lost the money you paid for the insurance. If you get in an accident and your car is totaled but it wasn't insured ... you lose the total value of the car unless you can get someone else's insurance to pay for the accident. I'm just talking about the "comprehensive" insurance that pays for damage to your car. Liability insurance for automobiles is different and is required by law. The idea for liability insurance is you are protecting other people from loss you might cause them.

Back to automobile comprehensive insurance, though - you want to pay a small amount of money that you can afford - this is a known payment that you can plan on paying without any surprises. What you get for these insurance premium payments is protection from an unexpected sudden financial crisis that would occur if you wreck your car and it becomes useless. This actually works for anything of value that you want to protect - cars, houses, boats, snowmobiles, etc. It also works for life insurance protecting your family from financial problems if the main bread-winner were to die; or health insurance protecting you from unexpected sudden financial crisis when you or someone in your family becomes seriously ill or hospitalized.

Before the insurance company pays you any money, certain things need to happen that cause you a loss. Then you can file a claim to the insurance company that describes the loss and explains how it was covered by the insurance policy. Once the claim is accepted, the insurance company will issue payment to help you financially. Insurance companies get the money for those payments from people who are paying for insurance but aren't making claims on it yet. And if you're paying for insurance and you aren't filing a claim for damages, your payment is going to help the person who needs to file a claim.

The insurance company sets the amount of your payments according to the risk you have for making a claim and the law of averages. Using the car example, if you are a pretty good driver, you might get classified with a group of clients who are expected to have a major accident only once every eight years. This would be your risk category. On average every driver in this category is expected to make premium payments for eight years between major claims. Usually that works out pretty well for everybody.

I've heard people complain about having their premiums increased because they filed a claim against the insurance company. That can happen. If you had car insurance in a risk category expecting the car to be in a major accident every eight years, and the insurance company allowed a high-risk driver into your risk category, how would you like that? Maybe that high-risk driver could expect a major accident every four years. If that driver were allowed into your risk category, you would be paying for their frequent claims; and they would be paying for your infrequent claims. That wouldn't be fair.

To protect clients against higher-risk clients like this the insurance company will keep track of several factors they think might change the frequency or size of damage claims (risk factors). This is done to protect the clients who are not likely to file frequent, or large, damage claims. For car insurance, having an accident might signal a change in your driving capability. So having an accident might increase your premium for a couple of years just in case you are turning into a higher-risk driver. The insurance companies are cautious.

There are other factors that signal increased risk to the insurance company. These factors can also cause you to be placed in a category that requires a higher premium. For auto insurance, you don't need to file a claim to have your premium payment increased. All you need to do is get a ticket for a moving violation. If your credit score drops, it might signal the insurance company that you aren't paying attention to things low-risk customers would. They can interpret this to mean that you aren't attentive in your driving skills, or you might park you vehicle in a place where it could be damaged. Also, if you buy a more expensive car you are likely to have larger claims. All these things can indicate the insurance company might lose money on you if they don't adjust your risk classification.

This change in risk classification also works in your favor. Insurance claim records indicate that drivers under the age of 25 are more likely to be involved in accidents than middle-aged drivers. So, when you have your 25th birthday, your car insurance premiums are reduced. If you go three years without a moving traffic violation you will be seen as improving your risk classification and your rates will drop. The insurance company also sees less risk if you buy a less expensive car (with cheaper repair costs), or start parking in a private garage instead of on the street.

The calculation of risk is also considered for house insurance. That is why you can get reduced insurance premiums for having a security system, deadbolts, and fire extinguishers. For houses, they consider the neighborhood you live in and the types of claims the insurance industry has received from your neighbors. A neighborhood with a lot of vandalism can increase the cost of your insurance.

Similar calculations are used for analyzing risk factors for life insurance and health insurance. The claims history on smokers, people who are overweight, and the elderly shows them to be a higher risk for the insurance company. People who exercise regularly, have regular preventive health care, and eat a healthy diet are seen as lower risk than other people their own age who do not follow those practices.

You buy insurance for the times you will be filing a damage claim. Until that time comes, insurance will cost you a small amount of money. But when the time comes to file a claim, insurance is a good thing to have and you will be glad you have been paying for it.

James W. Stone

Copyright 2009, James W. Stone, all rights reserved worldwide

James W. Stone has been involved in new product development and marketing for most of his working career. His current interests focus on the psychology and sociology that influence our daily decisions when we spend money.

Read more of Jim's articles at http://www.jameswstone.com

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Cash Payday Loan - Your Quick Cash Solution For a Tight Situation

Have you ever come up short during a given week, and wished you could get a loan to keep you going? This is a common problem and it's not restricted to just you. The good news is, you can get that money, and you can get it fast so long as you have at least a recent bank statement or your pay stubs from your current job. When you're certain you have the required items you can go online and look around for a place that provides cash payday loans.

You will find facilities in town and online which have the authority to provide you a payday loan, and all you need is your bank statement or perhaps the pay stubs from your job. You'll be asked to fill out an application and provide the required documents that verify your identity and application information. While this may seem inconvenient to some, just remember that this is your identity. Since you wouldn't be particularly happy if someone else got a hold of your information, it is very important to ensure that these companies confirm your information and that someone else isn't requesting a loan in your name.

Most cash payday loan services have a minimum income amount established, in which case you will be prevented from taking out a cash payday loan if you do not meet the minimum requirements. Basically, if you make an amount that is lower than their minimum monthly income requirement, then you will not be allowed to take out a loan. It is unfortunate, but it ensures that people can afford to pay back the amount that they borrow.

Another issue you might encounter with getting a cash payday loan is that the number of loans you can receive in a given time period is limited. With most companies the limit is one or two loans at a time per person. While you may need more money, these limits are actually in place to protect you. Payday loans are usually in smaller amounts, but they do have to be repaid within a week or two. Therefore, having several out at a time could cause some issues, especially if you are not able to pay one of them back, or if simply forget about one of them. Having several payday loans can become a juggling act that can end badly by creating additional problems for you and your financial situation.

You'll probably also notice that payday loan services are conveniently offered on the Internet, in addition to local offices in most areas. Online services are fast and easily accessible. All you have to do is talk to your current payday loan provider to see if they offer online services, or just do a quick Internet search to find the companies that offer them online.

Obtaining a payday loan can be pretty easy, and it's sometimes a reasonable solution to a short cash supply. It's important to make sure that you are able to pay back the amount you borrow plus the fee, so that you can avoid additional fees, possible legal issues, or irreparable damage to your credit.


Rose Martin writes for a blog that offers money saving tips, cash payday loan information, and coping with financial stress. She recommends http://paydayloantoday.com when you need a fast, affordable payday cash advance.

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How to Find the Best Payday Loan Lender

So, you have decided that you want to sign up for the best payday loan lender you can find. You will have some work to do, and it is important to know that fees vary and there are different types of lenders. Below you will find out how to secure the best loan payday, so that your costs will be minimal.

First, it is important that you compare the rates of at least ten different lenders. Since there is a lot of competition in the payday loan industry, the fees and interest rates you find are going to vary significantly. Find the best combination of fees and interest rates that you can find.

There are two ways to be a payday loan lender. The first is a brick and mortar store and the second is the Internet. Online websites usually have lower business running fees when compared to a physical office. The costs of running a business online is significantly cheaper than doing business in a building, so those savings will be passed on to you.

There are two types of lenders, direct and indirect. Indirect lenders are generally more expensive to work with simply because they are not lending you their own money. Instead, they are acting as a bridge between you and the actual lender. Direct lenders do lend their own money, so with no middle man, you will find a much better deal this way.

With these three basic pieces of information, you should be able to get the best loan payday possible. Your interest rates and fees will be a lot less by following these rules, so you will pay a lot less in the long run.

Rebecca Shamrock is an expert on best loan payday advance. Check out her website FastCashIn24Hrs.Com for tips and information on how to get the best loan payday advance and more!

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