old-age insurance

There’s a major battle going on right now for hearts and minds. On one side all those who want to defend Wall Street line up. On the other, there’s the Occupy movement claiming to represent the 99% that’s suffered at the hands of Wall Street. The problem for the defenders is the main reason for the recession was the behavior of the banks and financial institutions. The liberals generally and the Democrats who represent them argue this justifies more regulation. They assert a failure of free-market capitalism and want to move back in time to a much higher level of supervision and regulation to prevent this from happening again. The Libertarians and the GOP who include them in its broad church argue the reason for Wall Street’s failure was the presence of too much regulation. They claim we would all still be sleeping peacefully in our beds if only the Democrats had not introduced all those limits on free-market capitalism.

For these purposes, it does not really matter which side of the debate is right. All we need say is the housing bubble burst and this unleashed a wave of foreclosures that continues to roil the country. Some states like California are bracing themselves for a further rise of the number of evictions by the banks. It seems these bastions of fairness have overcome the problems of robosigning and can now prove title to all the mortgaged homes. With high numbers of owners four or more months in arrears, the banks continue in their reluctance to write off any of the capital owing. As more empty properties come on to the market, this will further depress prices. Everyone loses.

However, one feature of this process is under new investigation. Starting at the top of the tree, Chase, Wells Fargo and Bank of America are currently accused of fraud in their use of the force-placed insurance provision in all mortgages. In theory, this is a reasonable term. If the home owner defaults and fails to insure the property, the mortgagee should have the right to place its own cover and recover the premiums paid from the owner. This protects the lender’s security for the loan. Unfortunately, it seems the banks have been steering borrowers into significantly overpriced policies. There are reports of some force-placed policies being ten times more expensive than the policies held by the owners. The investigation is focussing on the lender’s use of affiliated insurance companies, thereby earning kickback commissions. If this investigation does prove fraud, it will mean both a fine and an obligation to refund the premiums charged to the home owners. Even if the investigation fails to establish actual fraud, the regulators could still order refunds in all cases where the premium rate for the force-placed policy is unusually high. Continue reading →

Auto insurance is mandatory for anyone driving a vehicle in the US and there’s no way going around it. No matter whether it’s your first car or you’ve already retired and have decades of experience behind the wheel you will still need auto insurance for your car since the law tells so. Besides the legal framework of auto insurance there’s also simple common sense involved in its mandatory nature. Auto insurance covers your costs in case of an accidents, which can be substantial assuming current repair and medical bills. Having your car insured is cheaper in terms of such costs than driving around without insurance. However, for a particular group of drivers this benefit may seem not to be that obvious.

We are talking about students and teens in general. This group of drivers usually faces the highest auto insurance rates possible simply because of their age. But before you claim that it’s discriminatory, let’s consider the logic behind such a decision taken by all insurance companies at once. As you know, insurance companies are all about managing their risks and the only way they can hedge their risks is putting rates that will cover their costs and earn them income. So if teen drivers are charged with higher rates they somehow seem to pose a higher risk to insurers. And according to statistics that’s exactly how things are. Drivers aged under 25 usually have little driving experience and produce more accidents with higher costs than drivers of other age groups. Of course, this doesn’t mean that all young drivers are bad drivers, but the overall tendency is exactly as described and that’s the situation where one good driver will pay for the rest of worse drivers. Continue reading →

Using a cell phone while driving can drive up cheap car insurance costs in two different ways. First, any involvement in an accident will inflate premiums. Secondly, a traffic violation will similarly increase premiums. It’s important to understand the different kinds of bans that are out there so you can be a safe driver and a safe cell phone user. Continue reading →

The recession may have finished as a matter of technical accounting, but the general economic conditions for business remain very difficult. Whether you are a start-up or continue as a small business owner, there’s a temptation to cut the business overheads to the bone. This can be a false economy. Let’s start with a little law. If you are trading as an individual or a partnership, you are personally liable on all the contracts you make and for any losses arising due to your negligence (or criminal activity). Although there are slight variations in the law from state-to-state, the general rule about an LLC is that you are personally liable in tort and for any crimes you may commit, but there’s a shield to prevent you from incurring liability in contract. The general rule for a full corporation is you avoid personal liability under both contract and tort, although you can still be sued if members of the company believe you have breached your fiduciary duties as a director or senior officer. The other piece of law you need to know is that either you or the company will be held vicariously liable for whatever an employee does during the course of the employment. So if an employee is driving a vehicle owned by the business or driving his or her own vehicle on company business, either you or the company will be liable if the employee drives negligently and causes loss to a third party.

Many people believe it will be enough to rely on a Business Owners Policy (BOP). Indeed, many insurers and their agents sell these policies as a one-stop insurance solution. Sadly, this is a dangerous assumption. In particular, many BOPs limit or exclude losses caused when vehicles are damaged or damage third parties or their property. This is something you should discuss with your insurance advisor. For example, although the business owner may find some third party losses covered when he or she is driving, vicarious liability is almost always excluded. This means you could find yourself personally liable for both the medical expenses of anyone injured and all the consequential losses arising from the accident. Worse, if you or an employee was driving a vehicle owned by the business, BOPs decline cover for repair or replacement if the vehicle if damaged. The same applies if the vehicle is stolen or vandalized. You will only be able to recover these losses if you have a commercial auto insurance policy in place. It gets worse because, even if the employee is driving his or her own vehicle, it’s at your risk. Similarly, BOPs usually exclude cover if you rent a vehicle for your own or an employee’s use. Continue reading →

We all use auto insurance to secure our vehicle no matter whether we want it or no. Auto insurance is mandatory and there’s no way going around this fact unless you’re bold enough to go against the law and risk driving without insurance. There are many things that will affect the cost of your insurance most of the factors dealing with the car and its characteristics, while some of the factors can also use your personal data to determine how good of a driver you are. Yes, by knowing your place of residence, age, sex, marital status and education the insurance company can tell how it is likely for you to have a traffic accident. They all have enormous bodies of statistical data on their hands and they know what they’re saying. However, some factors may seem odd and even bizarre to be used for determining your auto insurance rates and credit rating is definitely one of them. Continue reading →