How to Buy Insurance: Home, Auto and Life Insurance Buying Tips

this is about how to ensure things in your life first homes and cars second your wife [Music] 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 [Music] 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 [Music] 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 [Music] 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 [Music] 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 [Music] you

Channel: Clark Howard: Save More, Spend Less

Views: 29,852

Keywords: insurance, auto insurance, car insurance, how to buy car insurance, home insurance, homeowners insurance, how to buy homeowners insurance, life insurance, how to buy life insurance, level term life insurance, whole life insurance, collision and comprehensive insurance, car insurance collision and comprehensive, liability coverage, liability coverage car insurance, liability coverage home insurance

Id: YbUboX3aBfE

Length: 14min 50sec (890 seconds)

Published: Wed Jul 15 2020