Car Insurance

Motor insurance premiums have soared in price by 25 per cent over the past six months, according to price check website Insuresupermarket.com. With the average yearly premium for comprehensive cover standing at pounds 590, the need to find savings by shopping around is greater than ever.

Before hunting down that best deal, be prepared. First, work out a realistic value for your vehicle. Insurers will only pay the market value if the car is stolen or written off, so by providing an over-optimistic price for the vehicle, you might have to pay higher premiums than necessary.

Next, calculate how many miles you will drive. The higher the mileage, the more expensive the premiums. Be realistic about who will drive; by restricting cover to named drivers only, you can cut insurance costs dramatically, rather than needlessly opting for an “any driver” policy. And consider where the vehicle will be parked. Finding an off-road garage where you can park your pride and joy, rather than parking on the roadside, should lower premiums straight away.

Susan Carruthers, 50, has enjoyed accident-free motoring for 30 years. The freelance personal assistant, who lives in Cheltenham, Gloucestershire, pays Direct Line pounds 238 a year for comprehensive motor insurance for her J-reg Honda Civic.

Accountants would never advise clients to go without car insurance. Yet rarely do CPAs recommend their clients purchase long-term-care insurance when, in fact, the probability of needing LTC insurance is much greater than the likelihood of being in a car accident.

The American Council of Life Insurers says less than 10% of the nation’s elderly own an LTC policy. Benefits are tax-free and there’s no imputed income to employees whose companies provide this insurance as a benefit. It’s a good deal for many clients–even better than buying car insurance. Here’s what CPAs need to know to advise clients on their LTC insurance needs.

COMMON MISCONCEPTIONS

Many clients have a number of misconceptions about LTC insurance that makes them resist buying this important coverage:

Existing insurance will pay for LTC. Wrong. Health insurance pays only for restorative care, not chronic care such as that required for a long-term illness. Medicare pays only for the first 100 days in an LTC facility. Medicaid does cover long-term-care needs. However, it’s intended to cover those people with incomes at or near the poverty level–not most CPAs’ typical clients.

As the debate continues over the use of insurance credit scores in personal lines, one expert says that the insurance scores are being used in commercial lines.

“We believe it’s happening,” says Lamont Boyd, insurance market manager for Fair Isaac & Co. in San Rafael, Calif. “But carriers are very concerned about competitive advantage, so they don’t want to tell anyone they might be using our scores for commercial underwriting.”

Credit-based scores help insurers predict losses, says Boyd. “At the time we originally developed credit-based scores, we wanted to see if there was a correlation between scores and claims,” he says. “And we found very distinct relationships between 15-25 variables on a credit report and whether person would make a claim on an insurance policy.”

On the personal lines side, credit based insurance scores are widely viewed as an accurate tool to underwrite risk and have been in use for many years. “Credit-based insurance scores are an integral part of the underwriting process, a very important factor,” says Tim Hollyer, an agency product development manager for Progressive Insurance, which has been using the scores since 1992 in personal lines underwriting.

“We’ve found that credit helps us predict future losses better and more accurately, along with the standard factors such as age, driving record, car, location,” says Hollyer. “Credit scores help us be even more accurate, so we can offer a premium that reflects expected claims costs.”

Regulators, however, want to be sure people are not being unfairly denied coverage. Several states have pending legislation on regulating the use of scores in underwriting personal lines coverage, according to the Insurance Information Institute. In Louisiana, lawmakers are even considering whether to outlaw insurers’ use of credit information altogether.

IF YOU COULD LINE UP identical insurance policies a glass display case and dangle a price tag from each one, you’d uncover the insurance industry’s dirty little secret: Some companies charge two to three times more than their competitors for the exact same coverage. Buyers sign up for overpriced policies all the time simply because they don’t know about the other choices.

That’s where the Web comes in. Theoretically, you can answer a few questions, click your mouse and instantly see accurate quotes culled from vast databases containing hundreds of companies–all without having to speak with an agent. And, in theory, you can use the Internet’s vast array of calculators to help you figure out how much insurance you need.

But high-tech insurance shopping can quickly turn into a nightmare. For one thing, you could spend weeks visiting all the sites that promise to offer the best deal–but usually don’t. Because insurance is subject to patch-work of individual state regulations, you’ll find a limited menu of policies in some states. What’s more, you may get instantaneous quotes and you may not. And you’ll usually pay the same price as if you called an agent.

It’s not unusual to end up with inaccurate quotes, long waits, few companies to compare (or none at all, after wasting your time filling out excruciatingly detailed forms), and a never-ending stream of e-mail and calls from insurance agents.

Discouraged? That’s why we went through the mind-numbing experience of exploring the sites, requesting quotes for different families in different parts of the U.S., and checking to see how accurate those quotes were. (For more on how we shopped and the prices we were quoted, go to www.kiplinger.com) We name the top sites, plus runners-up.

You might call insurance a “necessary evil.” You can’t own a home or drive a car without it. When life moves along smoothly and you don’t make a claim, you wonder why you you’re paying for it in the first place.

If you do make a claim, it most likely means you were in a traffic accident or your home was damaged or destroyed in a fire or a bad storm. Either way, you pay and you lose.

But in some cases, a little bit of insurance can be a good thing. How about some SCC insurance? There are few issues in our industry as exciting and important as self-consolidating concrete (SCC). What would you say if I told you there is a way to formulate an SCC mix design that is guaranteed to meet the parameters and characteristics you set out for it?

There has been much research conducted on SCC, but none of it got down to the nuts and bolts of material selection, the actual mix design calculation, and the influences of certain variables.

To help cover those bases and tie up those loose ends, Axim Italcementi Group, the admixtures supplier in Middlebranch, Ohio, launched its SCC Web-based mix-design software online at www.scczone.com in early 2003. For the six previous years, Axim had used the technology in a non-Web-based application only in-house.

But as SCC became more popular, “we saw it was going to take a large portion of the market going out to 2010, so we developed a plan to have this model become a part of our entire offering,” says Jim Wamelink, Axim’s director of marketing. “We could sell admixtures and give you a support person, but combine that with this mathematical model, and you will design SCC day in and day out perfectly.”