Ever Wonder How Your Auto & Home Insurance Is Priced? Get A C.L.U.E.

September 12, 2017

Did you know that any insurance claims you have filed in the past 7 years for collision or comprehensive damage to your car or theft, fire, or storm damage to your home are factored in to any insurance quote you receive?

I learned this interesting fact a few years back when I noticed a clause on my homeowner’s insurance renewal that warned me that my insurance company could cancel or refuse to renew my policy if I had 3 or more weather-related claims within the past 3 years. Considering that I’m still waiting to find out if my condo in Florida sustained any damage from Hurricane Irma, this is important information and definitely had me thinking twice and doing more research.

Getting a C.L.U.E.

What I’ve learned is that insurance claims are actually reported to C.L.U.E. (the Comprehensive Loss Underwriting Exchange.) Kind of like your credit information is reported to the reporting bureaus, there’s also an insurance “reporting” bureau for insurance companies to consult when pricing your coverage. Too many claims on your C.L.U.E. report could even lead to being dropped by your insurance company.

Not just your claims

Even more interesting, it’s important to know that it’s not just claims that you’ve filed but also any claims that any previous owners of your home may have filed in the past 7 years. So you could file your first claim and unknowingly hit the 3-claim limit and lose coverage. That’s also important to know if you’ve owned your home for less than 7 years.

Getting my own C.L.U.E.

This got me curious about what might be showing on my report so I went to the website of LexisNexis Risk Solutions, which maintains the C.L.U.E. files. In compliance with the FACT Act, you can receive a free annual report of your C.L.U.E. file on your auto and property records. I had no claims showing on my property report but I did have 2 claims showing on my auto records and 4 “possible related claims” also were included.

This finally explained why my stepson had been excluded by my auto insurer from EVER driving one of my vehicles. The 4 possible related claims showing up on my report were actually collision claims that he had on his own auto policy over the past 7 years. But since we lived at the same address when he first got his licence, these claims also show up on my personal file as possibly linked. My insurance company flagged those related claims and issued an exclusion rider on my stepson a few years ago.

Checking your C.L.U.E.

Why should you care what’s in your C.L.U.E. file? Any inaccuracy on your report could be causing you to pay additional premiums or even keeping you from getting insurance coverage at all. By reviewing your report on an annual basis, you can dispute any errors before they negatively impact you.

An extra step in buying a home

You also want to order a C.L.U.E. report if you are buying a home that will be new to you but was previously occupied by another homeowner. In that case, you’ll need to ask the seller to order the property report for you to view, as it’s only available to current homeowners.

If you are uncomfortable filling out the online request form, you can also call LexisNexis at 1-866-312-8076 to request your C.L.U.E. report. Either way, be sure to get a clue.

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How to Reduce Your Auto Insurance Costs

October 25, 2016

You can only imagine all of the crazy scenarios that go on in your brain when you have had two car accidents in under six months. Unfortunately, these scenarios led me to getting practically every auto insurance option available when we bought our cars. Needless to say, I think I went a little overboard, which of course I figured out when I saw my first auto insurance premium bill. If you find that your auto insurance is higher than you would like, consider pairing down by doing the following:

Shop around: Do not assume that the policy you have is the best you can get. First, contact your current insurance company and ask for discounts for things like: multiple vehicles and good driving records to name a few. Consider getting all of your policies (home, renters, cars) from the same insurer to help reduce costs. Next, review  websites to help you evaluate various auto insurance companies and consider using sites like Esurance,  NerdWallet or  The Zebra to help you price auto coverage.

Deductibles:  In general, the easiest way to reduce your premiums is to increase your deductible. Typically, the more you have to pay out-of-pocket, the cheaper the policy. A rule of thumb is to choose a deductible amount you can easily pay if needed or allocate a portion of your savings to cover the deductible you choose.

Dump unnecessary coverage: Collision insurance covers physical damage to your car if you collide with an object (car or tree) and comprehensive insurance covers other damages like a flood, theft and fire. A rule of thumb is to consider dropping full coverage when the annual cost for the insurance is more than 10% of the actual cash value of your car. If you decide to drop coverage, consider creating a “car budget” to cover the cost of repairs and a newer vehicle.

Ultimately, I ended up increasing my deductible to an amount that I can afford to pay out-of-pocket and I dropped comprehensive coverage on one of the older vehicles we purchased, which lowered my overall premium. Consider annually scheduling a time to review all of your insurance policies. You can use your birthday or you can use your open enrollment period as a time to not only review your benefits at work but to review your auto insurance policies as well. Taking a few hours to review your policy can help you save money that can go towards other goals like paying off debt, building an emergency savings and saving for college.

 

3 Lessons I Learned About Insuring A College Bound Kid

May 03, 2016

I was talking to a group of friends whose kids were going off to college. Since I am a late-in-life parent, I was curious to see how they are handling being empty nesters. I expected some tears and sad stories about their kids leaving the nest. Instead, my friends were high-fiving each other that they survived the teen years and deciding what do with their kids’ rooms. They were even talking about going out and celebrating!

Of course, as the financial professional in the group, I had to burst everyone’s bubble. I asked the group if they had talked to their insurance providers about their kids going to college. I  brought this up because of all the lessons my family learned when my nephew went to college.

Lesson #1: Times have changed. When I was in college, my car, TV and computer were worth about $1,000. Today, a kid is going to college with thousands of dollars of electronics between their smartphones, iPads, X boxes and laptops. When my nephew’s dorm room was burglarized, my brother and his wife learned that their homeowner’s policy extended to my nephew’s dorm room but unfortunately, the extension did not cover the amount that was stolen. Contact your insurance company to make sure you have adequate insurance and consider adding additional coverage.

Lesson #2: Moving off campus is a game changer. The second lesson we learned is that when my nephew moved off campus, my brother’s homeowner’s policy did not provide my nephew with any coverage and in our case, a renter’s insurance policy may be needed. Contact your insurance carrier to see if your child will still be covered under your policy if your child lives off-campus. If not, consider renter’s insurance.

Lesson #3: Always update your auto policy carrier about any changes. If your child is leaving his or her car at home, ask about a discount since they will be driving it significantly less. This could have saved my brother and his wife hundreds of dollars in unnecessary car insurance.

Sometimes you may need to pay more though. After my nephew took his car with him to college, he was involved in a fender bender. When my brother contacted the insurance company, they refused to pay because my nephew was using the car for work to deliver pizzas part-time and we learned that he needed additional coverage.

So what’s the bottom line? Whenever you have a major life event, like a child going to college in this case, contact your insurance carrier to make sure that you have the best insurance for your needs. You don’t want to learn any of these lessons the hard way.

 

How to Get the Best Deal On a Car

April 27, 2016

My first car was a beat-up 1987 Ford Tempo that I called Shirley Tempo (nerd alert!). I paid cash to a family friend who had been using her as a loaner at his auto repair shop. Shirley got me around town in high school but when I went to Kalamazoo for college, my dad helped me negotiate for a slightly newer Geo Metro (aka “Ginny Geo”) – a car that could make the 200 mile trip without breaking down. By senior year, Ginny’s radiator was shot, the door locks didn’t work and my mechanic deemed her “unsafe to drive.” Needless to say, I was anxious to get a “big girl” car now that I had a “real job” upon graduation.

As soon as I returned from my graduation trip the summer after college, I found myself at the Saturn dealer test-driving a fully loaded coupe. Of course, I was in love and I signed a lease on the spot for Sally. Fast-forward a few months when my student loan payments kicked in and I was wishing I’d done a little more shopping around for that car. Sally was super fun to drive, but her payments were WAY outside my budget.

As my husband and I begin shopping for a bigger car now that his sedan is starting to wear out, we are being much smarter about this purchase. Here are some of the tips we’re using to find the best deal on a new ride:

  • Shop at the end of the month. The car sales guy actually told my husband this. They have quotas to meet, so if you head to the dealer toward the end of the month when the pressure’s on to meet that quota, you should be able to negotiate a few thousand more off the price. That could be a negligible amount to the dealer, but a nice chunk in your bank account.
  • Consider buying certified pre-owned. You’ve probably heard that a new car loses more than 10% of its value the minute you drive it off the lot. By getting in line as the second owner, you are paying significantly less for an almost-new car that still has warranty protection.
  • Know the wholesale price. If you just can’t resist a new car, at least know what the dealer paid for it. This is easy to find now by searching the make and model of your dream car along with the phrase “factory invoice price.” That way if the sales person tries to tell you they’re “losing money on this deal” when you’re negotiating (and you should at least try), you’ll know if they are trying to pull as fast one.
  • Remember that a car is NOT an investment. A car is what we CPAs call a depreciating asset. This is financial speak for it loses value over time and unless you’re a car collector, you will be selling the car for less than you paid for it. Remember that when you’re thinking about financing. (Try to pay as much in cash as you can).
  • Get full value for your trade-in. We took our car to CarMax and they gave us a trade-in estimate for no cost. This is just a best guess, but gives you a starting point when negotiating with the dealer. Edmunds and Kelley Blue Book are good online sources and you might also take it to a dealer to see what they will offer you. Depending on the make and model of your car, the dealer may be seeking used cars. SUVs are particularly hot right now due to low gas prices.
  • Don’t get cheap and choose an insurance deductible that’s too high for your savings. If you have a $2,000 deductible, you should have $2,000 on hand in case something happens. Use these best practices from my colleague Tania, who learned the hard way to make sure you’re properly covered.

Finally, as exciting as buying a new (to you) car is, try not to be impulsive. Take your time in researching and test driving to make sure you’re getting the best deal while also making a purchase that fits your lifestyle and budget. That new car smell fades pretty quickly. A too-high car payment takes a LOT longer to wear off.

 

 

The Insurance Move I’m So Glad I Made

March 15, 2016

If you ever read any of my posts, you probably know that I am a “drive a car until the engine falls out” kind of girl. Unfortunately, that is exactly what happened. I was coming home from the gym, wondering why I keep competing with women half my age, and a car came out of a fast food restaurant without stopping and hit me. I was unconscious for a few minutes and when I came to and was able to think, I thought it was a little strange that the driver of the other car did not get out. When I noticed the car starting, I tried to get the license plate number but it was too late, the car had driven off. Continue reading “The Insurance Move I’m So Glad I Made”

5 Things You Need To Know About Auto Insurance

April 13, 2015

If you own a vehicle, maintaining sufficient auto insurance coverage is a necessity. Unfortunately, this area of our financial lives can become easy to neglect over the years. This is why an annual review of our insurance policies should be part of the financial planning process and those auto insurance policies need more than just a passing glance. If for no other reason, a refresher on the basics of auto insurance can help save you money while providing reassurance that you are protected for those “life happens” moments that can occur while behind the wheel of an automobile. Here are 5 things to know about auto insurance: Continue reading “5 Things You Need To Know About Auto Insurance”

Could a Sonic Boom Crack a Windshield?

September 23, 2014

I had to make a call to my insurance agent today to report a claim on my broken front windshield.  My explanation for the needed repair sounded almost as absurd as “the dog ate my homework,” but the only direct link I could make to my windshield cracking was that a sonic boom broke the glass. I had gone to watch the Blue Angels Navy flight squadron fly over the Baltimore Inner Harbor as part of this month’s Star Spangled Spectacular, which is celebrating the 200th birthday of the writing of the Star Spangled Banner lyrics by Francis Scott Key. The Navy jets are VERY loud and I had parked my car at Martin Airport to see the take-off and landing of the squadron.  Continue reading “Could a Sonic Boom Crack a Windshield?”

Get a C.L.U.E.

September 02, 2014

Want a clue on how your auto and homeowners insurance is determined? Any prior claims you have filed in the past 7 years for collision or comprehensive damage on your car or theft, fire, or storm damage to your home are reported to C.L.U.E. – which is the Comprehensive Loss Underwriting Exchange. Too many claims on your C.L.U.E. report could even lead to being dropped by your insurance company. Continue reading “Get a C.L.U.E.”

My Homeowners Insurance Has a New Place to Live

November 06, 2013

This November, my homeowners insurance policy came up for renewal.  I’ve had my current policy ever since I purchased the home six years ago.  In North Carolina, if the cost of your homeowners insurance is more than what the insurance commissioner deems a reasonable rate, the insurance company must send a “consent to rate” form, whereby the homeowner consents to pay a premium higher than the threshold set by the state commissioner.  For the last several years, I’ve signed the consent without much thought, but this year I decided to shop around to see if I could get better rates somewhere else. Continue reading “My Homeowners Insurance Has a New Place to Live”

What an Accident Taught Me About Car Rental Insurance

April 19, 2012
Updated June 14, 2017

If you’ve ever had to rent a car, you know that car rental companies love to sell insurance on their cars. They’ll often ask whether you’d like just the basic coverage or additional coverage at the counter even after you’ve already declined both when making your reservation. After all, it’s one of their big profit centers. Continue reading “What an Accident Taught Me About Car Rental Insurance”

Spin Out in the Snow – Should Have Taken the Extra Rental Car Insurance

January 23, 2012

We all have something of a teenager mentality in us, “It won’t happen to me.  I am invincible!” I suppose you have to have some attitude or you’d never leave the house.  I did leave my house yesterday in a snow storm because my husband and I had tickets to a film showing at the Sundance Film Festival.  We specifically chose a film at the Sundance Resort for Saturday rather than a film in the town of Park City because we wanted to experience the ambiance of founder Robert Redford’s Sundance Resort viewing room.  This meant a 40 mile drive down Provo Canyon in a snow storm. Continue reading “Spin Out in the Snow – Should Have Taken the Extra Rental Car Insurance”