How Your Auto Insurance Rates Are Determined – Auto
How Your Auto Insurance Rates Are Determined
A. Chris Tijerina
Your auto insurance rates are determined by a number of factors:
driving record
usage, how you are using the vehicle, work, pleasure, business
how many drivers you have and their ages
how many vehicles you have
what kind of coverage limits you want
what area you live in
your payment history
what color car you drive
your insurance credit score
your claims history
your occupation and how many years you have lived at your current residence
how fast you can solve a Rubix cube
your daily, weekly, annual mileage
There is a lot of information about you that is used to determine your rates. You are grouped or pooled together with similar drives of the same background that way you are not paying for drivers that are much worse than you.
Similar risks will pay similar rates.
Your usage affects your rates because if you are driving to and from work or school 5 days a week, 15 miles one way you have a higher chance of getting in a accident than someone who only drives 1 mile 1 way 3 days a week or someone who works from home and only drives to get groceries. So business, work, and school usage is higher than pleasure usage.
The area you live in affects your rates due to the fact that one area or town may have a higher incidence of claims than another area. One area may have higher lawsuit payouts or higher theft rates than another area. Even if you live in a affulent area your rates may be higher due to the higher value vehicles in your area cost more to fix than in an area with lower value vehicles.
Although you may have heard that if you drive a red car you will pay higher rates but this is not true. It is a myth. GEICO, USAA For Military Only, and Allstate, to name a few, dont even ask what color car you drive when you apply for a quote. And your VIN number doesnt give this info either.
If you have one car and three drivers you will pay more because that car will get used alot more than if you had only 1 driver and 1 car.
If you have had a poor payment history or your policy has cancelled due to non payment you will have higher rates when you try to reapply for insurance.
The higher your insurance credit score the better. The insurance credit score is similar to your FICO credit score such that the higher your FICO score the lower your interest rate and the higher your insurance credit score the lower your insurance premium.
Your claims history will affect you for a minimum of 3 years. If you have filed a claimed or if you even mentioned a claim to your insurance company it can and most likely will affect your rates.
About The Author
A. Chris Tijerina has developed http://www.insurance-for-cars.com which answers the most common questions drivers have about auto insurance. Visit today.
info@act33.com
5 Ways To Protect Your Bond Portfolio From Rising Interest Rates – Mortgage
5 Ways To Protect Your Bond Portfolio From Rising Interest Rates
David Twibell
The Federal Reserve recently raised its target federal funds rate for the first time since March 2000. This could be just the tip of the iceberg, though, as many experts believe rising inflation and a strengthening economy will spur continued rate hikes for the foreseeable future.
This is bad news for bond investors, since bonds lose value as interest rates rise. The reason stems from the fact coupon rates for most bonds are fixed when the bonds are issued. So, as rates rise and new bonds with higher coupon rates become available, investors are willing to pay less for existing bonds with lower coupon rates.
So what can you do to protect your fixed-income investments as rates rise Well, here are five ideas to help you, and your portfolio, weather the storm.
Treasury Inflation Protected Securities TIPS
First issued by the U.S. Treasury in 1997, TIPS are bonds with a portion of their value pegged to the inflation rate. As a result, if inflation rises, so will the value of your TIPS. Since interest rates rarely move higher unless accompanied by rising inflation, TIPS can be a good hedge against higher rates. Because the Federal government issues TIPS, they carry no default risk and are easy to purchase, either through a broker or directly from the government at www.treasurydirect.gov.
TIPS are not for everyone, though. First, while inflation and interest rates often move in tandem, their correlation is not perfect. As a result, it is possible rates could rise even without inflation moving higher. Second, TIPS generally yield less than traditional Treasuries. For example, the 10-year Treasury note recently yielded 4.75 percent, while the corresponding 10-year TIPS yielded just 2.0 percent. And finally, because the principal of TIPS increases with inflation, not the coupon payments, you do not get any benefit from the inflation component of these bonds until they mature.
If you decide TIPS makes sense for you, try to hold them in a tax-sheltered account like a 401k or IRA. While TIPS are not subject to state or local taxes, you are required to pay annual federal taxes not only on the interest payments you receive, but also on the inflation-based principal gain, even though you receive no benefit from this gain until your bonds mature.
Floating rate loan funds
Floating rate loan funds are mutual funds that invest in adjustable-rate commercial loans. These are a bit like adjustable-rate mortgages, but the loans are issued to large corporations in need of short-term financing. They are unique in that the yields on these loans, also called