auto insurance

9 Surprising Ways Marriage Can Make You Richer

Tim Lemke — Mon, 19 Mar 2018 09:00:06 +0000

Marriage can be a wonderful thing, and not just because of the potential for lifelong companionship. Tying the knot can be a great financial decision, too.

When you get married, you'll be eligible for some key tax breaks, and there are a number of other advantages that will ultimately help you build wealth. Take a look at these examples of how marriage can make you richer.

1. There's a larger standard tax deduction

Under the 2018 tax law, every married couple filing jointly is eligible for a standard deduction of $24,000. That's nearly double from the previous law and exactly twice the standard deduction for single people. This standard deduction is more important than ever, as the new tax law does not allow for as much itemizing of deductions. (See also: 12 Things You Should Know About the New Tax Law)

2. You may save on taxes if filing jointly

Much has been said about the so-called "marriage penalty" in which couples could face a higher tax rate if they file jointly. But in truth, this was not an issue for most people, and the new tax law makes it even less likely that married couples will be penalized.

In fact, in most cases under the 2018 tax law, there won't be much difference between your taxes if you file separately or jointly. But it could be very advantageous for couples to file jointly if one spouse makes considerably more than the other.

To illustrate this, let's say you earn $37,000 in taxable income. Under the 2018 tax law, you'd be in the 12 percent tax bracket and pay $4,440 in tax if filing separately. Now let's say your spouse earns $190,000 per year and pays $60,080, based on the 32 percent tax bracket, also filing separately. If you file jointly instead, you'd report a combined income of $227,000 and would be in the 24 percent tax bracket. You would pay $54,480 in tax, a savings of nearly $10,000.

3. You have more buying power

When you get married, you are pooling financial resources. If both of you have assets and income, then you have greater ability to make purchases. It means you may be more likely to afford a down payment on a home, and have more ability to handle the monthly mortgage. It means you may become more attractive to lenders, though it is worth noting that you will still each have separate credit scores.

4. You can contribute to an IRA even if you don't work

If you want to contribute to an individual retirement account (IRA), you must have earned income. But there are exceptions, most notably in the form of a spousal IRA. With a spousal IRA, each spouse can have their own IRA, as long as one of the spouses has earned income. For most people, the limit of contributions on each account is $5,500 annually, so the total contributions allowed for married couples doubles to $11,000. The only catch to a spousal IRA is that couples must file their taxes jointly. (See also: 4 Ways Couples Are Shortchanging Their Retirement Savings)

5. You can receive Social Security spousal benefits

When you file for Social Security benefits, you can file for your own benefits or under your spouse's. Even if you did not earn any income during your life, you can receive benefits through your spouse. Usually, spousal benefits are up to half your spouse's normal Social Security benefit. You'll also be able to receive spousal benefits even after your spouse passes on.

6. You may spend less on health care

There is considerable evidence that being married can make you healthier. Married couples look out for one another. They keep each other on track regarding diet and exercise, and a spouse is often the first person to notice when you appear unwell.

The Harvard Health blog reported in 2016 that married people tend to live longer, are less likely to be depressed, and have fewer strokes and heart attacks. The report also cites studies showing that married people have better immune systems. This potentially means that your health care expenses could be less than if you remained single.

7. You can get health insurance through your spouse

If one spouse has access to health insurance through his or her employer, they can add a spouse to their plan. This is very helpful when one spouse is not employed or is not offered health insurance through their job. In most cases, family plans offer savings over plans for individuals.

8. Auto insurance is cheaper

Generally speaking, auto insurance companies will charge less to married couples than single people. That's because they tend to see marriage as something a more mature person does. Of course, it helps if both drivers have good driving records; if your spouse has a worse driving record than you, you may not see any savings.

An analysis from Carinsurance.com revealed that married couples can typically see savings of 10 to 15 percent in most states. It's worth noting that insurance companies will offer discounts for multiple cars, as well.

9. You can inherit assets from your spouse without a will

To be clear, no one is suggesting you should celebrate when your spouse passes away. But it's worth noting that when you are married, you are usually entitled to inherit their assets, even if you don't have a formal will drawn up. Note: Crafting a will is still a very good idea. (See also: Here's What Happens If You Don't Leave a Will)

Like this article? Pin it!

This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Ways Driverless Cars Could Impact Your Wallet

Carrie Kirby — Mon, 05 Mar 2018 09:30:10 +0000

You hear a lot about driverless cars these days, but the truth is, they have a lot of hurdles to overcome before one will be rolling up to your front door to pick you up. One hurdle is public opinion, with a AAA survey showing that 68 percent of baby boomers and even 49 percent of millennials are scared to ride in one.

That fear is rational enough, considering that the vehicles currently being tested still have trouble handling unexpected conditions, such as snow-covered roads. There are also ethical dilemmas, such as how the piloting software should choose between injuring the driver and injuring a pedestrian. And as with most new technologies, privacy could also be a real issue.

Despite all those challenges, self-driving cars are coming. Research firm IHS Automotive has predicted that there will be as many as 54 million of them on U.S. roads by 2035. When that happens, will you be better or worse off financially? There are a lot of ways that driverless cars could affect your bottom line.

1. You will spend less on insurance

Once all cars on the road are driverless, car accidents are expected to decline — in fact, consulting firm KPMG predicts a 90 percent reduction in crashes by 2050. And any accidents that happen would be the fault of malfunctioning hardware, not user error — and therefore the manufacturer's responsibility. KPMG predicts these changes will shrink the auto insurance sector by 71 percent. Even in the short term, while people are still buying auto insurance, they are likely to reduce or drop their liability coverage as the liability shifts to the manufacturer.

2. Early models will be expensive

The first cars to be autonomous will likely be high-end brands, such as Ferrari, Audi, and of course, Tesla. That adds quite a bit of sticker shock on its own. On top of that, the self-driving technology is expected to add between $7,000 and $10,000 to a car's price in 2025; by 2035, the differential will shrink to $3,000, IHS Automotive predicts.

3. Expensive drunken driving convictions could be a thing of the past

The gravest costs of drunken driving are human lives: Over 10,000 people die every year because someone got behind the wheel intoxicated, according to the Centers for Disease Control and Prevention. But there are also steep financial costs, even if you don't get into a crash. A national survey by Nolo put the average cost of a first-time DUI arrest at $6,500 to cover costs such as the ticket, towing, bail, attorney, increase in insurance rates, and other expenses. That doesn't include lost wages, which can amount to thousands more.

Once fully self-driving cars are safe and legal, owning one would be one way to avoid ever driving drunk. But even before mass adoption, on-demand self-driving vehicles might become a popular and affordable way to get home from the bars. Best of all, no Lyft driver will have to listen to your long-winded drunken stories.

Other tickets for moving violations, such as speeding or blowing a red light, could also become a thing of the past and save you hundreds (especially if you have a lead foot).

4. Jobs will be lost

The drunken driving scenario above might be great for people who need sober rides, but not so great for those who make a living driving people home from bars.

Taxi and ride-share drivers wouldn't be the only workers impacted. The 2017 launch of Uber Freight was a warning shot for truck drivers. Goldman Sachs estimates that, 25 years from now, automation could eliminate 300,000 trucking jobs a year.

5. Cities could save money on transport for the disabled

While the cost of owning an autonomous vehicle may be prohibitive for most disabled people at first, the technology could be a boon for cities that must provide paratransit services under the American Disabilities Act.

In many cities, these services are inefficiently run. New York, for example, spends an average $71 per trip transporting elderly and disabled people who can't ride the subway or public buses; studies estimate that this system is wasting up to $100 million a year. If cities invest in driverless vans and cars to pick up those passengers who don't need human assistance, it could save millions. That could possibly lead to lower taxes or subway fares for other citizens.

Disabled people who can afford it will probably be early adopters of privately-owned driverless cars as well. They might not even be more expensive than the current options, since converted vehicles with hands-only controls and other accessible features, for instance, can cost more than $50,000.

6. You might earn more through higher productivity

Since Americans spend 75 billion hours a year driving, just imagine how much more you could get done if you could work while your car drives you around.

Morgan Stanley predicts driverless cars could result in more than $500 billion in U.S. productivity gains. Whether you personally or your employer will enjoy the bulk of those gains depends on how things play out. If you are self employed, you could really unlock earnings potential.

If you don't want to spend your commute working, that's fine too. You'll have more time to catch up on a good book or even a nap.

7. You may buy fewer cars

A 2015 University of Michigan study suggests that autonomous vehicles could decrease car ownership by 43 percent, from 2.1 to 1.2 vehicles per household. The theory is that an autonomous vehicle could drop off one family member, and return home empty to be ready to transport others, instead of sitting idle in office parking lots.

Another way that self-driving cars might reduce ownership is through growth in ride-hailing services. Already, younger adults are more likely to feel they don't need a car because they can always get an Uber. If technology makes those services cheaper and more ubiquitous, that sentiment is sure to grow.

Avoiding a vehicle purchase would save the average family more than $8,000 a year, according to AAA's total cost of ownership figures.

9. You'll probably save on parking

Whether your car drops you off and returns to your home garage, or you rely on automated shared vehicles, you likely won't have to waste time and money on parking any more. Imagine never having to feed a meter, pay a parking ticket or a towing fee, or circle endlessly looking for a spot.

The average American wastes $345 a year in fuel costs, lost time, and emissions just looking for parking, according to INRIX Research.

10. You could save on baby-sitting

Many parents of young teens who could safely stay home alone end up hiring sitters just to pick them up from school, drive them to soccer practice, etc. If these kids could hop into a self-driving car instead, many families could drop their after-school sitter and save hundreds of dollars a week.

Like this article? Pin it!

This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Kinds of Insurance Every Retiree Should Consider

Dan Rafter — Thu, 01 Mar 2018 09:30:09 +0000

Your insurance needs don't remain constant throughout your life. You need different insurance coverage when you're single and in your 20s than you do when you're raising a family in your 40s. When you retire, your insurance needs will evolve once again.

There are certain types of insurance protections you'll no longer need after leaving the workforce, and other types that you'll want to add. Here is a primer on the kinds of insurance that every retiree should consider.

1. Health insurance

You'll absolutely need health insurance after you've retired. Health care costs are only rising, and seniors tend to spend a large percentage of their income on medical care each year.

A study released by Fidelity Benefits Consulting said that the average 65-year-old couple retiring in 2017 would need $275,000 to cover their medical expenses throughout retirement. That number isn't falling, either. Fidelity reported that the 2017 figure is up from the $260,000 that the average 65-year-old couple needed in 2016.

Most seniors will qualify for Medicare, the federal health care insurance program, when they turn 65. Medicare isn't free, but it does cost far less than what you'd pay for private insurance. Medicare covers a lot, but it doesn't cover every medical service you might need.

Do you need to purchase supplemental health insurance to boost the coverage you're already getting with Medicare? That's not an easy question to answer. It all depends on your health and how often you plan on visiting a doctor after you retire. For many retirees, Medicare may be adequate. (See also: 5 Common Medicare Myths, Debunked)

2. Homeowners or renters insurance

Will you still own a home after you retire? If so, you still need your homeowners insurance policy. This policy will pay out to help you rebuild if your home is damaged by a fire or other natural disaster. It will also help you pay for any items inside your home — such as electronics, clothing, furniture, and jewelry — that get stolen or damaged in a disaster.

Renters insurance works the same way, but it protects people who are renting an apartment. If you plan on ditching your home and renting after you retire, make sure to invest in a renters insurance policy. Think about how much money you'd need to replace your valuables if they were stolen or destroyed. (See also: 5 Reasons You Definitely Need Renters Insurance)

3. Auto insurance

If you plan to keep driving after retirement, you'll need to pay for auto insurance. It's illegal in most U.S. states to drive without car insurance.

Maybe you're planning to sell your car and move into an urban neighborhood after you retire. Instead of doing your own driving, you plan to walk, take public transportation, or Uber to grocery stores, movie theaters, and restaurants. In this case, getting rid of your car insurance might make sense. But even if you're hanging onto your car only for emergencies or long trips, you'll need to keep your auto insurance policy.

4. Life insurance

Life insurance is usually one type of policy you can drop after retirement. After all, life insurance is a way to protect your loved ones who are dependent on your income. Once you get to retirement age, these dependents — usually your children — should be self-sufficient. They won't need a payout after you die to pay their bills.

But what if your spouse or children still aren't financially self-sufficient by the time you retire? If that's the case, you should hang onto your life insurance policy. Maybe you have a child with special needs. That child might still rely on financial assistance from you. What if you were gone and you didn't have a life insurance policy? Would that child still get the financial assistance necessary?

In most cases, retirees no longer need life insurance policies. But for special cases, keeping the policy is the smart move. (See also: When Dropping Your Life Insurance Is the Right Decision)

5. Umbrella insurance

What if someone was visiting your home and seriously injured themselves? Would your homeowners insurance policy provide enough protection? Maybe. But umbrella insurance can provide retirees with the peace of mind that they'll be protected even if their homeowners insurance doesn't offer enough coverage.

Umbrella insurance provides extra liability coverage above the limits of your homeowners and auto insurance policies. Basically, it pays out in cases where your homeowners and auto policies don't pay enough to cover all of the damages for which you are responsible.

Say you get into an auto accident that ends up with a liability claim of $1 million. If your auto insurance only covers a maximum of $500,000 for liability, your umbrella policy would cover the remaining $500,000. (See also: Beware: Your Insurance May Not Cover These 8 Losses)

Like this article? Pin it!

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

What Kind of Auto Insurance Do Uber Drivers Need?

Holly Johnson — Wed, 21 Feb 2018 09:31:09 +0000

If you're scheming up a way to make extra money this year, it's likely you've considered driving for Uber or Lyft. There are few requirements to get in the door, after all, and you can work your own schedule. If you're over the age of 21, have a newer car, and have a clean driving record, you can apply to become a driver for Uber or Lyft and get started fairly quickly. (See also: How to Get a High Rating and Make More Money as an Uber Driver)

But that doesn't mean this side hustle comes without risks. Unlike other avenues to earning extra money, like freelance writing or picking up a traditional part-time job, driving people around in your car comes with real-life financial implications if you get into a crash.

So what type of insurance do you need to drive for Uber or Lyft? Generally speaking, your personal auto insurance policy won't cover you if you get into an accident while you're driving for Uber or Lyft. In fact, your auto insurer may be inclined to drop you from your policy if they find you haven't disclosed that you're driving for a ride-share service, notes NerdWallet.

Uber and Lyft offer drivers some coverage

Ride-share companies have initiated their own forms of insurance to cover drivers when their personal policies fail to provide coverage. That means it's secondary coverage — you'll first have to file a claim with your own insurance. And Uber's insurance comes with a $1,000 deductible, while Lyft's deductible is $2,500. But it's better than nothing.

Coverage levels depend on where you are in the ride-sharing process. If you drive for Uber, for example, you have different levels of coverage when you're waiting for a call, when you're on your way to pick up a rider, and when you have a rider in your automobile.

While you're waiting for a request

When your app is turned on and you're waiting for a ride request, you are covered by Uber for your liability to a third party if you're in an accident and at fault. Coverage is at least $50,000 in injury liability per person with $100,000 in total liability per accident. You also get $25,000 in property damage liability per accident, notes Uber. This does not include comprehensive/collision coverage or coverage for damages caused by uninsured motorists, however.

When you're on your way to pick up a rider

At this point, notes Uber, you're covered for three things: your liability to a third party for damages or injuries up to $1 million, any injuries caused by an underinsured/uninsured motorist, and collision and comprehensive coverage if you also have this coverage on your personal auto insurance policy.

Underinsured and uninsured motorist bodily injury coverage covers "any occupant of your vehicle in case of an accident where another party is at fault but does not have insurance or is underinsured," notes Uber. Hit and run accidents are also covered, and the total amount of coverage for bodily injury is once again set at $1 million.

The collision and comprehensive coverage offered during this period kicks in whether an accident is your fault or not and is limited to the cash value of your vehicle. A $1,000 deductible comes into play if you plan to use this coverage.

When a rider is in your car

You have the same type of coverage when carrying a passenger as you do when you're on your way to pick them up. In addition, however, the rider in your car is also covered.

Of course, when you're not driving for Uber and you're using your car for personal use, none of this coverage comes into play. During these times, you'll rely on your personal auto insurance policy for coverage in the event of an accident or injury.

Lyft liability coverage works similarly in that it's offered in different tiers based on where you are in the ride-share process. Coverage limits vary slightly, however, as do the types of coverage offered. Make sure you understand what your ride-share company's insurance policy offers and applicable coverage limits before you rely on it to cover your ride-share driving business.

Ride-share or commercial insurance

There are times during the ride-sharing process when your company's insurance may not be enough. For instance, Uber's insurance does not include comprehensive/collision coverage or coverage for damages caused by uninsured motorists while you're waiting for a ride request. You may also decide you want higher coverage limits than your company offers.

In those cases, consider buying separate insurance to fill in your coverage gaps. Insurance companies such as Allstate, Farmers, and Geico have begun offering individual ride-share policies that cover drivers for services such as Uber or Lyft while they're on the job, but these policies aren't available in all states. If you can't buy ride-share insurance in your state, another option is commercial auto insurance, but unfortunately, commercial policies are often prohibitively expensive ($3,000-$5,000, according to the Money magazine website) for Uber or Lyft drivers trying to turn a profit.

If you live in a state where ride-share coverage is offered, buying this type of coverage — or adding it to your personal policy — is probably your best bet. Fortunately, auto insurance for ride-sharing isn't overly expensive (typically $6-$20 a month). Geico Insurance, for example, offers ride-share coverage in most states (AL, AZ, AR, CT, CO, DE, DC, FL, GA, ID, IL, IN, IA, KS, LA, ME, MD, MN, MS, MO, MT, NE, NM, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, VT, VA, WA, WV, WI, and WY) and can cost as little as an extra $150 per year on top of your personal auto policy, according to NerdWallet.

Like this article? Pin it!

This article is from Holly Johnson of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Times You Shouldn't File an Insurance Claim

Dr Penny Pincher — Fri, 07 Jul 2017 08:31:04 +0000

It may seem like a waste of money to pay insurance premiums every month, then avoid filing a claim when you actually have damage. Yet sometimes, this is exactly what you should do to save money.

The strategy of filing a claim whenever you have home or auto damage may get you more payout from insurance companies, but your insurance premiums will likely go up significantly, and you may even be dropped from coverage altogether. Both home and auto insurance companies report claims to industrywide databases, so all of the major insurance companies can see your claim history. Even if you move on to a new insurance company after filing a lot of claims, your premiums will likely be very high.

Filing a lot of claims is almost certain to cost you more in higher premiums over time than you will get from claim settlements. According to a 2015 study from InsuranceQuotes.com, a single auto insurance claim can drive your rates up 41 percent to 76 percent, and multiple claims can drive rates up even higher.

Insurance companies set your rates based not only on their assessment of your risk of having property damage, but also for the risk to them that you will file a claim. As a result, there are situations where you are better off not filing a claim with the insurance company — even if your damage is more than your deductible and you could get a payout.

1. The claim would be less than the deductible

The first thing you need to know before deciding to file an insurance claim is your deductible. The deductible is how much you have to pay out of your own pocket before the insurance company will pay to settle a claim.

For example, if your auto policy has a deductible of $1,000 and your total repair bill is $1,100, then the insurance company will only pay $100. If the total damage is $900, then the insurance company won't pay anything, and your premiums could still go up.

There is not much point in going through the hassle of filing a claim, getting the damage appraised by an insurance adjuster, and risking higher insurance premiums if it is likely that the damage is below your deductible and you won't get a payout anyway.

2. You have filed recent claims

Even if your claim would be more than the deductible and you would get a payout, if you have filed other recent claims, you are risking a significant increase in rates by filing another one. The average person files a claim about once every eight to 10 years, so if you file claims more frequently than average, you could be setting yourself up for higher rates.

3. There is no accident report and no injuries

For auto insurance, the payout from a small damage claim can easily be offset by the years of higher rates you'll pay afterward. For small incidents, it can be much less expensive to simply pay to repair the damage without going through the insurance company if there are no injuries and no accident report is filed. If a police report is filed, your insurance company will likely find out about the incident whether you report it or not.

4. There is no potential for lawsuit

One of the benefits of getting your insurance company involved is to handle a potentially very expensive lawsuit. Even if your incident is minor, you may want to talk with your insurance company if you get the feeling that the other party may pursue a liability claim. If a lawsuit does not seem like a possibility based on the incident and the parties involved, this can tip the balance in favor of paying for the damage yourself without involving the insurance company.

5. You have an emergency fund

If the damage is a few thousand dollars or less, you might still come out ahead by paying out of pocket rather than filing a claim. You can avoid the risk of higher premiums for years, and getting a record that can follow you even if you look for insurance from a different provider. For example, the back window of my car shattered, and I decided to take care of this $300 repair without going through the insurance company at all.

6. Watch out for expensive home policy claims

Dog bites, water damage, and slip-and-fall claims are most likely to trigger rate increases on your homeowners insurance, according to Bankrate. Think twice before making a claim in these categories if the claim would be fairly small and you can handle the expense on your own.

7. Inquiries can make your rates go up without even filing a claim

Some insurance agents are obligated to report inquiries to the insurance company, and a mere inquiry about your coverage can be used to raise your rates due to the increased risk that you may file a claim.

You may want to investigate your coverage on your own by looking at your insurance policy and deciding whether it is worth it to call your insurance agent. You can also ask your agent if they are obligated to report the inquiry to the insurance company before you start talking about a potential claim.

Like this article? Pin it!

This article is from Dr Penny Pincher of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Beware: Your Insurance May Not Cover These 8 Losses

Dan Rafter — Fri, 19 May 2017 08:30:08 +0000

You might think that you have enough insurance protection. After all, you have car, homeowners, life, health, and disability insurance coverage. What else could you possibly need?

Here's an unsettling truth: Even if you've taken out all the insurance policies necessary to protect yourself and your family, you might still face coverage gaps. Review your policies regularly. And when you do, watch for these potential gaps in your coverage.

1. Life insurance

Many employers offer group life insurance to their workers as an important financial benefit. The American Council of Life Insurers said that at the end of 2015, group life insurance represented 44 percent of all life insurance policies issued in the United States.

Employees like this insurance because it is usually inexpensive. But there are some negatives: Most group life insurance policies end if you leave your employer, and the next company at which you work might not offer this coverage. Secondly, the payouts for group life policies tend to be smaller than for an individual life policy that you'd buy for yourself. Usually, the death benefit with a group life policy is one to two times your annual salary. That's a nice bit of cash, but it's certainly not enough to provide for your family long-term should you unexpectedly pass away.

That's why you should use a group policy as a supplement, not a replacement, for an individual life insurance policy. Yes, an individual policy will cost more, but you'll also receive a far larger death benefit. (See also: Why Your Group Life Insurance Is Not Enough)

2. Dog bites

According to the Insurance Information Institute, dog bites and other dog-related injuries accounted for more than one-third of all homeowners insurance liability funds paid out in 2016. That equaled 18,123 claims, with the average cost for each claim coming out to $33,230.

The challenge with dog bites is that many insurance providers won't insure homeowners who own certain breeds considered "dangerous." Insurance companies vary on this, but many won't insure pit bulls, Rottweilers, German shepherds, or Doberman pinschers. If you have a dog, check with your insurance company to make sure that it is covered. Paying for a dog bite without the help of your insurer can prove costly.

3. Transportation expenses

Your car insurance policy will cover the damages to your vehicle following an accident as part of its collision coverage. But what if you need to rent a car to get around while your vehicle is in the shop? That can be expensive.

Unfortunately, most auto policies don't provide what is known as transportation expenses coverage. And when policies do provide it, the amount they'll give you to rent a car — often as little as $20 a day — might not be enough to cover the whole cost.

Check your policy to determine if it will cover a rental car. If it does, make sure you know exactly how much you'll be getting. If you're not satisfied, it might be time to pay to boost this coverage.

4. Extra liabilities

What if a neighbor drowns while swimming in your pool? Will your homeowners insurance provide enough coverage if your neighbor's family files a costly lawsuit against you?

Probably not — and that's where an umbrella insurance policy comes in. An umbrella policy provides extra liability coverage above the limits of the coverage provided by your auto or homeowners insurance. Maybe your homeowners insurance policy provides liability coverage of up to $500,000. If someone sues you for $1 million, you then might be on the hook for the extra $500,000.

An umbrella policy can protect you from this. It kicks in when a legal action against you supersedes the amount of liability coverage you have. In the example above, your umbrella policy would cover the extra $500,000 that the homeowners policy would not. An umbrella policy can offer you the same kind of extra protection if you cause a serious car accident.

Umbrella insurance isn't overly expensive. The Insurance Information Institute says that consumers typically pay between $150 to $300 a year for $1 million worth of umbrella liability protection. This investment might help you avoid a financial catastrophe.

5. Not enough disability coverage

You might think you've taken the steps to protect yourself and your family by taking out a disability policy. If you are injured or become ill and can't work, this policy will kick in to provide you and your family regular payments.

Here's the challenge, though: Most group disability insurance plans only pay out 60 percent of the insured's base salary. And employees who rely on bonuses and overtime won't receive any pay out for those extras.

Receiving 60 percent of your pay even though you are not working might sound like a good deal. But it can be challenging to live on just a portion of your regular income. Could you afford to cover all your monthly expenses if 40 percent of your income suddenly disappeared, especially if you've got medical deductibles and other costs to cover?

If not, consider investing in supplemental disability insurance. You will have to pay for this, of course, but this extra coverage could protect you in case medical problems keep you out of work.

6. Wind or hurricane damage

A 2016 report from Travelers Insurance identified heavy wind storms as the cause of the greatest number of homeowners insurance claims from 2009 through 2015.

You better make sure, then, that your homeowners insurance policy provides adequate coverage for wind damage.

The Insurance Information Institute says that many insurers, especially those clustered along the Atlantic seaboard and Gulf of Mexico, include deductibles for hurricane and wind damage that are separate from those for incidents such as fire or lightning strikes. These can be expensive. Your standard deductible for most forms of home damage might be as low as $500, meaning that you'll have to cover the first $500 of any repairs before your homeowners insurance kicks in. But an extra deductible for wind or hurricane damage may instead be a percentage of the insured value of your home.

Say your home's insured value is $300,000 and your insurer's wind or hurricane deductible is 5 percent. This means that you'd have to cover $15,000 in damages out of your own pocket before your insurance coverage would kick in.

If you live in a storm-prone area, check your coverage. If the deductible for wind or hurricane damage is too high, it's time to shop for a new policy.

7. Flooding

If a heavy rainstorm causes your basement to flood, a standard homeowners insurance policy won't cover the damages caused by the water.

If you want to protect yourself from floods, you'll need to purchase a separate form of protection known as flood insurance. You can usually purchase one of two policies — one that covers your home for up to $250,000, and a second that covers your personal property for up to $100,000.

Flood insurance will only cover water damage resulting from a flood. It won't provide coverage if your water heater bursts and floods your basement or if water backs up from your toilets.

Flood insurance doesn't do much to protect your personal belongings if they are stored in a basement, either. This insurance only covers damages to mechanical systems, electrical systems, and structural elements. (See also: 9 Surprising Things Your Homeowners Insurance Doesn't Cover)

8. Fire

What if a fire destroys your home? Yes, your homeowners insurance policy will help you rebuild. But don't expect it to pay for the full cost.

Most insurance policies place caps on the amount of coverage they'll pay out. They also factor in depreciation when determining the value of the possessions that were destroyed in the fire. You might receive a much smaller payout than you expect when it's time to rebuild your home.

Call your insurer to make sure that you will receive enough coverage should a fire destroy your home. If that coverage isn't enough, you might have to pay for extra protection.

9. Theft

According to the Insurance Services Office, the average loss in a home burglary is $3,786. Your homeowners policy can help you recover some of the costs from your stolen personal property, but don't assume it'll reimburse you completely. Often, the payout comes up very short.

In order to keep premiums down, homeowners policies put caps on some valuable items, such as jewelry, electronics, or artwork. Even cash often has a measly limit of $200. Let's say your homeowners policy puts a $1,000 threshold on jewelry, and your $3,000 diamond ring is stolen, along with several other expensive necklaces. You'd be out thousands of dollars. The payout wouldn't come close to the value of what was stolen.

If you have valuable items in your home, you may want to consider purchasing an additional rider (or "floater") policy that will cover items beyond what homeowners will offer. Some providers offer special riders for unique items, such as jewelry or camera equipment.

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Here's How a Claim Will Impact Your Car Insurance

Dan Rafter — Fri, 17 Mar 2017 11:00:11 +0000

You sideswiped a parked car. Or maybe you slammed on the brakes too late and rear-ended the driver ahead of you. Whatever happened, the accident is clearly your fault. Now it's time to give your insurance a call.

When you file a claim, your auto insurer will pay for the repairs to your vehicle and, if you are at fault in the accident, whatever repairs are needed for other vehicles involved in the collision. Your insurer might also pay for any injuries suffered by you or other drivers.

But filing a claim also comes with a negative: In most cases, it will cause your insurance rates to rise. How much your policy's rate rises depends on a host of factors.

Mitigating Factors

On its website, Geico says that drivers' rates don't automatically rise after an accident. Instead, the insurer looks at several factors before deciding whether to issue a rate increase. These include your driving record, the number of claims you've made in the past, and the amount of money that the insurer has paid out to you during the life of your insurance policy.

Esurance also states that insurance rates don't automatically jump after an accident. The company says that minor accidents and fender benders don't always equal a rate increase, especially if you have a record of safe driving.

Fault matters, too, of course. Esurance says that if you weren't at fault in an accident, your premium might not jump.

When Are Rates Most Likely to Jump?

Both Geico and Esurance say that premiums are more likely to increase if you are found at fault in a major accident. Again, your past driving record plays a big role in determining not only if your rate jumps after a major accident, but by how much.

Your insurer, though, might increase your rate even if you weren't the driver who caused the accident. That's because car insurers have determined that even after an accident that isn't your fault, you are still statistically more likely to get into another accident. This makes you more of a risk to your auto insurer.

Some states regulate how much of an increase you'll see after an accident, no matter who was at fault. Consider New York. Here, insurance companies can boost rates only if you were found at fault in an accident that caused injuries or more than $2,000 in property damage. In Massachusetts, insurers can only raise your premiums if you are found to be more than 50 percent at fault in an accident.

You might also live in what is known as a no-fault state. In these states, each driver's insurer pays part of the costs involved in an accident, no matter who caused the incident. If you live in a no-fault state and file a claim, odds are that your insurance premium will rise even if the other driver was the cause of your accident.

How Long Before Your Rates Fall Again?

Fortunately, a rate increase isn't permanent. Esurance said that several factors play a role in how long your insurance premiums will remain at an elevated level after an accident. These include the severity of the accident, who was at fault, and whether alcohol was involved.

Some states will regulate how many years back insurers can look when calculating premiums. In Massachusetts, drivers' at-fault accidents can only impact their auto insurance rates for three to five years.

In general, you can expect your elevated rates to remain in place for three to five years.

How Much of an Increase Will You See?

Here's the big question: How much will your insurance rates rise after an accident? Again, this depends on a host of factors: Who caused the accident, were people injured, was there significant property damage, was speeding involved, were you drinking?

A 2016 report by NerdWallet found that rates typically rise by $300 or less a year for an accident that you caused resulting in under $2,000 worth of damage. That rate increase jumps to $300–$600 a year if you cause an accident with $2,000 or more in property damage. If you cause an accident that results in any human injury, your rates will typically increase by $400–$800 a year.

And if you are found at fault in multiple accidents causing $2,000 or more in property damage, your rates could rise by $1,000 or more a year.

If your rate is going to rise, it won't come as a surprise. Insurers will notify you of any upcoming increase. Geico, for instance, says it will send you information about any rate increases about 30 days before your policy is up for renewal. At that point you can shop around to see if another company might give you a better rate.

Like this article? Pin it!

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Times When Bundling Insurance Doesn't Make Sense

Dan Rafter — Tue, 14 Mar 2017 10:30:18 +0000

Insurance companies offer a host of ways to reduce the premiums you pay for auto, life, home, and health insurance. If you have a clean driving record, you might qualify for a discount on your auto insurance rates. If you install a security system to protect your single-family home, you might have to pay less for your homeowners insurance. And if you don't smoke, you'll certainly pay a lot less for life insurance.

One of the most popular ways to qualify for a discount is to bundle different insurance policies together — say, your homeowners and auto policies — from the same insurer. Insurers will give you a discount as a reward for buying more than one policy from them.

Bundling is popular. A 2016 story by InsuranceQuotes.com cited a U.S. National Auto Insurance study by J.D. Power and Associates saying that 58% of policyholders bundle their homeowners and auto insurance policies. InsuranceQuotes.com also reported that bundling insurance can save policyholders about 10% off their annual rates, if they land the best bundling deals available.

But, there is a catch here, and sometimes taking out life, auto, and homeowners policies with different companies makes the most sense. Even though bundling might sound like the obvious choice for consumers hoping to save money on insurance coverage, there are a few times when bundling actually doesn't result in the biggest financial savings.

You Didn't Shop Around

The best way to nab the lowest rates on insurance is to take the time to shop around with different companies. This is far easier today, with insurers providing online quotes to potential customers.

It can be tempting to skip the shopping phase if, for example, your auto insurer offers to provide a bundling discount for your homeowners insurance, too. But resist the temptation to take your insurer's offer until you've shopped around. You might find another insurer that will provide you a policy with a premium low enough to outweigh your first insurer's bundling discount. Armed with a lower quote from a competing insurer, you might even be able to convince your current insurance company to provide you an even bigger discount.

You Have a History of Health Problems

You'll pay far less for life insurance coverage if you have a history of good health. If your past is dotted with serious health issues, you can unfortunately expect your life insurance premiums to be higher. This spotty health history might also make it less financially sound to bundle your life insurance coverage with auto or homeowners insurance. Again, it's especially important to shop around with life insurance providers, especially when you have a complicated health history — including if you smoke or have a chronic condition.

It's also worth noting that you may not want something as important as your life insurance coverage bundled through a company that specializes in say, auto insurance. In that case, it may be worth having it be its own separate policy.

Your Driving Record Isn't Exactly Flawless

Claim an accident on your auto insurance, and you can expect your premiums to soar. Again, it makes sense to shop around with different insurers to find the lowest rates when you are stuck with a spotty driving record.

If you instead simply bundle your auto policy with the company that provides your homeowners insurance, you might miss out on lower premiums that will outweigh the bundling discount. Do your homework — even if it takes time — to discover if there are other insurers out there willing to give you a bigger break for your past driving mistakes.

You Need Specialized Homeowners Coverage

What if you need your homeowners insurance policy to cover an expensive jewelry collection? What if you need to insure solar panels on your home's roof? This coverage can be complicated, and cost more. Again, when you have such specific needs, if often makes more sense to talk to different insurers than blindly accept your provider's bundling offer.

The main point here is that often, bundling will save you the most money. But there are exceptions, and you won't know the savings you might enjoy if you don't first shop around with other providers — even if your current insurer is promising a bundling discount.

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways Being a Safe Driver Will Save You Big Money

Dan Rafter — Tue, 05 Jan 2016 18:00:07 +0000

That speeding ticket can cost you — to the tune of an initial fine of $100 or more. That's bad enough, but then comes the hit to your insurance premium. You can expect the cost of your auto insurance to jump by at least 20% if you're caught driving 15 miles per hour over the speed limit, according to a study by InsuranceQuotes.com.

But if you follow the speed limit, you don't have to worry about this financial hit. (See also: 10 New Car Costs the Dealer Is Hiding From You)

That's just one of the ways that being a safe driver can save you a load of money. Here's a look at the financial benefits that a safe driving record will bring you.

Lower Insurance Rates and Discounts

A clean driving record — one free of auto accidents, speeding tickets, or other moving violations — can dramatically reduce the amount you pay to your auto insurer each month.

Insurance Quotes and Quadrant Information Services studied the impact of traffic incidents on insurance rates, and discovered that driving under the influence increased auto insurance premiums by an average of 93%. Reckless driving boosted it upward by an average of 82%. For speeding, the average increase varied, but those drivers going up to 15 miles per hour over the limit generally saw their insurance premiums jump by 21%.

Another study by InsuranceQuotes.com, released in early 2015, found that drivers who make one accident claim will see their auto insurance rates jump by an average of 41%. Those who make two claims in a year will see their auto insurance rates increase by 93%.

If you're a safe driver, you can actually be rewarded and save money by way of discounts. Allstate offers savings of 22% on policies after three consecutive years without any violations or accidents. After five years without any violations or accidents, drivers can reduce their insurance rates by 35%. Allstate also offers a defensive-driver discount. Under this program, drivers who are 55 or older and who complete six or more hours of defensive-driving courses can save up to 10% on their auto insurance.

Don't have Allstate? Geico offers a discount of 26% for drivers who have been accident-free for five years. American Family offers drivers without accidents, violations, or claims a discount of 5% to 10%. Contact your auto insurance provider and see what safe driver discounts are available.

No Speeding Tickets

Getting a speeding ticket isn't much fun. It's costly, too. Last year, NerdWallet took a look at what a speeding ticket can cost drivers in California. According to the site, those drivers who were ticketed for going 15 miles per hour over the speed limit paid an average of $234 when fees and surcharges were taken into account.

In 2013, insurer Esurance reported that the average speeding ticket costs drivers throughout the United States $150. That's a lot of money. And it doesn't even take into account how much your insurance rate will jump after a speeding ticket. Speaking of which...

Gas Savings

You might not think that driving the speed limit will save you money at the fuel pump, but it will. According to the Department of Energy's FuelEconomy.gov, aggressive driving — which includes speeding, rapid acceleration, and hard braking — can lower your car's gas mileage by 33% at highway speeds and by 5% when you're driving in town.

By driving the speed limit, and by avoiding rapid acceleration and braking, you can save up to 21 cents per gallon in fuel costs.

Fewer Traffic Accidents

Car accidents are terrifying events. They're also expensive ones.

Speeding, not paying attention, or driving under the influence can not only result in terrible injury or death, but tremendous economic impact. According to a 2010 study by the National Highway Traffic Safety Administration, the overall cost of motor vehicle crashes in the U.S. amounted to nearly $1 trillion. By being more aware, you can save yourself and others the costly financial burden of deductibles, auto and property repairs, rate hikes, and bodily injury.

Driving safely and at the speed limit won't completely protect you from car accidents and their costs. But it will help.

Do your driving habits help or hurt your wallet?

This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Steps You Must Take If You've Been in a Car Accident

Aaron Crowe — Fri, 20 Mar 2015 11:00:04 +0000

Getting in a car accident can be one of the most unnerving moments in a person's life. The unexpected has just happened. If you're lucky, no one has been injured.

Then comes all of the hassles that can be part of being in an accident: filing police reports and insurance claims, getting your car fixed or replaced, and many other things. Remembering what steps to take can be difficult. Here are some things drivers should do after a car accident. (See also: What to Do (and Not Do) When You're in a Car Accident)

1. Stop

Don't drive or run away from the scene of the accident — you could be arrested for leaving, even if it's minor.

If your car is still operable, drive it off to the side of the road and out of traffic. If you can't safely drive it, leave it to a tow truck. Assuming you can safely get out of your car, put warning flares out and turn your flashers on to warn traffic of your accident.

2. Seek Medical Care

Are you, or is anyone else in your car, injured? How about in the other car? If you think someone needs urgent medical help, call 911. Injuries often aren't immediately apparent in auto accidents, so you may need to see your doctor or go to a hospital emergency room a day or so later.

3. Call the Police

Even if no one is injured, calling the police is a good idea. They can help with traffic control so another accident doesn't occur, and can collect evidence, talk to witnesses, and file a report that will help both drivers with their insurance claims. Unless the vehicles interfere with traffic, they should remain where they are so police can determine what happened.

When talking with the police, tell them exactly what happened. If you don't know certain facts, don't fudge them and say that you're unsure. If an officer asks if you're injured and you don't know, say that you're uncertain instead of no. Pain from an accident can come hours later, so saying you're not injured when you don't know could be held against you later in an insurance claim.

4. Take Notes

To help your insurer, draw a map of the accident scene and write down property and vehicle damage. Also take note of the weather conditions, which can negatively affect drivers ability to travel safely. According to the Federal Highway Administration, weather related factors account for 24% of the 6.3 million car crashes each year. Get the names and phone numbers of any witnesses, as well as the other driver involved in the accident. Also be sure to get their insurance information, and write down their license plate number.

5. Take Photos

Even if you have a dash camera going at all times, get out your smartphone and take photos of the accident scene. Take videos if possible. Without getting in the way of the police, take pictures of any visible damage to the vehicles. If you can't get photos at the scene, take them as soon as you can afterward.

Some smartphone apps have insurance reporting tools that help collect photos, audio, and provide checklists of what to do after an accident.

6. Exchange Information

If police are on the scene, they'll be gathering contact information from everyone involved in the accident. But if police don't respond, you should still get the name, phone number, and address of everyone involved, including drivers, passengers, and any witnesses. Don't stand between two cars while exchanging information — your cars could be hit by a rubbernecker.

Ask to see the insurance card of the other driver. If police are there, ask for the police report number so you or your insurer can get a copy of the report later.

7. File an Insurance Claim

Once you've received medical attention and are in a safe place, call your insurance company to file a claim. Your insurer should be available 24 hours a day, so contact them as soon as you can. A claims adjustor may need to see your car, either at your home or the repair shop.

If your car has a black box in it, your insurer may need access to the data port. These black boxes record vehicle data from the last 20 seconds before the crash and help determine how it happened. This information can include vehicle speed, wheel direction, when airbags were deployed, and if the brakes were applied.

Find out if you have medical benefits as part of your auto insurance coverage. If you do, you'll likely have to submit any medical bills related to the accident directly to your insurer.

8. Get Your Car Repaired

Your insurer should help you with a lot of this by recommending repair shops, and help you get a tow truck to the scene if necessary. They should also help you get a damage appraisal, and tell you when, if at all, you'll have to pay a deductible for repairs. If your car is totaled, ask when you can expect to receive a check.

If you have rental car coverage, they can also help you arrange for a rental to use while your car is in the shop.

9. Keep a File

To keep track of all of the paperwork, start a file with the insurance claim number on it so you can keep on top of what's happening with your vehicle. It should include the contact information for the claims adjustor who is handling your case, along with contact information for everyone involved in the accident. Also keep receipts for your rental can and other related expenses.

Your insurance company should be your first contact to make sure everything is being done to fix your car and your medical needs are being paid for. Your insurance agent or claims adjustor should contact the insurer for the other party in the accident.

10. Alert the DMV

Within a day or so of the accident, contact your local DMV office and tell them your car was in an accident. This is required by most state laws.

After doing all of this, you should hopefully be able to relax and get back to driving.

Have you ever been in an auto accident? What steps did you take?

Like this article? Pin it!

This article is from Aaron Crowe of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

This Is What That Ticket You Got Will Do to Your Car Insurance Rate

Paul Michael — Mon, 04 Aug 2014 17:00:04 +0000

There are two types of drivers in America: those who've received a ticket; and those who haven't.

In the past five years, 25% of drivers have received traffic tickets. That's one in four. Of course, tickets can range from the minor (such as driving with a broken headlight), to the very serious (a DUI). Tickets carry penalties, including fines and point violations, and if you hit 12 points your license is taken away. Typically, you'll automatically get 12 points for a DUI. However, the biggest hit your wallet takes will not come from fines and fees, but from the insurance rate hikes that accompany tickets. Here are five of the biggest insurance rate increases you'll get from traffic tickets.

DUI or DWI — 93% Rate Increase

That's almost double, if you're lucky; many insurance carriers will actually drop you altogether, and some will triple your rate.

The insurance industry does not like people driving under the influence. They consider you to be a very high-risk driver, and rightly so. Drunk drivers are a danger not only to themselves and their own property, but also to everyone else on the road. If you can afford to pay the increased rate, it will be that way for three years. That equates to thousands of dollars. If your policy is cancelled, you need to get SR-22 insurance from another carrier before you can legally drive your car. And guess what? You now have a cancellation on your record, so it will be even more expensive. Of course, depending on your blood alcohol level, you may not even be able to get behind the wheel for another nine months.

The bottom line is, never ever drive under the influence of alcohol. With the insurance hikes, penalties, classes, interlock devices, and everything else, it will cost you $10,000 and stay on your record for a long, long time. How much does it cost to get a cab, or spend the night in a nearby hotel? It's not $10k!

Texting — 21% Increase

Texting rate hikes have not come in line with DUI rate hikes yet, but they will. Research has shown that texting and driving is the same as driving after four beers — something that would easily get you a DUI conviction. Worse still, you are SIX TIMES more likely to cause an accident if you're texting, as opposed to driving while intoxicated. Not only that, but 25% of all car accidents are now caused by drivers who text.

It's an outrage that the insurance companies, and the laws, are not seeing texting for what it really is; one of the greatest dangers to road safety today. As it stands right now, if you get a ticket for texting and driving you can get as little as one point and a $20 fine, plus a 21% increase in your insurance rate (it's treated the same as a 15 mph speeding violation). It's very possible that if you have a good record, your insurance company will forgive you.

But like I said above, expect the penalties for texting and driving to start increasing.

Reckless Driving — 82% Increase

If you're driving without using your hands, reading a book or map, erratically changing lanes while speeding, tailgating, road raging, or basically your attention is anywhere but the road ahead, you can get a ticket for reckless driving. Also, some DUI cases will plea down to reckless, or "wet reckless" (meaning alcohol was involved), and this results in slightly lesser charges and penalties. But don't go celebrating. Reckless driving is not something your insurance company likes to see on your record, and they will heavily penalize you for it.

Careless Driving — 27% Increase

On the other hand, careless driving brings much smaller penalties.

While reckless driving is seen as intentional, careless driving is not done on purpose. You may forget to signal while changing lanes, or may fall asleep at the wheel (which brings disastrous consequences, but was never something the driver wanted to do). If you are ticketed for careless driving, you'll get a few points on your license and your insurance rate could rise by as much as 25%. Of course, your previous record will come into play, and your insurance company may let you off easy. There's a world of difference between forgetting to signal, and falling asleep behind the wheel.

Failure to Stop/Running a Red — 19% Increase

Whether you run through a stop sign or a red light, you can get a ticket.

These days, cameras at intersections are grabbing offenders and sending tickets out automatically. You can always try to fight it, especially if you went through a yellow and the camera or police officer has you down as running a red. But, chances are you'll probably be too busy to go through with a court case, and will simply pay the fine and take the reduced points. Expect your insurance to go up about 19%, unless you have an exceptional history.

Speeding — Up to 30% Increase

The big one. Almost everyone, at some point in his or her driving life, is going to go over the speed limit. Even if it's just a few miles per hour over, it's breaking the law. Of course, most police officers don't usually bother unless you're going 10 mph or more over the limit (unless it's a very slow day). Depending on how much over the limit you were going, your insurance hike can range from 21% up to 30%. If you were doing something crazy, like 160 mph in a 55 mph zone, you may get a reckless driving ticket instead.

Driving Alone in a Carpool Lane — 18% Increase

It seems so trivial to get a ticket for driving in a HOV or carpool lane without passengers. However, those lanes are put there to ease traffic congestion, and if we all disobey the rules of the road they will become futile. While nothing major is going to happen, you can expect almost the same rate hike as a low-end speeding ticket. It's really not worth the hassle. Or the cost.

Have you ever gotten a moving violation? What was the hit to your pocketbook?

This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Things You Must Know to Protect Yourself in an Auto Accident

Megan Brame — Fri, 21 Mar 2014 10:24:43 +0000

Every year there are six million car accidents in the United States, with over 30,000 involving fatalities. Knowing what to do in a life-threatening situation can be crucial to your survival. Here are some tips on what to do in a car accident. (See also: Emergency Situations You Must Prepare For)

1. Prepare Yourself in Advance

Being prepared for emergencies is always beneficial. Consider keeping these items in your glove box as you never know when they'll come in handy: a cheap multifunctional tool like a combination seat belt cutter and window breaker, pen/pencil and paper (for taking notes at the scene or copying down insurance information), an emergency backup battery for your phone, a disposable camera for photos, and a first aid kit. If you're planning on driving your car often, always make sure your car passes safety inspections with flying colors, as a faulty system can mean the difference between life and death. Also make sure flammable materials are secured before driving.

2. If You Know the Collision Is About to Happen, Prepare Your Body

Relaxing the body before impact is a popular myth, but most chiropractors believe it will not help minimize injury sustained in a car crash. If you do anticipate a car accident, keep your wrists straight and your hands on the steering wheel at 10 and 2 and keep your head back against the headrest instead of leaning forward to minimize the force of impact of the air bag. (See also: Lifesaving Skills Everyone Should Know)

3. Assess Your Situation

This sounds easier said than done, but making a conscious effort to focus on what is happening can be the difference between life and death. Assess your situation, take an inventory of your body and your surroundings, and notice if there are any injuries or anything that seems like it will turn into a hazardous situation (like leaking gasoline). By figuring out what exactly has happened you allow your mind to create a plan and work out the next steps.

4. Call 911 Yourself If You Can

The "Bystander Effect" describes the situation when a group of two or more individuals don't act during an emergency because they think the other(s) have probably already taken action. This is not the time to make assumptions. If you're able to do it on your own, call 911 and report the situation. If you're unable to but are able to communicate with another person at the scene, explicitly point to them and say "Call 911." By giving them a direct order, you remove the Bystander Effect, as now one specific person has been given the responsibility.

5. Turn Off Your Engine and Don't Smoke

As soon as you're able to, put the car in park and turn the engine off. This minimizes the potential for further circulation of flammable materials. Also, if you're a smoker, then chances are this is definitely one of the times you need a smoke to calm down. But don't light up just yet, as there could be flammable materials in the air or on your clothing. Don't let others smoke around the accident, either, until police or the fire department have assessed the situation.

6. Get to a Safe Area

If you're able to get out of your car, you should move to a safe clearing away from the scene as soon as possible. Not only will this prevent further injuries from the aftermath of the crash, but it will also help you to assess the situation and treat any minor sustained trauma. (See also: What to Do If You Get a Huge Medical Bill)

7. Exchange Details

If another driver has been involved in the accident, and they're safe, now is the time to get all relevant details to each other. Make sure to get names, addresses, insurance information, phone numbers, and any other relevant details that you feel will be needed.

8. Approach Witnesses

If there were bystanders who are able to give accounts of the accident, it's best to get their information, too, and ask them to stay until the police show up to take a statement. If there are serious damages or injuries, having a witness testimony can help you when it's your word against the other driver's.

9. Contact Your Insurance Company

Most policies require you to contact your insurer within 24 hours of an accident so make sure to let your insurance agency know as soon as possible. Some agencies now have smartphone apps that will help you take pictures and file your claim. (See also: Car Insurance Shopping Mistakes)

Have you ever been in an auto accident? How did you get through it?

This article is from Megan Brame of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

What to Do (and Not Do) When You're in a Car Accident

Aaron Crowe — Wed, 24 Jul 2013 10:36:30 +0000

If you've ever been in a car accident, chances are that taking photos of the accident scene and remembering to get the other driver's insurance information weren't your first thoughts. (See also: Financial IQ Test: Do You Have the Best Auto Insurance Coverage for Your Needs?)

Making sure you, your passengers, and anyone else involved in the accident are safe, and that medical help is on the way, should be the first step. But once things have calmed down and you have a few minutes to gather your thoughts, there are some things you shouldn't do, and a few you should, right after a car accident.

What You Shouldn't Do

It's hard to think straight after a trauma like an auto accident, but these mistakes can hurt you later, even if you follow all of the "shoulds" outlined below.

Talk Too Much

Police, insurance investigators, and the other driver may want to talk to you to find out what happened. If it's a minor fender-bender that you're at fault for, cooperating with police is a good idea. But if it's a criminal or negligent act, such as running a stop light, you may want to first talk to a lawyer after providing basic information such as proof of insurance, driver's license, and car registration to police.

Talking to someone other than your attorney — including your own insurance company — after a car accident can hurt because your statement can be obtained by the other side's insurance company and used against you. Something as simple as an apology after the accident can be taken as an admission of guilt and liability.

Share Too Much Personal Info

It may be instinctive to give your home address and telephone number to the other driver involved in the crash, but you don't have to. To avoid having your personal information stolen, the National Association of Insurance Commissioners recommends not sharing personal information such as a driver's license number. Since many retailers use that information to verify identity over the phone, it's best to only give your name and vehicle insurance information to the other driver.

Fail to Call the Police

Close to 20% of people believe the only reason to call police after an accident is if someone is injured, according to the NAIC, which has a free smartphone app called WreckCheck to walk users through creating an accident report. Filing a police report, however, can help facilitate the insurance claims process, the NAIC says.

What You Should Do

While you're avoiding saying too much or giving up too much information, you should also be aware of safety and gathering information you will need later.

Get Off the Road

Get to safety as soon as you can. If it's a minor fender-bender, move your car safely off the road and out of traffic. If you can't move your car without creating more damage, don't try — leave it to a tow truck. State Farm recommends keeping flares or other warning devices in your trunk to alert traffic of your emergency.

Take Photos

If you have your cellphone with you, videotape or photograph the accident scene, so that your insurer can see where it happened and get an idea of how it might have happened. You don't want to get in the way of police, and you should only do this if you, any of your passengers, and people in the other car (if one is involved) are safe. There are lots of auto insurance smartphone apps that include accident reporting tools to help you collect photos, audio recordings, and other information so you can more easily file a claim with your insurer.

Take Notes

You should draw a map of what happened for your insurer, and write down how you remember the accident, along with weather and traffic conditions, property and vehicle damage, and injuries to you or others. If there are witnesses nearby, get their names and phone numbers. And of course, get the name and insurance information from any driver whose car was in the accident. If your insurer doesn't provide you with an accident form to keep in your car, print one out from insureuonline.org (PDF) and fill it out if possible at the accident scene.

Tell the DMV

Most states require drivers to report accidents to the DMV, so be sure to do that within a day or so of the accident.

Keep Your Documents Handy

If you've kept your proof of auto insurance forms that most insurers mail to policyholders in your glovebox, then a lot of this should be easy, and you'll have your insurer's phone number handy to call as soon as possible. Some states allow electronic proof of insurance on a cellphone.

You'll probably get a visit from an insurance claims adjustor soon after the accident, which won't be as traumatizing as the accident, but will make life a lot more interesting as you try to recreate the accident and explain what happened. It'll be a lot easier if you've followed the advice above.

File Your Claim

Now that you're safe and have exchanged information, file an insurance claim with your carrier. Your insurer should be available 24 hours a day, seven days a week, so don't delay in making the call.

If you can do all of this after an accident, you should congratulate yourself on being prepared and getting through a traumatic experience.

Have you ever been in an auto accident? What do you wish you had done, or hadn't done, afterward?

This article is from Aaron Crowe of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Auto Insurance Discounts You May Be Missing

Ashley Jacobs — Wed, 29 Aug 2012 10:00:42 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some awesome articles on auto insurance discounts you may be missing, date night on a budget, and creating a more flexible work environment.

Best Money Tips: Cut Auto Insurance Premiums in Half

Ashley Jacobs — Mon, 19 Mar 2012 10:00:12 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some fantastic articles on how to cut auto insurance premiums in half, saving money while getting fit, and reasons you should have a side business.

News & Events

Best of Money Carnival #147: Hosted by Yes, I Am Cheap — The Best of Money Carnival features the ten best money-related posts of the past two weeks.

Be sure to check out our News & Events Calendar to see all the awesome upcoming events in the personal finance world!

This article is from Ashley Jacobs of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: