It’s a rare situation that you can afford to be without home insurance. Most mortgage lenders require home insurance as part of the terms of a mortgage, and even if you own your home free and clear, insurance can be the easiest way to safeguard your investment. But home insurance isn’t exactly cheap — especially when you realize that the costs can vary by hundreds of dollars, depending on which insurance company you purchase your policy through. There are a few steps you can take to make sure your home insurance costs are low:

1. Shop around: This may sound like a particularly easy suggestion, but you’d be surprised how many people just sign up for the first home insurance policy they find. Try both online providers and companies in your area to find the best deal. Of course, you aren’t shopping just for the lowest price you can find — you need a policy that will cover your house well, and it’s okay to pay a litle more in order to go with the insurance company with great customer service.
2. Raise your deductible: If you want to drop the cost of your home insurance in a hurry, your best bet is to raise your deductible. Most policies have a deductible of at least $500, but if you can raise that to $1,000, you can save up to 25 percent. If you do choose to raise your deductible, it’s generally worth your while to set aside an amount equivalent to your deductible in a rainy day fund.
3. Don’t insure your land: It’s common to take the value of the land your house sits on into account when deciding how much coverage you need — but it isn’t necessary. A windstorm or a fire isn’t about to damage your land, so there’s no need to insure it.
4. Group your policies together: You can often get a discount on one of your insurance policies if you buy multiple policies from the same company. Take a look at your auto policy — can you buy from the same company for a lower rate? You may need to move one of your policies to qualify for such a discount.
5. Ask your agent for tips: Many insurance agents will offer you tips on how to decrease your costs with a particular company. For instance, many insurance companies will cut your costs if you make your home more disaster-resistant — especially if you have an older home that can use some retrofitting. Home security systems can also be a way to drop your rates.
6. Keep your credit clean: The number of insurance companies that take credit scores into account when deciding on your coverage and price are growing. In some cases, there can be a direct correlation between higher rates and lower credit scores. The cleaner your credit, the better.
7. Stay loyal: If you’ve been with one insurer for several years, you may be eligible for a loyalty discount. Such discounts are typically available after five or ten years — an insurer may reduce your premium by five to ten percent as a reward.

Popularity: 12% [?]

Insurance is a way to hedge your bets — to get someone else to cover the risks of every day life. Your car insurance covers the risks you face on the road. Your health insurance limits the risks you face in the event of illness or injury. But with a little more knowledge about your insurance options, you can manage your risks even better.

Back Up Your Insurance With An Emergency Fund

Even with great insurance coverage, you’ll face expenses that simply aren’t covered by your insurance provider — or your deductible is high enough that your insurance doesn’t kick in. Maybe it’s a medical procedure, maybe it’s a cosmetic repair for your car — either way, having an emergency fund in place can help you eliminate the risk of an expense your insurance doesn’t cover.

Just how big an emergency fund needs to be varies, but even starting small can make a big difference. Even if you can only set aside $25 per week, at the end of the month you’ll have $100 saved up that you didn’t have before.

Keep A Close Eye On Changes

Especially in light of the current economic situation, many insurance companies are making changes to their offerings. They’re not the only ones, either: if your insurance is part of your benefits package from your employer, you may find that changes are coming from that direction as well. You should receive notice in writing of all changes — make sure that you read such documentation and understand it. In some cases, if may mean that you need to purchase supplemental insurance or change providers.

Make Insurance A Priority

It’s tough to manage all the insurance a person can really use. Even something as important as health insurance often falls by the wayside if you’re facing a financial crunch. But make it a priority to keep your insurance in place, especially your health insurance. You may not need it it — but it can just as easily make the difference between your finances remaining stable or an illness putting you entirely under.

It’s not just health insurance, either. If you can increase your home insurance, life insurance, long-term disability insurance and so on, it’s generally a good financial choice. We don’t know what the future holds, but we can see the risks. Minimizing the effects a situation can have makes sense, financially.

Check Out Your Insurer

Some insurance companies could use a little health coverage themselves right now. Take a look at the ratings for your insurance company from Standard & Poor’s or another ratings organizations: such information can tell you if your insurer is on solid ground. If the company is, great. If it isn’t, it’s worth shopping around to make sure that your policies will be there when you need them. This is especially true of policies you pay for over a long period of time for what may be a very large payout — life insurance, long-term disability and other options.

Popularity: 9% [?]

These days, there seems to be insurance for just about anything: you can even insure your pet’s health. But while you can probably get away without health insurance for Fido, there are certain kinds of insurance that can wind up being very important. One of those insurance options is long-term care insurance.

Long-term care insurance is meant to cover any extended illnesses or disabilities. It’s meant to cover all the assistance you need, whether you’re at home, in an assisted living facility or in a nursing home. Those last two may convince you that long-term care insurance is meant just for senior citizens, but it can be important no matter what age you are. While illnesses may be less of a concern if you’re young, what happens if you’re in an accident and need care beyond a short hospital stay? If you don’t have someone who can help you out at home, if you need extended physical therapy or other care, long-term care insurance can really save your bacon. According to the U.S. Government Accountability Office, 40 percent of people receiving long-term care services in the U.S. are between the ages of 18 and 64.

Where Can You Get Long-Term Care Insurance?

Unfortunately, long-term care insurance isn’t as available as one might hope. It isn’t covered by Medicare or Medicaid in most cases and even Medicare supplement insurance won’t usually help. Some employers have started offering long-term care insurance in benefits packages as more insurance companies offer it. Those companies offering this type of insurance also offer it to individuals.

The costs can vary significantly for long-term care insurance — but the younger you are, the better the deal you can get. Many companies charge $7,572 for insuring a 79-year-old for $150,000 — but that amount drops to $564 for a 50-year-old. That amount is a yearly premium: your premium will typically stay the same as the day you purchase your policy, so the younger you are when you purchase long-term care insurance, the less you’ll pay during the life of the policy. You can get even cheaper policies if you’re willing to cover more initial expenses: most plans have a deductible or elimination period during which you must cover out of pocket before the insurance kicks in. That period can be anywhere between 20 days and 100 days. A policy with a 100 day elimination period is certainly less expensive up front — but you’ll have to pay for more than three months of care out of pocket before your insurance becomes effective.

Uninsured Issues

The type of care covered by long-term care insurance is the stuff that uninsured horror stories are made of. Any kind of extended illness or injury can easily wipe out a person’s savings — even if they’re doing pretty well beforehand. That concern can make long-term care insurance very attractive. After all, it isn’t impossible to cover basic health care out of pocket — why not focus on a policy that covers the stuff a person really can’t pay for even if they have solid savings?

Popularity: 9% [?]

It’s easy to get caught up in the thinking that we make personal finance decisions just for the sake of managing out money. The fact is, though, that every decision we make about personal finance can ripple through the rest of our lives.

Just A Few Ripples

It’s hard to comprehend how important even a little thing like deciding to save up for a large purchase, rather using a credit card can affect all of the rest of your finances. But there are plenty of situations where such a decision can have a huge impact: having more credit available on your card, along with a few extra dollars in your bank account, can make all the difference in the world if something happens to your car that your insurance doesn’t cover.

And decisions affecting your credit in particular can affect whether or not an employer will hire you or a landlord will rent to you. It may seem like your credit score’s importance is overblown — after all, you can effectively eliminate your debt if you’re willing to declare bankruptcy. But with even employers examining the credit reports of the candidates for each job, such a move can be disaster for your job applications (as well as your ability to get a credit card) for the next seven years.

Keep Those Ripples Under Control

It isn’t possible to prevent your personal finance decisions from affecting the rest of your life: after all, they’re called personal for a reason. But you can create a cushion so that your decisions don’t affect your life beyond a level that you can handle. While simply making good financial decisions seems like an easy answer to the issue, everyone makes the occasional mistake.

Instead, the best protection you can have is a good emergency fund. When you have a solid amount of savings in case of contingencies, you have more room to handle ripples. Even if something occurs that isn’t the result of something you specifically did — such as a car accident or a layoff — having an emergency fund will allow you to approach the situation in such a way that your finances don’t compound the original issue.

In addition to an emergency fund, insurance policies can provide further protection. It can take a little more careful consideration than you might expect to find the right insurance policies, though. Choosing a policy that doesn’t work well with your current financial situation can create more than few ripples on its own. Carefully weighing factors, like what a reasonable deductible might be, is absolutely necessary. Because everyone’s financial situation is different, it’s probably a good idea to seek out professional help in making sure that you find the right insurance policy.

Rocking The Boat

If you’ve got your finances under control, a ripple isn’t going to do much more than rock your boat. Moving forward in improving your overall financial situation is always a good idea — even if it rocks the boat a little.

Popularity: 11% [?]

If you’ve been reading the news lately, you may have heard of the recent failure of Indymac Bank. After facing a liquidity crisis by making too many high risk loans, Indymac has been officially taken over by the FDIC. This is the second largest bank failure in United States history, and it is expected that the FDIC will have to disburse 4 to 8 billion dollars to the former customers of Indymac, or 10% of the total FDIC fund. The past few days have seen lines of angry people trying to withdraw their funds from the failed bank, but what many of them don’t know is they may not walk out with all their money.

What Is the FDIC?
Most people aren’t fully aware of exactly what the FDIC is, much less what their rights are under it. Most know that a bank with an FDIC seal is a good thing, but not why. The Federal Deposit Insurance Corporation was created after the stock market crash and massive bank failures of the Great Depression. During that time, people were simply out of luck if a bank failed. Once the bank closed, the customers usually were broke (hence the tendency of many of our grandparents to stuff money under the mattress). To counteract the devastating effect this had on the rest of the country, the government created a corporation to insure depositors money.

Account holders are now insured for up to $100,000 on regular deposit accounts, such as checking, savings, or CDs (A recent change to law in 2005 changed the coverage of IRAs from the standard $100,000 to $250,000). Because the FDIC has taken over Indymac, each customer is only allowed to withdraw up to that $100,000 limit. Customers who had more than that in their accounts will have to sue Indymac for the balance, which could take years and never result in a payout. So does this mean you’re screwed if you have more than $100,000 in your bank? Not necessarily, if you know how the system works.

The Breakdown
The FDIC has a few rules that, once you know how they work, can cover every penny you have.

- Each depositor is covered for up to $100,000 for accounts held in their name at a financial institution that is a member of the FDIC.
- If the depositor has accounts at another institution in addition to the first, the depositor is covered for $100,000 at the second institution as well. Therefore the depositor will have $200,000 of coverage between the two banks. Have accounts at eight banks? You have $800,000 of coverage, as long as you don’t exceed the $100,000 limit at any one bank.
- Accounts held in a different title are considered separate. Joint accounts, trusts, or beneficiary accounts are all considered to have their own $100,000 coverage.

The rules get a little more complicated the more spread out the money gets, but these are the basics that would apply to most people. Remember that banks aren’t guaranteed to be around forever, so you should take as many precautions as you can to protect your hard earned cash.

Popularity: 47% [?]

People in the Midwest have been facing torrential downpours for days. Many have been forced to evacuate, leaving their homes and most of their possessions behind. Many have also opted to stick it out — to fight off Mother Nature with sandbags and pumps. Making decisions in this sort of situation is hard: you have to balance the emotional and financial, decide whether to stay or what to take.

There are a few points that can help speed up the decision-making process — crucial in a natural disaster when time is of the essence.

Think first of your own needs.

You decisions should be made on the basis of your ability to take care of yourself and the people who depend on you. Deciding whether (and when) to evacuate isn’t simply a matter of how much stuff can you cram into your car: it’s a question of whether you’re likely to get hurt if you stay. In a natural disaster, there may be very little you can do to protect your property — but you certainly don’t want to face doctors’ bills on top of the financial losses you may face.

As long as you are healthy, you can find work and build back up. In my experience, it’s more important to protect yourself and your family than stuff that you can replace.

What is truly irreplaceable?

You can buy a new computer or replace the floors in your home. You can’t go back in time and take new pictures of your children as babies. As you pack for any sort of evacuation, always remember that there are more stores down the road. While you should take some spare clothing and food, focus on taking those things you can’t pick up at the first Wal-Mart you pass.

It’s worth taking a look at your insurance policy every once in awhile, as well. In an emergency, you aren’t going to have time to go down the list of what items your insurance company will replace. You don’t want to waste car space on the property that you’ve been paying the insurance company to cover in just this situation, though.

Don’t forget your paperwork.

No matter whether you stay or leave, you are probably going to need that insurance policy you’ve been paying for all these years. Make sure you know exactly where that paperwork is and keep it safe and dry. You’ll want to do the same with your personal papers (birth certificate, ID, etc.), as well as phone numbers for the insurance company. No one wants to have to deal with filing a claim — especially when plenty of the neighbors will be doing the same thing, but making sure that you’re prepared will make it easier to replace all your replaceable stuff.

Popularity: 58% [?]