trail: insurance

Taking a Look at Your Home Insurance Policies Ahead of the Hurricane Season

There's been a lot in the news about how the BP oil disaster the Gulf of Mexico has already seen landfall in some beach communities and turned the air around there into an unbreathable toxic cocktail. Well, while that's certainly one way for a natural disaster (or man-made one) to go, but chances are much higher that if a disaster should ever strike your community, it should be the regular kind - a hurricane, a wildfire or an earthquake. And these days, right at the start of the hurricane season, the home insurance companies are at pains to remind us that some forecasts predict that it could be rough this year. While you may have plans in place to protect yourself and your family when something like this happens, you also need to make sure that as a homeowner, you have the best interests of your property in mind long too before the wind begins to howl around your windows. Florida has had a long and painful history with hurricanes, and you'll see most homes there showing the effects of the lessons they've learned from it. Everywhere you look in Florida, homes have extra strong construction and storm shutters. There have been warnings for years that what with global warming the eastern seaboard could see some pretty rough hurricane action soon. Sadly though, most areas of the country haven't really learned their lessons as well as Florida has. And neither has the west coast, with the exposure they've had to wildfires. The home insurance industry frequently puts out public service advertisements with information on how to protect your home in the event (so that they won't have to pay as much damages as they otherwise would have to); let's look at some of the best pieces of advice they have in mind for you. Storm shutters and impact resistant glass are your best insurance policy against storm damage. And remember that if the hurricane begins to blow into your house through an opening of some kind, it makes it doubly dangerous. Garage doors for instance, absolutely have to be properly secured when it starts. But there is a certain amount of misinformation abroad about home insurance policies that can be just as dangerous as the hurricane. Most people who have policies against hurricane damage believe that , they are protected against anything that comes out of a hurricane. That's not quite true; if a hurricane brings in so much rain it floods your town and causes flood damage to your home, your home insurance company will wash its hands off it. The floods are consequential damages as far as they're concerned. And there's more love from the home insurance companies too. The National Flood Insurance Program that's run by the government gives each homeowner $250,000 in aid to cover building losses, and $100,000 for damage to personal property. The insurance companies only ever agree to compensate you for any losses you incur flooding in over these thresholds. So if you have flood damage to your home that comes up to, say, $251,000, your home insurance policy for flooding will give you exactly $1000. And the government isn't going to give you anything right away either, because their program just ran out of money. So you best insurance policy at this time against calamity would be to shore up your house to meet all hurricane codes. Where's the point trusting the home insurance companies anyway?

Taking a Look at Your Home Insurance Policies Ahead of the Hurricane Season

There's been a lot in the news about how the BP oil disaster the Gulf of Mexico has already seen landfall in some beach communities and ...

Health insurance companies aren't gouging us – take a look at the numbers

The much-maligned health insurance industry has not always deserved the contempt it receives. These companies are usually accused of caring only for profits, but those profits are not as great as most of us imagine. There is room for some improvement in the industry, but such improvements will not reduce health costs significantly. A clear understanding of your policy will go far to reduce the hostility many feel towards this essential industry. Most commercial health insurance companies have three objectives: collect dollars from premiums, pay off overhead with what's collected, pay off claims, and have about 3 to 6 percent of the total collected remaining as net profit. This profit goal is relatively modest. Americans pay $2 trillion dollars a year on health care, including the operating costs and profits of health insurance companies. This averages out to approximately $6,551 for each man, woman and child in the United states, or approximately $537 a month. At a 6 percent profit, the industry is earning $120 billion a year. This averages out to $387 a year, or $310 million in total from what Americans pay towards the insurance companies' profits, or $32 a month. A mere 5 percent of what you pay each month for health insurance goes to the profits of the insurer. You pay that percentage to a taxi cab driver as a tip. Obviously, the health insurance companies are not charging their customers an excessive percent of the total for health insurance. Yes, they are in it for the money, but they're not gouging us. All organizations have some leakage of cash, and the health insurance industry is no exception. Their organizations spend a great deal on administrative costs, streamlining their operations, and increasing efficiency of operations. All this may go to reduce their operating expense and thus, the cost of insurance for us, but we can't expect significant savings here. Yet the new Health Reform law is requiring health insurance companies to spend 80 percent of those $2 trillion on medical treatments. That means they'll have $400 billion left over. Subtracting their profits ($120 billion), they'll have $280 billion to cover overhead. If they are able to reduce operation costs by just 1 percent, or $2.8 billion, and turn that into premium reductions, the $537 each person now pays is then reduced to $528, a savings of $9 a month or a savings of $108 a year. Although every penny counts these days, these numbers aren't too significant to most of us. Health insurance companies have been mandated by the new Health Reform Law to modify some of their policies, which may raise the cost of insurance. They are now prohibited from dropping people from insurance while they are sick. Now, they cannot deny coverage to children with pre-existing conditions. They can no longer impose a cap on the amount they will pay during a person's lifetime. In 2011 they have to start paying 80 percent of their earnings towards medical treatment. In 2014 they can no longer refuse to sell policies to anyone, with or without a pre-existing condition, and the price they set for policies can't be based on the customer's health condition. So, by 2014, no one will be excluded from obtaining health insurance in the United States. These measures, particularly the provision that doesn't allow insurance companies to deny insurance based on a person's health status, will go a very long way in reducing our overall health care costs. With universal coverage, many illnesses can be cured in their early stages, thus avoiding the most expensive treatments, those in the emergency room. All of us should pursue a clearer understanding of the purpose of health insurance companies. They are not humanitarian, non-profit organizations, but businesses with the objective of making a profit. Much of the misunderstanding is fostered when an ailing patient is told by the insurer that their medical requirements are not covered by their policy. It is therefore absolutely imperative that you're clear about what your policy will cover before you enter into an agreement for coverage. Nobody likes to spend money needlessly, but when it comes to spending money on your health, without an insurance company, you could do worse. Know your policy and expect health insurance companies to strictly abide by it. Whether we like it or not, we can't do without them, and they can't do without us. You'll appreciate them most when that $13 thousand dollar bill comes in following a brief visit to the emergency room, and you don't have to pay a dime. Then spend or save that $13 thousand for your future needs, such as college or retirement!

Health insurance companies aren't gouging us – take a look at the numbers

The much-maligned health insurance industry has not always deserved the contempt it receives. These companies are usually accused of caring ...