Can Having Bad Credit Affect Your Insurance Quote?

Having bad credit not only penalizes you from getting mobile phone contracts, obtaining a mortgage or getting a great interest rate on a car loan, but it also increases your insurance premium.  Bad credit shows lenders and suppliers that you have a habit of defaulting on payments or bad spending habits, which puts them at risk.  Because of this risk you are often penalized by having to pay higher than normal interest rates or you may be denied financing and funding altogether.  This is no different when obtaining insurance quotes.  Home Insurance, health Insurance and car insurance quotes are all affected by credit risky behavior.

How Insurance Companies Calculate Your Premium
According to CNN Money, how insurance companies calculate your premium has been a long kept secret; however,  90% of home and auto insurance carriers use a score based on your credit report as part of that secret.  It is important to note that the credit score used to determine your premium is not just your traditional score given by the three credit bureaus.  Your credit score along with other information is used to calculate what’s called an insurance credit score.  This insurance credit score determines how much you'll pay per month for your car insurance.  Good driving habits, no accidents and a low amount of claims on your policy can help improve your insurance credit score, which will lower your premium for the next term, should you decide to go with the same insurance company again.

Why Your Credit Score is Taken into Consideration
Businesses use your credit score to determine how likely you are to simply pay your bills on time.  Other companies use your credit score to determine your credit risk and how likely you are to repay monies loaned.  If you have small marks on your credit report such as defaulting on a hospital bill or having libraries fines, this may not give you " bad credit," with an insurance company; however, a credit report that contains bankruptcies, loan defaults or unpaid utility bills will negatively impact your insurance credit score.

Another form of credit which is often overlooked by consumers, but not by lenders or insurers is Chexsystems. Chexsystems is a credit bureau used by banks and other financial institutions to report bounced checks, accounts closed with negative balances, and other charges related to FDIC insured institutes. Chexsystems is referred to as a “bank's blacklist”.  If your name is on this list, you may be denied bank accounts, loans and in some cases insurance.  However, insurance companies understand the need to be insures, so they will often extend insurance albeit with the penalty of having to pay a higher than usual premium.

For more information about an Oklahoma City insurance policy, call an Alexander & Strunk agent today at 800-375-8356.

Insurance: The Secret Weapon of an Effective Savings Plan

For many individuals and families, it is difficult to find the financial footing to start saving for emergencies, vacations, and retirement. With the cost of living rising and paychecks not always keeping pace, savings have become an even more precious asset to protect.

While you might think of insurance as a product that protects “things”, it actually protects your savings because it prevents you from needing to use your personal assets to pay for lost or damaged possessions and liability claims.

Your Property as an Investment

When you buy small ticket items like clothes, accessories and certain electronics, you might not think of them as investments but they are. Often, discretionary dollars are used to make the purchases, which is money that could have been used for savings instead of spending.

Whenever you spend money, you are making an investment. You are trading long hours of work for a product meant to improve your life in some way. By having the proper insurance on the item, whether through home insurance, flood insurance or auto insurance, you give yourself protection like other investors dream of. With your insurance, you’ll be made whole after a loss; and that means you won’t need to tap into your savings.

Liability Protection

Everyone is exposed to potential liabilities. From having a loose walkway stone that causes a neighbor to trip, to running a stoplight and hitting someone, to damaging your neighbor’s mailbox while backing out of your driveway. These are just a few examples of how you face many situations each day that could result in a liability claim.

Liability insurance coverage and umbrella policies help ensure that if you are sued, you won’t suffer financial damages beyond your deductible and those that exceed your limits.

For Your Heirs

Life insurance offers a great way to preserve your savings for your loved ones. Death benefit proceeds can help pay for estate tax liabilities and other expenses after you’re gone. This will ensure that the money you worked hard to save goes to your heirs after death.

When creating your savings plan, you’ll spend a lot of time on your budget. You’ll figure out what expenses to cut and how much to put into certain savings accounts. One of the biggest mistakes you can make though, is to ignore potential shortfalls in your insurance policies. With too little, or nonexistent coverage, you may find that your savings doesn’t stand a chance at accumulating.

Contact an agent at Strunk Insurance to make sure your Oklahoma City Insurance policy is going to protect you in the event of a loss.

What Makes HIPAA So Important

When you have a pre-existing condition, it can be difficult to get insurance coverage. If you delay obtaining insurance coverage until you know you are sick and need treatment, it is an action referred to by insurers as adverse selection. It is adverse because in order for insurance to work with existing premium payment structures, it cannot be purchased only by individuals with costly medical treatment expenses. Insurance must be purchased by a large number of individuals in order to protect against the potential of a serious illness or injury.

One way that health insurance companies protect themselves from adverse selection is to create pre-existing condition exclusions that allow them to collect premiums and provide protection for treatment of injuries and illnesses that are unrelated to the pre-existing condition while excluding claims that are related.

HIPAA, the Health Insurance Privacy and Accountability Act, limits the pre-existing condition restrictions that a group health insurance arrangement can enforce. It gives group health plans the ability to exclude conditions for the first 12-months (in some cases 18-months) only if the insured had a significant break in creditable health insurance coverage (which excludes coverage like major medical) that lasted more than 62 days. This protection means that as long as you have continuous coverage, a group policy cannot exclude your pre-existing condition.

But HIPAA also protects the privacy of your medical records, something that’s become increasingly important in this digital age. The way that your sensitive health information is handled and disbursed is tightly regulated and penalties are explained within the act, giving many businesses the encouragement they needed to train staff in proper data handling and enforce compliance.

Between helping secure your coverage and protect your information, HIPAA is one of the most valuable legislative protections to affect the insurance industry in recent years.

Check with Strunk Insurance today to make sure your Oklahoma City Insurance has you covered.

Variable Life Insurance

Variable Life Insurance—The Basics
If you’ve decided to get a whole, or permanent, life insurance policy then you are going to have a policy that not only pays out a death benefit, but also accrues cash values which can earn interest and accumulate. Whole life policies aren’t a singular breed; there are many different types that you can get and one of the most popular is the variable life insurance policy.

What is a variable life insurance policy?

A variable life insurance policy is one that has its cash values invested in funds that the life insurance company sets up. These funds are created from various underlying investments like bonds, money markets, and stocks. The funds may be created based on risk tolerance, type of investment or even for the purpose of diversification.
The important note here is the word variable. That word means that your cash values will perform as any other investment would, and means they may increase and gain in value or they may decrease in value. This can happen throughout the life of your policy, depending on how the underlying investments perform in the fund that you’ve chosen.
Like other permanent policies, the variable life needs to be underwritten only once—when you first apply (unless you allow it to lapse through nonpayment of premium and want to reinstate it). The death benefit and premiums are fixed for the life of the policy and, as long as you pay your premiums, you can expect your beneficiaries to receive the death benefit (normal exceptions including material misrepresentation and two-year exclusions apply).
Can I switch funds?

If you choose a fund when you first take out the policy that you feel is no longer right for you, then you can switch funds. It is important to note that even if you switch funds, any losses you experience will not be gained back upon switching, although your fund could increase in value giving you the opportunity to gain it back again. As you age and your tolerance for risk reduces, you may find it a good strategy to switch from aggressive funds with high historical returns to less aggressive funds.
How does this affect my death benefit?
If you lose money in your cash value, that is held separate from your death benefit and won’t affect any payout to your beneficiaries. If you take a loan from the cash value and do not pay it back, then your death benefit may be reduced.
A variable life insurance policy has more risk than a fixed policy, but it also has the potential for more flexibility and higher cash values. It is important to work with your agent and weigh the benefits and drawbacks of variable life against your personal goals.
Make sure you have the best possible option for your Oklahoma City Life Insurance policy with Alexander & Strunk today!

Why do I need Motorcycle insurance?

Many states require motorcycle owners to have liability insurance. Liability insurance compensates the other party if the policyholder is held accountable in an accident and as a result, causes injury to someone else or damages their property. Usually, because motorcycles cause less damage than a car, liability for a motorcycle is moderately priced. 

Other policy coverage to take into account is comprehensive and collision coverage, which includes damage to the vehicle, but does not cover mechanical breakdown. Collision covers accidents with other objects, such as trees, signs, or another vehicle. Comprehensive, also referred to as Other Than Collision, provides coverage for dangers such as vandalism, theft, flood, fire.  Most policies would pay up to the actual cash value of the bike.

Medical coverage for injuries to your passengers should be contemplated. This coverage is referred to as Guest Liability. This can be highly valuable on the occasion that you are the cause of an accident and your passenger is hurt. Coverage can also be purchased to cover your injuries. 

To guard against injury caused by uninsured drivers, Uninsured or Underinsured Motorist coverage can be obtained. In some states uninsured motorist coverage is restricted to only covering your medical payments, while in other states you can also purchase coverage to pay for damages to the motorcycle in the instance it is damaged by uninsured driver.

Learn more about Motorcyle Insurance from Alexander & Strunk today!