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Car Insurance Basics | Auto Insurance Coverages

Car Insurance Basics

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Car insurance is an important asset to protect you financially. All states but New Hampshire require car owners to show that they are financially able to cover liability costs and most states require a car insurance as a proof. In New Hampshire, the driver is required to prove their financial ability after an accident occurs.

The car insurance offers three main areas of coverage:

  • Property coverage that pays for damages to the car or theft;
  • Liability coverage guarantees the legal responsibility of the policy owner to pay for bodily injury or property damage to the other party in the accident;
  • Medical coverage is for costs incurred after treating injuries, rehabilitation or in the case of death – for funeral expenses.

Actually, there are six types of auto insurance coverages, some of which are required, while others are optional. There are some extras as well, that the car owner can select. Below, you can see more details about the different coverages.

Bodily injury liability

The coverage pays for injuries caused to a person by the policyholders or members of their family, who are included in the policy. The policyholders are also covered in case they drive someone else’s car with permission. There is a state required minimum of the bodily injury liability, but the car owner can choose to buy a higher coverage, which will be useful in case they are sued for large amounts after an accident.

Property damage liability

The coverage is used in case the policyholder or someone driving their car with permission causes damage to another person’s property. In most of the cases this is damage to the car of this person, however, the property damage liability also covers damages to buildings, fences, lamp posts, telephone poles or other structures that are caused as a result of driving accident.

Medical payments (MedPay) or Personal Injury Protection (PIP)

This coverage is for treatment of injuries of the driver and the passengers in the car of the policyholder. PIP covers medical costs, lost wages or payment for services that are normally performed by the injured person. It can also cover funeral costs.

Collision

The coverage reimburses for any damage caused to the vehicle of the policyholder as a result of a collision. The collision may be with another car or a different object/construction. The damages sustained after flipping over or as a result of potholes are also covered. Collision coverage usually has a deductible in the range of $250 to $1,000. The premium decreases with the increase of the deductible amount. This coverage is used by the policyholder even if they are at fault for the accident that resulted in a damage. In this case, they got reimbursement for the amount for the repair of the car minus the deductible. If the other driver was at fault for the accident, the insurance company may try to recover the amount paid by the other person’s insurance. In this case, the policyholder will be reimbursed for the amount of the deductible as well.

Comprehensive

This coverage pays for any damage to the vehicle that is caused by a reason different than a collision with another car or object/construction. This includes natural disasters as well such as earthquakes, hail, flood, windstorm, etc. It also covers the car in cases of fire, falling objects, contact with animals, riots or vandalism. The comprehensive coverage reimburses the policyholder in case of theft of the car. The insurance is usually sold with a $100 or $300 deductible, but the car owner may choose a higher amount, which will lower their premium. In case your windshield is cracked or shattered, you will also be reimbursed by this coverage.

Uninsured/Underinsured motorists coverage (UM/UIM)

This coverage pays for the damages in case the policyholder, their family or a driver who is driving their car with permission, are hit by uninsured or a hit-and-run driver. If the driver, who caused the accident, has insufficient insurance to pay for all the losses, the UIM is used. It also protects the policyholder in case they are hit by a car as a pedestrian.

Extras

You can include different extras in your car insurance like roadside assistance, for example. Keep in mind that if you request towing, it will go down as a claim on your record as well.

Another popular extra is the rental reimbursement, which covers the costs in case your rental car gets damaged or stolen.

Knowing the different types of car insurance coverages and what they pay for is essential for making the right decision what to include in your own insurance. It is also important in case you are the person who has suffered the accident and didn’t cause it – thus, you will know what kind of reimbursement you can expect from the other party. Note that states do not require that a car owner has a collision or comprehensive coverage. If you have taken a loan for your car, though, the lender may require them until the loan is paid off.

10 Budgeting hacks that help you save more

10 Budgeting hacks that help you save more

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If you have tried saving up money, you might have noticed that it is tougher than it sounds. Being part of a modern consumer society, we often find ourselves spending far more than we had planned. But with a bit of self-discipline, good organization, and our useful budgeting hacks below, you could save more.

10 Budgeting hacks that help you save more

Envision your success

Make your wish as specific as possible. Then surround yourself with it. If you want to save up for a car, the first step is to choose the specific type you want. Then print pictures of it and put them on your fridge, bathroom mirror, and on your workspace. Take a step further and set them as your phone and computer wallpaper. Make sure you are constantly reminded of what your goal is. That will help you to stay motivated and keep saving up money.

Cook at home

A lot of money is spent on food. Instead of having home cooked meals, we sometimes order food or go out to eat, which is much more expensive. In the dynamics of today’s world, few of us have the time to prepare meals at home. A solution we can offer is to cook only one day a week. Eating the same dish more than twice can be boring but you can prepare various meals and freeze them for later that week. This way you will be able to save up money and even take the food to work.

Think of the real price

When going for shopping, no matter what product or service you are about to spend your money on, first think of the real price. What we mean by that is to simply calculate how much time you have to work for the item of interest. For example, if you are looking at a dress that costs $70 and you get paid $8 per hour that would mean you have to work about 9 hours for it – an entire day and some more. Once you know how much it will cost you in terms of time, simply decide for yourself whether it is really worth it.

Grocery Shopping

Many times, we come out of the store having bought way too many things. By the time we get to use them all, we might even have to throw some away. This is mainly because we have the bad habit of grocery shopping when hungry. Besides going to the store on a full stomach, other things that can help us not waste time and money are to chew gum and wear headphones. The mint is used to counter the persuasive scents in stores. Likewise, listening to our own music blocks the one in the store usually carefully selected in order to make the customers spend more time shopping.

Use Cash

The next tip is to use cash instead of credit or debit cards. Cards are convenient because it is easier and safer to carry and use them instead of cash. The downside, however, is that one can very easily spend a larger amount of money on things that are not particularly necessary. This leads to falling off track and not reaching your financial goals. By setting a budget and carrying only necessary cash, you can stick to your budget much easier.

Sales

An important part of saving money is to figure out what your priorities are. Just because you are saving up for something doesn’t mean you have to cut all things that bring you joy. You can still go shopping and go eat out, it would just be on a budget. Sales are great because you end up buying something you want but at a lower price, of course, at the additional cost of the time, you would have waited for the item to be on sale.

Start slow

Like with everything else that requires a change in lifestyle, it is better to start slow. Take small steps by putting aside a small amount of money and then gradually increase with time.

Saving can be fun

If you get motivated by challenges, then try the 52-week money challenge.  The money you deposit each week is equivalent to the week number. So, in the first week, you will put aside just $1, during week 2 – $2, week 30 -$30 and so on. At the end of the year, you should have $1378 in savings. Another fun way to save money, besides challenges would be to use tools such as SaveUp, which reward you with cash and prizes for saving money.

Avoid

“Quick” visits to the shopping center and going out with friends are usually the types of activities where we get tempted to spend money most easily. Restrict yourself from giving into these temptations too often. At the end of the day, homemade coffee is as good – if not even better – as the one you are going to spend $9 for.

Treat yourself

Just because you are saving money doesn’t mean you have to stop doing/eating/shopping for what you like. Definitely treat yourself, whenever you reach a milestone. For example, when you have saved up the first $500 for your dream car, in order to treat yourself on reaching the mile stones, you should set a “fun” fund beforehand.

Saving money is not for everyone and we know for a fact that in some cases it isn’t even an option. For the times when you need money urgently, call us at Fast Money Loan. You will have cash with no credit check in as little as 30 minutes.

Best budgeting apps

Best Budgeting Apps: Keep track of your income, spending and saving with ease

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Like everyone else, you are probably doing these two things every day:

  1. Looking at your smartphone to check Facebook, read your email, check the weather, count your steps or simply play a game.
  2. Wondering where all your money went.

Keep track of your income, spending and saving with a budgeting app. Turn your smartphone into a personal financial advisor and let it do the budgeting for you.

Downloading a budget app is a simple way to create a budget, learn new positive financial habits and avoid costly mistakes.Best budgeting apps

How to choose a budgeting app

A good budgeting app:

  • Is free – if you are on a budget, you don’t have the extra money to spend on apps.
  • Saves time – the app should streamline typical budgeting activities, like allowing you to scan or take a picture of your receipts, calculating automatically how much you spent or being able to connect to all your devices or accounts, etc.
  • Tracks your expenses – that’s a no-brainer – after all this is the main function of the app.
  • Links to your accounts – it links to your bank accounts and credit cards directly.
  • It tracks your credit score – this is a newer feature on some apps, and we are sure others will catch on – if you can snag a free app with credit tracking – go for it.
  • Identity theft protection – some apps offer alerts if they uncover suspicious activity or inconsistencies.

Top 7 free budget apps to help you manage your money

  • Mint – Mint has been around a long time and is one of the best budgeting apps you can get. It helps create a budget with several spending categories. Then it uses brightly colored graphics to warn the users when they are near the end of the budget in each. It is free and links to your accounts. What’s even better is that it gives you access to your credit score. You can download the app on iOS, Android, and Kindle.
  • BillGuard – The app keeps track of your spending by type, month and location. It links to your account and gives you free access to your credit score. You can upgrade for an annual fee of $83.88 and get credit monitoring and identity theft insurance. You can download the app on iOS and Android.
  • Dollarbird – The app allows you to divide your spending by category and also adds past and future income and expenses to a calendar. Thus, it calculates the impact on your balance. The disadvantage is that it doesn’t link to your bank account. You can download the app on iOS and Android.
  • Good budget – The app uses the envelope budgeting strategy. You can set a budget for each category and it will warn you when the money is about to run out. Then you simply stop spending from this category. It doesn’t link to your account and if you want to sync up to five devices, have access to unlimited categories and five-year history you will need to pay $45 a year. The app is available for iOS and Android.
  • Level Money – The app recreates the experience of actually opening your wallet. In order to determine how much you can spend per month, week or day, the app subtracts recurring expenses and savings from your income and then distributes the budget according to the period you have set. It links to your bank account and is completely free. The app is available for iOS and Android.
  • LearnVest – The app is quite useful as it categorizes transactions by expense type and helps set and track goals. You can also use it for net worth calculation as well. It links to your bank account and only for $19 per month you can partner up with a financial planner if you wish. The drawback is that it only operates on iOS.
  • Personal Capital – This app offers something more than the usual sophisticated budgeting tools. It can be used to track investments and helps to establish goals and models for retirement, college or other important life events. What’s more, since it links to your account, the app will send recommendations for investment opportunities to people with more than $25,000. The app is available for iOS and Android.

Bonus: You can also install an app that helps you with your saving, without any complications or sophisticated actions on your behalf. Acorns app offers to automate savings for you, thus modeling good financial behavior. You need to select a portfolio of low-cost exchange-traded funds (ETFs) and each time you make a payment with a card connected to the app it will round the amount up to the next highest dollar and automatically invest the difference. You can end up accumulating some nice savings over a year – just keep in mind that since it is invested in ETFs, the value of your savings will fluctuate with the market. The good news is that the service is free to college students and costs about $1 per month for the rest.

Download one of these great apps to optimize your budget and identify why and where you are losing money. Once you master your budgeting skills, you can move on to the next level and start actually making money.