Save Money When You Pick the Right Car Insurance

Some California drivers think they can save money on car insurance by cutting corners. Their reasoning generally goes something like this: “Why should I pay more money to cover unlikely situations? I can probably just cover the basics and save big.” However, this is only true if you have the good fortune to avoid any unexpected and unforeseen emergencies.

Now, maybe you walk around with a pocket full of four leaf clovers and have the best luck in the world. Or maybe you’re just an incredibly safe driver who has never had occasion to worry about getting in a freak accident. The trouble with both of those scenarios is that luck has a bad habit of running out just when you need it most. Furthermore, even if you’re a brilliant driver, that won’t necessarily protect you from the mistakes and poor judgment of other drivers. An article from the Sun Sentinel points out that other vehicles cause over 60 percent of motorcycle accidents, and that only 19 percent of car crashes involve a single vehicle. This statistic means that no matter how good you are behind the wheel or handlebars, you need an insurance policy that protects your vehicle…and you.

There’s one thing we should talk about before you decide on a policy, though. As stated above, many people assume they have to choose between having either complete or affordable coverage. That is simply not the case, however, because you can get both – complete coverage at an affordable price.  You just have to choose the right company.

What to Look For

There are lots of great ways you can save money while driving, but getting cheap and unreliable auto insurance shouldn’t be one of them. When you’re looking for auto insurance, you’ll want to make sure that it covers everything you’re going to need. That includes liability, collision, comprehensive, medical, personal injury protection and uninsured or underinsured motorist coverage. You should also pick a company that works with you to determine the right amount of coverage that you’re likely to need. After all, there’s no point in getting too much coverage, either. It’s all about coming up with an efficient strategy to cover all your bases. The right insurance company can make that happen by communicating effectively with you and working to understand your specific individual needs. Insurance can be complicated, however, and sometimes it’s hard to know what to buy, so it might make sense to work with an agent. These professionals know the ins and outs of insurance and they can help choose the coverage plan that’s right for you.

What to Avoid

Avoid insurance companies that claim to save you money by offering less coverage. There’s no point in getting a cheap policy if it isn’t going to protect you when something goes wrong on the road. Getting into a scrape on the highway is bad enough. The last thing you want is to deal with financial problems on top of that. Many discount insurance companies don’t offer you enough coverage to protect you from anything but the most basic and predictable situations. You want to arm yourself with the best coverage you can find, as long as it’s affordable and appropriate. And here’s a good tip: Check out the company’s financial ratings, because you want to make sure they have the resources to pay your claim.

To Sum Up

Picking an auto insurance provider can be a challenging and intimidating task, but it doesn’t have to be. When you choose the right provider, it can make your entire insurance process painless and even helpful. You should feel good about the company you choose, because the reality is that your car insurance company is there to help you when you need it. When you choose a provider, just make sure to keep in mind the most important criteria: affordable rates with coverage suited to the way you drive. Keep away from shady providers who offer incomplete policies, or overly expensive options that try to sell you more than you need. If you can do this, you should be able to insure your vehicle in a way that keeps you safe and your wallet happy.

Is Private Mortgage Insurance a Good Idea?


Private mortgage insurance, commonly referred to as PMI, is insurance which borrowers have to pay in case they cannot afford to pay a 20% down payment. As a borrower, it will cost $50 to $80 monthly. Mortgage insurance reimburses the lender if you default on your home loan. However, it can sometimes become a burden for the borrowers, especially if they do not proceed carefully. As it is based on a percentage of the mortgage loan, borrower is expected to pay each month, it varies depending on borrower’s credit risk and the size of his home loan.

2 Types of Private Mortgage Insurance

Private Mortgage Insurances can be classified into 2 broad categories – Borrower-paid PMI and Lender-paid PMI.

Borrower-paid Private Mortgage Insurance

This type of PMI is where the borrower has to pay insurance premium. Usually, borrower is required to purchase this insurance policy when he is unable to afford the 20% down payment on his home loan. It is also known as Traditional Mortgage Insurance.

Lender-paid Private Mortgage Insurance

The lender-paid PMI is the type where the lender pays the PMI premium cost of PMI but the borrower must bear the premium cost. Most lenders tend to add the extra expense of premium cost to the mortgage loan interest. Lender generally buys the lender-paid PMI policy for high loan-to-value mortgage.

Advantages of Private Mortgage Insurance for the Borrower

It has been established that there are risks associated with private mortgage insurances for the borrowers, which will be discussed in details in a later section. However, there are some up-sides of these insurances as well. One of the biggest reasons why borrowers choose this is because it allows the low income borrowers or borrowers who are in need for large amount of fund the opportunity to buy a home.  Even when the borrowers can pay only a small percentage of the total cost, they can but the home.

In addition to providing shelter, this also helps build equity. They are able to enjoy all benefits as homeowners.

Disadvantage of Private Mortgage Insurance and Ways to Avoid Them

While is seems like a great idea for both lenders and borrowers, there are some downsides associated with PMIs. As a borrower, you may have to pay for a longer period than expected. Some lenders may require you to maintain a PMI contract for a fixed period of time. So, even after you meet the 20% threshold, you may be obligated to continue paying for the insurance.

These insurances are hard to cancel and eliminating the monthly burden is not as easy. The lender might want you to to draft a letter requesting to cancel the PMI. Depending on the lender, the process may take a few months.

Ways to Avoid Risks of Personal Mortgage Insurance

Even though the risks are evident, more and more people are getting personal mortgage loans. They cave in to their financial needs. There are 3 main ways to avoid the risks associated with personal mortgage insurances. They are:

  • Make a down payment which is equal to minimum 20% of the home’s purchase price.
  • Rely on a piggyback mortgage
  • Get a lender-paid mortgage insurance

It is true that Private mortgage insurances are expensive. If you are not confident that you will be able to get 20% equity in the home in a few years, it is suggested to either consider a piggyback loan or give a larger down payment. piggyback loans might be riskier than traditional alternatives but they are tax deductible.  

Before making the final decision, assess both the positives and negatives of getting a Private Mortgage Insurance.