Insurance Term

Tuesday, June 19, 2007

Term Insurance Explained

Life insurance comes in two types – temporary and permanent. Most people have some type of temporary insurance either as a term insurance policy, mortgage insurance, or group insurance policy (likely through work or an association plan like an automobile club). Some also have permanent insurance either in the form of whole life, insurance, universal life insurance, or Term to 100 Insurance. ce.

The purpose of this insurance is usually for a short term or temporary need (to age 55 or 65 while the family is growing up and you are saving for retirement. It is to provide cash in the event of your death so those who depend on you will have the money to:

Settle your debts – mortgages, loans (business & personal), remove guarantees, make up for the income you provided to the family – Remember the impact of inflation when doing this calculation. At 3% inflation, a need to supplement income by $25,000 will grow to $50,000 in 24 years.

Provide for children’s education, marriage etc.

Complete the funding for your spouses retirement plan – very important and why many need some term insurance to age 65 – this can also be a consideration for those looking for permanent insurance as well.

For businesses, it can be to fund a buy/sell agreement or to provide insurance on a key employee to provide cash to find a new person, absorb the financial shock of the loss and have additional funds to pass on to the family.

You can see the temporary nature of this insurance. It has a specific relatively short term purpose which will no longer apply by at least age 65. This insurance can be very inexpensive for the amount you are purchasing ($1 million can cost between $60 and $100 per month depending on age, sex and smoking habits) because most people will never collect it. It is purchased to cover you life when you are relatively young and the need is frequently gone by age 55 or age 65 for some of those concerned about saving for retirement.

It generally comes in 5, 10, 15, and 20 year terms. This means that the premiums are guaranteed for that period of time and they will automatically renew at a higher rate for the next term period. For example, a 10 year term policy has guaranteed rates for the first ten years and then you can renew it for another ten years without a medical at a set rate contained in the policy. Do not renew it if your health is good as the renewal rates can be 25% to 100% more than the premiums if you shop around for a new policy. The assumption is that you only renew if you are too sick to get a new policy.

Money Saving Tip 1: Over half the people renew term insurance and pay these high premiums – get a new policy – with preferred term rates it might be less than you were paying.

At one time, insurance premiums were divided into smokers and non smokers. However, the companies now have statistics that enable them to determine those who are least likely to die based on lifestyle, family history and blood pressure and some measurements they get from blood samples, such as cholersterol levels. About half the people will qualify for a preferred rate. At the time of this writing, a 35 year old should be able to purchase $500,000 for about $35 per month at regular rates but preferred rates would be in the $25 per month range. Some companies also offer a preferred smoker rate for those who would qualify for a preferred rate but they smoke.

Finally, there is the issue of convertible. You will see most policies are renewable which means you can renew them for another term of say 10 years and convertible. Convertible means you have the right to convert all or part of the policy to a Permanent Policy at any time during the term without a medical. You just pay whatever the rates are at the time of conversion. If you policy was issued on a preferred basis some allow you to convert on a preferred basis if they have preferred universal life insurance rates. This is an inexpensive option that is usually built into the policy cost and worth the extra price. A few companies will offer policies without this conversion option for a small savings.

Money Saving Tip 2: Ask for preferred rates. Refer to the sample questionnaire to see if you would qualify at Preferred Insurance Levels.

Money Saving Tip 3: There are significant differences between some companies in the percentage of people who will qualify for preferred rates ranging from under 50% to over 75%. Ask me about this.

Money Saving Tip 4: If you are a smoker of cigars or enjoy a pipe, some companies will consider you to be a non smoker. Make sure you get this rate.

It is not expensive to move the financial risks to your family of your death to an insurance company and it is the responsible thing to do.

Remember, the impact of inflation when doing this calculation. At 3% inflation, a need to supplement income by $25,000 will grow to $50,000 in 24 years.

Term life insurance is the original form of life insurance and is considered to be pure insurance protection because it builds no cash value. This is in contrast to permanent life insurance such as whole life, universal life, and variable universal life.

Term life insurance provides coverage for a limited period of time, the relevant term. After that period, the insured can drop the policy or pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.

Term insurance functions in a manner similar to most other types of insurance in that it satisfies claims against what is insured if the premiums are up to date and the contract has not expired, and does not expect a return of Premium dollars if no claims are filed. As an example auto insurance will satisfy claims against the insured in the event of an accident and a home owner policy will satisfy claims against the home if it is damaged or destroyed by say an earthquake or fire. Whether or not these event will occur is uncertain, and if the policy holder discontinues coverage because they have sold the car or home the insurance company will not refund the premium. This is a pure risk protection.

Accident Forgiveness

In most states, customers who have not had an at-fault accident in the previous five years qualify for this program. Accident forgiveness means that GEICO won't add a surcharge to your premium after your next at-fault accident.

Actual Cash Value

The fair market value of property; technically, replacement cost less depreciation.

Actuary

A statistician who computes insurance risks and premiums. Actuaries keep GEICO profitable and financially stable by setting prices, assessing trends, and determining how much to hold in reserve to pay claims.

Adjuster

See Claim Adjuster.

Adverse Carrier

Term used to refer to the other party’s insurance company.

Agent

An individual who acts as a representative for the company and sells insurance, usually on a commission basis. This individual could be an "exclusive" or "non-exclusive agent."

Agreed Price

The price or cost of repairs agreed to by the AD (auto damage) adjuster or independent appraiser and the body shop representative.

After-Market Parts

See "Competitive Auto Repair Parts."

Amendment

A change to the basic policy contract. An amendment alters the policy; an endorsement adds to it.

American International Underwriters

GEICO offers overseas insurance from American International Underwriters through GEICO’s International Insurance Underwriters agency.

Anti-lock Braking System (ABS)

A computer-controlled high pressure system that assists the vehicle’s normal braking system. ABS allows all wheels to slow at the same rate, thereby preventing loss of control.

Anti-Theft Device

A device that deters auto theft. Autos equipped with these devices may entitle you to a discount on your insurance premiums.

Appraisal

Process that determines the value of property, or the extent of damage, usually performed by an impartial expert.

Arbitration

A process of settling a dispute through an impartial party. It is used as an alternative to litigation.

Assigned Risk (AIP)

A driver or vehicle owner who cannot qualify for insurance in the regular market. He or she must get coverage through a state assigned risk plan which specifies that each company must accept a proportionate share of these drivers/owners.

Assured

Means the same as an "insured," "policyholder," or someone who has an insurance policy.

At-Fault

The party that is legally liable for the damages in an accident.

Auto Damage (AD)

Division of the claims department that handles auto claims.

Auto Damage Adjuster

The auto damage adjuster is responsible for writing the repair estimate for your vehicle. This adjuster will also answer your questions about the repair process, your rental vehicle, or your total loss settlement.

Auto Insurance

Auto Insurance provides protection from losses resulting from owning and operating an auto. The insurance covers losses to the insured’s property and losses for which the insured is liable as a result of owning or operating an auto.

Auto Repair Xpress®

GEICO program that maximizes convenience. It allows you to complete your vehicle's repair process at one location. GEICO claims adjusters are on site to facilitate the repair process. Rental vehicle arrangements are available on-site through Enterprise Rent-A-Car. All work is guaranteed by GEICO for as long as you own the vehicle.

Auto Theft

The theft of an auto is a type of loss that is covered under comprehensive coverage.

Berkshire Hathaway

The parent company of GEICO. Other companies in the Berkshire Hathaway group are listed at the Berkshire-Hathaway website.

Binder

A temporary agreement declaring that the policy is in effect. Used in certain cases to protect a policyholder when it is not possible to issue or endorse the policy immediately.

Bodily Injury

An injury sustained by a person.

Bodily Injury Liability Coverage

Pays damages for bodily injury or death resulting from an accident for which you are at fault and provides you with a legal defense. This coverage is subject to the terms, limits and conditions of your policy contract.

Cancellation

Termination of an insurance contract before the end of the policy period, by the insured or insurer.

Carrier

The insurance company or insurer.

Catastrophe

A disaster affecting a specific geographic area. Catastrophes often cause injury or even death; most result in extensive property damage. Hurricanes, floods, tornadoes, and even large hailstorms are typical examples of catastrophes.

Certificate of Financial Responsibility (CFR)

See SR-22

Certificate of Satisfaction

A form signed by the insured when he or she takes delivery of the car from the repairer. It certifies that he or she is satisfied with the vehicle operations, appearance, and visible quality of the repairs.

Claim

Any request or demand for payment under the terms of the insurance policy.

Claimant

Individual or entity presenting a claim.

Claim Adjuster

A person responsible for investigating and settling a claim.

CLUE^® Report

Comprehensive Loss Underwriting Exchange (CLUE) report; provides claim history information.

Collision Coverage

Pays for damage to an insured vehicle when it hits or is hit by another car or object, or if the car overturns. This coverage is subject to the terms, limits and conditions of your policy contract.

Comparative Negligence

A doctrine of law that, in some states, may enable claimants to recover a portion of their damages even when they are partially at fault, or negligent. Each party's negligence is compared to the other's and a claimant's recovery can be reduced by the percentage of his or her own negligence.

Competitive Auto Repair Parts

Parts made by a company other than the manufacturer of the auto. All parts we authorize meet or exceed the quality of the manufacturer's parts, but cost less. GEICO guarantees these parts for as long as you own the car.

Competitive Estimate

A term used when an insurance company requests that you submit multiple repair estimates for consideration.

Comprehensive Physical Damage Coverage

Pays for damage to your car from theft, vandalism, flood, fire or other covered perils. This coverage is subject to the terms, limits and conditions of your policy contract.

Condition

The portion of the insurance contract which outlines the duties and responsibilities of both the insured and the insurance company.

Condo Insurance

A type of homeowners insurance that meets the special needs of condominium owners.

Contributory Negligence

A doctrine of law that, in some states, may prevent claimants from recovering any portion of their damages if they are even partially at fault, or negligent.

Coverage

Protection and benefits provided in an insurance contract.

Customized Vehicle

A vehicle that has been altered or has equipment or accessories not typically found in a personal vehicle.

Damage

Loss or harm to a person or property.

Damages

Money that one party becomes legally obligated to pay to another party.

Declarations

The part of your policy that includes your name and address; the property that is being insured, its location and description; the policy period; the amount of insurance coverage and the applicable premiums.

Deductible

The portion of a claim you pay out of pocket. Choosing a higher deductible will lower your insurance premiums.

Defensive Driver Discount

Certain drivers (usually over age 50) who have voluntarily taken a defensive driving course may qualify for this discount on their auto insurance premiums.

Depreciation

The decrease in value of any property due to wear, tear, and/or time. Generally, depreciation is not an insurable loss.

Direct Check

Direct Check is GEICO’s electronic payment method that lets you to pay your premium online with an electronic check.

Direct Pay

Direct Pay is GEICO’s electronic payment method that lets you pay your premiums with automatic deductions from your checking account.

Discount

A reduction in your premium if you or your car meet certain conditions that are likely to reduce the insurer’s losses or expenses. For example, auto insurance discounts are given for cars with auto theft devices and for drivers and passengers who use seat belts.

Driver Training Discount

A discount for people who have taken an approved driver training course. This discount is not available in all states or for all individuals.

Drive-In

A GEICO office staffed with GEICO employees where insureds and claimants bring their vehicles for damage inspections and estimates.

eBill

An electronic version of your bill that you can review online. Everyone who has registered to use GEICO’s Policyholder Service Center can choose to receive eBills.

Emergency Road Service Coverage

Protection for problems that are not typically handled by your auto insurance, such as:

being locked out of your car
towing not related to an accident
having a dead battery re-charged
inflating a flat tire
filling an empty gas tank.

Endorsement

An addition to the basic policy contract. An endorsement adds to the policy contract; an amendment alters it.

ePolicy

GEICO’s electronic system that allows you to review your policy documents online.

Estimate

An assessment of the cost to repair your damaged property.

Exclusion

Restriction in your insurance policy that limits and may exclude coverage for certain perils, persons, property, or locations.

Expiration Date

This date, found on your declarations page, indicates when your policy coverage runs out. Your renewal policy will start on this date.

Field Adjuster

An insurance adjuster who works primarily outside of an office and often meets personally with the public. Field adjusters can conduct face-to-face meetings, negotiations with claimants, scene investigations, and damage inspections.

Financed Car

A vehicle financed by a loan. The lender retains a lien on the auto until it has been paid off.

First Party

Term used to refer to an insured.

First Party Claims

A claim for damage, loss or injury made by an insured.

Forms

Two types of forms are important in insurance: 1. pre-printed contracts that comprise your insurance policy, 2. questionnaires or coverage selection forms that a policyholder is required to fill out.

GEICO^®

Government Employees Insurance Company and its affiliates GEICO General Insurance Company, GEICO Indemnity Company and GEICO Casualty Company market collectively under the trademarks GEICO and GEICO Direct.

GEICO Direct^®

A brand name that includes all of the GEICO companies.

GEICO Overseas

A program provided by International Insurance Underwriters, Inc. that provides automobile and property insurance outside the United States.

Good Student Discount

May be awarded to full-time students who maintain a grade average of "B" or better.

Hazard

Anything that increases the chance of an accident occurring.

Homeowners Insurance

Protects homeowners from losses to their homes, personal property, and some types of damage or injury to others for which the homeowner is liable. Homeowners insurance is subject to the terms, limits and conditions of your policy contract.

Indemnity

Compensation for a loss intended to restore an individual or entity to the approximate financial position prior to the loss.

Indemnification

The act of providing compensation for a loss with the intent to restore an individual or entity to the approximate financial position prior to the loss.

Independent Adjuster

An individual who estimates losses on behalf of an insurance company, but is not an employee of that company.

Inspection

Verification of a vehicle's physical condition.

Insurable Interest

Exists when an individual would suffer an economic loss as the result of damage to property or bodily injury.

Insurance

Insurance is a system in which groups of people who have similar chances of suffering a loss transfer their risk of loss to an insurer who pools the risk of many people together. In exchange for payment of premium, the insurer promises to reimburse the person for their covered losses.

Insurance Fraud

The act of falsifying or exaggerating the facts of an accident to an insurance company to obtain payment that would not otherwise be made. Common types of insurance fraud are staged accidents, exaggerated injuries, and inflated medical bills.

Insurance ID Card

A card issued by your insurer containing basic information about your insurance policy. Some states require you to keep an ID card in your vehicle.

Insurance Score

Used in the underwriting process in some states. An individual's insurance score is frequently based, in part, on a person's credit history.

Insured

A person or organization covered by an insurance policy.

Insurer

An organization that provides insurance.

International Insurance Underwriters, Inc.

A GEICO-owned subsidiary that provides insurance through American International Underwriters.

Legal Liability

Liability imposed by law, as opposed to liability arising from an agreement or contract.

Leased Vehicle

A vehicle rented under a long-term contract (lease). The leasing company retains ownership of the vehicle and must be shown on your insurance policy as an insured.

Liability

Any legally enforceable obligation or responsibility for the injury or damage suffered by another person.

Liability Adjuster

The liability adjuster handles the investigation of the accident. These adjusters' responsibilities can include collision payments, property damage payments, and bodily injury settlements. In some states, these adjusters may also handle the medical portion of your claim.

Liability Investigation

The process of gathering information to determine the cause of an accident.

Lien

A claim, charge, or encumbrance on property as a security for the payment of a debt.

Lienholder

A person or organization with a financial interest in property up to the amount of money borrowed or still owed on the property.

Limit

The maximum amount of protection purchased by the insured for a specific coverage.

Limits of Liability

The amount specified in your policy up to which the insurance company will protect you.

Loss

Any measurable dollar cost of damage and/or injury suffered by a person.

Loss of Use

Compensation to a third-party claimant for financial consequences resulting from the inability to use property as the result of accident-related damage.

Malicious Mischief

Intentional damage of personal property with malice of forethought.

Material Damage

All property-related damage losses covered by the policy. This includes the following: property damage (PD), comprehensive damage (COMP), collision damage (COLL), Fire/Theft Combined Additional Coverage (FTCA), rental reimbursement (RR), or uninsured motorist property damage (UMPD).

Mechanical Breakdown Insurance

Covers repairs to all mechanical parts of the car, protecting you from expensive repair bills.

Medical Adjuster

The medical adjuster is responsible for reviewing all medical bills, replacement/essential services, and lost wages submitted to the company for injuries sustained by you and/or the passengers in your vehicle (depending upon the state in which you live and the coverage on your policy).

Medical Payments Coverage

Pays medical expenses related to an automobile accident. This coverage is subject to the terms, limits and conditions of your policy contract.

Misrepresentation

To make written or verbal statements that are untrue or misleading.

Motor Vehicle Report (MVR)

A report from the agency that issues your driver’s license, listing accidents and violations that appear on your driving record. This report is used to verify information provided by insurance applicants and policyholders.

Motorcycle Insurance

GEICO® Motorcycle Insurance provides protection from losses resulting from owning and operating motorcycles.

Motorcycle Safety Foundation (MSF)

An international non-profit organization dedicated to motorcycle safety training, research and awareness. Some applicants who complete MSF courses qualify for discounts on GEICO® Motorcycle Insurance.

Multi-Car Discount

Available to policyholders who insure more than one vehicle at the same location.

Named Insured

The person or entity listed on the policy declarations page.

National Insurance Crime Bureau (NICB)

A not-for-profit organization that partners with insurers and law enforcement agencies to facilitate the identification, detection, and prosecution of insurance criminals. The NICB receives support from over 1,000 property/casualty insurance companies.

Negligence

The failure to exercise the care that is expected of a reasonable person in similar circumstances.

No-fault Insurance

May pay for your medical treatment, lost wages, or other accident-related expenses regardless of who caused the accident. This coverage is subject to the terms, limits and conditions of your policy contract and is not available in all states.

Non-Renewal

When an insurer decides not to renew a policy at the end of its policy period.

Occurrence

An event, or repeated exposure to conditions, which unexpectedly causes injury or damage during the policy period.

Original Equipment Manufacturer Parts

Auto parts obtained from the original manufacturer of the car or the supplier of the original part.

Overseas Insurance

Auto and Property Insurance for those living abroad is available from American International Underwriters through GEICO’s subsidiary, International Insurance Underwriters.

Passive Restraint System

A passenger safety system, such as an air-bag, that activates automatically in the event of an accident.

Payment Plans

Your auto insurance premium can be paid using one of our installment payment plans; you make several smaller payments but incur a service fee.

Payment Recovery

If your car is damaged because of another driver's negligence and you ask GEICO to settle the claim for damage to your vehicle, we will seek to recover your deductible and our payments from the other party. This process of payment recovery is also called subrogation.

Payment Recovery Adjuster

The Payment Recovery Adjuster is responsible for recovering your deductible from the other party's insurance company.

Peril

A danger or hazard that can cause a loss, for example, a car collision with an object, or a fire.

Personal Injury Protection

Personal Property

Property that is not land or connected to land (real estate), such as furniture or jewelry.

Physical Damage

Damage to property.

Policy

A contract between you and the insurance company.

Policy Change

Any change made to your insurance policy during the period that the policy is in force.

Policyholder

The person or entity listed on the policy declarations page.

Policyholder Service Center

Refers to geico. com’s online system for managing your car insurance policy online, also known as mypolicy.geico.com

Pre-accident Condition

The state of the vehicle before the accident, including damage not related to the accident, mileage, options, and other factors.

Premium

The price of the insurance policy that the insured pays in exchange for insurance coverage.

Primary Insurance

Insurance that must be maintained as a condition of the GEICO Personal Umbrella Policy (GPUP). Primary insurance acts as the first layer of coverage on common types of losses. This usually includes auto, motorcycle and homeowner insurance, but may also include boat insurance, commercial liability or some other policy. Please check your insurance policy documents for more detailed information.

Proof of Loss

A statement made regarding the extent of the claim; it may be requested in accordance with the conditions of the policy.

Property Damage Liability Coverage

Pays for damage to someone else's property resulting from an accident for which you are at fault and provides you with a legal defense. This coverage is subject to the terms, limits and conditions of your policy contract.

Proximate Cause

An act or omission initiating an unbroken sequence of events resulting in injury to a person or damage to property.

Quote

A statement of the premium that will be charged for insurance coverages based on specific information provided by the person requesting the quote including drivers, vehicles, and driving record.

Rate

Often used as a synonym for premium but actually refers to the base rating units that are used to determine the final premium.

Rating Plan

The rules that determine the cost of your insurance premium. These rules modify the base rates by applying discounts and surcharges based on your personal characteristics, for example, using your seat belt, insuring more than one car.

Reinspection

A review of an estimate or appraisal done by an adjuster during or after repairs to a vehicle. This is done to guarantee the accuracy of staff or independent auto damage personnel, and to guarantee that the work required in an estimate or appraisal is being completed by the body shop.

Release

Legally binding contract stating that all obligations past, present or future arising from a particular accident or occurrence have been fulfilled.

Rental Reimbursement

Optional coverage that helps pay rental vehicle costs when your insured vehicle is disabled as the result of a covered accident or loss. Available to most policyholders for an additional premium.

Renewal Date

The date that your insurance policy expires and the date that your renewed policy will begin.

Renters Insurance

Insurance that provides protection from losses that arise out of the rental of a home. Protection covers losses to the insured’s property, not to losses that occur as a result of owning a home.

Replacement Parts

Several types of parts may be used when your vehicle is repaired: new parts, both original equipment manufacturer and after-market; and recycled parts. New or after-market parts will be used if we can't find like-kind and quality recycled parts. A 5-year-old car, for instance, would be repaired with parts at least as good as the parts that had been in the car. We guarantee the after-market parts used for these repairs for as long as you own the car.

Resident Adjuster

Staff adjuster who handles claims in remote areas of a region.

Rider

In motorcycle insurance, a rider is someone who will operate the insured motorcycle. In life and health insurance, the term "rider" is often used to refer to an endorsement to an insurance policy.

Risk

The chance of suffering a loss.

Salvage

Damaged property which is taken over by the insurance company after payment of a claim.

Select Repair Shop

Body shops chosen by GEICO that are authorized to handle the repair of insured vehicles without the need for an inspection by a staff adjuster. Vehicle owners always have the right to choose the body shop of their choice.

Self-Insured Retention

In umbrella insurance, self-insured retention is similar to a deductible in other types of insurance. The self-insured retention is the amount of damages for which the policyholder is responsible before the umbrella coverage begins to cover a loss.

Special Investigation Units

GEICO helps fight fraud through its special investigation unit, staffed with experts in fraud detection and investigation.

SR-22, Certificate of Financial Responsibility (CFR)

An SR-22 (CFR) is a certificate mandated by the state to verify that an individual is maintaining auto insurance liability coverage. If a person needs an SR-22 (CFR), they will usually be notified by their state's Motor Vehicle Department.

Staff Adjuster

Individual who is employed by GEICO to handle claims.

Subrogation

If your car is damaged because of another driver’s negligence and you ask GEICO to settle the claim for damage to your car, we will seek payment recovery (including your deductible) from the other party. This process of payment recovery is called subrogation.

Sunny Day Lay-Up Program

GEICO® Motorcycle Insurance Sunny Day Lay-Up Program gives riders who don't normally use their cycle in the winter a credit on their premiums, but it covers the rider and cycle year round.

Supplement/Supplemental Estimate

Used to cover damage not included in the original estimate.

Theft

The unlawful taking of another’s property with the intent to permanently deprive the owner of its use or possession.

Third Party

Person or entity not party to an agreement but with an interest in the agreement.

Third Party Claim

Claims for injury or damage to property of a third party alleged to have been caused by the insured.

Tort

A private or civil wrong or injury, other than breach of contract, which violates a person's legally protected right(s), and for which the law may permit a remedy in the form of money damages.

Tortfeasor

One who commits a tort (see above).

Total Loss

Property that has sustained damage so extensive that repairing it is not reasonable. A vehicle is considered a total loss if it cannot be repaired safely, if repairing the vehicle is not economically practical, or if state regulations require us to consider it a total loss.

Towing and Labor Coverage

Provides insurance if your auto needs to be towed or requires roadside assistance.

Umbrella Insurance

Provides high limits of additional liability coverage above the limits of your homeowners and auto policy. In addition, it provides coverage that may be excluded by other liability policies.

Underwriting

The process an insurer goes through to determine whether or not it will provide coverage for an applicant.

Uninsured Motorist Coverage

In some circumstances, may pay for your injuries or property damage caused by an uninsured motorist or, in some states, an unidentified driver. In some cases it also includes coverage for underinsured motorists and at-fault drivers with insufficient insurance to pay your claim. This coverage is subject to the terms, limits and conditions of your policy contract.

Vandalism

Destruction or defacement of property.

Vehicle Identification Number (VIN)

A 17-digit number assigned to each vehicle manufactured in the United States after 1980. This number is used for identification purposes and is visible on the dashboard when viewed from the outside of the vehicle.

Warranty

A written guarantee of the integrity of a product and of the manufacturer's responsibility for the repair or replacement of defective parts.

The basics of travel insurance

While travel insurance was formerly looked upon as a luxury, consumers concerned about whether their vacations can be canceled by incidents outside their control, or worried about the quality of medical care in the area they are visiting, now view travel insurance as a good value. Generally, a comprehensive travel insurance policy costs 5 to 7 percent of the price of your trip.

Before buying travel insurance, be sure you don't already have sufficient coverage through your home insurance, health insurance, or as a perk on your credit card if you charged your trip.

What to buy

A travel insurance policy usually offers two coverages: trip cancellation/interruption and emergency medical evacuation. Reimbursements for lost baggage or trip delays are nice if they come bundled with trip cancellation/interruption or emergency medical evacuation, but they're usually not good buys on their own. If you have absolutely no health insurance, or if your health plan won't cover you at all while you're abroad, then you should look into medical or hospital coverage. Be sure to check your health insurance policy carefully.

Trip cancellation/interruption coverage will reimburse you for any nonrefundable deposits you put down on a trip or cruise if it turns out that you won't be able to go after all, or if you have to leave early. The catch? It will only pay out if you have to cancel or leave early because of a covered reason. That's why it's so important to read the fine print. Some policies will cover only medical reasons (say you're admitted to the hospital), and some will not cover pre-existing medical conditions like an old back injury flaring up).

Trip cancellation/interruption will pay the difference between what you can get refunded from the cruise line, tour company, or airline, and what you originally paid. That means that you must seek a refund first with the tour company before you file a claim on your trip cancellation/interruption insurance.

Trip cancellation/interruption policies may also cover "unforeseen emergencies," such as an accident on the way to the airport, a hijacking, a natural disaster, a fire or flood at your house, or a call to jury duty. However, they probably still won't cover you if you change your plans, if your job forces you to stay in town, or if you can't go because of personal finances. Travel insurance in general also excludes self-inflicted injuries and problems arising from the use of illegal drugs.

If your cruise line or touring company goes out of business, your trip cancellation/interruption policy may cover the loss. If you bought the policy from the tour company itself however, chances are you're out of luck. Your coverage also depends on how the policy is written: Some will only pay out if the company ceases all operations for 10 days or more, or if it files for bankruptcy. But many touring companies never bother to file for bankruptcy — they just disappear. And if your trip operator closes down for just a few days, it can still mess up your plans. If you're up on top of a mountain and break your leg, or if you're in the depths of the Amazon jungle and you get a fever, emergency medical evacuation coverage will pay for the cost of transporting you to safety and, in some cases, all the way home.

This is coverage for the really big problems such as a helicopter rescue, which can run you as much as $20,000, or the cost of your trip back to states. It makes the most sense to buy this coverage if you're going on an adventure vacation or to an area where you'll be far from modern medical facilities. In such situations, you should make sure you've gotten all the recommended vaccinations. It's also a good idea to bring along an emergency kit with medical supplies. If you are going to be engaging in risky behavior like hunting big game, mountain climbing, or skiing, make sure that your policy covers such situation.

If you have health insurance, find out from your health plan what benefits apply when you're abroad. If you won't have any health coverage while you're traveling, you might want to look for a travel insurance policy that includes medical coverage. You'll probably get the best buy if it's bundled with trip cancellation/interruption or emergency medical evacuation coverage, although there are companies who specialize in health care and "general assistance" for travelers abroad. You should know whether the policy will actually pay for the medical care up front, whether you have to get approval from the insurance company's medical specialist before you can get care, and if there is a referral line for you to call. Be cautious about salespitches that play on your fears.

How much does it cost?

Most comprehensive travel insurance policies, which include travel medical coverage, medical evacuation, and trip-cancellation or interruption insurance, cost between 5 and 7 percent of the price of your trip. Prices are based on your age and the cost of your trip — where you're traveling generally doesn't factor into the price — as well as the amount of medical coverage and baggage-replacement insurance you buy.

So, if you're taking a weeklong tour of England or Ireland that costs you about $1,000 per person, you should expect to pay between $50 and $70 each for a travel insurance policy. If, on the other hand, you're planning a two-week cruise of the Caribbean — from $3,000 to $5,000 for a stateroom — it could cost as little as $150 to as much as $350 to insure your vacation.

What about safaris in the Australian outback or the African Serengeti? With tours running upwards of $4,000 and airfare that could top $2,000, you should expect to pay $300 to $420 per person for travel insurance on these adventure getaways.

Where to buy it

Many travel agencies, cruise lines, and tour companies sell travel insurance directly, but it's not really the best way to buy it. While prices are sometimes better, the coverage is likely to carry more exclusions. Buying insurance through a cruise line or tour company also means you probably won't be able to collect if they go under. In general, it's best to buy travel insurance directly from an insurance company.

Top insurance mistakes made when getting married

By Insure.com

1. Buying too much or too little life insurance to cover your new family. If you have people who are dependent on your income, you'll want to make sure they're provided for if you die. Having trouble figuring out how much life insurance to buy? Use the Insure.com Life Insurance Needs Estimator Tool.

2. Depending on the group life insurance available at work. Group life insurance amounts are often inadequate to cover a family's needs, and aren't portable once you leave your job. Lock in your life insurance by buying your own policy.

3. Having the wrong beneficiaries named on existing policies. Is your first spouse still named as the beneficiary on your life insurance? Remember to update these policies as needed.

4. Not getting all available insurance discounts. Do you and your new spouse have auto insurance policies through separate insurers? You may be able to save money by moving to the same insurer, making you eligible for a multivehicle discount and, if you have home or renters insurance though the same company, a multiline discount.

5. Not understanding coordination of health insurance benefits. If you have health insurance but are also insured under your spouse's plan, you'll want to understand the "coordination of benefits" rules. These rules decide which plan will pay, and for what, when you file a claim.