Insurance and The Gig Economy

Insurance & The Gig EconomyThough the name has been hotly contested, there’s no debate that the gig economy, or the private-citizen-to-private-citizen trade of goods and services, is alive and thriving. From cars to dwellings to clothes to furniture to even friends, app developers have helped facilitate the expansion of a market that lets regular people sell or rent their stuff or labor to strangers online. On the whole, the results have been wonderful. Sellers are finding new, creative ways to bring in extra income, and buyers are happy to spend extra money for a better, more personal experience.

Some dubious scenarios surrounding accident and theft coverage for the sellers in these situations, specifically regarding who’s on the hook for costs, have arisen. One woman publicized a horror story of an AirBNB gone bad when she rented her beautiful condo and returned to find her house trashed, her stuff ransacked, and her memories scattered all over. A man who took odd jobs on Airtasker discovered while he was on a gardening job that the house where he was worked had asbestos. These incidents and more beg the question: Who’s on the hook for insurance in the gig economy?

Insurance agencies got hip to Uber quickly and discontinue the policy whenever a driver has the app open, although Uber allows a small amount of coverage while they’re on the app. AirBNB used to offer nearly no protection whatsoever, but now offers some protection from rare vandalism and theft. Airtasker offers a little insurance to its workers as well, but its policy has a lot of caveats as to which tasks it will offer worker’s compensation for; for example, the business will not offer insurance coverage to building jobs, fitness training, taxi driving, and other “risky” jobs.

The classic argument that the apps offer in court when they’re sued for insurance liability is that the people who use the app do so willingly knowing full well that the coverage is minimal. Furthermore, if a person were doing handiwork for a neighbor without the facilitation of the app, the worker would not expect any sort of compensation in the event of an accident.

Still, there’s a clear void in the market for who’s responsible for accidents that are incurred in the gig economy. Welcome Bunker, an insurance agency that handles the leg-work for freelancers, independent contractors, and other who don’t have employers to cover their risks. Put most simply, Bunker allows contractors and employers to get on the same page regarding required insurance and proof of coverage. While it doesn’t necessarily offer insurance, it does ensure that the employee is covered enough to prevent suits on either side. While the site is still rather young, it’s starting to help fill the coverage void for non-traditional workers.

As the gig economy grows and diversifies, insurance will continue to play catch-up, but if you’re participating in the gig economy either as a buyer or seller, you need to know what you’re covered for on your personal policy and the company’s policy.

High Deductible or Low Deductible?

 

When it’s time to shop for insurance, you may be tempted to pick a plan based on deductibles without knowing the full consequences of what your choice means to your future. Understanding how deductibles work will help you calculate your risk and how to optimize your insurance plan to save you money while properly covering you.

At its most basic, a deductible is the threshold amount an insured person has to pay for a service (accident repairs, an emergency room visit, etc.) before an insurance policy will step in to cover the rest. A premium, conversely, is the amount of money you pay into your insurance on a schedule (yearly, quarterly, etc.). Usually, your premium and your deductible are inversely proportional; that is, the higher your premium is, the lower your deductible is, and vice versa. A plan with low deductibles offers higher coverage, and a plan with high deductibles costs less monthly but demands more out-of-pocket money in the event of an accident.

Note that the deductible is not, in fact, the copayment, or proportion of the cost you’re responsible for. Deductibles exist to deter small claims that an individual could likely pay totally on their own in order to save the insurance company money on petty costs.

When it comes time to decide how much you want to spend on  your premium versus your deductible, there are some important factors to consider regarding your own situation, your budget, and your emergency fund.

Insurance exists to ensure that you’ll be financially stable in the event of an accident or similar tragedy, so picking an premium/deductible package based solely on saving money in the present may not be the wisest solution. Suppose someone chose an insurance plan that demanded a low monthly payment of $100, but a deductible of $3000, for example, confident that nothing bad will happen to them and they can use the extra cash that they won’t be spending monthly on insurance. Such an individual may feel good about spending so little money on a monthly basis to “be covered,” but in the event of an accident, may not have $3000 sitting around to cover costs, so the insurance policy proves completely useless to the person in peril.

Cutting premiums to save money only really works if your emergency fund is well-stocked. That is, if you can easily afford to pay a $3000 deductible in the event of a crisis, then a low premium may be just fine. Without any accidents, the math may look “better” with a low premium, but accidents are just that — unforeseen, unplanned emergencies.

The simple answer to the “high or low deductible” question lies in your ability to pay said deductible in a moment’s notice. Choosing a high deductible for the sake of cutting costs may turn around and bite you if something bad were to happen. Do your math carefully and think about your emergency readiness before you start skimping on insurance premiums.

Car Insurance Coverage Limits: How To Pick The Right One For You

Car Insurance Coverage Limits- How To Pick The Right One For You

When it comes to your car insurance policy, you have quite a few options. It can be difficult to figure out which car insurance coverage limits are right for you. There are a number of aspects that you need to take into consideration. Here are a few things you’ll need to think about when deciding on the right car insurance coverage limits:

  1. Car Payments

You may be required by your loan or leasing company to add comprehensive and collision to your policy. The only thing you’ll need to decide on is your deductible, since the limits of these coverages are equal to the value of the car. You may also want loan/lease gap coverage. If your car is totaled while your insurance settlement is less than the amount you still owe, you may have to pay down a car you can no longer drive. Gap coverage will help bridge the gap between what you still owe and the value of your car.

  1. Assets

If you’re a homeowner with a lot of financial assets, you may want to increase your liability coverage limits above the legal minimums. If you’re in an accident that you caused and your liability limits are too low to cover your expenses, the other party may go after your assets in court. The higher your limits, the more you will be able to protect your assets. If you have a high net worth, you may want to get umbrella insurance in order to protect the assets you’ve attained.

  1. Spending Money

If you set your coverage limit high and your deductible low, you’ll only have to pay a small amount out of pocket after an accident or claim. When setting your coverage limits and deductibles, figure out the amount that you can comfortably afford.

  1. Health Insurance

If your health coverage does not pay for accident-related medical expenses, you may want to add medical payments coverage to your policy. Even if your health coverage does cover these kinds of expenses, your medical payments coverage could assist you in paying the health plan’s deductible. Make sure you look into your health insurance plan before figuring out how much medical coverage to add to your policy.

  1. Driving Ability

If you’re a cautious driver who rarely gets ticketed, you might want a higher deductible and a lower rate. If you’re not a careful driver, you’ll want to consider higher limits because they provide more protection.

  1. The Car You Drive

If you have a new car, you’ll want vehicle-protecting coverages like collision and comprehensive. Collision coverage helps cover damage to your own car while comprehensive coverage protects against theft and more. Those who drive older cars may benefit less from these types of coverage since repairs after an accident might barely exceed your deductible, so you’d be shouldering most of the cost anyway.

There are many factors to consider when it comes to getting the right coverage limit on your car insurance. If you think long and hard about these aspects, you’ll be able to make the correct choice for you.

5 Ways Critical Illness Insurance Can Be a Financial Life Saver

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Almost everyone recognizes that health insurance is an important protection against the devastating financial costs of becoming sick or injured. However, many people are unaware of how helpful critical illness insurance can be. This form of insurance gives you a lump sum if you contract an illness that is covered with your policy. If you get one of the illnesses that is specified on your policy, the extra money can be extraordinarily beneficial.

Avoid Loss of Income

Having a chronic illness can be devastating when it prevents a person from going to their job. Though some people may have disability insurance or other forms of coverage, this type of insurance is usually bound by several requirements. For example, a person with cancer may not be able to work for a few days each week, but their insurance might not provide them with anything because they can still work occasionally. There are no limits of that sort on critical illness insurance. Therefore, it will let you focus on getting well instead of worrying about being back at work or stressing about your financial state. This type of income protection will help to lower anxiety while you deal with the critical illness, and it is particularly important for self-employed people who have no chance of continuing to be paid while ill.

Cover Expenses Not Included in Health Insurance

Health insurance is great, but there are plenty of expenses associated with treating a chronic illness that cannot be covered by health insurance. People with severe illness often need to travel to consult with specialists or receive innovative treatments. Though the medical processes will be covered with insurance, plane tickets and hotel fees will have to be payed for the sick person. Other examples of illness related expenses include babysitters, who may be needed to care for the children of a sick parent, or new furniture designed to accommodate a patient on bedrest. All of these small yet necessary expenses can add up to cause financial strain if you do not have extra money from critical illness insurance.

Manage Mortgage and Car Payments

The modern family tends to have several loans that require regular payment. When you are ill, your family’s property may be put at risk due to diminished earning capability. This situation is actually one of the main issues with chronic illness that this type of insurance was designed for. It was created by a heart surgeon who wanted to save his patients from the financial stress and worry that happened after they had heart attacks and were unable to work. Many financial experts recommend that you make sure your critical illness insurance is at least enough to cover two to five years of payments for essential items.

Paying for Deductibles and Copays

Many people opt for health insurance plans with high deductibles and copays. When you are healthy, this can seem like a wise move because it lowers your monthly premium. However, it can become quite problematic when you actually get sick. Even though the health insurance will be quite beneficial, you might still end up needing to pay thousands of dollars in medical bills depending on your own unique insurance plan. It also tends to cost the insurance user more to go to out of network health care professionals, and chronic illnesses often require visits to out of network specialists or emergency trips to out of network hospitals. There are a lot of out of pocket expenses associated with the typical health care plan, and paying for all of them may be difficult or impossible. Critical illness insurance helps you to avoid diminishing your savings or going into debt because of medical bills.

Renovate a Home to Aid in Illness

When a person becomes disabled even temporarily, a typical home suddenly becomes inconvenient and potentially dangerous. Plenty of chronic illnesses, such as a stroke or multiple sclerosis, can greatly incapacitate a patient. Adding ramps, wheelchair lifts, widened doorways, and tub lifts can all be extremely pricey for the average person. However, these renovations are essential to the well being and happiness of a patient, and some families are forced to take out more loans in order to add these important additions. With the lump sum payment from a critical illness insurance policy, you can upgrade your house without having to worry about breaking your budget.

When Should You Review Your Life Insurance Policy?

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A life insurance policy is something we all should have, but it isn’t something you should look at one time and let it go. As a policy that ensures the comfort of your loved ones that rely on your income or support after you pass away, you’ll want to ensure your policy is correct and up to date as possible. Your life insurance policy is actually something you will need to periodically check on, revise, and revisit as you move through life and make major changes.
But what are those changes that would call for a change in your life insurance policy?

Here are six major events that might call for an insurance change.

1. Change of Relationship Status

Now, we’re not talking about every time you go on a new date, but when you get married or divorced, you should take a look at your life insurance policy. If you’re getting married and your spouse will rely on your income, you may want to consider upping your policy. If a divorce happens and the same amount of policy money isn’t needed anymore, you can adjust it back down.

2. Having a Child

Just as marriage or divorce would influence your life insurance policy, so would having a child or bringing on another kind of dependent. For each child you have, you will want to continue to consider if you should up your life insurance policy. If you should pass away, you want to ensure your children are well taken care of. If there is someone out there who relies on your money to live, a good life insurance policy should be in place.

3. Buying a Home

If you’re buying a home that requires a mortgage, you’ll want your life insurance policy to cover the additional cost of the mortgage. If you have such a large debt to continue paying off, it will be placed on someone else in the event of your death. To prevent sending your spouse or children into a debt they can’t afford, ensure your life insurance can cover the cost.

4. Change of Employment

Your life insurance policy should reflect your income, so if you get a raise, a new job, or add another form of income in the form of a side business or part time job, you will want to adjust your life insurance. If your income declines, you may also want to consider checking your policy and ensuring the coverage you have is necessary. This is particularly important when you consider a spouse or children that rely on your income and what coverage they may need if you pass away.

5. Taking Out a Loan

Whether you’re taking out a loan for a car, education, or just to make another large purchase, you’ll want to take a look at your life insurance policy. Depending on the size of the loan and the amount of time you believe it will take to pay the loan off, you may want to up your insurance policy. Similar to point #3, you don’t want to leave your debts in the hand of someone else if you should pass away before they can be paid off.

6. Changes of Beneficiary

Aside from possibly changing the amount of your life insurance policy, you’ll also want to continue to address who the beneficiary of the account is. This will usually change as you go through life. While it may start out as a parent or sibling, you will usually want to change it when you get married. As you get older and have children, you will probably also want to consider adding them to the beneficiaries list. In the event that your main beneficiary passes away before you, you will want to readdress your life insurance policy and make changes.

Your life insurance policy is one of the most important things you should consider. If you have a spouse, children, or other dependent that relies on your income and care, leaving behind a life insurance policy that ensures they don’t need to worry can be a bit of comfort in an extremely tough and confusing time.

You never know what is going to happen in life, so your life insurance policy is not something you want to let go ignored. Making periodic revisions to your life insurance policy can ensure you stay up to date.

5 Facebook Tips For Insurance Agents

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These days, if your business isn’t using social media, you’re missing out on an important opportunity to strengthen your relationships with policyholders. This is especially true for industries that have a longer sales cycle such as insurance. Acquiring a new customer can cost five times as much as retaining an existing customer. But retaining people in the digital age is even more difficult. It requires regular communication that is relevant, engaging, and valuable. Facebook is one of the best platforms to do this. If you’re just getting started with Facebook, it can be overwhelming. Here are a few tips to help insurance agents use Facebook in the most effective way possible:

1) Look Over Your Profile Information

Most people and companies fill out their profile information when they first sign up for Facebook and don’t look at it again for years. Read over your profile information to make sure that it is personable and current, and that it shares pertinent information about your business.

2) Choose Your Profile Picture Carefully

A profile picture is extremely important because it will be connected to everything you post. Make sure to use a professional-looking photo that is high quality. Both personal headshots and company logos work well as profile pictures. If you use a headshot, make sure you’re easy to recognize, and if you use a logo, make sure any text is legible.

3) Include Images In Your Posts

Facebook posts with images receive 2.3 times more engagement than text posts. What’s more, posts with images are 40 times more likely to be shared. To find images for your posts, either use stock photographs or take your own photos. Just make sure the images are high quality.

4) Post Important Information

One thing that you have that your policyholders want is knowledge. You’re an expert in insurance, an area that many people find complex and confusing. Your Facebook page is the optimal place to share bite-sized pieces of insurance information. This will make people feel as if they’re learning something new and getting the inside scoop. These are the types of posts that many people like and share. If they ever need someone who knows a lot about insurance, they’ll turn to you.

5) Keep Track Of Your Peers

If your page has 100 likes or more, you have the option of seeing the page insights of your peers and competitors. Click on the “Insights” tab and scroll down to the section titled “Pages to Watch.” Then, click “Add Pages” and choose at least five pages that you want to keep track of. Then click “Watch Page” for each so that you can compare your number of posts, likes, and engagement on a weekly basis with each of these pages. If you notice that one of these pages has had a very engaged week, visit their page to see what they’ve done and what you can do differently. Another way to stay on top of your peers is imply to like their pages, as well as relevant organizations and publications. This will help you finds articles, videos and other content to repurpose.
Using Facebook for professional purposes can be tricky. But if you follow these steps, your insurance company will be looking great on Facebook in no time.

Hurricane Season, How to Make Sure You’re Prepared

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Coastal residents all over the country are bracing themselves for what is thought to be a rough hurricane season ahead. This years season is predicted as slightly above average. With many named storms predicted it is essential that homeowner’s are protected financially and physically. Here is a list of things to double, maybe triple check before taking the summer by storm.

At Home Checklist

  • Stock up on non-perishable food items prior to storms notices to avoid chaos at the store. Canned goods and bottled water are great items with a long shelf life. In the event of a power outage, candles and battery powered lights can be of great value
  • Prepare a list of emergency phone numbers with long distance contacts to be used after the storm has passed.
  • Formulate a safety plan with your family to assure everyone is informed and on the same page during the storm,
  • Be sure to check the physical structure of your house and minimize vulnerabilities during the storm.
    • Doors, Windows, Sheds, Garages, loose belongings. Etc.
  • Have trees assessed each year to assure they are stable and safe. Trees can cause the most damage to your home during episodes of high wind.
  • Determine a safe area in your home to occupy during the storm. Stay away from windows and near stable structures. Community based safety areas are highly recommended.
  • Stay informed using the National Hurricane Center each week for updates and other hurricane prevention tips.

Insurance

Prior to Hurricane season it is essential to review your homeowner’s insurance policy to find out how you are being covered. In most basic homeowner’s policies damage from hurricanes is partially covered. You are going to want to ensure that your policy has enough coverage to rebuild your home in the event that it is destroyed. Pay mind to the fact that this is the cost to rebuild your home, which differs from what you paid to purchase your home. In regards to water damage from hurricanes, many basic homeowner’s policies cover water damages from internal sources like plumbing but fail to cover larger water damages from flooding. Flood insurance policies can be purchased through just about any insurance provider. Also, in many specific hurricane and flood prone areas many insurance agencies offer hurricane and wind damage deductibles that are calculated through a certain percentage of the home’s value. In addition to protecting your home as a structure, be sure to review insurance policies pertaining to belongings and personal property.

Do College Students Need Life Insurance?

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Some people share the common misconception that we only need life insurance when we get older. However, this is far from the truth. While it might not be necessary for everyone to go out and purchase a plan for themselves immediately, for some people, that might be the smart thing to do. As with any tough financial question, the answer is: it depends on your situation. This post will discuss the importance of having life insurance as a college student. 

There are many different reasons to consider getting life insurance while you are a college student, but we want to highlight two big reasons below.  If these reasons don’t apply to you, it doesn’t mean that you don’t need life insurance, but you still may want to consider it based on your individual needs.

You’re Getting Married

One of the biggest situations where you may want to consider getting life insurance is marriage.  In fact, about 9% of college students are married, while another 15% on top of that are engaged.  And while insurance may not be the first thing on your mind when it comes to your significant other, insuring a new marriage or engagement can help protect a couple against financial hardships.

The amount of life insurance you need should be based on how much you need to protect your spouse and any expenses that you may have together.  This includes things like rent, mortgage payments, or other debts.  In the event of your death, you don’t want to burden your spouse any more by leaving him or her with a pile of bills that they can’t pay.  That is why it is important to make sure that you are both protected as you take this big step forward in life.

You might be thinking “How can I afford life insurance if I’m only in college?”  Jeff Rose, certified financial planner and founder of www.lifeinsurancebyjeff.com says, “Many consumers are convinced that life insurance is way too expensive which is totally not the case.  In fact, for someone in college it should be much cheaper since they are most likely much younger and in good health.  A 26 year old could get a $250,000 policy for around $12 per month. I know that when I was in college and even though I was broke I could come up with an extra $12 per month.”

You’re In Debt

Another instance when college students should consider getting life insurance has to do with student loans and debt.  If you need to get private loans for your education, chances are you had to have someone co-sign the student loan for you (usually a parent).  The trouble with having a co-signer is that if anything happened to the student, the co-signer would still be liable for the debt.

This has happened countless times across the United States, where a child dies, and the parent is not only left without their child, but stuck with student loan debt they have to pay off.  If you are getting your student loans cosigned, use a life insurance calculator to also factor in the costs of having enough life insurance to pay off the loans should anything happen to you. In fact, many parents are happy to pay the premium for that insurance just to be protected.

Do you think that college students should consider getting life insurance?

3 Clever Ways To Save On Auto Insurance

If you own a car, you’re going to have to pay for car insurance. Unfortunately, there’s no getting around it. It’s frustrating, but at least there is a way around paying far too much for your car insurance. It is all too often that consumers pay their bill without really knowing all of the ways to save. It is extremely useful to do a little extra research. There are a number of ways that many people can reduce their car insurance rates. Here are some smart ways to save on your car insurance.

1. Shop Around

It is easy to chose an agency and then just stick with it, but you shouldn’t get so comfortable that you’re not looking for the best deals! It’s important to get at least three price quotes, which can be achieved by either researching the information online or calling the company directly. Depending on what state you live in, your state insurance department may provide comparison of the prices charged by all of the leading insurers.

It’s important to remember that in addition to looking at different insurance companies, you should also look at different types of insurance companies. There are some insurers that sell through their own agents, and others that sell through independent agencies that give policies from a number of different insurance companies. There are also a lot of insurers that will sell to consumers over the phone or the internet.

2. Buy Your Auto Insurance From The Same Company You Buy Your Homeowners Insurance From

There are a number of insurers that give discounts to those who “bundle” more than one type of insurance, or those who have more than one vehicle insured with the same company. Bundling shows that you’re a loyal customer, and for that the company wants to reward you. Make sure you take advantage of these rewards. But even with this idea in mind, one should still consider shopping around. Depending on how much your insurer charges, it’s possible you could save more money buying from different companies than from bundling with an expensive company.

3. Reduce Coverage on Older Car

When it comes time to renew your insurance, you should review your coverage instead of just blindly renewing it. It is important to make sure that your insurance aligns with your current needs. If you car’s value is less than 10 times the premium, buying the coverage will most likely not be cost effective. If you notice that this is the case, it is a good idea to drop your comprehensive coverage, your collision coverage, or both in order to save. There are many user-friendly ways that consumers can research the value of their vehicles online. A couple of the free sites available are Kelley, TrueCar, and the National Association of Auto Dealers (NADA).

Auto insurance is something that all car owners have to deal with. But there are many ways that these costs can be decreased that you may not know about. Make sure you remember these tips when you’re paying your auto insurance so that you can save as much as possible!