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Things to Remember When Shopping for Car Insurance

Things to Remember When Shopping for Car Insurance

Like your real neighbor, State Farm is there to make money. All those shiny geckos, cavemen, jokes, and jingles are in your head because Warren Buffet’s Geico pays a LOT of their hard-earned money to put them there. When you buy a car, the law requires certain levels of insurance, and, depending on who, how, when, what, and where you are, you will pay different amounts for this insurance. It’s all so confusing and annoying–can’t we just pay someone to figure that out for us?

You actually do, and that’s all rolled into the price of your insurance (along with marketing money, operations, etc). A lot goes into determining your insurance premium, and, lucky for you, I spent the majority of my 20s working in at insurance tracking company, and I’m happy to teach you all the ins and outs they don’t want you to know behind the curtains of Oz. Here are a few things to remember when shopping for car insurance.

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We all live in a yellow submarine. A yellow submarine? A yellow submarine...

    We all live in a yellow submarine. A yellow submarine? A yellow submarine…

    If You Have a Loan, You Need Insurance

    Anytime you take out a collateral loan (house, car, RV, boat, motorcycle, etc), you have to buy insurance on it. It’s called Collateral Protection Insurance, and it’s not much different than a store or phone warranty. If you don’t voluntarily purchase insurance, you’ll be saddled with the bank’s inflated Force-Placed Insurance. Assurant (a company also owned by Warren Buffet) ironically has subsidiaries that underwrite both Force-Placed Insurance and cell phone insurance (which is why you’ve never heard of them, despite probably paying money to them).

    Liability insurance is usually standard (meaning the accident’s your fault) for any vehicle. If you don’t own the vehicle, the banks will require certain levels of collateral and collision insurance. Some states are beginning to pull this market-share from the banks, so who’s forcing you to pay varies by state, but you’re paying it either way.

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    Force-Placed Insurance Ruins Lives

    While we’re speaking of the dark underbelly of insurance, it’s important to know that the high price of force-placed insurance is largely responsible for the majority of repossessions and foreclosures nationwide. Basically what happens when you run into financial trouble is you stop paying on your insurance to keep up your rent/mortgage/car/utility/food payments.

    When you avoid that $100-$1000 bill, your bank punishes you by backdating a more expensive policy (4-10x more expensive), and forcing you to prepay the next year’s premium as well. In addition, an analysis will be performed on your loan, and your car or mortgage payments will double or triple. That’s all it takes to push many honest and hardworking people to lose their home and their car within a year. Even if you recover, it’ll take years, as your credit will be ruined, and it’ll take more and more money to get back above water.

    Avoid all of this by keeping up on your insurance, and, when the banks erroneously accuse you of not having insurance, just because you were price-shopping online and the insurance company mailed them a letter to let them know, be vigilant and stern in correcting their mistake immediately. Hold them accountable. Speaking of which—

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    Insurance Agents Are Everywhere–Price Shop

    There’s no reason not to price shop. If you’ve ever travelled on an airline, you know you can use aggregate services like Priceline or Hotwire to get basic prices, but the best deals are always on the airline’s actual site. This works the same way in insurance—no matter how honest a company seems, they really want you to use their service. They may sometimes show a competitor is cheaper, but they’re there to make money as well, and you’re not a part of their family. The very least you can do for yourself is check every company’s website, no matter how many times you’re forced to enter all your info again.

    You May Already Have Insurance

    A lot of insurance companies, such as Erie, Traveler’s, Lloyd’s of London, etc. offer umbrella policies, which can cover your home, vehicles, recreational vehicles, and more. When looking for insurance, check with the company you already have. It doesn’t even have to be a full umbrella policy, car insurance sometimes covers the driver, so you can drive other cars you don’t own without paying extra. Some provide car rentals in case of an accident and/or cover damage to the rental car itself. See what you have before you buy more.

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    Whenever you don't trust a cop, take a picture...

      Whenever you don’t trust a cop, take a picture…

      Extreme Couponing

      Every insurance company has discounts that can be obtained in different ways. Remember your agent is just a sales person. No matter how local they seem, their policies are underwritten by someone bigger than they are, who in turn is underwritten by someone bigger until you get to one of the big guys. If you’re not insured by that structure, you’re borrowing from a legitimate loan shark/bookie/drug dealer, and you’ll probably be brutally killed for not making your payments.

      Because they’re salespeople, agents offer discounts for good grades, reaching a certain age, being born a certain sex, and things like that. They’re not offering these discounts—a billion dollar research project analyzed consumer data and determined how much to charge you to make as much profit as possible while still undercutting the competition. The real deals your agent is offering you are discounts for watching a video, taking a class, or some other menial task—they do that because they’re good sales people, and know it’s subsidized by the government to make the streets safer. Since the government is run by taxes, ultimately, you’re always footing the bill.

      It’s About Who You Know

      If you work in the government, you can get a great deal with USAA. Like credit unions, many insurance companies started as coops. Even Geico stands for Government Employees Insurance Company. By the time you heard of them, they were already huge. That’s the thing about insurance companies—despite what you think from their public face, they hide in the shadows making money. If you’re a teacher, work for a non-profit or tech firm, you may be able to obtain cheap insurance from your occupation. Look into it.

      Long-time customers are valued in any business, so whoever you do pick to insure your car, stick with them as long as you can. They may experience ups and downs, but they’ll appreciate you sticking with them in the long run, and you’ll often be surprised at how much local agents will go out of their way to help long-term customers. Don’t shop for insurance by the flashy ads or from whoever’s offering the best deal up front. Look into their track record, check to see if loss ratios are in line with the competition. Ask friends and family how their company and agency treats them. With a little elbow grease, you can find the right car insurance for you.

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      Published on November 8, 2018

      How to Answer the Tough Question: What are Your Salary Requirements?

      How to Answer the Tough Question: What are Your Salary Requirements?

      After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

      But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

      Unfortunately, this is the wrong approach.

      Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

      Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

      Of course, you can’t command a high price without bringing value.

      The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

      1. Hack time to accomplish more than most

      Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

      With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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      Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

      Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

      For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

      Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

      It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

      2. Set your own boundaries

      Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

      Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

      Here are some important traits to consider:

      • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
      • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
      • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

      These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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      3. Continuously invest in yourself

      Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

      You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

      Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

      Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

      Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

      It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

      4. Document the value you bring

      Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

      To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

      A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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      Here are some ideas:

      • joesmith.com
      • joeasmith.com
      • joesmithprojects.com

      Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

      During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

      5. Hide your salary requirements

      Avoid giving you salary requirements early in the interview process.

      But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

      The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

      Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

      6. Do just enough research

      Research average salary compensation in your industry, then wing it.

      Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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      Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

      Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

      7. Get compensated by your value

      Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

      Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

      Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

      You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

      The bottom line

      You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

      You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

      Featured photo credit: LinkedIn Sales Navigator via unsplash.com

      Reference

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