Sunday, February 10, 2008
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Panel On Home Insurance Rates Yields Ways To Shield Floridians
From the Tampa Tribune:
TALLAHASSEE - An unprecedented peek behind the curtain at how homeowners insurance rates are set in Florida has given state lawmakers plenty of ideas to take to bill-drafters in advance of this spring's annual legislative session.
From the way insurers are forecasting storms, to the profits they are allowed to earn, state senators vowed Tuesday to continue to tweak regulatory statutes to help provide lower premiums for homeowners.
"I don't think you're ever going to see the day again in Florida where insurance providers may assume that they can just throw something at the wall and see what the consequences are if it is not carefully thought through and justified in every detail," said Sen. Jeff Atwater, R-Palm Beach Gardens, co-chairman of the Senate Select Committee on Property Insurance Accountability.
But it's not just greater scrutiny of rate proposals that lawmakers are considering after a grueling two days of testimony at the state Capitol from regulators and executives of five of the state's major home insurers.
"What we're finding out also," Atwater said, "is if there is any more we can do legislatively that doesn't harm the creation of a vibrant marketplace, but at the same time protects consumers from an industry that is beginning to use alternative sets of information at their whim when people are already on their knees."
Home Insurance Important For Mortgage Holders
From MoneyHighStreet.com:
While car insurance is vital for drivers as it is a legal requirement, home cover is probably the second most important insurance available to consumers.
That is the opinion of Graeme Trudgill, technical and corporate affairs executive of the British Insurance Brokers' Association (Biba), who said that last year's flooding had demonstrated that around 25 per cent of homeowners did not have this sort of insurance.
He explained: "Home insurance is absolutely the second most important insurance you can buy. The first is motor insurance if you have a car because it is a legal requirement but home insurance is critical for several reasons.
"Firstly, if you have a mortgage there will be a contract between you and the mortgage provider which almost certainly says that you have to take out buildings insurance and if you don't you will be in breach of your mortgage contract."
Mr Trudgill added that all a person's "worldly goods and investments" are generally tied up in their home and that they could effectively lose everything if they do not invest in home insurance.
"Insurance premiums for buildings and contents insurance have hardly changed in the last ten years - they are very low, they are great value for money and it's really competitive out there at the moment," he concluded.
While car insurance is vital for drivers as it is a legal requirement, home cover is probably the second most important insurance available to consumers.
That is the opinion of Graeme Trudgill, technical and corporate affairs executive of the British Insurance Brokers' Association (Biba), who said that last year's flooding had demonstrated that around 25 per cent of homeowners did not have this sort of insurance.
He explained: "Home insurance is absolutely the second most important insurance you can buy. The first is motor insurance if you have a car because it is a legal requirement but home insurance is critical for several reasons.
"Firstly, if you have a mortgage there will be a contract between you and the mortgage provider which almost certainly says that you have to take out buildings insurance and if you don't you will be in breach of your mortgage contract."
Mr Trudgill added that all a person's "worldly goods and investments" are generally tied up in their home and that they could effectively lose everything if they do not invest in home insurance.
"Insurance premiums for buildings and contents insurance have hardly changed in the last ten years - they are very low, they are great value for money and it's really competitive out there at the moment," he concluded.
Saturday, January 12, 2008
Lending crisis has many faces
From the Charlotte Observer:
But a wave of home-loan defaults, particularly in the high-interest sub-prime area, tightened lending standards across the country. Like a river in a drought, home-loan money began to dry up.
Rainer, who said she lost nearly 70 percent of her practice, now focuses more on criminal defense and personal injury law.
"It was drastic; it was like the ball dropped," said the 38-year-old, who had to change her spending habits. "I had to beat the bushes to develop those other areas of my practice."
It's true that real estate agents, mortgage lenders and builders are on the front line of the housing market and are most affected by a housing crunch. But a supporting cast also feasts when markets are fat and feels hunger pangs when sales thin -- as has happened in Charlotte the past six months.
They are home insurance agents, inspectors and real estate attorneys, like Rainer. They are home appraisers, like Jeff Taylor, who have witnessed it firsthand.
Taylor, 41, has worked in the field for 17 years. Appraisers' clients, usually lending institutions, need to make sure a property is worth the selling price or close enough to it. So they hire Taylor and others in his field to have a look and estimate values.
A typical appraisal costs $300-$400. It's the key to how much a potential buyer can borrow for a mortgage. Overly generous appraisals have been blamed, in part, for the current housing crisis around the country. This is the worst market Taylor has seen, he said.
Want to be Richer in 2008?
Sanjay writes:
Some wise people have made a smart new year's resolution for 2008: to manage money better. Are you one of them? We have a checklist of ideas to help you get started. So, whether you take a loan or are planning to invest, keep these thumb rules in mind.
Smart loan mantras
� Borrow money to buy ONLY useful assets, such as a home, a car or to fund your education. It's a strict �no-no� for personal loans, credit card loans and if you plan to take a holiday on equated monthly installments (EMI).
� Your EMI for all loans put together should not exceed more than 40 to 50 per cent of your take-home salary.
� Before opting for a loan, shop around for the cheapest interest rate.
Getting insured?
Buy insurance when you really want to be insured, not when you want to invest or save tax. Your insurance policy should provide financial security to your family, and here's why you must opt for one:
� For protection against medical emergencies. Opt for a mediclaim policy.
� For protection of life or disability. Opt for a term or accident policy.
� For protection of home loan. Opt for a term or mortgage policy.
� To protect your home and valuables. Opt for a home insurance policy.
Insurance plans like endowment, money-back, whole-life or unit linked schemes are not mentioned in the above category, because these are complicated, not to mention rigid; hence they should be preferably avoided. Remember, we are looking for simple, cheap, yet effective insurance plans.
Improve your home with caution
Gracy writes:
Many people keep on saving money so that they can build a home of their dreams. If you are already a homeowner, you might well have plans to improve your home and raise your standard of living. Very often, people find that home improvement is not an easy task especially when their old home requires a lot to be done. A limited budget is often cited by the homeowners as a reason for holding their home improvement plans.
If you are interested in carrying out home improvements, some precautions should be taken. All plans regarding remodelling and expansion of your home have to meet the required sanction of the local councils. You should take care that all the necessary sanctions have been taken before executing any home improvement plan.
Any liability or expenses incurred before taking sanction may prove costly if, later on, the concerned authority refuses to approve your plan. It is always better to exercise precaution than regret later on.
Another precaution that a homeowner should take when improving home is regarding the home insurance clauses. As is obvious, do-it-yourself home improvement is very popular among the UK residents but this type of home improvement may violate some of the clauses of your home insurance policy. You are required to check with the insurance company that what types of DIY home improvements will not violate the insurance policy in respect of your home. If you do not take care regarding this aspect, the insurance company might refuse to compensate in case of any loss arising during the home improvement process. As far as funds required for home improvement is concerned, you can always pledge your home and take homeowner loans of upto £250,000. Of course, the loan amount will depend on many factors like loan-to-value ratio, lender’s policy and your credit rating.
Secured homeowner loans are secured against your home and this may lead to repossession if you fail to repay the loan instalments in time. To avoid taking such a risk, many people prefer taking unsecured homeowner loans. These loans do not require any security and are quickly available. The interest rate may be a little bit higher compared to the cases where you have to provide a security. Almost all types of loans are available on the Internet and the best part is that the online lenders process your loan application quite quickly. Before taking any loan offer, you can also consult an independent financial adviser so that the best possible decision can be made.
The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. She has done her masters in Business Administration and is currently assisting Loans-Bazaar as a finance specialist. For more information visit on Bad Credit Loans visit www.loans-bazaar.co.uk
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