Category Chapter_10

Apr 1 2023

How you drive could save you money on car insurance

Many auto insurance companies offer policies that adjust what you pay based on how much you drive or how well you drive. Here are some things to know when deciding if this type of policy is right for you.

1.    Pay-by-the-mile policies

These policies charge you a base amount plus a fee for the number of miles you drive each month. Most companies measure this through a device attached to your car’s computer. If you have an older car without a connection, ask your company if you can take a picture of the car’s odometer instead.

Pay-by-the-mile policies might be good for people who work from home. Some companies offer a cap on the number of miles you drive each day so you don’t get charged too much for the occasional road trip.

2.    Usage-based policies

Usage-based insurance policies also use a device plugged into the car’s computer or a phone app to monitor how you drive. They look at where and when you drive, how fast you go, and your braking and acceleration habits, among other things.

Your insurance company uses that information along with other factors – such as your age, type of car, and driving record – to set your cost.

3.    Is it a good deal?

These types of policies could lower your premium cost if you drive safely or don’t drive a lot. Be sure to get an estimate and compare it to the cost and coverage of your current policy.

  • The National Association of Insurance Commissioners Drive Check tool can help you figure out if a usage-based policy could save you money.
    • The Federal Highway Administration says the average car is driven 13,476 miles a year, or 1,123 miles each month. If you usually drive less than that, a pay-by-the-mile policy might be a good choice.

4.    What about my privacy?

Here are some questions to ask when considering these types of policies:

  • What device will my insurer use to track my driving? What exactly will be monitored?
    • Do I want my company to have information about my driving?
    • Am I a good driver? Do I think my driving style will help lower my premium cost?
    • How much could I save?
    • Could that information be used after an accident?

For more information, click here.

Teaching Suggestions:

  • Ask students if they would consider pay-by-the-mile auto insurance policy. Why or why not?
  • Ask students to talk to friends or relatives who might have pay-by-mile insurance policy.  What can you learn from their experience?

Discussion Questions:

  1. What type of drivers should consider pay-by-the-mile auto policy?
  2. Under what circumstances pay-by-the-mile auto insurance policy could lower your premium?
Dec 17 2022

Personal Finance Simulations for Budgeting and Investing

Question:  What is a Personal Finance simulation? 

Answer:  A Personal Finance simulation allows students to fine-tune their decisions when they encounter real-life scenarios while taking a Personal Finance course. 

The authors of Personal Finance, 14e and Focus on Personal Finance, 7e have partnered with StockTrak.com to provide students with an interactive learning experience before they leave the classroom.   

The simulation that accompanies the Kapoor Personal Finance texts includes two components–a personal budgeting simulation and an investing simulation.

The Budgeting Simulation

  • Students assume the role of a full-time employee or part-time employee living on their own.
  • Over a virtual 12-month period, students review their estimated income and expenses, create monthly budgets and savings goals, and try to build an emergency fund. Each month takes about 20 minutes to complete.
  • Each month students manage their checking, savings, and credit card accounts as they deal with life’s expected and unexpected events that affect their budget.  
  • Within the simulation, additional personal finance tutorials are available to make sure students are learning about budgeting, banking, credit, employment, taxes, insurance, and more.
  • A class ranking based on net worth, credit score, and quality of life keep the students fully engaged and professors informed of each student’s progress.

The Investing Simulation

  • Students receive a virtual $25,000 in a brokerage account.
  • They can research U.S. stocks, ETFs, bonds and mutual funds and create their own investment portfolio.
  • All investment trades are based on real-time market prices.
  • Within the simulation, interactive tutorials help students get started and provide additional information during the simulation.
  • Students can monitor their performance versus their classmates.  At the same time, professors can track each student’s progress.

And BEST of ALL, with the new partnership between Stock-Trak and McGraw Hill, classes using the Kapoor Personal Finance textbook get a 50% savings when students register for the simulation – only $9.99 per student instead of retail price of $19.99.

Teaching Suggestions

  • Visit StockTrak.com/kapoor to learn more about the Personal Finance Budgeting and Investing Simulation.  You can learn even more by watching a short video or accessing the Kapoor demo materials located toward the bottom of the above site. 
  • It’s easy to get started.  All you need to do is access the above site, register your classes for Spring 2023, and indicate the dates you want your student to have access to the Personal Finance Simulation.  The site will generate a unique link for you to give to your students.
Aug 27 2022

Preparing for Hurricanes

In 2022, the National Oceanic and Atmospheric Administration (NOAA) predicted that 14 to 21 named storms would develop over the Atlantic Ocean during the hurricane season, which runs from June through November. The agency said there could be six to 10 hurricanes including three to six major hurricanes.  Colorado State University experts forecast 20 named storms this year with 10 becoming hurricanes, including five major hurricanes. The good news is that we have time to prepare.

Here are some tips to protect your home and belongings:

  • Consider buying flood insurance. Flood damage isn’t covered by your home insurance. Don’t wait too long: It typically takes 30 days for flood policies to take effect.
  • Write a family disaster plan. Start on the TexasReady.gov website
  • Decide where and how far you’ll go if you evacuate.
  • Build a “go-kit” with food, medicine, clothes, pet food, and other vital supplies.
  • Make a room-by-room home inventory. This could help later if you file a claim with your insurance company.

For more information, click here.

Teaching Suggestions

  • Ask students to search for flood maps at FEMA’s Flood Map Service Center.  Is their area prone to hurricanes and floods?
  • Ask students to use FEMA’s Historical Flood Risk and Cost data to help evaluate the flood risk in their area.
  • Ask students to talk to their home insurance agent about their need for a flood insurance policy from the National Flood Insurance Program.  (If their agent does not sell flood insurance, call 1-800-427-4661.)
  • Ask students if their families are prepared for the hurricane season?  What preparation have they made, if any?

Discussion Questions

  1. Is flood insurance worth its cost?  Who must purchase flood insurance?
  2. Why isn’t flood damage covered by a standard home insurance policy?
  3. Why are flood maps difficult to keep up to date?
  4. What factors determine the cost of a flood insurance policy?
Nov 6 2021

Pay-Per-Mile Car Insurance

During the pandemic and at other times, if you drive very little, consider pay-per-mile car insurance to lower your premium. According to the U.S. Department of Transportation, the average American drives about 13,500 miles a year. Insurance companies estimate that a person would likely benefit from pay-per-mile insurance program if they drive less than 8,000 miles annually.

Pay-per-mile insurance may be appropriate for people who work from home, are in college, regularly use public transportation, or who have a second vehicle that is rarely used. This coverage has a base rate, which is determined similar to traditional auto insurance. After that, the per-mile rate is added on. High mileage, aggressive driving, and overnight driving can result in higher auto insurance rates. 

Usage-based insurance programs use telematic technology with an app or in-car device to track your driving. Instead of in-car monitoring systems, some companies require that you submit a photo of your odometer each month.

Another type of usage-based insurance is pay-as-you-drive with rates based on driving habits. With this coverage, rates may increase as a result of bad driving habits. Behaviors that are monitored include hard braking, acceleration and speed, the time of day you drive, mileage, and cellphone use.

For additional information on pay-per-mile car insurance, click here

Teaching Suggestions

  • Have students talk with others to learn about their current auto insurance coverage and costs.
  • Have students conduct online research for pay-per-mile and pay-as-you-drive auto insurance to obtain additional information on the features, benefits, and drawbacks of these coverages.

Discussion Questions 

  1. What features of pay-per-mile car insurance might be appropriate for you or people you know?
  2. How might a person reduce the amount paid for auto insurance? 
Oct 30 2021

Travel insurance: What does it cover and when do you need it?


Not all travel insurance is the same. Some policies only cover certain kinds of trip cancellations. Here are some questions to help you decide if you need travel insurance and what kind of policy will work best for your trip.

  1. What does it cover?

Cancellations: Some policies will only cover trips canceled for certain reasons such as weather or illness. And policies may have exclusions for cancellations due to a preexisting medical condition or if an epidemic or pandemic is declared. You can also pay more for “cancel for any reason” coverage.

Medical coverage: You can also buy medical policies that cover emergency medical and dental expenses while you’re traveling that aren’t covered by your regular health policy. Some policies cover medical evacuations, which can be costly depending on where you’re visiting and probably wouldn’t be covered by your regular health plan.

Other coverage: You can also find policies to cover medical evacuations, lost luggage, and many other potential situations.

Make sure you know exactly what a plan covers before buying.

2. What’s your risk?

Cancellation penalties: You may be able to cancel some parts of your trip, including hotels and tours, without financial penalty. Check the cancellation policies for each item you’ve booked in advance and see how much money you’d lose if you had to cancel all or part of your trip.

Medical expenses: Check with your health plan to see if it would cover medical expenses if you got sick or hurt on your trip. This is especially important if you’re traveling abroad because most health plans, including Medicare, won’t cover treatment in another country. Think about how you’d get to a hospital or medical care if you’re traveling to a remote area.

Coronavirus risk: Check the Centers for Disease Control and Prevention website for the latest information and guidance related to COVID-19.

3. Am I already covered?

Your homeowners or renters insurance may include travel coverage. Ask your insurer or agent what your policy covers. Some credit cards include travel protections or may offer travel insurance, too, so ask when you use the card for trip expenses.

When you’re planning your trip, consider what you paid and decide if it’s something that makes sense for you. If you decide travel insurance is a good option for you, you can search the internet to compare plans and prices.

For more information, click here.

Teaching Suggestions

  • Ask students if they or their family members have purchased travel insurance.  If so, what have been their experiences?  If not, why they chose not to purchase travel insurance?
  • Ask students to make a list of travel circumstances when it might be wise to purchase travel insurance.

Discussion Questions

  1. Under what scenarios should you spend more money for “cancel for any reason” travel insurance?
  2. Is it better to buy travel insurance from tour operators, cruise lines representatives or travel agents?  Explain.
  3. Is it essential for an international traveler to consider travel insurance?  Why or why not?
Oct 23 2021

NON-OWNER CAR INSURANCE

If you don’t own a car but regularly drive a rental vehicle or another person’s car, consider non-owner car insurance. This coverage provides liability protection to pay for injuries and property damage of others in an accident. Damage to the car you are driving or your injuries are usually not covered. In some states, you may also obtain coverage for uninsured/underinsured motorist protection and medical payment for your injuries. 

Recommended situations for non-owner car insurance include:

  • ·         When using a car-sharing service, such as Zipcar or Turo.
  • ·         To maintain continuous coverage between selling your car and buying a new one.
  • ·         If you frequently rent cars.
  • ·        If you frequently borrow other people’s cars, especially if you want a higher level of coverage than that of the vehicle’s owner.
  • ·         When obtaining or reinstating a driver’s license, some states require insurance to show “proof of financial responsibility.”

If you frequently borrow a car from someone in your household, non-owner insurance is not recommended.  Instead, you should be included as a covered driver since all driving-age household members may be required to be listed on the policy. If you drive rarely, buy insurance when renting a car or you may be covered on the policy of the person whose car you borrow, if driving with their permission.  

To obtain non-owner car insurance, directly contact an insurance company or agent. Most insurers don’t provide non-owner quotes online. Non-owner car insurance usually has a lower cost than the same liability coverage if you owned a car.

For additional information on non-owner car insurance, click here.

Teaching Suggestions

  • Have students contact an insurance agent to obtain rate information for non-owner car insurance.
  • Have students create a visual (poster or slide presentation) describing situations in which non-owner car insurance might be appropriate.

Discussion Questions 

  1. When might non-owner car insurance be of value to a driver?
  2. Describe actions people might take to determine if they have adequate auto insurance coverage.  
May 8 2021

Insurance tips following storms

If your home was damaged by the severe weather, contact your insurance company or agent to file a claim as soon as possible. These tips will help you make the process go smoother:

  1. Keep a list of everyone you talk to at your insurance company.
    Be ready to answer questions about the damage.
  2. Make a list of damaged property.
    Take pictures or videos. Don’t throw anything away until your insurance company tells you to do so.
  3. Take steps to protect your home from further damage.
    Cover broken windows and holes to keep rain out and prevent vandalism or theft.
  4. Try to be there when the insurance company comes to inspect the damage.
    If you can’t stay in your home, leave a note with information on where you can be reached.
  5. Ask your agent about additional living expenses.
    If you’re forced out of your home to make repairs, your insurance policy may pay for some of those expenses.
  6. Avoid fraud (with the following recommendations):
    • Get written estimates.
    • Get more than one bid
    • Beware of contractors who solicit door to door.
    • Check references and phone numbers.
    • Don’t pay up front.
    • Avoid contractors who offer to waive your deductible or promise a rebate for it.
    • Never sign a contract with blank spaces.

For More Information, click here.

Teaching Suggestions

  • What actions should you take to protect your property before a severe storm and floods?
  • Make a checklist of actions that you should take after the storm?  Share the list with other students.

Discussion Questions

  1. Under what circumstances is it better not to file a claim?
  2. If you file a claim and your insurer rejects it, what are your options?  Who should you turn to for assistance?
Jan 16 2021

Home Inventory Update

While insurance may be the last thing on your mind during the holidays, the start of a new year is the perfect time to review your insurance coverage and update your home inventory list. When you reflect on the last 12 months, especially with the pandemic, you might realize that some of those changes could greatly affect your home insurance needs.  So, try starting a new tradition: update your home inventory list. Here are four good reasons to add an annual insurance review and home inventory update to your list of holiday traditions.

  1. Your new gifts may not be covered.
    Your homeowners insurance will cover most of your big-ticket gifts like a big screen TV, new electronics and expensive jewelry, but only up to your policy limits. That’s why it’s important to maintain a current record of all your belongings. Update your home inventory this holiday season so your coverage limits meet your insurance needs.
  2. A lot can change in a year.
    Think about the new “normal” we’re living in with COVID-19. With many people spending more time in their homes, it is not surprising that home improvement projects have increased in popularity. According to a recent porch.com survey, 76% of homeowners have completed at least one home improvement project since the start of the pandemic. Take photos or a video of your remodeled kitchen or bathroom, gather receipts and add them to your inventory list. When you review coverage at the start of the year, you can ensure your new assets are safeguarded.
  3. It will make filing an insurance claim easier.
    The information you put into the home inventory list can make an insurance claim settlement faster and easier. This is especially crucial for high-value items. Don’t forget to document your attic, basement, closets and other storage areas. Can you imagine trying to compile all this information after a disaster? Without a record of your belongings, remembering everything you own or what you’ve lost can be challenging.
  4. It’s free and easy.
    With today’s technology, it’s never been easier to keep a detailed catalog of your possessions.  Keep your home inventory list in a safe place outside your home or cloud-based storage services like Dropbox or Google Drive. Also, your insurance agent will be happy to review your insurance coverage with you at no cost.

Creating a home inventory doesn’t have to be complicated. It can be as simple as standing in the middle of each room and taking a 360-degree video. Tackle this project with your children and show them family keepsakes and their history.

For more insurance information, click here.

Teaching Suggestions

  • Ask students if they rent or own home. Do they have renters or homeowner’s insurance?  Have they prepared a list of their personal belongings?  If not, why?
  • If students don’t have a household inventory, encourage them to prepare a list of their belongings.

Discussion Questions

  1. Why is it important to annually review your home insurance needs?
  2. Where should you keep your home inventory list?
Aug 17 2019

Do You Need Rental Insurance?

Your landlord’s insurance will cover damage to a building or home you rent, but it will not cover your personal items, and yet only 40 percent of renters purchase renters insurance.  But renters insurance is usually affordable.  For people who rent, renters insurance typically includes three types of coverage—personal property coverage, loss of use, and personal liability.  Keep in mind that flood damage is not covered with renters insurance.  Also remember, if you are a dependent, your parents’ home-owners policy may cover your belongings even if you are not living at home.

For more information, click here.

Teaching Suggestions

  • Ask students if they are living on their own and renting an apartment. If so, do they have renters insurance?
  • Ask students to call local insurance agents to get quotes for renters insurance. Do you have to pay extra for expensive items you own?

Discussion Questions

  1. What can you do to cover losses to your personal property due to floods or other acts of God?
  2. What actions can you take to reduce the cost of renters insurance? Should every renter purchase renters insurance?  Why or why not?
Jul 29 2017

Could usage-based car insurance save you money?

  1. How does it work?

Most usage-based car insurance policies have you plug a small device into your car’s diagnostic port, which is usually under the dashboard.  Others use cell phone connections or apps.  All of them send information about your driving to your insurer.

  1. Is it a good deal?

It could lower your premium if you drive safely and don’t drive lots of miles.

  1. How about my privacy?

There are many privacy issues to consider related to these types of policies.

For more information click here.

Teaching Suggestions

  1. Ask students to find out if their car insurer offers usage-based insurance.
  2. Under what circumstance will you consider purchasing usage-based car insurance?

Discussion Questions

  • What might be the purpose of using global positioning systems and other technology in determining the car insurance premiums?
  • Will younger drivers embrace the monitoring devices, especially when car chips allow parents to monitor the speed and braking habits of young drivers?