Dec 24

If your looking for the best way to save on car insurance, then your not looking at price alone. It is important to save money and it is possible, but price isn’t the only factor to look at when shopping for new insurance.

car insurance

Here are a couple of things to consider when shopping for new car insurance:

  1. Price isn’t the only consideration. Any company can save you money by providing less
    coverage. This isn’t the best way to save. The difference between broad form collision and standard is usually $75-100/vehicle. Add that up over 2-3 vehicles and you can save $300-500/year by changing that coverage alone. This isn’t a bad idea to go with standard coverage versus broad form, but you more than likely don’t need to change carriers to save money with this option.
  2. Not all carriers are equal. This is the same as buying off brand shoes or buying Nike. We all know which product is better. With Insurance, you get the same thing. When it comes to making changes to the policy, or most important; paying the claim. Not all carriers do a great job at this. With some carriers even a small change in the policy midterm can completely screw up the billing. This can be extremely frustrating especially if you are having the company take the money out electronically.
  3. Some carriers will just turn around at your first renewal and raise the rates even higher then you were originally paying. This doesn’t save you anything in the long run. This can also happen due to the agent giving discounts that don’t apply. The carriers will remove them at the first renewal.

There are many factors to look at when changing car insurance carriers. The best option is to go with a well know A rated carrier. In most cases this will eliminate a lot of headaches in the long run.

Dec 23

If you have a high-deductible health insurance plan, you should be eligible for a tax deductible health savings account. What this means is that you can set up a savings account (yes, you get paid interest) to deposit money into each year. Since I am single, I can deposit up to $2,800 per year before tax. (If you have a family, I believe this limit is raised to $5,600 per year). This means that I can put $2,800 into my health savings account and write that off. I don’t even need to itemize for that year if I want to take the deduction. The money sits in the account and earns interest tax-free until you need to use it for related medical expenses.

 

health insurance

Here is an example of how this works. I start my high deductible health insurance and tax deductible health savings account on January first, 2008. I start the year off by depositing the maximum $2800 into the account. Throughout the year, I end up incurring $2000 worth of medical expenses which I use my tax deductible health savings account to pay for. At the end of the year, I have $850 left in the account (I made a few extra bucks because of the interest). When it comes time to file my taxes, let’s pretend I made $30,000 in wages that year. Well, since I made that $2800 contribution to my tax deductible health savings account, the government is only going to tax me on $27,200 rather than the full $30,000.

Ok, so I saved a bunch of money on my 2008 taxes, and I have also made a few bucks in interest for my tax deductible health savings account along the way. Now it is January 1st, 2009, and I still have this $850 left in my account. Any remaining balance rolls over. This is just like a regular savings account; its not like a “Flexible Health Spending Account” where the unused balance at the end of the year is lost. So I have this $850 still in my account on January 1. So I decide that I want to make the maximum tax-deductible contribution again, and put another $2800 into the account. Again, I get to write that $2800 off when I do my taxes, and now I have a whole $3650 in my Health Savings account that is just sitting around earning interest.

Remember that you don’t have to choose to throw in a whole $2800 all at once. You can make as many deposits as you want into your account. At the end of the year you total them all up, and you can write off the sum of them as long as it is not over the legal limit (for 2008, the limit is $2800 for single people and $5600 for families).

You can use the money in your tax deductible health savings account for a wide range of health purchases. Not only can you use it to cover any medical bills that are not covered by your insurance (your deductible), you can use it to buy over-the-counter medicine, even diapers!

If you don’t have medical insurance, start looking online for something today. My plan is only $50 a month and has already saved me well over ten thousand dollars in medical bills, not to mention having the tax benefits of the tax deductible health savings account.