t is not a must to have perfect credit rating to get a loan these days. You can find many lenders extending bad credit car financing. You just need to seek them out and learn what you can do to improve your chances of acceptance.
There are lenders who are excellent in dealing with any kind of credit problem. You can approach such lenders and they can help you get a loan with reasonable terms. You might face rejection from quite a few dealerships but these lenders are very knowledgeable and have the ability to get your loan pushed through.
Do not allow dealer to pull your credit, this is a big mistake. You should find a lender who you trust and let him handle your credit issues regularly. Do not allow a lot of dealer to peek at your credit. The more people that inquire into your credit report, the worse it looks to lenders. You should be well aware of your credit report and have a copy of it.
You can discuss about your credit issues with people you trust and who can guide you. But do not let every other person to look at your report. Make sure you have your report pulled by someone who may have a car you are willing to buy else it would hurt your report.
You need to think smart and work around ways to obtain bad credit car financing. It is not very difficult but can be stressful at times. Finally do not forget to trade in. A car that seems of no use can help you get a lower interest rate.
Sunday 13 March 2011
Auto Finance Companies Now Offer You Car Loan Packages
For most people, the purchase of a vehicle through immediate payment is next to impossible. Fortunately though, you can find auto finance companies that specialize in giving car loan financing plans with the intention that everyone might get the car that they've always wanted.
It is the dream of plenty of people to own a car. Mostly every working person would love to own a car, one which they'll use to travel to work to, something he or she can use on a night out of town, something they could drive their loved ones in, just something they can drive around in everyday. A vehicle is likewise the mark of any individual's personal and professional achievement. Above all,it's a symbol of liberty, of the freedom of being capable of go wherever you intend to go, and never be confined by commuting schedules and the restrictions of public transport. Which isn't to suggest that public transportation is restrictive; no, it's simply that a car can present you with more personal freedom in regards to traveling.
For the average person however, a car can certainly be a purchase. The average worth of a car can run into thousands of dollars, and with the recent financial recessions of the past several years, purchasing one can sound impossible when using the average worker's salary. Thankfully though, there are now numerous auto finance companies that specialize in car loan financing, the goal of which would be to assist the average individual get a car, without the need to immediately pay money for the whole amount of the automobile.
People may get car loan financing plans from numerous sources, but three of them stick out the most. These include retail banks, auto finance sub companies that actually work for auto manufacturers themselves, and specialist auto finance companies solely focused on providing consumers with car loan financing packages. Auto financing companies are much more liked by people thinking about buying a car, given that they have more experience and also have good working relations with all the different auto manufacturers. Many businesses provide car loan financing plans to their employees, but instead of the employees purchasing their cars outright with subscription to the plan, the company retains ownership of the vehicle and leases it long-term to the employee.
The most famous car loan financing providers, however, are definitely the companies who specialize solely auto financing packages. There are plenty of these established companies nowadays, and consumers simply have to pick which one they would like to do business with.
An organization that specializes in car loan financing will offer consumers financial packages that may assist them to acquire automobiles with no need to cover the whole amount of the automobile straightaway. Instead, these packages enables the consumer to pay for the car gradually, usually in installment payments over a period of years, depending on the type of auto finance plan they subscribed to.
Additionally, you can find companies now that specialize in auto finance for bad credit. Many people today have earned poor credit ratings because of some circumstance in their financial history. This poor credit rating will reflect negatively on their future financial transactions and will also prevent them from getting car loan financing. Fortunately though, there are companies that focus on getting auto finance for bad credit rating individuals. These companies are experienced with these types of circumstances and will help a person with bad credit get approved for an auto finance plan. This way, just about everyone can get the dream of owning their own automobiles within reach.
It is the dream of plenty of people to own a car. Mostly every working person would love to own a car, one which they'll use to travel to work to, something he or she can use on a night out of town, something they could drive their loved ones in, just something they can drive around in everyday. A vehicle is likewise the mark of any individual's personal and professional achievement. Above all,it's a symbol of liberty, of the freedom of being capable of go wherever you intend to go, and never be confined by commuting schedules and the restrictions of public transport. Which isn't to suggest that public transportation is restrictive; no, it's simply that a car can present you with more personal freedom in regards to traveling.
For the average person however, a car can certainly be a purchase. The average worth of a car can run into thousands of dollars, and with the recent financial recessions of the past several years, purchasing one can sound impossible when using the average worker's salary. Thankfully though, there are now numerous auto finance companies that specialize in car loan financing, the goal of which would be to assist the average individual get a car, without the need to immediately pay money for the whole amount of the automobile.
People may get car loan financing plans from numerous sources, but three of them stick out the most. These include retail banks, auto finance sub companies that actually work for auto manufacturers themselves, and specialist auto finance companies solely focused on providing consumers with car loan financing packages. Auto financing companies are much more liked by people thinking about buying a car, given that they have more experience and also have good working relations with all the different auto manufacturers. Many businesses provide car loan financing plans to their employees, but instead of the employees purchasing their cars outright with subscription to the plan, the company retains ownership of the vehicle and leases it long-term to the employee.
The most famous car loan financing providers, however, are definitely the companies who specialize solely auto financing packages. There are plenty of these established companies nowadays, and consumers simply have to pick which one they would like to do business with.
An organization that specializes in car loan financing will offer consumers financial packages that may assist them to acquire automobiles with no need to cover the whole amount of the automobile straightaway. Instead, these packages enables the consumer to pay for the car gradually, usually in installment payments over a period of years, depending on the type of auto finance plan they subscribed to.
Additionally, you can find companies now that specialize in auto finance for bad credit. Many people today have earned poor credit ratings because of some circumstance in their financial history. This poor credit rating will reflect negatively on their future financial transactions and will also prevent them from getting car loan financing. Fortunately though, there are companies that focus on getting auto finance for bad credit rating individuals. These companies are experienced with these types of circumstances and will help a person with bad credit get approved for an auto finance plan. This way, just about everyone can get the dream of owning their own automobiles within reach.
What Are No Credit Car Loans and How Do You Get Them?
With the handful of credit car loans that continuously grow in number these days, it is easier now to get a car loan that is applicable to your situation. Many of these car loan businesses have flexible terms, which comply according to your financial status, making vehicle financing easier for anyone than ever before.
What are the different types of vehicle loans? What are no credit car loans? What are zero credit auto loans? How are each different or similar to other types of financing?
There are many terms about car financing which you need to educate yourself with. In order to accomplish the first task, allow yourself to learn several definitions of terms that are generally related to car loans. You may find useful websites that provide such information to prospective car buyers and dealers.
One site claims that no credit automotive loan is the least risky and is actually the most reliable type of auto loan. The idea is basically making the car you are going to buy as the collateral itself. There is no other better option for you than this. As well, when you set off to buy a car with no credit at a buy here pay here car lot or even private party, it is yet your first step towards rebuilding your credit history.
As you may already be aware, getting a vehicle loan comes with so many requirements such as important documents that directly reflect your source of income. Of course, it is not that big of a deal if you have them ready on hand. How about if you do not possess any or one of the important documents, such as credit history? Would you still be able to purchase a car through loan? There are indeed more questions about the ubiquitous: what are no credit car loans?
Once no credit loan becomes your record for future financial transactions in car dealings and purchases, dealers and managers might even commend you for taking the level up. Sooner or later, you will eventually obtain some credit, therefore, this first step is quite vital.
Check on some websites that offer free assessment of your application for no credit automotive car loan. While you are at it, why not address them some questions on your mind even from as basic as 'what are no credit car financing?' to 'how many loans could you make at the same time?'. Usually, these business firms would be willing to walk you through the whole thing, considering that you are trying to get a vehicle financed for the first time.
Seek counsel from your friends and family alike, as they may have a plethora of information and what not too, about the actions you are about to take.
What are the different types of vehicle loans? What are no credit car loans? What are zero credit auto loans? How are each different or similar to other types of financing?
There are many terms about car financing which you need to educate yourself with. In order to accomplish the first task, allow yourself to learn several definitions of terms that are generally related to car loans. You may find useful websites that provide such information to prospective car buyers and dealers.
One site claims that no credit automotive loan is the least risky and is actually the most reliable type of auto loan. The idea is basically making the car you are going to buy as the collateral itself. There is no other better option for you than this. As well, when you set off to buy a car with no credit at a buy here pay here car lot or even private party, it is yet your first step towards rebuilding your credit history.
As you may already be aware, getting a vehicle loan comes with so many requirements such as important documents that directly reflect your source of income. Of course, it is not that big of a deal if you have them ready on hand. How about if you do not possess any or one of the important documents, such as credit history? Would you still be able to purchase a car through loan? There are indeed more questions about the ubiquitous: what are no credit car loans?
Once no credit loan becomes your record for future financial transactions in car dealings and purchases, dealers and managers might even commend you for taking the level up. Sooner or later, you will eventually obtain some credit, therefore, this first step is quite vital.
Check on some websites that offer free assessment of your application for no credit automotive car loan. While you are at it, why not address them some questions on your mind even from as basic as 'what are no credit car financing?' to 'how many loans could you make at the same time?'. Usually, these business firms would be willing to walk you through the whole thing, considering that you are trying to get a vehicle financed for the first time.
Seek counsel from your friends and family alike, as they may have a plethora of information and what not too, about the actions you are about to take.
How Many Steps Are You From Getting Car Finance?
5 Steps for Getting Car Finance
Getting approved for finance can be an easy process made harder by being under prepared. Many people will end up disappointed - missing out on the car they wanted because another buyer got the money quickly.
Here are 5 steps that will make the process run smoothly and get you to settlement quicker.
Step 1) Find a Car: If you have found the car of your dreams that's great, if you haven't don't stress but at least have an idea, finance company final approvals are based on the vehicle you buy so if you find a similar model for your first approval it won't pose a problem if you end up getting a slightly different car.
Step 2) Be Prepared: It doesn't matter which lender you use they are all going to want to know allot about you before they hand over their cash. So make sure you have all your information on hand, this often includes drivers license numbers, details about your address (and possibly previous residences), your employers details and also any information about previous borrowing, if you have a partner on the loan you will need to have their information and they will need to be prepared to answer questions as well.
Step 3) Be Available: The lender may require you to send in some documentation, the only hold up at this stage is YOU. Make sure that you have access to a fax or scanner to get this to the lender and that if you are needed to sign the documents that you are available.
Step 4) Read Carefully: Make sure you read the documents carefully and I don't just mean the small print, the documents are a legal document and you need to sign and date in the correct places or new documentation may need to be drawn up.
Step 5) You're Approved: You've got the finance approval you know how much you can borrow, now you need to ACT NOW, find the exact car you want (if you hadn't already) use the approval to bargain with the seller, they will have to provide the finance company with certain documents, collect these, get them to the lender and the next step is settlement.
It can be an easy or hard process depending on how you react to the requirements of the lender, ignore these steps and it could more than a week or you can follow these steps and you will be amazed how quick it can be.
Getting approved for finance can be an easy process made harder by being under prepared. Many people will end up disappointed - missing out on the car they wanted because another buyer got the money quickly.
Here are 5 steps that will make the process run smoothly and get you to settlement quicker.
Step 1) Find a Car: If you have found the car of your dreams that's great, if you haven't don't stress but at least have an idea, finance company final approvals are based on the vehicle you buy so if you find a similar model for your first approval it won't pose a problem if you end up getting a slightly different car.
Step 2) Be Prepared: It doesn't matter which lender you use they are all going to want to know allot about you before they hand over their cash. So make sure you have all your information on hand, this often includes drivers license numbers, details about your address (and possibly previous residences), your employers details and also any information about previous borrowing, if you have a partner on the loan you will need to have their information and they will need to be prepared to answer questions as well.
Step 3) Be Available: The lender may require you to send in some documentation, the only hold up at this stage is YOU. Make sure that you have access to a fax or scanner to get this to the lender and that if you are needed to sign the documents that you are available.
Step 4) Read Carefully: Make sure you read the documents carefully and I don't just mean the small print, the documents are a legal document and you need to sign and date in the correct places or new documentation may need to be drawn up.
Step 5) You're Approved: You've got the finance approval you know how much you can borrow, now you need to ACT NOW, find the exact car you want (if you hadn't already) use the approval to bargain with the seller, they will have to provide the finance company with certain documents, collect these, get them to the lender and the next step is settlement.
It can be an easy or hard process depending on how you react to the requirements of the lender, ignore these steps and it could more than a week or you can follow these steps and you will be amazed how quick it can be.
Ford Car Leasing - The Options
I have been looking for a new car for a while, and a Ford car is looking like a good choice but I need to consider the personal Ford car leasing options that available as I can't afford to buy a car outright.
FordCredit is the manufacturers own finance arm and is one of the world's biggest automotive finance companies. They have finance plans to cater for a variety of needs, and the expertise to help me choose the right option, so I am sure I will find a package that suits my requirements.
Ford Options is a personal contract purchase plan, where I can choose to 'renew', 'return' or 'retain' my Ford car at the end of the agreement. All cars will have a Guaranteed Minimum Future Value (GMFV) so I don't need to worry about the cars value falling by the end of the agreement. I can spread the payments out over 24, 30 or 36 months too, so I can pay what I can afford each month and as the repayments are fixed and regular there won't be any nasty surprises.
If I fancy a new car at the end of the agreed contract I can choose to renew by trading the car in at my local Ford Dealer, or privately once the money have been squared up. Any excess monies over the GMFV can be used as a deposit for a new car. There is the opportunity to renew before the end of the agreement to if I see another Ford car I like the look of, but I will have to settle the remaining balance first which is not ideal.
I can also return the car at the end of the agreement, with no more to pay as long as the dealer deems that the car meets 'fair wear and tear standards' and provided I have not exceeded the agreed mileage. If I decided I want to keep it I can pay the GMFV and purchase fee and its all mine! Luckily the FordCredit will make contact way before the agreement is up so I'll have time to decide what I want to do.
So that's the Ford Options agreement, so what's the Ford Options Cashplan? It's very similar to the Options agreement in that you have a GMFV and the options to renew, return or retain you car, but you don't have regular installments to pay, which is fine as long as you are good at planning your finances. The Ford Options Cashplan can be taken out over 12, 24 or 36 month terms, as opposed to 24, 30 or 36 months for the regular Ford Options agreement.
The last Ford car leasing option is Ford Acquire, a traditional hire purchase plan where at the end of the agreement you will own the car as long as all payments have been cleared. It is probably the most flexible of the finance agreements, as repayments can be paid over anything from 12 to 60 months in installments that suit you.
Personally I think the Ford Options plan will suit me best, I have a regular wage and by paying a fixed amount each month I can budget better. Whichever Ford car leasing agreement suits you though its handy to know you can access account services online so there is always help just a click away!
FordCredit is the manufacturers own finance arm and is one of the world's biggest automotive finance companies. They have finance plans to cater for a variety of needs, and the expertise to help me choose the right option, so I am sure I will find a package that suits my requirements.
Ford Options is a personal contract purchase plan, where I can choose to 'renew', 'return' or 'retain' my Ford car at the end of the agreement. All cars will have a Guaranteed Minimum Future Value (GMFV) so I don't need to worry about the cars value falling by the end of the agreement. I can spread the payments out over 24, 30 or 36 months too, so I can pay what I can afford each month and as the repayments are fixed and regular there won't be any nasty surprises.
If I fancy a new car at the end of the agreed contract I can choose to renew by trading the car in at my local Ford Dealer, or privately once the money have been squared up. Any excess monies over the GMFV can be used as a deposit for a new car. There is the opportunity to renew before the end of the agreement to if I see another Ford car I like the look of, but I will have to settle the remaining balance first which is not ideal.
I can also return the car at the end of the agreement, with no more to pay as long as the dealer deems that the car meets 'fair wear and tear standards' and provided I have not exceeded the agreed mileage. If I decided I want to keep it I can pay the GMFV and purchase fee and its all mine! Luckily the FordCredit will make contact way before the agreement is up so I'll have time to decide what I want to do.
So that's the Ford Options agreement, so what's the Ford Options Cashplan? It's very similar to the Options agreement in that you have a GMFV and the options to renew, return or retain you car, but you don't have regular installments to pay, which is fine as long as you are good at planning your finances. The Ford Options Cashplan can be taken out over 12, 24 or 36 month terms, as opposed to 24, 30 or 36 months for the regular Ford Options agreement.
The last Ford car leasing option is Ford Acquire, a traditional hire purchase plan where at the end of the agreement you will own the car as long as all payments have been cleared. It is probably the most flexible of the finance agreements, as repayments can be paid over anything from 12 to 60 months in installments that suit you.
Personally I think the Ford Options plan will suit me best, I have a regular wage and by paying a fixed amount each month I can budget better. Whichever Ford car leasing agreement suits you though its handy to know you can access account services online so there is always help just a click away!
Why You Should Consider Bankruptcy Car Loans
It is not uncommon for people to often find themselves in debt or other financial difficulties just when they need to purchase a much-needed asset. If you find yourself in such a situation, and have been patiently waiting for years to buy your dream car, you are probably struggling to find a way to make this dream come true. This is especially true if you have been in bankruptcy at some point. You can now put those worries to rest as you have the option of taking out bankruptcy car loans to finance the purchase of the car.
So what is a bankruptcy loan? These are loans that a bank or other financial institutions offer to those who are unable to take out normal loans due to their previous bankruptcy record.
Regardless of whether you have filed for a Chapter 7 or Chapter 13 bankruptcy, all hope is not lost. While the application process is relatively easy both in the UK and USA, you need to know, that even in the case of these auto loans, there is no guarantee that a USA financial institution will lend you this money. You would need to see if you meet certain criteria for you to qualify for such car loans. Typically, they would require the person to have a job and a decent credit record. While most lending institutions expect there to be at least a two-year gap between the time of bankruptcy and the time you decide to take out a loan, some will be willing to lend you the money as long as you make a down payment. This is the case with a few banks. Some other lending companies would also keep the car as collateral. The amount you pay monthly will depend on the price of the car, the down payment amount and of course, the terms of the loan. You should know that if you default on payments, the car will be seized. If you feel that you are unable to afford the high monthly payments, you could always opt for a used car.
You should first embark on finding a financial lending institution that is reputed for offering good loans for those with bad credit or after bankruptcy. A simple search online will give you several companies that are willing to lend to bankrupt. You need to have a look at a few bankruptcy car auto loans before you decide, because not all will offer the same package. The interest rate too may vary and will typically be more in your case as there's a higher level of risk involved.
Bankruptcy Auto Financing, a well-known lender, requires that all applicants earn a monthly income of a $1500, minimum, and that you've been working with your current employer for at least a year. Auto Credit Service is another such reputed provider of auto financing. They however simply require that you are able to guarantee employment for the period of the bankruptcy car loans. Their other requirements can be sound on the website. To get approval, you simply need to fill out a form online to see if you will qualify.
So what is a bankruptcy loan? These are loans that a bank or other financial institutions offer to those who are unable to take out normal loans due to their previous bankruptcy record.
Regardless of whether you have filed for a Chapter 7 or Chapter 13 bankruptcy, all hope is not lost. While the application process is relatively easy both in the UK and USA, you need to know, that even in the case of these auto loans, there is no guarantee that a USA financial institution will lend you this money. You would need to see if you meet certain criteria for you to qualify for such car loans. Typically, they would require the person to have a job and a decent credit record. While most lending institutions expect there to be at least a two-year gap between the time of bankruptcy and the time you decide to take out a loan, some will be willing to lend you the money as long as you make a down payment. This is the case with a few banks. Some other lending companies would also keep the car as collateral. The amount you pay monthly will depend on the price of the car, the down payment amount and of course, the terms of the loan. You should know that if you default on payments, the car will be seized. If you feel that you are unable to afford the high monthly payments, you could always opt for a used car.
You should first embark on finding a financial lending institution that is reputed for offering good loans for those with bad credit or after bankruptcy. A simple search online will give you several companies that are willing to lend to bankrupt. You need to have a look at a few bankruptcy car auto loans before you decide, because not all will offer the same package. The interest rate too may vary and will typically be more in your case as there's a higher level of risk involved.
Bankruptcy Auto Financing, a well-known lender, requires that all applicants earn a monthly income of a $1500, minimum, and that you've been working with your current employer for at least a year. Auto Credit Service is another such reputed provider of auto financing. They however simply require that you are able to guarantee employment for the period of the bankruptcy car loans. Their other requirements can be sound on the website. To get approval, you simply need to fill out a form online to see if you will qualify.
Why Your Credit Score Matters When Purchasing A Car
Your credit score is a numerical representation of your credit history report, which includes details of all your credit accounts and loans, and how good you've been about paying them. It also reports any defaults, repossessions, or bankruptcies. Credit scores, which for most people falls between 400 (poor) and 800 (excellent), are a major factor in determining the cost of buying or leasing an automobile. The score determines what interest rate you'll pay, or even if you can get approved at all. It also determines if you will be allowed to take advantage of special new-car incentives, such as 0% APR loan and lease offers.
There are three major credit agencies in the U.S. - Equifax, Experian and TransUnion. When you apply for a loan to purchase a car, the dealer has to check and give your credit score information to the finance companies they work with. Scores can vary a little or maybe a lot between agencies. Unfortunately, you can't control how the lender interprets your credit score. A score of 700 is considered excellent, for others 720 or higher is considered excellent. A score of 620 while not that bad, may shut you out of a deal with one finance company and / or charge you a higher what they call "subprime" interest rate, costing you more money out of your pocket. If you're in the market for a car and know you want to finance it, you absolutely need to know your credit score before walking in to the dealership. It's easy to obtain online with companies such as MyFico.com and CreditScore.com. Not only will you get your score, looking at your credit history report will allow you to find mistakes and old data that may be unfairly damaging your score. Under the Fair and Accurate Credit Transactions Act, you can obtain one annual free copy of your credit report. For more information visit http://www.annualcreditreport.com or call 877-322-8228. You will still have to pay a fee to get your scores.
What can you do to improve your credit score rating?
Pay your bills on time. Delinquent payments can have a major negative impact on your score and the longer you pay your bills on time, the better your score. For example, someone with an average credit rating of 706 can raise their score by as much as 20 points by paying all their bills on time for one month.
Keep balances low on credit cards. High outstanding debt can affect your score. Maxing out your credit cards could lower your average score by as much as 70 points.
Don't open a number of new credit cards that you don't need. New accounts will lower your average account age, which could actually lower your score by up to 10 points.
Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and making timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
Get current on delinquent accounts. Your payment history makes up 35% of your credit score. Getting current on your delinquent accounts will have a great impact on your credit.
Closing an account doesn't make it go away. A closed account will still show up on your credit report and may be factored into the score.
If you're having trouble paying off your debt - talk to your creditors about your situation. Many of them have temporary hardship programs that will reduce your monthly payments until you can get back on your feet. Remember, "fixing" a credit score is more about fixing errors in your credit history. It's now about following the guidelines above to maintain consistent, good credit history. Raising your score after a poor mark on your report or building credit for the first time will take patience and discipline.
Joy Sherman, Founder, Ms. Motorcars has been in the automotive industry for over 20 years.
After attending Northwood Institute and obtaining certification in Dealership Management, I started working in the dealership delivering vehicles to our customers. I became very familiar with the paperwork involved. Moving between the jobs of Delivery Coordinator to Sales Consultant, Service Consultant and overseeing the Customer Relations Department, taking care of the customer was always in the forefront. With over 20 years of experience, I'm proud to say my customers saw a level of competence and trust which continues today.
There are three major credit agencies in the U.S. - Equifax, Experian and TransUnion. When you apply for a loan to purchase a car, the dealer has to check and give your credit score information to the finance companies they work with. Scores can vary a little or maybe a lot between agencies. Unfortunately, you can't control how the lender interprets your credit score. A score of 700 is considered excellent, for others 720 or higher is considered excellent. A score of 620 while not that bad, may shut you out of a deal with one finance company and / or charge you a higher what they call "subprime" interest rate, costing you more money out of your pocket. If you're in the market for a car and know you want to finance it, you absolutely need to know your credit score before walking in to the dealership. It's easy to obtain online with companies such as MyFico.com and CreditScore.com. Not only will you get your score, looking at your credit history report will allow you to find mistakes and old data that may be unfairly damaging your score. Under the Fair and Accurate Credit Transactions Act, you can obtain one annual free copy of your credit report. For more information visit http://www.annualcreditreport.com or call 877-322-8228. You will still have to pay a fee to get your scores.
What can you do to improve your credit score rating?
Pay your bills on time. Delinquent payments can have a major negative impact on your score and the longer you pay your bills on time, the better your score. For example, someone with an average credit rating of 706 can raise their score by as much as 20 points by paying all their bills on time for one month.
Keep balances low on credit cards. High outstanding debt can affect your score. Maxing out your credit cards could lower your average score by as much as 70 points.
Don't open a number of new credit cards that you don't need. New accounts will lower your average account age, which could actually lower your score by up to 10 points.
Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and making timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
Get current on delinquent accounts. Your payment history makes up 35% of your credit score. Getting current on your delinquent accounts will have a great impact on your credit.
Closing an account doesn't make it go away. A closed account will still show up on your credit report and may be factored into the score.
If you're having trouble paying off your debt - talk to your creditors about your situation. Many of them have temporary hardship programs that will reduce your monthly payments until you can get back on your feet. Remember, "fixing" a credit score is more about fixing errors in your credit history. It's now about following the guidelines above to maintain consistent, good credit history. Raising your score after a poor mark on your report or building credit for the first time will take patience and discipline.
Joy Sherman, Founder, Ms. Motorcars has been in the automotive industry for over 20 years.
After attending Northwood Institute and obtaining certification in Dealership Management, I started working in the dealership delivering vehicles to our customers. I became very familiar with the paperwork involved. Moving between the jobs of Delivery Coordinator to Sales Consultant, Service Consultant and overseeing the Customer Relations Department, taking care of the customer was always in the forefront. With over 20 years of experience, I'm proud to say my customers saw a level of competence and trust which continues today.
How to Get the Best Personal Insurance Quotes?
No matter what kind of insurance you need, getting good insurance quotes is the first step to ensure you have the right coverage and that you are not over paying. You can either actively or passively find insurance quotes. You can get passive insurance quotes by opening a cellphone contract and applying for a house, car or personal loan and waiting for unsolicited phone calls. This reactive way of getting quotes will only waste about half an hour each time someone calls to promise the lowest rate. Unfortunately, this may or may not result in lower premiums or better cover. On the other hand, actively finding insurance quotes will ensure you do it right the first time, here's what you need to know.
Only buy what you need
There are many types of personal insurance coverage you can buy, such as car insurance, home contents or life insurance to name just a few. Before you are able to get an accurate insurance quote, you should determine what you need and assess the value of the coverage you require. Take a look at the different policies and identify the coverage that is suitable for you. Ask yourself, is there something I don't need? Or do I feel comfortable paying a large excess out of my pocket?
Use a calculator
Once you have established the coverage required, the best way to start your insurance quote search is to use an online calculator. These are not completely accurate but by plugging in the basics you can get a rough idea of the costs involved. In addition, if you are passively searching for insurance quotes some calculators will link your details to a database for, yes you guessed it, unsolicited phone calls.
Do the research
Now that you have an idea of what insurance should be costing you each month, it's time to get insurance quotes from providers. This can be done in several ways. The yellow pages list many insurers and the internet has numerous insurance directories. Online insurance quote engines have become a popular choice, especially those linked to multiple insurance companies. It is quick and easy because you enter your information once to get multiple quotes.
Alternatively, speak to a broker. Many broker companies focus on full financial planning, offering investments, stocks, insurance, trusts, will & testaments, and related products. The advantage of having everything under one roof is you can easily keep tabs on your portfolio of financial products. In addition, a trusted broker will look after your interests and ensure you get the good advice and coverage at the best price.
Understand the policy before you sign
By their nature insurance policies are designed to prevent abuse and fraud. Therefore it is important to understand your rights and responsibilities as the policy holder. You also have an obligation to question things you don't understand and change clauses you are not satisfied with.
Only buy what you need
There are many types of personal insurance coverage you can buy, such as car insurance, home contents or life insurance to name just a few. Before you are able to get an accurate insurance quote, you should determine what you need and assess the value of the coverage you require. Take a look at the different policies and identify the coverage that is suitable for you. Ask yourself, is there something I don't need? Or do I feel comfortable paying a large excess out of my pocket?
Use a calculator
Once you have established the coverage required, the best way to start your insurance quote search is to use an online calculator. These are not completely accurate but by plugging in the basics you can get a rough idea of the costs involved. In addition, if you are passively searching for insurance quotes some calculators will link your details to a database for, yes you guessed it, unsolicited phone calls.
Do the research
Now that you have an idea of what insurance should be costing you each month, it's time to get insurance quotes from providers. This can be done in several ways. The yellow pages list many insurers and the internet has numerous insurance directories. Online insurance quote engines have become a popular choice, especially those linked to multiple insurance companies. It is quick and easy because you enter your information once to get multiple quotes.
Alternatively, speak to a broker. Many broker companies focus on full financial planning, offering investments, stocks, insurance, trusts, will & testaments, and related products. The advantage of having everything under one roof is you can easily keep tabs on your portfolio of financial products. In addition, a trusted broker will look after your interests and ensure you get the good advice and coverage at the best price.
Understand the policy before you sign
By their nature insurance policies are designed to prevent abuse and fraud. Therefore it is important to understand your rights and responsibilities as the policy holder. You also have an obligation to question things you don't understand and change clauses you are not satisfied with.
Brief Overview of the Property and Casualty Insurance Industry
Unexpected accidents happen every day in our lives. Be it at home, at work and on the playground we are always at the risk of having an accident or having something being stolen or even being struck by a natural disaster like a fire outbreak or earthquake. Insurance is what makes us feel a little bit safer about all these uncontrollable events, and also protects us financially when such an incident occurs.
There are various types of Insurance available today. The type you decide to choose will also depend on the events you want to insure. If you own properties like a home, then property insurance is the type of insurance that you should consider seriously. Casualty Insurance is another type of insurance you may consider.
Property insurance
Property insurance covers your business or home building, and also the contents within these buildings against events like theft, damage or loss. Note that, not every property insurance policy cover everything, you must make sure that you understand the coverage terms of the policy and ensure you are covered for everything. Some insurance policies cover only fire damage and others against theft. When choosing a property insurance it is imperative that you choose the policy that covers for multiple perils e.g. theft, fire, loss etc.
Location also affects the type of property insurance that you will take. If you live in a low peril area, like where earthquakes are unlikely, then you will not need to take earthquake insurance. However, if you are living in a wet zone where constant heavy rain occurs, ensure that you take a property insurance that covers flood damage.
Casualty insurance
Casualty Insurance is slightly different. This covers the loss and liabilities of a person or property. This loss or liability is equally due to unforeseen accidents, however, it excludes life, fire accidents and health. For those ones you will require a different coverage.
It covers things like fraud or terrorism, burglary. When your house is robbed and you have casualty insurance, you will likely be able to recover back the financial cost of your property. Also when you are a victim of a terrorist attack and have been hurt, your casualty insurance will take care of all medical bills incurred.
The casualty insurance is also very beneficial to both home owners and business owners. If you are living a high risk life with the tendencies of unexpected accidents occurring, then insuring yourself with casualty insurance is very beneficial. For a business, it will protect you when a member of your work force is injured.
Your final choice of insurance will largely depend on your personal needs. You need to get a lot of information about the insurance industry before deciding to take an insurance policy. You have to be very certain of the type of policy you require for your scenario, whether it is property or casualty insurance. Whatever you decide should match your needs and all you wants so that you will not be left out on the cold on that accident rainy day.
There are various types of Insurance available today. The type you decide to choose will also depend on the events you want to insure. If you own properties like a home, then property insurance is the type of insurance that you should consider seriously. Casualty Insurance is another type of insurance you may consider.
Property insurance
Property insurance covers your business or home building, and also the contents within these buildings against events like theft, damage or loss. Note that, not every property insurance policy cover everything, you must make sure that you understand the coverage terms of the policy and ensure you are covered for everything. Some insurance policies cover only fire damage and others against theft. When choosing a property insurance it is imperative that you choose the policy that covers for multiple perils e.g. theft, fire, loss etc.
Location also affects the type of property insurance that you will take. If you live in a low peril area, like where earthquakes are unlikely, then you will not need to take earthquake insurance. However, if you are living in a wet zone where constant heavy rain occurs, ensure that you take a property insurance that covers flood damage.
Casualty insurance
Casualty Insurance is slightly different. This covers the loss and liabilities of a person or property. This loss or liability is equally due to unforeseen accidents, however, it excludes life, fire accidents and health. For those ones you will require a different coverage.
It covers things like fraud or terrorism, burglary. When your house is robbed and you have casualty insurance, you will likely be able to recover back the financial cost of your property. Also when you are a victim of a terrorist attack and have been hurt, your casualty insurance will take care of all medical bills incurred.
The casualty insurance is also very beneficial to both home owners and business owners. If you are living a high risk life with the tendencies of unexpected accidents occurring, then insuring yourself with casualty insurance is very beneficial. For a business, it will protect you when a member of your work force is injured.
Your final choice of insurance will largely depend on your personal needs. You need to get a lot of information about the insurance industry before deciding to take an insurance policy. You have to be very certain of the type of policy you require for your scenario, whether it is property or casualty insurance. Whatever you decide should match your needs and all you wants so that you will not be left out on the cold on that accident rainy day.
History of Property and Casualty Insurance
Insurance can be said to have appeared with the human society. There are two different types of economies found in a human society: The natural and the non-monetary economies. In the non-monetary economy business is carried out with no central or standardized form of financial policies. This is primitive and the insurance found in such an economy will entail agreements for mutual aid. For instance, if one family's house is destroyed by an accident, the neighbors are supposed to help rebuild it.
Now, turning to the practice of Insurance from a modern perspective i.e. where it is a part of the financial structure of the society. As far as the 2rd and 3rd Millennia BC, respectively early ways of transferring or spreading risk were practiced by Babylonian and Chinese traders. The Chinese business men traveling dangerous river rapids would always spread their goods across many vessels to reduce the loss due to any single vessel's sinking. The Babylonians on the other hand created a system whereby if a merchant receives a loan for the funding of his shipment, then he would have to pay additional money to the lender to get the lender's guarantee that the loan should be cancelled in the event of the shipment being lost at sea or stolen.
In Ancient Persia the Achaemenian monarchs were the first to start insuring their people and legalizing it by documenting the insurance details in the government notary offices. The ensuing insurance tradition became practiced every year in Norouz, where the people and heads of their ethnic groups presented gifts to the monarch. When a gift presented is worth more than the sum of 10.000 Derrick (The Achaemenian Gold currency), it would be recorded in a special office. This was good to the presenters of the gift. The reason for this registering was to ensure that whenever someone that presented a gift registered by the court gets into trouble, then the court and the monarch would come to his assistance.
The inhabitants of Rhodes some thousand years later developed the principle of the general average. This states that merchants having their goods shipped together will pay an equally distributed insurance premium that can be used to repay a merchant whose wares where deliberately thrown overboard to make the ship lighter and prevent it from complete loss.
In London some modes of insurance was already being practiced by the early years of the 17th century, while in the United states the first insurance firm sold fire insurance and was formed in the city of Charles Town, the modern-day Charleston, in 1732. The practice of insurance was popularized and made standard by Benjamin Franklin especially against fire through the form of perpetual insurance. Then in 1752, he started a company known as "Philadelphia Contributionship for the Insurance of House Loss by Fire." This company was one of the first to start making contributions towards fire prevention. His company not only warned again fire hazards, it also did not insure some buildings they considered high risk, such as wooden houses.
Property and casualty insurance enjoys a rich history just like every other insurance policy. Over the centuries man has come to realize that for as long as there is life there would be risks and dangers. And with insurance, the effects of these situations can be mitigated.
Now, turning to the practice of Insurance from a modern perspective i.e. where it is a part of the financial structure of the society. As far as the 2rd and 3rd Millennia BC, respectively early ways of transferring or spreading risk were practiced by Babylonian and Chinese traders. The Chinese business men traveling dangerous river rapids would always spread their goods across many vessels to reduce the loss due to any single vessel's sinking. The Babylonians on the other hand created a system whereby if a merchant receives a loan for the funding of his shipment, then he would have to pay additional money to the lender to get the lender's guarantee that the loan should be cancelled in the event of the shipment being lost at sea or stolen.
In Ancient Persia the Achaemenian monarchs were the first to start insuring their people and legalizing it by documenting the insurance details in the government notary offices. The ensuing insurance tradition became practiced every year in Norouz, where the people and heads of their ethnic groups presented gifts to the monarch. When a gift presented is worth more than the sum of 10.000 Derrick (The Achaemenian Gold currency), it would be recorded in a special office. This was good to the presenters of the gift. The reason for this registering was to ensure that whenever someone that presented a gift registered by the court gets into trouble, then the court and the monarch would come to his assistance.
The inhabitants of Rhodes some thousand years later developed the principle of the general average. This states that merchants having their goods shipped together will pay an equally distributed insurance premium that can be used to repay a merchant whose wares where deliberately thrown overboard to make the ship lighter and prevent it from complete loss.
In London some modes of insurance was already being practiced by the early years of the 17th century, while in the United states the first insurance firm sold fire insurance and was formed in the city of Charles Town, the modern-day Charleston, in 1732. The practice of insurance was popularized and made standard by Benjamin Franklin especially against fire through the form of perpetual insurance. Then in 1752, he started a company known as "Philadelphia Contributionship for the Insurance of House Loss by Fire." This company was one of the first to start making contributions towards fire prevention. His company not only warned again fire hazards, it also did not insure some buildings they considered high risk, such as wooden houses.
Property and casualty insurance enjoys a rich history just like every other insurance policy. Over the centuries man has come to realize that for as long as there is life there would be risks and dangers. And with insurance, the effects of these situations can be mitigated.
The Benefits of Property and Casualty Insurance
A contract in which a company promises to pay for any property or personal damages in exchange for an agreed monthly fee paid by the policy holder is called a Property and Casualty Insurance. This covers all the three business related intangible and tangible assets such as money and securities, inventory, accounts-receivable, furniture, supplies and machinery. The multiple-peril policy of property insurance covers the losses caused by theft and fire and other likely disasters.
Business or personal property risks like damage, theft, loss of cash, machinery, furniture, records, brand names, even trademarks and supplies are all taken care of by the Property and Casualty Insurance. While natural disasters like fires, earthquakes and floods which destroy a business premise or residence is catered for by some particular insurance policies.
You can insure your property both for one or multiple specific dangers. In the event of an incident occurring on your property, you will be required to completely identify all that was lost. A clear case is when your house is burnt down; you may stage your claim under the "fire catastrophe property insurance", provided you had ensured your home was covered for fires.
The other incidents commonly covered for are explosions, flood, lightning, earthquake and theft. You should always consider the likely perils that may occur with your property and your location to finally decide an adequate property and casualty insurance option. If you have not planned well you may find yourself paying for insurance policies you many never require.
You can also get an "open perils insurance cover", these handles all the grounds of damage and loss that are not excluded in your existing insurance policy. Unless your policy explicitly denies it, you should be able to get help from the "open peril" insurance for almost all incident cases. However, if you decide to opt out of coverage for flooding, you will surely not receive compensation for damages to your asset as a result of flood.
Some of the natural disasters on the list of exclusion to open perils are war, earthquake, and nuclear incidents. Your home may be exposed to such dangers, and you will be required to purchase the special property and casualty insurance policy that deals with such open perils cases. People who live in the west coast should be mindful of disasters like earthquake while those living in the south should always consider dangers from tornados and those living in Hawaii may have the dangers of volcanic activity.
The benefits of a property and casualty insurance cannot be over emphasized today. Every property owner or business must find out the particular insurance policy that meets their need and go for it. We live in a world that daily is faced with all sorts of dangers both old and new which seems to be increasing each passing day. With an insurance policy covering our assets, we can be rest assured that we have done the much we can do towards the security of our asset while we leave the rest to providence.
Business or personal property risks like damage, theft, loss of cash, machinery, furniture, records, brand names, even trademarks and supplies are all taken care of by the Property and Casualty Insurance. While natural disasters like fires, earthquakes and floods which destroy a business premise or residence is catered for by some particular insurance policies.
You can insure your property both for one or multiple specific dangers. In the event of an incident occurring on your property, you will be required to completely identify all that was lost. A clear case is when your house is burnt down; you may stage your claim under the "fire catastrophe property insurance", provided you had ensured your home was covered for fires.
The other incidents commonly covered for are explosions, flood, lightning, earthquake and theft. You should always consider the likely perils that may occur with your property and your location to finally decide an adequate property and casualty insurance option. If you have not planned well you may find yourself paying for insurance policies you many never require.
You can also get an "open perils insurance cover", these handles all the grounds of damage and loss that are not excluded in your existing insurance policy. Unless your policy explicitly denies it, you should be able to get help from the "open peril" insurance for almost all incident cases. However, if you decide to opt out of coverage for flooding, you will surely not receive compensation for damages to your asset as a result of flood.
Some of the natural disasters on the list of exclusion to open perils are war, earthquake, and nuclear incidents. Your home may be exposed to such dangers, and you will be required to purchase the special property and casualty insurance policy that deals with such open perils cases. People who live in the west coast should be mindful of disasters like earthquake while those living in the south should always consider dangers from tornados and those living in Hawaii may have the dangers of volcanic activity.
The benefits of a property and casualty insurance cannot be over emphasized today. Every property owner or business must find out the particular insurance policy that meets their need and go for it. We live in a world that daily is faced with all sorts of dangers both old and new which seems to be increasing each passing day. With an insurance policy covering our assets, we can be rest assured that we have done the much we can do towards the security of our asset while we leave the rest to providence.
Top Property and Casualty Insurance Companies
The property & casualty insurance industry today faces a lot of challenges including market pressures, technology, rising claim cost, expense management, legislation, compliance and more. The top property and casualty insurance companies have to take these challenges in stride. They often do things with a different approach to set themselves apart from the competition.
These top performing companies in particular maintain efficient operating models; they meet the needs of their clients and successfully execute their business strategy. There are some benchmark practices that set apart the top performing companies from the rest of the industry.
Operational Efficiency
Today companies must manage significant changes in workloads and workflows in all areas of their organization as a result of technological advances and changing market conditions. The top property & casualty insurance companies have about 19% fewer employees when measured against premiums written. Also web-based technology, enterprise content management, predictive modeling have significantly impacted on operating models.
The ability to switch to new technology has provided significant savings in expense and a more efficient workforce. For instance, imaging and automated workflow has provided the companies the opportunity to centralize the back office operations while still keeping the customer-facing activities in the field. They have also succeeded in maintaining a staff to management ratio of 6.8 to 1, in comparison to 5.3 to 1, on the average. This difference in staff to management equals a savings of nearly $2,200 per employee, on the average.
Customer Focus
Most often, when companies begin to experience increasing demands from their clients, it is easy for them to get lost in the myriad of request and possibly lose focus on the customers. Customer services have gone beyond just servicing the policy holders. Insurance firms know that they have a lot of customers to support both internal and external.
The top companies consciously service all the customers, including the policy holders, employees, agents and outside service partners. Because they believe with superior customer service and ease of doing business, customer loyalty and retention will be improved significantly.
Strategic Execution
Companies that want to remain competitive must clearly understand their core competencies with which to develop and execute their corporate strategy. The top property & casualty insurance companies always achieve superior results through the combination of effective distribution channels, product focus, technology and strong market knowledge within their target areas. Every company that has been able to quickly capitalize on these strengths will always have a tremendous competitive edge.
Based on the above benchmarks, some top performing property and casualty insurance companies are as follows:
Accident Fund
Acuity
Amerisure Companies
ANPAC
California State Automobile Association
Canal Insurance Group
Chubb Group
GEICO
Germania Insurance Group
Grange Mutual Casualty Group
When you need the services of a top property and casualty insurance firm, always make sure that they satisfy these fundamental benchmarks, and by so doing you will be guaranteed a great service. The insurance industry and their services are even more needed in the 21st century than ever because our society today is plagued with so many dangers and uncertainties, hence the increasing need for insurance.
These top performing companies in particular maintain efficient operating models; they meet the needs of their clients and successfully execute their business strategy. There are some benchmark practices that set apart the top performing companies from the rest of the industry.
Operational Efficiency
Today companies must manage significant changes in workloads and workflows in all areas of their organization as a result of technological advances and changing market conditions. The top property & casualty insurance companies have about 19% fewer employees when measured against premiums written. Also web-based technology, enterprise content management, predictive modeling have significantly impacted on operating models.
The ability to switch to new technology has provided significant savings in expense and a more efficient workforce. For instance, imaging and automated workflow has provided the companies the opportunity to centralize the back office operations while still keeping the customer-facing activities in the field. They have also succeeded in maintaining a staff to management ratio of 6.8 to 1, in comparison to 5.3 to 1, on the average. This difference in staff to management equals a savings of nearly $2,200 per employee, on the average.
Customer Focus
Most often, when companies begin to experience increasing demands from their clients, it is easy for them to get lost in the myriad of request and possibly lose focus on the customers. Customer services have gone beyond just servicing the policy holders. Insurance firms know that they have a lot of customers to support both internal and external.
The top companies consciously service all the customers, including the policy holders, employees, agents and outside service partners. Because they believe with superior customer service and ease of doing business, customer loyalty and retention will be improved significantly.
Strategic Execution
Companies that want to remain competitive must clearly understand their core competencies with which to develop and execute their corporate strategy. The top property & casualty insurance companies always achieve superior results through the combination of effective distribution channels, product focus, technology and strong market knowledge within their target areas. Every company that has been able to quickly capitalize on these strengths will always have a tremendous competitive edge.
Based on the above benchmarks, some top performing property and casualty insurance companies are as follows:
Accident Fund
Acuity
Amerisure Companies
ANPAC
California State Automobile Association
Canal Insurance Group
Chubb Group
GEICO
Germania Insurance Group
Grange Mutual Casualty Group
When you need the services of a top property and casualty insurance firm, always make sure that they satisfy these fundamental benchmarks, and by so doing you will be guaranteed a great service. The insurance industry and their services are even more needed in the 21st century than ever because our society today is plagued with so many dangers and uncertainties, hence the increasing need for insurance.
What Exactly Is Property and Casualty Insurance?
The Property and Casualty Insurance is designed to take care of most of the risks to an individual or a business's property like damage, records, losing money, theft, furniture, trademarks, machinery and as well as supplies. There are some special insurance policies currently available that are designed to cover natural disasters like earthquakes, and floods which may damage and individual's private residence.
A property may be insured for named or multiple dangers. You will need to accurately identify all that you have lost. A key example is when your house is burnt down by fire, you would only be allowed to make a claim under the "named peril property insurance" if you had previously insured your house against fire. The other perils that are commonly covered are theft, explosion and lightning. You should always carefully examine all the risks that are part of your insurance policy. Otherwise, you may end up paying for insurance that would not assist you in the event of maybe your car stolen.
All causes of damage or loss that have not been removed from a policy are covered by the open perils. Unless your insurance premium explicitly excluded it, you will be able to receive assistance from open perils property insurance. If you did not take the option to be insured for floods, you will definitely not receive assistance for any damage to your house caused by a flood. Some of the items that are often found in the list of open perils exclusion are nuclear accidents, earthquakes, war, and acts of terrorism. You can purchase an additional coverage plan if your open peril insurance does not cover the open peril that you may face.
The cost of property insurance premiums may be reduced if the client have a good claim history and have taken the proper steps to reduce the risk of damage or loss. Some ways of reducing the cost of property insurance is by installing alarms, sprinkler systems, smoke detectors and security personnel. Mostly it depends on whether or not the steps taken can in reality prevent damages.
Many businesses and companies prefer insuring their properties with a Business Owner's Insurance premium known as BOP. In this policy, liability insurance and property insurance are joined into a single policy to create this special insurance policy. Some of these BOPs also offer Business Interruption and Extra Expense insurance premium as a further option.
The BOPs are considered very convenient though it provides less coverage than the standard insurance premiums. This explains why many companies that opt for it also end up buying other policies for a full coverage. A good example of a BOP is the premium called the "extra expense insurance". This works by reimbursing the policy holder money to cover the effects of a short-term move in the event of an incident covered by the policy occurring e.g. a flood. While the "Business Interruption Insurance" pays for any likely loss of revenue or profit in the event of the business being interrupted by an incident covered by the policy.
A property may be insured for named or multiple dangers. You will need to accurately identify all that you have lost. A key example is when your house is burnt down by fire, you would only be allowed to make a claim under the "named peril property insurance" if you had previously insured your house against fire. The other perils that are commonly covered are theft, explosion and lightning. You should always carefully examine all the risks that are part of your insurance policy. Otherwise, you may end up paying for insurance that would not assist you in the event of maybe your car stolen.
All causes of damage or loss that have not been removed from a policy are covered by the open perils. Unless your insurance premium explicitly excluded it, you will be able to receive assistance from open perils property insurance. If you did not take the option to be insured for floods, you will definitely not receive assistance for any damage to your house caused by a flood. Some of the items that are often found in the list of open perils exclusion are nuclear accidents, earthquakes, war, and acts of terrorism. You can purchase an additional coverage plan if your open peril insurance does not cover the open peril that you may face.
The cost of property insurance premiums may be reduced if the client have a good claim history and have taken the proper steps to reduce the risk of damage or loss. Some ways of reducing the cost of property insurance is by installing alarms, sprinkler systems, smoke detectors and security personnel. Mostly it depends on whether or not the steps taken can in reality prevent damages.
Many businesses and companies prefer insuring their properties with a Business Owner's Insurance premium known as BOP. In this policy, liability insurance and property insurance are joined into a single policy to create this special insurance policy. Some of these BOPs also offer Business Interruption and Extra Expense insurance premium as a further option.
The BOPs are considered very convenient though it provides less coverage than the standard insurance premiums. This explains why many companies that opt for it also end up buying other policies for a full coverage. A good example of a BOP is the premium called the "extra expense insurance". This works by reimbursing the policy holder money to cover the effects of a short-term move in the event of an incident covered by the policy occurring e.g. a flood. While the "Business Interruption Insurance" pays for any likely loss of revenue or profit in the event of the business being interrupted by an incident covered by the policy.
Professional Liability Insurance: 6 Critical Safeguards for Value Engineering
In 2011, an emphasis on lean operation and expenditure has led the phrase "value engineering" to become synonymous with "cost cutting." This trend is problematic from a risk management perspective. It shifts the pure intent of value engineering and puts into practice a less judicious methodology focused more on saving money than optimizing the project. Such practices can affect a company's reputation with prospects and clients, as well as its ability to find reasonable rates on professional liability insurance.
Value engineering can be an effective strategy among design professionals with clients like government, whether local, state or federal. It is the practice of examining a project to achieve successful completion while obtaining the greatest value for each dollar spent. Regrettably, the idea of value engineering is often shirked until designs have been complete, bids have been placed, and the bids have returned over budget. The owner then approaches the design professional, most often the architect, to attempt cost-cutting by asserting value engineering upon the project. This typically means the project owner wants the design professional to use less expensive materials and products or to do away with "extras" in an effort to save money while still achieving the same results. Cheaper ingredients however, seldom result in a product of equal quality. So, in countless situations, the owner is dissatisfied and may even go back to adding the "extras" the design professional was asked to eliminate in the process of "value" engineering.
Professional liability claims can evolve from value engineering performed by the design professional when making an effort to reduce project costs to comply with the owner's request. This is where skirting integral costs can damage more than the project at hand. Consenting to such strategies can drastically alter the availability of professional liability insurance at low premiums, considerably altering the criteria for profitability in a design firm. When an architect performs "value" engineering after design rather than in conjunction with it, the owners may suppose that the architect was excessive in their original design, possibly because the architect's fee was based on a percentage of construction costs. Or the owners may assume that value engineering is equivalent to an acknowledgment that the initial designs were not prepared in agreement with the owner's budgetary limitations. Owners might also view value engineering as a process by which the scope of the design, rather than the application of unique materials and finishes, functions as the true starting place for a reduction in cost.
In one claim example, an architect achieved what seemed to be a successful value engineering outcome, removing specific extras from the project in an effort to reduce costs. However, the owner requested for certain items to be reincorporated into the project after previously requesting that they be removed to meet the budget. The end result? The contractor requested a change order for the extras, the owner declined to pay, and a lawsuit was initiated. The owner named the architect in the lawsuit, alleging the architect's design was lacking and that the design should have incorporated the materials that were removed during value engineering. Another drawback is the probable domino effect where value engineering can run into construction delays and sequencing problems on a project. What can a design professional due to effectively manage this exposure to risk?
1. If the design professional of record on a project is requested to perform value engineering in an effort to cut costs, detailed explanation of the process to the owner is a necessity. Effective communication and credible documentation are also crucial. Verify the owner's expectations and requirements, and get it in writing. If something wouldn't function appropriately after value engineering altered the designs, inform the owner in writing. Bear in mind: If something goes wrong, the owners will certainly point to the design professional.
2. Include a condition in each professional services contract that all final decisions about redesign will have to be made by the owner and agreed to by the design professional of record.
3. If the owner might employ their own value engineer to evaluate construction documents for the project, it is prudent to insert contract language that states the value engineering should be performed in a timely manner to avoid delays in the project. Include a provision that requires the owner to indemnify the designer of record against any and all claims attributable to the value engineering.
4. Incorporate a stipulation that provides for the opportunity to examine and respond to all suggestions made by the value engineer.
5. If a firm is not the designer of record, but is being asked to provide value engineering recommendations, it is imperative to include a stipulation in the agreement that they are only recommendations and that the original design professional of record should have the chance to review and respond accordingly to the suggested changes.
6. If there is a perceived risk to public safety or health, document concerns and follow up with the owner.
Value engineering can be an effective strategy among design professionals with clients like government, whether local, state or federal. It is the practice of examining a project to achieve successful completion while obtaining the greatest value for each dollar spent. Regrettably, the idea of value engineering is often shirked until designs have been complete, bids have been placed, and the bids have returned over budget. The owner then approaches the design professional, most often the architect, to attempt cost-cutting by asserting value engineering upon the project. This typically means the project owner wants the design professional to use less expensive materials and products or to do away with "extras" in an effort to save money while still achieving the same results. Cheaper ingredients however, seldom result in a product of equal quality. So, in countless situations, the owner is dissatisfied and may even go back to adding the "extras" the design professional was asked to eliminate in the process of "value" engineering.
Professional liability claims can evolve from value engineering performed by the design professional when making an effort to reduce project costs to comply with the owner's request. This is where skirting integral costs can damage more than the project at hand. Consenting to such strategies can drastically alter the availability of professional liability insurance at low premiums, considerably altering the criteria for profitability in a design firm. When an architect performs "value" engineering after design rather than in conjunction with it, the owners may suppose that the architect was excessive in their original design, possibly because the architect's fee was based on a percentage of construction costs. Or the owners may assume that value engineering is equivalent to an acknowledgment that the initial designs were not prepared in agreement with the owner's budgetary limitations. Owners might also view value engineering as a process by which the scope of the design, rather than the application of unique materials and finishes, functions as the true starting place for a reduction in cost.
In one claim example, an architect achieved what seemed to be a successful value engineering outcome, removing specific extras from the project in an effort to reduce costs. However, the owner requested for certain items to be reincorporated into the project after previously requesting that they be removed to meet the budget. The end result? The contractor requested a change order for the extras, the owner declined to pay, and a lawsuit was initiated. The owner named the architect in the lawsuit, alleging the architect's design was lacking and that the design should have incorporated the materials that were removed during value engineering. Another drawback is the probable domino effect where value engineering can run into construction delays and sequencing problems on a project. What can a design professional due to effectively manage this exposure to risk?
1. If the design professional of record on a project is requested to perform value engineering in an effort to cut costs, detailed explanation of the process to the owner is a necessity. Effective communication and credible documentation are also crucial. Verify the owner's expectations and requirements, and get it in writing. If something wouldn't function appropriately after value engineering altered the designs, inform the owner in writing. Bear in mind: If something goes wrong, the owners will certainly point to the design professional.
2. Include a condition in each professional services contract that all final decisions about redesign will have to be made by the owner and agreed to by the design professional of record.
3. If the owner might employ their own value engineer to evaluate construction documents for the project, it is prudent to insert contract language that states the value engineering should be performed in a timely manner to avoid delays in the project. Include a provision that requires the owner to indemnify the designer of record against any and all claims attributable to the value engineering.
4. Incorporate a stipulation that provides for the opportunity to examine and respond to all suggestions made by the value engineer.
5. If a firm is not the designer of record, but is being asked to provide value engineering recommendations, it is imperative to include a stipulation in the agreement that they are only recommendations and that the original design professional of record should have the chance to review and respond accordingly to the suggested changes.
6. If there is a perceived risk to public safety or health, document concerns and follow up with the owner.