The most frequent question we get at Mancuso-Nowak is: Why did my auto insurance go up and my car is one year older?  Great question!  There are a number of different factors that go in to determining insurance rates.  Foremost, it cost more every year to repair your car.  If you got in to a car accident today, and then you got in to the same accident a year from today it would cost more to fix your car a year later. The cost of labor increases as do the parts to repair your car.

Another reason for an increase in your auto rate would be if the insurance company changed the symbol on your car.  Every car is assigned an ISO (Insurance Services Office) symbol, which is a number ranging from 1-40+.  Every year the insurance industry analyzes each type of car and how often the car gets into accidents, how much it costs to repair after an accident and how often it gets stolen.  Then the car is assigned a symbol based on this information.  The higher the symbol the more expensive the car is to insure.  If your car moves from a symbol 10 to 11, your auto rate will go up.  Foreign cars are usually assigned a higher symbol because their parts are not domestically manufactured and they need to be shipped from overseas.  Sedans usually have higher symbols than SUVs and trucks because they sustain more damage when in an accident.

Also, an insurance company may re-rate the town you live in based on the number of thefts and accidents.  So consequently, your insurance rates go up.

And of course if you get in to an at-fault accident your rates will go up.  Now you look like an unsafe driver which is a risky investment to insure, so the insurance companies will increase the cost to insure you.

Hope this helps explain why auto rates increase, even though your car is a year older.  If you still have questions, please feel free to contact us at Mancuso-Nowak.

September is Life Insurance Awareness Month.  Life Insurance is not one of those fancy things you want to go out and buy, but it is absolutely necessary.   Here is why….

Take getting married for example, once you are married many of your finances are combined. You make joint investments, such as buying a house/condo. With such large joint investments, it would be difficult for just one of you to make all the payments. This is why life insurance is so crucial. Even if both of you have life insurance through work, it is also smart to buy a separate policy for each of you. If one of you loses his/her job, all the money invested into the company life insurance is gone. You don’t have life insurance anymore. On the other hand if you are putting money into personal life insurance policies it is always there.

How much life insurance do you need to buy? Many times people only buy 4 times his/her annual income, when in reality you will probably need closer to 10 times your annual income. Think of all the expenses life insurance needs to cover: funeral costs, mortgage, car loans, credit card debt, taxes, education, retirement, and list goes on. An equation you can use to help determine your life insurance needs is:

current and future financial obligations – (spouse’s earnings, savings, investments and life insurance already owned) = amount of life insurance

There are two main types of life insurance: term and permanent life insurance. As the name implies, Term Life Insurance is for a specified term or time period. Policies can range from 1-30 years for a term. This type of life insurance is relatively inexpensive because it does not build any cash value and it just ends when the term expires. The payments are at a fixed rate until the end of the term. If future life insurance is needed, the rate will most likely go up because the person buying it is now older (an influence on the rate of a policy) and could have health issues that were not present when first buying the term insurance. If the purchaser does die during the term of the policy, the beneficiary will receive full payment of the policy. This type of life insurance can be used for the purpose of covering a mortgage. If you have a 30 yr mortgage, you may buy a 30 yr term policy just to cover your mortgage payments if you die within that time period.

Permanent Life Insurance, such as Whole Life, will initially be more expensive. However, the rate on the policy will not change regardless of any changes in health or occupation, as long as timely payments are made. A significant difference from Term Life Insurance is that Permanent Life Insurance will build up cash value. Over time, the policy value will be increasing by more than the actual premiums. The owner will have access to this cash if so needed. In the end, Permanent Life Insurance will be more cost effective and provide a better solution to family planning.

During Life Insurance Awareness Month, please review your personal and family needs for the future.  Call us at Mancuso-Nowak to help set up a policy or ask questions.