Auto insurance is insurance for all kind of vehicles e.g. car, trucks.
If you own a vehicle, you need to get it insured as auto insurance is a legal necessity. Auto insurance protects you against financial loss if you have an accident.
Auto insurance policy basically includes the following six coverages:
1. Bodily Injury Liability
This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and your family members listed in the policy are also covered when driving someone else’s car with their permission. In the latter case, the coverage is given to you only if the injury is caused by you. It also covers legal costs that you may incur.
2. Personal Injury Protection (PIP)
This coverage pays for the treatment of injuries to the driver and passengers of the policyholder's car. It is also sometimes known as “no-fault” coverage.
3. Property Damage Liability
This coverage pays for damage you may cause to someone else's property. E.g. another vehicle and neighbor’s mailbox or fence.
4. Collision
This coverage pays for damage to your vehicle resulting from a collision with another vehicle or object. It includes a deductible amount which may vary from state to state. If you are at fault your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you're not at fault, auto insurance company may try to recover the amount they paid you from the other driver’s insurance company. If successful, you'll also be reimbursed for the deductible.
5. Comprehensive
This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, explosion, earthquake, flood or contact with animals.
6. Uninsured and Underinsured Motorist Coverage
This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured driver.
The auto insurance policy is a contract between you and the insurance company.
For more information visit http://www.campbellsolberg.com/
Wednesday, September 9, 2009
Common sense approach towards investment products
Several people have posted comments that they have lost trust in investment products. They are not impressed with the recent announcement by the Monetary Authority of Singapore in improving the regulatory regime on the sale of investment products. They lost their trust in financial institutions after losing a lot of money on the credit linked notes.
I wish to advise these investors to learn from the lessons from the sad episode. It is important that consumers should be educated. The key lessons are:
a) Invest some time to understand the fundamentals of investing. Join FISCA (Financial Services Consumer Association).
b) Stay away from any product that you do not understand. Although I can be considered a financial expert, I have to stay away from many complex and opaque products, such as dual currency investments, land banking, credit linked notes, time sharing, etc.
c) Use your common sense. Ask a few questions about the financial product. What do I get from the product? How much do I pay? What is the chance of making a profit or a loss? How much do the seller earn by selling the product to me? These are simple questions, but they cannot be answered. Even the seller does not know the answers. So, I stay away from these products.
d) Do not trust the words of any sales person. You need to see any informations stated clearly in writing. If the wordings are not clear, do not accept them.
e) Avoid special invitation to sales seminars. I have received many telephone calls to attend land banking seminars, time shares, property launches, etc. I decline. These events are costly and have to be covered by the commissions earned on the actual sales.
f) Invest in stocks and bonds for the long term. I spread my savings into 20 stocks, chosen for their long term value. I hold them through the cycles of the stock-market. I advised my children, who have smaller sums to invest, to put their savings into a low cost, exchange traded fund.
It is important for ordinary people to learn the fundamentals about long term investments. I have set up FISCA (Financial Services Consumer Association) to meet this need for financial literacy. It will focus primarily on the undertanding of long term savings.
If you remain uneducated about financial literacy, you can stay away from investment products only for a short time. You are likely to fall for the next scam that comes your way. It is better to be financially literate, so that you can understand what to avoid. Take the first step and join FISCA.
Tan Kin Lian
I wish to advise these investors to learn from the lessons from the sad episode. It is important that consumers should be educated. The key lessons are:
a) Invest some time to understand the fundamentals of investing. Join FISCA (Financial Services Consumer Association).
b) Stay away from any product that you do not understand. Although I can be considered a financial expert, I have to stay away from many complex and opaque products, such as dual currency investments, land banking, credit linked notes, time sharing, etc.
c) Use your common sense. Ask a few questions about the financial product. What do I get from the product? How much do I pay? What is the chance of making a profit or a loss? How much do the seller earn by selling the product to me? These are simple questions, but they cannot be answered. Even the seller does not know the answers. So, I stay away from these products.
d) Do not trust the words of any sales person. You need to see any informations stated clearly in writing. If the wordings are not clear, do not accept them.
e) Avoid special invitation to sales seminars. I have received many telephone calls to attend land banking seminars, time shares, property launches, etc. I decline. These events are costly and have to be covered by the commissions earned on the actual sales.
f) Invest in stocks and bonds for the long term. I spread my savings into 20 stocks, chosen for their long term value. I hold them through the cycles of the stock-market. I advised my children, who have smaller sums to invest, to put their savings into a low cost, exchange traded fund.
It is important for ordinary people to learn the fundamentals about long term investments. I have set up FISCA (Financial Services Consumer Association) to meet this need for financial literacy. It will focus primarily on the undertanding of long term savings.
If you remain uneducated about financial literacy, you can stay away from investment products only for a short time. You are likely to fall for the next scam that comes your way. It is better to be financially literate, so that you can understand what to avoid. Take the first step and join FISCA.
Tan Kin Lian
Interview by Foreign TV
A few foreign TV stations wish to find a Minibond investor to be interviewed, to share his or her experience on the impact of the investment on their life, and how the distress that they suffered to get compensation. If you are willing to be interviewed, please send an email to kinlian@gmail.com. Please come forward for your story to be told.
Lack of standard to compare the payout
My doctor asked me about the work of FISCA. I said that there are a lot of challenges, due to the unfair treatment of consumers.
I quoted the example of a policyholder who paid 21 years of premiums under a whole life policy with some riders. At the end of 21 years, he just got back to the total premiums paid, i.e. break-even point. The total amount was $54,000. A similar policy taken with a good insurer would have paid $75,000 (or 39% more).
The doctor was surprised. Surely there must be some standard for the consumer to compare the payouts? Where did the difference in the maturity payout go to?
I said that most consumers are in the dark. They are not able to compare what the payouts would have been, if they had taken a similar policy from another insurer. The insurer that gave a poor return probably had higher expenses and kept a larger part of the surplus as surplus or orphaned money.
Many years ago, if a policyholder sends a complaint to MAS, the MAS officer would ask the insurance company for an explanation. The insurance company would have to justify the low payout and have to give the answer truthfully.
This practice has stopped in recent years, after the formation of FIDREC. The policyholders are now asked to send their complaint to FIDREC. Unfortunately, FIDREC does not have the same powers as MAS.
To ensure fair treatment of consumers, it is important that the concept of asset share for each individual policy, as practiced in Malaysia, must be adopted in Singapore. This will ensure that consumers get a fair payout and make the practice more transparent.
Tan Kin Lian
I quoted the example of a policyholder who paid 21 years of premiums under a whole life policy with some riders. At the end of 21 years, he just got back to the total premiums paid, i.e. break-even point. The total amount was $54,000. A similar policy taken with a good insurer would have paid $75,000 (or 39% more).
The doctor was surprised. Surely there must be some standard for the consumer to compare the payouts? Where did the difference in the maturity payout go to?
I said that most consumers are in the dark. They are not able to compare what the payouts would have been, if they had taken a similar policy from another insurer. The insurer that gave a poor return probably had higher expenses and kept a larger part of the surplus as surplus or orphaned money.
Many years ago, if a policyholder sends a complaint to MAS, the MAS officer would ask the insurance company for an explanation. The insurance company would have to justify the low payout and have to give the answer truthfully.
This practice has stopped in recent years, after the formation of FIDREC. The policyholders are now asked to send their complaint to FIDREC. Unfortunately, FIDREC does not have the same powers as MAS.
To ensure fair treatment of consumers, it is important that the concept of asset share for each individual policy, as practiced in Malaysia, must be adopted in Singapore. This will ensure that consumers get a fair payout and make the practice more transparent.
Tan Kin Lian
Sudoku pocket book (Logic9)
There is some interest in the Sudoku pocket books (Logic9). Each book has 128 puzzles at 4 levels (32 puzzles at each level). They are suitable for mental exercise in the train, bus or plane. The 3 volumes sell for $7.90 in total (compared to the orginal price of $15 for 3 volumes). It represents a discount of 47%. Stocks are limited. Go to www.easyapps.sg/ishop.
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