I am buying a used car that is worth only a few hundred dollars. Do I need to insure it?

A standard auto insurance policy is a package of different kinds of coverage. You generally have some flexibility in terms of both the types and amounts of coverage you select. However, practically every state has enacted insurance laws that require drivers to carry at least some auto insurance. Many states even require that you present proof of insurance before you register a car. So the short answer to the question is that you will need to insure your car, regardless of its value.

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May 29, 2009 at 4:12 pm

I am buying a home and there is a creek in the backyard. Does this mean I need flood insurance?

Even if the creek in your backyard were to dry up tomorrow, you should seriously consider purchasing flood insurance. According to the Federal Emergency Management Agency (FEMA), approximately 25 percent of all flood insurance claims come from areas that are at low to moderate risk for floods. Flooding doesn’t happen only along the banks of rivers, creeks, or other bodies of water. It can also occur in low-lying areas or can result from heavy rains, melting snow, inadequate drainage, and hurricanes.

May 29, 2009 at 4:05 pm

I don’t live near water—is there any reason why I would need flood insurance?

You should consider purchasing flood insurance even if you don’t live in a high-risk area for floods. Factors such as storms, inadequate drainage, melting snow, and hurricanes can cause serious flooding even if you don’t live near a river or other body of water. If you are purchasing a home in a designated flood zone, you may be required to purchase flood insurance before obtaining a mortgage.

Despite what you may think, your homeowners insurance policy doesn’t cover damage from flooding. To complicate matters further, you can’t simply buy flood insurance as an endorsement to your current policy. Instead, if you are eligible, you must purchase a separate flood insurance policy through an insurance company that participates in the National Flood Insurance Program (NFIP). Flood insurance is available for residents of approximately 19,000 communities nationwide.

May 29, 2009 at 4:00 pm

I just got engaged and I’m worried about losing my diamond ring. Can I buy insurance to protect it?

Your diamond ring is probably covered to some extent for loss due to theft under your homeowners/renters insurance policy. However, check your policy. Most homeowners/renters insurance policies have limits for certain types of personal property—including jewelry.

If the value of your ring exceeds your homeowners/renters insurance policy coverage limits, you have a couple of options. First, you can purchase a floater, which will provide you with a specific amount of coverage for your ring based on its appraised value. Or, you can purchase a stand-alone policy that is specially designed to protect valuable items. Keep in mind, however, that your insurance company will most likely require you to have your ring appraised by a certified jeweler when you purchase either a floater or a stand-alone policy.

May 28, 2009 at 5:17 pm

My neighbor’s tree fell across my fence. Will their insurance cover the damage?

In most cases, your insurance will be the one to cover the damage. Although the tree fell from your neighbor’s property, the damage affected your property. Your homeowners insurance covers damage to your property, so you should make a claim under your policy. Your policy probably also provides coverage to remove the debris from your property (typically up to $500).

May 28, 2009 at 5:15 pm

How do I change the beneficiary on my life insurance policy?

Changing the beneficiary on a life insurance policy is generally a simple matter. You’ll need to contact your insurance company and follow its instructions for executing a change of beneficiary. Beneficiary change requests must be in writing, usually on a form that your insurer will provide. Some insurance companies actually make a physical change to your insurance policy (called an endorsement) to reflect the new beneficiary, but this is unusual.

May 28, 2009 at 5:13 pm

What is a life insurance medical exam and how should I prepare for it?

Sometimes when applying for a life insurance policy, you may be asked to take a medical exam. Generally, you won’t have to take a medical exam if you’re under age 40 and applying for life insurance coverage of less than $100,000. However, the older you are, the less life insurance you can buy without a medical exam. Of course, these figures also depend on your health history and the underwriting guidelines of the insurance company you choose.

A typical medical exam may include a basic physical, blood work, and urine tests. Some insurance companies also require EKGs and/or treadmill EKGs (stress tests), especially for large life insurance policies. You’ll also have to provide information on your medical history, including the names of doctors you’ve seen, dates you saw them, and any treatment recommended. A nurse or doctor (often an independent contractor) who is paid by the insurance company will normally conduct the exam.

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May 28, 2009 at 5:12 pm

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