In the good old days, the world was a simple place. You went into a store to buy goods, or to an agent or broker to buy services. The price was quoted and you paid it out of the cash in your bank account. If your account was poorly stocked with dollar notes, you had to wait until you had saved enough. In this primitive way, people lived within their means, only buying goods and services when they could afford them. Those who had regular income and some collateral, were graciously allowed to borrow money from their banks. But pity those who defaulted. Their collateral would rapidly disappear into the hands of their bankers. It was a tough world for borrowers. Then there was a revolution. Suddenly, there was cheap credit available and we could all have what we wanted right now. Just one down-payment and the rest in easy instalments. Then the revolution became a financial tsunami as the newly launched credit cards suddenly put real buying-power in our hands with generous credit limits. Add in the housing equity release plans and all the other wonderful financial gizmos dreamt up by the folk who live on Wall Street, and you have the modern age just before the worst recession in decades and the credit crunch that took everyone by surprise.

Buying insurance policies has always been potentially expensive. When you see the premium rate expressed as an annual sum, it can look a little daunting. Yet, when you are old enough to put wheels on the road, there’s mandatory liability cover in all but three US states. This is where dreams would fade were it not for the willingness of insurance companies to be flexible on the payments. First they dropped to 6 monthly payments. Some went for quarterly. And then the final act of liberation – the monthly instalment plan. Now you could buy your policy on the same basis as your home, the furniture and white goods in it, and the car you wanted to drive. Everything had come down to the total amount you could afford to pay every month and still have something left over to buy food. This has some major benefits. You can buy insurance with no down payment. Just use the internet search engines to find cheap auto insurance quotes offering the lowest premium rates, pay the first instalment in advance and you are legal on the road.

But there is more to it than that. Ignoring the supposed advantage of easier money management, it also frees you to change your auto insurance policy whenever you find a better deal. If you have paid six or twelve months in advance, this locks you into the policy. Yes, companies do allow you to change, but usually subject to cancellation charges – sometimes eye-poppingly high. The freedom to change insurers can be important if you change the make and model you drive. The existing insurer may be less competitive on the rates for the new vehicle, but the charges may take up the saving available by switching to a competitor. However, because insurers prefer stability, they offer discounts on 6 or 12 monthly payments to give them your cash in their hands. Paying on a monthly basis is always more expensive. As always, it’s your choice.

The easiest thing to say in the world right now is that some US states are suffering more than others in the recession. The national media rightly focus on the headline figures showing the total numbers of unemployed, the foreclosure rate, and so on. This can be somewhat deceiving because it hides the fact that some states are actually turning in statistics very different from the national average. In Michigan, for example, the unemployment rate stands at 15.3%. The government estimates that, by the end of 2009, some 310,000 jobs will have disappeared with no sign of any consistent move for businesses to begin rehiring. That’s why Michigan has sponsored a tax rebate for small businesses – the majority having been unprofitable for the last year – and is extending a tax credit to home buyers to help meet their mortgage obligations – Michigan is ranked 8th in the national foreclosure rank. Not surprisingly, Michigan is facing a budget deficit right now and, with the cost of the tax rebate and credits extending into 2010, the deficit can only grow worse.

So if a state has taken on major new commitments at a time when its tax revenues are falling, it is interesting to see it also championing new provisions that might help families struggling to make ends meet at the expense of the profits of the insurance industry. This is carrying the idea of redistribution somewhat further than Barack Obama intended during his presidential campaign. He was only talking about using taxes on rich individuals to reduce the wealth gap. This is more bold. Going back to the beginning, everyone with a vehicle on the road will tell you their insurance premiums have been rising during the recession. The Consumer Price Index may have been falling, but many now see the cost of insurance as one of the biggest headaches when it comes to the family budget. So, this November sees the state election panel accepting a ballot proposal for 2010 to cut car insurance rates by a flat 20% and to protect the consumer against a range of unfair practices. If the backers can collect 300,000 signatures, the proposal will appear on the ballot next year. Should a sufficient number of voter support the proposal, the law would be changed. In theory, it will stimulate competition between the insurance companies licensed to sell policies into Michigan and advance the interests of consumers by encouraging affordable policies for everyone.

Needless to say, the insurance industry is shocked and awed by this proposal, insisting such a change in the law would force them out of business. To many experts, this claim seems somewhat exaggerated. The insurance industry declared hundreds of millions of dollars in profit during 2008 and paid good dividends to their stockholders. Just one company, State Farm, declared profits of $5 billion. So the notion they would all become insolvent overnight is less than convincing. Voters in Michigan will say whether this change is the law is desirable. If the vote is affirmative, the legislature will move to cut industry profits. One indicator to watch will be the car insurance quotes. If these keep on rising leading up to the vote, the people may be encouraged to promote their own interests. But if the industry moderates its pricing policies up to the vote. . . Well, let’s just say the politics will be interesting.

When you are buying either term or whole life, there’s a chance you will be asked to go through a medical exam. It will not be necessary for most young people who are only asking for small amounts of coverage. So, for example, a 30 year old only asking for $50,000 will usually be allowed to self-certify good health. As age and the amount to be covered increases, you will move through a simple paramedical exam to a full examination by a physician. A paramedical is licensed professional employed or hired by the insurance company. The physicians and paramedicals are independent and their only role is to make a basic assessment of your medical history and current condition. Some operate a mobile service and will come to your home or office with all the necessary equipment. Others will ask you to attend at a laboratory or clinic. The cost of all medical exams is met by the insurance company. For the record, almost all insurers insist on independent exams and refuse to accept information provided directly by your own physician.

The process of underwriting is all about assessing risk. Hopefully, you are in perfect health and there is no likelihood you will follow in the footsteps of your parents or other close family in contracting a disorder or disease. But all insurance companies have strict guidelines about who to accept and on what terms. The companies therefore give the examiners sets of questions to ask you about your medical history. These questions will usually be answered face-to-face but, in some instances, the questions are posted online for you to answer. This saves time. The extent of the tests is then determined by your age and the amount of insurance cover you have requested. The older you are and the larger the amount to be insured, the more careful the exam, moving from paramedical to physician as the person responsible for assessing you.

The paramedical or physician starts by collecting basic physical information about you, measuring your weight, height, pulse and blood pressure. There are questions about your lifestyle, particularly if you are carrying excess weight, smoke or drink. There are follow-ups if you have any of the more interesting hobbies or play contact sports. You will be expected to provide samples of blood, urine and and oral fluid. Most people over the age of 50 will be expected to go through an EKG, a test to record the electrical impulses generated by your heart. With sums over $5 million, older proposers will be asked for a treadmill test which assesses the whole cardiovascular system, lung capacity, stamina, etc. The point is to identify any underlying health problem that could shorten your life. The blood and urine samples are used to eliminate a range of problems with your liver and kidney, identify immune disorders and check on your sugar levels for diabetes, and so on. There are even tests for the presence of standard medications and street drugs like cocaine.

All this is taken with the information you gave when asking for the life insurance quotes. Always get as many offers of a policy from different companies as possible. Sitting with the life insurance quotes alone is not enough because every company has different guidelines on who to accept and at what premium rates.

Although it may seen odd to talk about spending money on your property during a recession and a credit crunch, this is the time when you may be most at risk if you start changing things around. Let’s start with a simple question. One of the results of this downturn has been a dramatic increase in the level of unemployment. So many more people have either found their hours cut or they are out of work. But what to do? The bills are still there to be paid. The obvious answer for some is to start running some kind of business from home. Even if your efforts only produce a few dollars of profit a week, that’s a few dollars more than you would have had. Except that’s changing the use of a part of your home from residential to commercial. So think about what business you might try. It might be turning your kitchen into a catering operation to sell cakes and cookies. You might look to do some woodworking in the garage. Your spare bedroom might become a home office. The idea is to convert an existing hobby or skill into money. Except your home is currently insured as a residence. Adding in commercial woodworking or cooking operations may increase the risk of fire. More people may come into your home to buy goods or services. If they are injured by slipping on your floor tiles or tripping over a loose carpet, are you covered against third party liability claims? So here comes the headline: always tell your insurance company if you are going to change the use of your home. If you do not, the insurer could refuse to pay out on any claims!

Another possible way of raising money is to convert a part of your home into a self-contained flat and rent it out. That rental income could make a big difference when it comes to paying those monthly bills. Except that your policy will be limited to occupation by you and your family. Almost all policies have terms requiring you to tell the insurer if you increase the number of occupants. Again, failure to alert the insurer will lead to a refusal to pay out on claims.

Finally, let’s say you have a little cash but negative housing equity. In better times, you would have traded up and purchased a bigger home. Now the best option looks to be adding to or renovating your home – being forced to stay does not mean the building must stay small and uncomfortable. Now remember the rebuilding value you declared when you got your home insurance quotes. That was the price per square foot of putting your home back into its then condition. If you increase the size and quality of your home, the price per square foot of reinstatement also goes up. You must tell your insurer about the proposed increase in value and whether any changes in the materials used will affect the risk, e.g. using more wood will increase the risk of fire, replacing a wood-burning stove with central heating reduces the risk. Remember home insurance quotes are only good for the home as you had it. Always tell your insurer when you change the size or building materials used.

This is being written as we approach Thanksgiving and most people will be meeting up with family and friends to celebrate. As we plan for these big holidays, the main focus tends to be on planning the menu for the feast, buying the food and deciding who’s going to be responsible for laying in the alcohol. Not that many take out the auto policy to check nothing will go wrong with their insurance. This is a mistake. There will be bumper-to-bumper traffic on all the main routes as everyone gets on to the road to get where they are going. These are the busiest times of the year on the road. At peak times on regular days, the usual suspects are making their commuter runs to and from work or dropping off the kids at school. These are the seasoned drivers with years of experience. Switch to a national holiday and you have a completely different look and feel to the roads.

The moment more drivers spend more time on the road, the chances of an accident increase dramatically. Instead of making short runs along familiar roads, whole families are suddenly loaded into cars for longer journeys along less familiar roads. There are a lot of weekend drivers all around you. With one driver and no passengers, it’s easier to concentrate and, with fewer distractions, there’s less risk of an accident. Fill the back seat with kids and the distractions are hard to ignore. The short, boring commuter trip is suddenly converted into a stressful epic. Worse, some drivers never think to have their vehicles go through a routine maintenance before setting out. The family car may be alright on short runs, but curl up and die when asked to cruise at high speeds down an interstate. Precautionary time in a repair shop will reduce the risk of an engine or tire blow-out but, in a recession with family budgets under pressure, most give this a miss. Those who are worried about their vehicles or know they need something bigger to fit in everyone and their baggage, rent a car. This puts them behind the wheel of something unfamiliar and the chances of an accident just increased again. Many carpool with family and friends – the people who still have SUVs find themselves in demand.

Put all these causes together and the chances of accidents are high. Now look at the auto insurance quotes and resulting policy. If you are proposing to share the driving in your vehicle on a long journey, are you insured for more than one named driver? Are you insured when driving a vehicle belonging to someone else, whether a family member, friend or rental company. If you have rented a vehicle, what’s the relationship between your own insurance policy and the policy the rental company may be selling? Now the hard questions. If you only drive with the mandatory minimum cover, what happens to the medical bills if you and your family are injured? It may be worth looking at short-term medical cover for yourself and your passengers. It may be worth covering the cost of repairing or replacing your own vehicle if it’s damaged or totaled. Get multiple auto insurance quotes to get the best protection. Stay safe on the roads and and have peace of mind.