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Why should I buy insurance for my car?

Vehicle insurance is a legal requirement in most states of the US. In some states it’s even impossible to get a plate number for your car without providing a valid insurance policy first. If you’re caught driving without a valid insurance policy the consequences will be negative depending on the state you’re licensed in. You can face a fine, license suspension, penalty points on your driving record or even time in custody. However, besides the legal requirement insurance is also a matter of common sense. In case of an accident it provides the necessary financial support that you could lack at the moment.

Why vehicle insurance is mandatory?

There’s a reason for vehicle insurance to be a legal requirement for all drivers. Not all drivers are conscious enough to realize the benefits and the importance of car insurance. By making insurance mandatory the government assures that all traffic participants are financially able to settle liability caused by traffic accidents. Because the repair costs and medical bills in case of an accident can be very high and exceed the financial abilities of an average person vehicle insurance is needed to assure that everything will be paid for.

What type of coverage should I include into the policy?

The only mandatory type of coverage that should always be present in your policy is third party liability, which includes bodily injury and property damage. However, you should also consider other insurance options in order to meet your exact needs. For example, comprehensive coverage will pay for the damage to your car caused by perils like fire, theft, vandalism and acts of nature. Personal injury protection will pay for any injuries caused to you or your passengers no matter who was at fault in the accident. Explore the possibilities and choose the types of coverage you really need. (more…)

Economics forecasters on cable television seem to be of two minds ever since Standard and Poor’s downgraded the US debt rating from AAA to AA+. Some sound more like doomsday prophets, claiming the American economy is due to crash into a smoldering sea of ash and brimstone. Others, such as the stocks and investing specialists on Fox and MSNBC, come across as hype men for Wall Street, claiming that S&P are simply playing politics and that the US is still the champ and can take on all challengers.
Nobody is answering the question most Americans are asking:
How does this downgrade impact me now and in the near future?

REAL EFFECTS OF THE US DEBT DOWNGRADE

The hype men at Fox and MSNBC and the doomsdayers both look pretty wrong, as it turns out. The market has continued on as before, gaining a bit some days and losing others. Actually, this is exactly what several prominent academic and foreign economists expected.

The downgrade is largely misunderstood amongst the public, because people on television are trying to make sure you are not informed! Debt downgrades are not actually catalysts for economic change – they are symptoms. It’s just like a report card. You don’t do poorly in class because you got a bad grade. You get a bad grade because you were doing poorly in class. The United States was rated too highly, so S&P gave them a new report card.

In the short term, the real effect of the downgrade is small. Over the next few years, everything should continue as normal. However, if the US is not upgraded or is downgraded again, it will be a sign that the US economy is really ailing.

One sign of this is the continuing increase in the value of gold and silver, which are setting all-time highs right now. Because the trustworthiness of the US dollar has been falling, more banks are trading in gold and silver. The bank of South Korea has actually changed all its holdings from US dollars to gold and is storing them in the UK.

MORE PRESSING FEARS

You should be more worried about the trading value of US currency than our country’s debt rating. The US economy has largely been artificially stable because the dollar has a privileged status as trading currency. If that goes, then the US economy will come down to earth. But it won’t happen overnight.

We will probably see steady market decline, say the academic economists at leading institutions in the US. Derivatives are built with triggers tied to debt. If financial institutions are downgraded as well, banks will demand more collateral and the market will begin to decline with falling derivatives. (more…)