Consumers should be wary of purchasing insurance from sellers of cars, homes, electronics and travel, the Consumer Federation of America (CFA) said in a consumer alert today.

“Add-on” insurance, the CFA warned, tends to be outrageously overpriced, typically involves kickbacks to sellers and is often unnecessary. For example, collision insurance policies sold by car rental agencies are often many times more expensive than regular policies. Your existing auto insurance policy or credit card probably already covers the risk, the group says.

“In our experience, insurance offered to you in conjunction with the sale of other products is often not needed or, if needed, can be purchased much less expensively from other sources,” said J. Robert Hunter, CFA’s director of Insurance and former Texas Insurance Commissioner and Federal Insurance Administrator, in a statement.

Continue reading Do you need ‘add-on’ car rental or travel insurance? No, says consumer group

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Most people rush to schedule as many medical tests as possible just before their COBRA coverage runs out. But some experts now say that’s precisely the wrong thing to do when you’re shopping for post-COBRA health insurance. The problem with those medical tests is that they just might find something — and if that something requires treatment or even the potential for treatment, that can make you undesirable to most insurers.

But are these experts offering life-threatening advice — time of diagnosis is often a factor in advancing diseases? With that understood, here’s what some people are saying:

Continue reading New Recession Rule: Don’t get tests while shopping for health insurance

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Texas Attorney General Greg Abbott has ordered Traveler’s Insurance to stop airing what it considers to be a deceptive ad or face legal action.

The AG says the ad is misleading because it gives viewers the impression they should purchase additional car insurance or risk losing their home because they didn’t carry adequate automobile liability insurance.

The ad, “Drive Your House,” features a man driving his home through the desert when he’s distracted trying to answer his home phone. The man loses control of his car, sending him, the vehicle and the contents of his home – including his cat and prized souvenir baseball – flying through the air.

A man is then heard saying, “Without the right auto insurance, a crash might impact more than your car. Make sure you’re properly covered, so when you’re driving your car, you’re not risking your house. Travelers, take the scary out of life.”

Continue reading Texas AG demands ‘improper’ Travelers Insurance TV ad be taken off air

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There are types of insurance that Americans don’t buy enough – renters insurance, disability insurance, long-term care insurance, flood insurance. Then, there are others that we buy way too frequently and are, for the most part, a waste of money.

Today, I am more worried about the latter — and there is good reason to be concerned. This morning, the New York Times published an op-ed column by Nobel Prize-winning economist Paul Krugman who wrote: “We are now, I fear, in the early stages of a third depression.” Hammering that point home, more than one million people are expected to lose their unemployment benefits this week.

For most Americans, these are scary times and any extra money we have floating around can certainly be put to better use. So when it comes to that part of your budget earmarked for insurance premiums, here are the policies you should consider avoiding:

Continue reading 10 insurance policies that aren’t worth the money

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Sometime in August, Patricia Holland will drop into Medicare’s dreaded doughnut hole. She is already bracing for that financial wallop.

Holland, 67, of Centreville, Md., regularly takes seven prescription medications. One of them — Entocort — is especially expensive. It prevents severe attacks of her colitis, an inflammatory bowel disease.

Right now, with full Medicare drug coverage — before the doughnut hole — Holland pays $195 a month for Entocort. That’s her co-pay, nowhere near the full price of the medication.

When she enters the doughnut hole, though, her Entocort cost will go up exponentially, consuming, she says, her entire state retirement check.

The doughnut hole is the coverage gap in the Medicare prescription drug benefit, called Part D. Seniors get initial coverage until their total drug expenses exceed $2,830. Then Medicare covers nothing until total spending reaches $6,440, when catastrophic coverage starts. The doughnut hole is the $3,610 space between the two amounts, when seniors pay all costs for their drugs.

Continue reading $250 Medicare rebate checks a ‘drop in the bucket’ compared to rising drug prices

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Whenever I ride in a taxi in New York City, I marvel at the intestinal fortitude of the drivers who navigate pedestrians, potholes and other drivers who seem to have learned how to drive via a video game. And, according to a recent survey of driver knowledge by GMAC Insurance, it turns out that the awe these drivers inspire is justified.

GMAC’s sixth annual survey quizzed more than 5,200 licensed Americans from across the country on their driving knowledge and New York drivers fared the worst for the second year in a row, with an average score of 70 percent. That’s more than six percentage points below the national average score of 76.2 percent. New Jersey residents shouldn’t laugh too loudly at their neighbor’s expense. Garden State drivers finished second to last. Kansas, on the other hand, proved to be the best place to drive with a score of 82.3 percent. Oregon, South Dakota, Minnesota, Iowa and Nebraska drivers were also among the best performers on the survey.

Overall, though, the findings were pretty dismal. The study found that “nearly 1 in 5 licensed drivers — roughly 38 million Americans — would not pass a written drivers test exam if taken today.” A whopping 85 percent could not identify the correct action to take when approaching a steady yellow traffic light (hint: it involves the brake pedal). Many drivers also remained uncertain about safe following distances.

Nationally, the average score slipped from 76.2 percent from 76.6 percent. “When analyzed regionally, the results reveal that drivers in the Northeast may not be as road-rule savvy as their Midwestern counterparts,” according to GMAC’s press release. “The Northeast had the lowest average test scores (74.9 percent) and had the highest failure rate (25.1 percent). The Midwest region had the highest average test scores (77.5 percent) and the lowest failure rates (11.9 percent).”

Some other notable trends: Older drivers outperformed younger ones and men did better on the test than women but also flunked it at a higher rate. One-in-four drivers admitted that they did “distracting behaviors” such as selecting music on their iPhones, applying make-up or reading, though only 5 percent admitted to text-ing while driving.

The results are similar to GMAC’s finding over the past six years that it has conducted the survey. Wade Bontrager, senior vice president of GMAC Insurance, is not sure why there is such a disparity in results but does have some theories. He believes drivers in large, urban areas fare worse than their counterparts in rural areas because they must contend with more distractions and they don’t drive as often because they rely more heavily on public transportation. Nevertheless, he doesn’t think these factors should be used as an excuse.

“There is knowing the rules of the road. and there is obeying the rules of the road,” he says.

Continue reading Worst drivers in America by state

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Ever wish you could find one place to go for basic financial information about anything? If that’s your wish, you’ll find all that you need at the government’s newly launched MyMoney.gov website, which was developed with financial information from 12 Federal agencies, departments and bureaus that make up the Financial Literacy and Education Commission.

“As America recovers from the most severe financial crisis since the Great Depression, it’s critical that we strengthen every aspect of our financial system,” Treasury Deputy Secretary Neal Wolin said in a press release announcing the launch of the site. “Financial education and access is a priority for this Administration, and we’re pleased to provide this critical resource to help Americans find free, reliable and unbiased information that can help inform their daily financial decisions and plan for the future.”

Continue reading MyMoney website: A one-stop bonanza of financial information

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Every weekday, Betsy Langston makes a 90-minute drive with her son to Myrtle Beach, S.C. Then, after about three hours there, she drives the same 90 minutes back home to Florence.

That’s $20 a day in gas, not to mention the wear on her station wagon and herself. “It gets really tiring,” Langston says. But the trip is well worth it, she adds. Pierce, 3, goes to a clinic in Myrtle Beach where he receives intensive therapy for his autism.

Pierce has made big strides for the past year through applied behavior analysis (ABA) treatment. “He went from having only two words to now having spontaneous phrases,” Langston says. “When we go out to eat, we can ask him what he wants.”

His meltdowns have decreased in severity. Before ABA, she says, “I was a prisoner of the house. I would have to wait till my husband came home to go shopping.”

Continue reading Coverage for autism crucial for families

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When consumers buy insurance, they are guided by a “well, you never know philosophy.” That, according to experts, is a huge mistake.

Saving money can be as easy as making a phone call. “The number one way people waste money is simply not asking for all the credits that they could,” says Bill Wilson, associate vice president of education and research for the Independent Insurance Agents & Brokers of America.

For instance, most insurance companies offer discounts for customers who buy more than one type of coverage. There are also deals for good drivers and for teen drivers with good grades. People should periodically review their coverage to make sure they are getting the most value for their money. Here are a few of the most common mistakes.

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Has your driving routine changed because of a job loss? Notify your insurance agent immediately if you are putting less mileage on your car and your rates will be lowered. Also, watch deductibles, particularly if your vehicle is older, otherwise someone may pay as much to insure their vehicle as it is worth.

Continue reading How to determine if you’re smartly insured

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My grandmother died at home in her own bed, surrounded by her 13 children and dozens of grandchildren. Her daughters and daughters-in-law cared for her the last six months when she was bedridden and in pain.

For today’s aging Baby Boomers, however, that scenario is unlikely to be repeated because families are a fraction of the size they were two generations ago. As gerontologist and Boomer expert Ken Dychtwald says, “There’s going to be a caregiving crunch because there’s no family for Boomers to rely on. They’ll have to turn to professional caregivers.”

And that takes money. Big money.

Here are some details on the new federal long-term care program, Class Act. The Congressional Budget Office assumed a $123 average monthly premium – that’s $1,476 per year with a $50 to $60 per day payout should you qualify by being unable to perform two of the six activities of daily living (eating, bathing, dressing, toileting, transferring and maintaining continence, or cognitive impairment).

In the world of long-term care, $50 to $60 per day is a pittance. Insurer Genworth annually surveys the cost of long-term care nationwide. Its latest survey, released last month, concludes that the median cost of nursing home care in a private room is $206 a day. Even at the lowest care level, the median cost of hiring a licensed homemaker is $18 per hour or $144 for an eight-hour shift.

Continue reading Another long-term care insurance option for Boomers

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