Bonds and Insurance Are Two Different Things

This is always where the conversation starts. Why? Because if you think a bond is an insurance policy, you will have the wrong set of expectations.

It's a common problem. When a bid or performance bond is needed by a contractor, who do they call? Their insurance agent.

The insurance agent is an intermediary. They represent and provide access to insurance companies - the actual providers of the insurance and bond products.

Another reason is that business people are likely to have prior experience with insurance, but not necessarily with bonds.

If you are seeking a bond, you're likely to become very frustrated unless you have a correct understanding and the expectations to go with it.

Here are two basic differences between insurance and bonds:

1. Insurance transfers risk of a specific event from the insured (policy holder) to the insurer. (Example: The risk of financial loss due to fire is transferred from the insurance applicant to the fire insurance company.) With a bond, the bond applicant HOLDS the risk.

2. Insurers charge rates that expect a certain number of claims and losses. Sureties do not expect to have claims or losses and do not charge enough to pay for them.

There are other additional differences, but let's focus on these two. With a bond, the surety is backing the bond applicant performance for the benefit of the party paying for the work. If a problem develops, it is still up to the applicant to solve it. In fact, contractors give their indemnity to the surety (promise to reimburse the surety if they fail to perform and the failure costs the surety money.) So when a bond is in place, it is even more important for the contractor to perform correctly. With insurance, you pay a premium to reduce your risk. With bonds you pay the premium, but have even more at stake than on an unbonded project.

On the second point regarding rates, this helps explain why bonds are hard to obtain. If the surety has no tolerance for claim or loss, they can only provide bonds for the most qualified applicants. This means you must present yourself in the best manner possible if you hope to obtain a bond. Doing so requires good financial reporting, record keeping and complete disclosure. We'll talk more about this later in this series.

If you understand the decision-making on bonds, it will help you navigate the process.

Insurance: Holidays

Having booked your longed for break abroad, dusted off your passport and sorted out the suitcase, the last thing on your mind will be that anything could go wrong on your trip. But things can and, inevitably, do!

One of the first priorities to consider after your tickets are booked is to get holiday cover signed, sealed and paid for before you take one step further out of your home. Buying an appropriate holiday cover policy from a reputable insurance company could be the best investment you ever make, and you may well be surprised at how affordable it can be.

Don't leave home without it

Whether it's a single trip policy, a policy to cover all the family, or even an annual policy to cover you for the entire year, the price of insurance can often be far less than you expect - and far more valuable than you could ever imagine.

Most of us don't like to think of the "What happens if... " scenario, but unfortunately what "happens" tends to be when we are at our most relaxed - on holiday. If you're in an accident abroad the medical expenses incurred can be nothing short of crippling, but even if we're just talking lost luggage, taking holiday cover enables you to relax that little bit more. You'll know your insurance policy is there to back you up - whether it's a trip, fall or something bigger.

The key is knowing the insurer will be there 24 hours a day, seven days a week, and that they are providing the best available services to you and your family. As long as the policy encapsulates everything you may encounter, you're home and hosed.
Choosing the right policy

Sourcing a good insurer is one thing, but getting the right holiday cover policy is the next hurdle. Read the small print of potential policies, query anything you are unsure about, check out the medical expense limits and know that the cover extends to any adventures you want to get up to. For example, does the cover exclude dangerous sports in case you want to bungee jump on the spur of the moment? Making a rash or spontaneous decision on holiday could be expensive if you find the policy excludes the pursuits you want to take part in.

Ensure the policy has sufficient medical insurance as well as provision if you have to cancel the holiday due to any unforeseen issues, such as a death in the family or you are suddenly made redundant. Ask your insurer questions: how much they will pay out on luggage delay and loss of personal belongings; whether you will be compensated for flight delays; and what will be your personal liability if you happen to cause an accident.

Understanding other elements, such as excess, how it works and what countries you won't be insured in, are also worth checking out. But with all these aspects considered, you should be able to travel in confidence and enjoy your trip abroad.

Insurance: How to Find Great Rates

You can never know when you will be in an accident. Worse yet, if it is your fault, or the other driver does not have insurance, you can be out thousands of dollars. That cost far exceeds the amount of money an automobile insurance policy will cost each month. Instead of going without insurance, use the techniques below to find great car insurance rates.

Insurance Calculator

When you go to for car insurance comparisons, you will need to know what your requirements are. The state you live in will provide very little help, as they often only make liability a requirement. Purchasing a vehicle will often make collision coverage a requirement as well. Insurance calculators will take your information, your vehicle's information, and then give you a recommended amount of coverage to purchase. You can then take these numbers when shopping for car insurance quotes and have a common factor to compare them to.

Compare Discounts

Once you have the basic insurance coverage amounts you need, you will want to look at what discounts each auto insurance company has to offer. It is often easier to compare various car insurance companies by breaking down the costs and discounts. You can compare the actual premiums based on the amount of insurance you intend to purchase, but you can also look at the discounts available. It is important to consider which discounts will benefit you and see which companies provide them. Finally, see how much the discount is so you can apply that to the car insurance rates.

Talk to Agents

It is important when you purchase insurance to cover you vehicle that you feel comfortable with the insurance company. You want to be able to trust that when you are in an accident, they will be there to help you through the process. This includes from having your vehicle adjusted and repaired, to needing assistance in renting a backup vehicle. Just because the prices are good, it does not mean that the agents will be knowledgeable.

Get Referrals

Finally, you will want to make sure you talk to people you know and trust to find out car insurance company they have a policy with. Investigate as to why they chose that company, how easy/hard it is to file claims, and how often their insurance rates fluctuate. When you talk with an insurance company, ask for references that you can talk to who can give you direct insight as to what their thoughts are on the car insurance company.

It is irresponsible to drive without insurance, but it can also be very costly. If you believe your car insurance rates are too high, then you will want to go back and start shopping around again. Never cancel your insurance plan until you have a replacement for it. Use these tips as a guide to finding great car insurance rates, and work with a company that keeps you in control. Automobile insurance should not be a dreaded task. Take the time to do the research, and you will never have to worry about driving without proper insurance for your vehicle.