You’ve probably seen embedded insurance in the wild. Here’s an example: Let’s say you buy a new refrigerator. During checkout, you’re asked if you’d like to get insurance for the item. That insurance policy, or “protection plan,” gets embedded into your purchase as a single transaction.

Companies can offer insurance policies on everything from buying the latest iPhone to renting a U-Haul. But if getting insurance can be so easy, then why is it such a hassle when you buy or lease a new car?

In order to understand whether embedded car insurance is right for you, it helps to get context on how it all works. More importantly, that should also answer a bigger question: Can this actually save you money?

Rising anxiety about the cost of owning a car

Getting a new car isn’t all that different from any other purchase. If you’ve ever bought a laptop, an espresso machine or even a high-end electric toothbrush, you know the feeling: That sense of excitement that comes with being a new owner, especially after weeks or months of research.

But when it comes to big purchases, the word “ownership” can also cause anxiety. According to a 2023 NerdWallet survey, 53% of Americans plan to buy or lease a vehicle in the next 12 months. However, 23% of Americans who own a personal vehicle consider the cost of vehicle ownership to be a source of stress.

Those numbers might seem contradictory, but the reality is that the total cost of owning a vehicle is hard to calculate. You can budget your car purchase to the dollar, but it can still be hard to predict gas prices and car insurance rates. In fact, the average car insurance price for 2023 is nearly 32% higher than the average rate for 2022, according to NerdWallet’s annual analysis.

The burden of financing, insuring and paying off a vehicle lasts years after the initial excitement wears off. So drivers are looking for ways to save wherever they can, including at the dealership.

What is embedded insurance?

One way to reduce the stress of buying a new car is to find ways to simplify the process. This is why bundling auto insurance into a car purchase (not unlike our example of buying a new fridge) appeals to drivers.

“There’s no need to call your agent, spend 20 minutes on the phone digging up and providing details then waiting for your proof of insurance. With embedded insurance, it’s instant and seamless,” said Cassi Conrad, chief insurance officer at Sure, in an email. Sure is a digital insurance seller that specializes in embedded insurance.

Almost every state requires drivers to have liability insurance, so you’ll need proof of coverage before you can purchase a vehicle at a dealership. But having the car dealership bundle an insurance policy into your financing package might save you time and effort, both during the “checkout” process as well as when it’s time to make payments.

Additionally, consumers are more likely to buy insurance at the time of a car purchase. 50% of Gen Z (ages 18-26) and 54% of millennials (ages 27-42) believe the best time to shop for auto insurance is when buying or leasing a vehicle, according to the NerdWallet survey.

The convenience of bundling insurance into a purchase — combined with a rise in digital insurance as a whole — has created a demand for embedding policies into the car buying experience, Conrad said.

But can embedded insurance save you money?

All of this lines up with what drivers actually want when buying a car: 72% of recent car buyers would have liked to purchase insurance directly from the dealership, according to an online 2022 survey of recent car buyers by Polly, a company that sells embedded auto insurance. That same survey states that 42% of car buyers received no support from the dealership about actually getting insurance in their most recent car purchase.

Part of this disconnect is tied to availability. Embedded insurance is sort of an ongoing experiment for both insurers and car dealerships, and there just isn’t enough information available to predict whether it will save you money.

In fact, while embedded car insurance is definitely convenient, you could end up paying more for insurance over time. If you’re offered a single price for financing that includes a car loan and an insurance policy, you may end up paying interest on your insurance, which is unnecessary as well as expensive.

Choosing insurance is subjective. It’s largely dependent on how much coverage you want as well as what you feel comfortable paying, and the factors that determine pricing vary by person. But because there isn’t a standardized embedded auto insurance offering right now, the details could depend on the dealership, insurer and financing terms rather than what you want or need.

Ways to save on new-car insurance right now

If you do get offered embedded insurance at a dealership, it’s probably in your best interests to decline at this time. But that doesn’t mean you can’t find other ways to save money on insurance for a new car.

Remember all those hours you spent selecting the perfect year, make and model? Apply that same process to finding car insurance. Spend one hour getting a few different quotes for the specific vehicle you want, then compare those rates to find the best fit for your situation. If you do this before you get to the dealership, you can compare their offers to the quotes you already have.

Embedded auto insurance is still an evolving thing. Until some sort of standard policy offer exists, we recommend prepping before you get to the dealership to decide if embedded insurance is a good fit. You may still decide to add insurance to your cart at checkout, but at least you’ll know whether its the best deal before you sign the paperwork.

Could you afford to replace your entire wardrobe if your apartment caught fire? What about your phone, your laptop and all your furniture? If the answer is no, you probably need renters insurance.

“Renters insurance can’t stop awful things from occurring, but it can make life a little easier if and when they do occur,” Yael Wissner-Levy, vice president of communications at the insurance company Lemonade, said by email.

And the coverage may cost less than you expect — in fact, some tenants could pay next to nothing. Find out why you may want renters insurance and how affordable it can be.

1. Your landlord’s insurance won’t cover you

Some landlords require their tenants to have renters insurance, but if yours doesn’t, it’s not because they’ve got you covered. “Many renters [believe] that, since their landlord has insurance, it covers damage to their property. This is not the case,” Wissner-Levy said.

Landlord insurance covers the structure of the building but not tenants’ personal belongings. If your TV is stolen or your dishes are lost in a kitchen fire, your landlord’s insurance won’t pay to replace them — but a renters policy probably will.

A landlord’s policy is also unlikely to help if you accidentally damage a neighboring apartment. “If you [let] your bathtub or sink flood out the apartment below you, the landlord’s not going to cover that,” says Jeff Schneider, president of Gotham Brokerage Co. in New York City. “You can be sued for … causing damage to the apartment below you.”

A standard renters insurance policy includes liability coverage starting at $100,000, which can pay damages and legal expenses if you’re sued for accidentally injuring someone else or damaging their property.

2. You probably own more than you think

“[One] reason why people avoid renter’s insurance is the thought, ‘I don’t have anything valuable worth protecting,’” Wissner-Levy said. But you might be surprised.

Brandon Okita, vice president at FIA Insurance Services in Torrance, California, advises opening each drawer and closet in your home to take an inventory of your belongings. Once you start tallying up the value of each item — electronics, jackets, shoes and so forth — you’ll probably find that it would cost a lot more than you expected to replace everything.

3. Renters insurance can pay for housing after a disaster

“Most policies provide what’s called a ‘loss of use’ or ‘additional living expense’ benefit,” Schneider says. “It pays you if you are forced out of your apartment by a major claim — usually fire or extensive water damage — and you have to stay in a hotel.”

Loss of use coverage can also pay for restaurant meals or other expenses associated with living away from home while it’s being repaired.

4. It can protect your finances

Maybe you’re saving for a down payment on a house, or you’ve worked hard to get out of debt and build an emergency fund. The last thing you need is a lawsuit wiping out everything you have.

“Let’s say you go golfing … [and] you hit someone in the head and they turn around and sue you,” Okita says. If a court deems you responsible, your renters liability insurance will typically cover costs up to the limit you’ve purchased, even if the incident takes place away from home.

This coverage can also come in handy if your dog bites someone at the park, your child breaks a valuable heirloom at a friend’s house or a guest slips and falls inside your apartment.

5. It covers belongings away from home

Many renters policies provide some coverage for your stuff even when it’s not at home. “If your laptop was swiped at the neighborhood cafe, or your phone stolen on the subway, your policy could cover you,” Wissner-Levy said. (Keep in mind that it would make sense to file a claim only if the lost item were worth more than your deductible.)

You may also have coverage for items in a storage unit, Okita says.

6. The cost may be less than you expect

One common reason to avoid renters insurance is the cost. “A lot of people are not looking for added expenses these days,” Schneider says.

The average cost of renters insurance is $168 a year, or about $14 a month, according to NerdWallet’s rate analysis. But if you have a car, you could pay less by bundling your renters policy with your auto insurance, thanks to multipolicy discounts offered by many carriers.

For example, Okita notes, a 5% bundling discount on a $3,000 auto policy would be $150, which would nearly pay for the average renters policy premium.

You may also be eligible for discounts if your apartment has smoke detectors, burglar alarms or other safety and security devices.

If the worst happens, you’ll likely be glad you paid for the coverage. “Renters insurance is the best defense against things in life you have no control over,” Wissner-Levy said. “Once covered, most people see the benefits.”

The article 6 Reasons Not to Skip Renters Insurance originally appeared on NerdWallet.

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Life insurance applications for Americans have jumped in 2020 as the COVID-19 pandemic has made us more aware of our own mortality.

No one has been more interested in their own life insurance gaps than the under-45 crowd. Application activity has grown almost twice as fast this year for Americans 44 and younger as for those 45-59, according to research through September from MIB Group, a data-sharing service for insurance companies.

Younger buyers are often first-time applicants, digging into the details to understand how life insurance works. If you’re looking for a policy, here’s how to ease your way through the application process and get the most out of your new coverage.

Plan for tomorrow, not today

Many young Americans are still near the beginning of their financial journeys. Jobs, homes, cities and relationships will likely change over the next decade, which means needs and dependencies may change too.

“The question of who needs life insurance is very personal, but an easy way to know if you need life insurance is to consider if someone would suffer financially if you were to pass away,” Faisa Stafford, president and CEO of industry group Life Happens, said in an email. “If the answer is yes, then you should consider life insurance.”

She recommends focusing on two main issues: replacing your income and repaying your debts if you die. That means thinking ahead to cover your growing financial commitments as your life changes.

For example, a new homeowner can skip mortgage protection insurance, which pays off your loan if you die, and choose a term life policy instead, suggests Roslyn Lash, a financial educator in North Carolina and author of “The 7 Fruits of Budgeting.” Your mortgage debt will shrink over time, but your life insurance benefit stays the same — so if you die, some of the money could be used for other priorities, such as sending a child to college.

Skip the medical exam while you can

Life insurance applications are notoriously frustrating. You might expect to fill out forms, explain medications and take a life insurance medical exam just to find out if you’re approved.

While this process is still out there, simpler options are now available. “The use of e-signature, no blood or urine tests, and online applications all have made life insurance more accessible to more people,” Stafford said.

In a growing practice called “accelerated underwriting,” many insurers now rely on your prescription drug use, data about you from MIB Group and electronic health records to speed the process, according to the Society of Actuaries.

Accelerated applications can cut approval times down from weeks to hours, according to the National Association of Insurance Commissioners, with no medical exam required. Young buyers are often the most likely to be approved, and there’s almost no downside. Most insurers will simply have you take a medical exam if you aren’t approved without one.

Don’t assume life insurance is expensive

Buying now rather than later can help you save money on life insurance, which makes sense: The older you get, the more risk you pose to your life insurance company. The result is that a policy for a 25-year-old is likely to be much less expensive than the same coverage for a 45-year-old.

Many millennials may not realize the value of buying life insurance while they’re young and healthy. Research by the life insurance trade group LIMRA shows that half of millennials overestimate the cost of coverage. Only 52% own life insurance, even though 80% recognize they need it, according to LIMRA.

But the 2020 pandemic is providing new motivation. In October, nearly 1 in 3 millennials said they feel an increased need for life insurance due to COVID-19, according to consumer research from LIMRA.

To get started, all you have to figure out is how much you need and for how long you need it. Think about the people who depend on you. How much money would they need to pay off the house? How long would they need to finish school or find a job?

Stafford suggested starting with a general guide to determine your coverage need: 10 times your annual salary. “But since finances are complicated, working with a financial professional can help you figure out how much coverage you need for your own personal situation,” she said.

This article was written by NerdWallet and was originally published by The Associated Press. 

The article Smart Tactics for Millennials Flocking to Buy Life Insurance originally appeared on NerdWallet.

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The latest coronavirus relief package did more than dole out $1,400 checks. The law also made health insurance free for millions more people and reduced costs for others, at least for now.

The American Rescue Plan, which President Joe Biden signed in March, expanded subsidies for people buying their own insurance on Affordable Care Act exchanges. In addition, anyone who receives unemployment benefits this year can qualify for zero-premium health insurance through the exchanges, regardless of income.

In fact, many people who are currently uninsured will qualify for free or low-cost coverage through the exchanges or Medicaid, says Daniel McDermott, a policy analyst with KFF, the nonpartisan health care think tank formerly known as the Kaiser Family Foundation.

People who lost their jobs but want to keep their former employer’s health insurance also may get help. If you don’t qualify for group health insurance elsewhere, the federal government will pay your COBRA premiums for up to six months.

Millions qualify for free ACA coverage

Since 2013, ACA exchanges have allowed people to buy individual and family health insurance policies, usually with tax credits that reduced their premiums and other costs. ACA has four levels: bronze, silver, gold and platinum. Bronze plans typically have the lowest monthly premiums and the highest deductibles; platinum plans have the highest premiums and the lowest deductibles.

Before the new relief package, people with incomes greater than 400% of the federal poverty level typically didn’t qualify for subsidies to reduce their premiums. Now people with incomes up to 600% of the poverty level — up to $76,560 for a single person or $157,200 for a family of four — can qualify, according to KFF. (KFF’s calculator can show you how much you’d likely pay for ACA coverage.)

The relief package reduced premiums for the vast majority of people who buy their own insurance, McDermott says. In addition, nearly half of the 29 million currently uninsured now qualify for a free plan, he says.

Those with incomes below 250% of the poverty line also will benefit from reduced cost-sharing, which means lower deductibles and other out-of-pocket costs. At 150% of the poverty line — income of about $19,000 for a single person and just under $40,000 for a family of four — people qualify for zero-premium silver plans with annual deductibles of just $177.

Millions of unemployed people will be eligible for similar coverage. Anyone who receives unemployment benefits for any part of 2021 can qualify for a zero-premium silver plan with the maximum cost-sharing reductions, McDermott says. “For all intents and purposes, the health insurance exchanges are going to look at you as if your income was under 150%” of poverty level, he says.

This new provision for the unemployed may not be reflected on HealthCare.gov and most state-based exchanges until this summer, and perhaps not until fall, McDermott says.

“It is my understanding, though, that if these people enroll in coverage now and can prove that they received unemployment benefits at some point in 2021, then the benefits will be retroactive and they will eventually be reimbursed for the unnecessary expenses they incurred,” McDermott says.

How to qualify for ACA subsidies

The expansion of Affordable Care Act subsidies is retroactive to Jan. 1 and will continue through Dec. 31, 2022. People must purchase their insurance from Healthcare.gov or their state’s ACA exchange to qualify for subsidies. The act also created a new special enrollment period that extends through Aug. 15, 2021.

Some people still don’t qualify for subsidies, including most people with incomes above 600% of the poverty line; undocumented immigrants; people who have offers of employer-provided health insurance that’s considered affordable; and certain low-income people in states that haven’t expanded Medicaid coverage.

What you should know about free COBRA coverage

Many people prefer to keep their employer’s health insurance coverage when they lose their jobs, although the cost is often prohibitive. Most employers pay a large portion of the cost to cover workers, but former employees who opt to extend their coverage using the federal COBRA law typically must pay the full premium plus a 2% administrative fee.

Thanks to the new law, employers are required to provide free COBRA coverage from April 1 through Sept. 30 to eligible former employees who lost their health care coverage because of involuntary termination or a reduction in hours, says financial planner and certified public accountant Kelley Long, consumer financial education advocate for the American Institute of CPAs. The employers’ cost will be offset by federal tax credits.

If you’re eligible for other group health coverage — through a spouse, new employer or Medicare, for example — you won’t qualify for free COBRA.

“The intention is to help people who have no other options and would otherwise be uninsured because they can’t afford COBRA,” Long says.

Normally you have 60 days after you lose your job to opt for COBRA coverage, which typically lasts a total of 18 months. If you missed that 60-day window, or signed up but then dropped coverage, you may have another opportunity to enroll. The new law extends the sign-up period so that people who lost their jobs during the pandemic can get the free coverage. Employers are required to reach out to eligible former employees by May 31. If you think you’re eligible but you haven’t heard from your employer, McDermott recommends contacting your former employer’s human resources department.

There will be a special enrollment window at the end of September to allow people with COBRA to switch to an ACA plan, McDermott says.

This article was written by NerdWallet and was originally published by the Associated Press.

The article You May Qualify for Free or Cheaper Health Insurance Now originally appeared on NerdWallet.

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