Protect Against Collisions and More If you drive a car in the United States, liability insurance must cover it. This type of policy pays for medical and property damage resulting from a vehicular accident. You can also purchase comprehensive and collision insurance to cover other costs. These additional coverages help protect the value of your car should it be damaged. If you are calculating how much it will cost to buy a car, you need to take into consideration the cost of insurance as well. In this article, we’ll review the basics of car insurance and the best auto insurance companies in America, including costs, pros and cons. This is a brief introduction to automobile coverage. Liability Coverage When an accident occurs, liability insurance covers you, household members and authorized drivers for the costs associated with property damage and bodily injury. It covers the cost to repair or replace property damage that you caused. [youmaylike] You are also covered if you cause the bodily harm or death to someone else while you are driving the car. This includes medical expenses, loss of income and specified legal defense costs. Collision Insurance If you are involved in a collision, this type of insurance will help pay for repairing or replacing your vehicle. If the collision is your fault, the coverage may extend to other damaged vehicles involved in the accident. States do not mandate that you buy collision insurance, but your lender or car dealer will if you finance or lease the car. Policies offer a range of deductibles, which is how much you’ll have to pay for repairs before the insurance kicks in. Larger deductibles lower the policy premiums but expose you to more out-of-pocket expenses if a collision occurs. Comprehensive Insurance Comprehensive insurance covers damage to your car that occurs for reasons other than a collision, including theft, fire, vandalism, weather and natural disasters. This coverage is often required if you finance your automobile. You can add riders to this insurance to provide coverage of additional costs, including auto towing, glass repair, daily rental while your car is in the shop and emergency roadside service. As with collision insurance, you can set the deductible on your comprehensive insurance policy to cut your premium costs. Gap Insurance If your car is severely damaged in an accident or other incident, you might find that your comprehensive and collision damage won’t provide enough coverage to pay off the amount you owe on the vehicle. Many policies pay only the fair market value of a totaled car, which might be only 80% of the amount you owe. You can buy additional insurance to plug this gap and ensure you can pay off the car loan in full if the vehicle is destroyed or stolen. Normally, car leases require you to buy gap insurance. If you pay cash or pay off your loan, you can save money by avoiding or dropping gap insurance when no longer needed. Top Five Auto Insurers These five insurers all offer full coverage policies and many additional services. Amica Amica is a superstar among car insurers, winning accolades from Consumer Reports and J.D. Powers. It’s known for handling the claims process smoothly. The average annual cost for full coverage: is $1,360. Pros You can have your car repaired at any body shop, without restrictions. Offers a premium package which, for an additional cost, provides full glass coverage, rental coverage, good driving rewards and identity fraud monitoring. Superior financial stability rating from A.M. Best. Cons Missing some discounts, such as military, low-mileage and prepay discounts. Must speak on the phone to get a quote. Sparse website when it comes to customer education. State Farm State Farm is the country’s largest multi-line insurance company. It excels in customer service and regularly garners high marks from customers. The average annual cost for full coverage: is $1,337. Pros Superior financial stability rating from A.M. Best. Excellent online quote tool, getting customers a quote in as little as five minutes. Easy claim handling and top service from its more than 18,000 agents and its easy-to-use mobile app. Cons Doesn’t offer coverage for new car replacements or uninsured motorists. Missing prepayment and automatic payment discounts. The Hartford While only 11th in size, The Hartford is big when it comes to policy options. It offers rates based on your actual driving as well as full replacement of new cars when destroyed shortly after purchase. Average annual cost for full coverage: N/A. Pros Solid benefits, including superior roadside assistance and towing programs. High marks from customers for their purchase experiences. One of the few insurers with mechanical breakdown coverage for out-of-warranty repairs. Cons Mediocre service interaction according to J.D. Power surveys. Sparse online learning materials. Geico Geico is the second-largest U.S. car insurer. It is a favorite among tech-savvy geeks who appreciate the insurer’s mobile app and excellent online service. The average annual cost for full coverage: is $1,627. Pros Geico offers plenty of ways to save, such as multi-vehicle, driving history and vehicle safety equipment discounts. Special savings for active and retired military members and federal employees. Full-featured mobile app for getting quotes, buying insurance, managing your policy, submitting claims, summoning roadside assistance and making payments. Cons Human help may be in short supply, as just about everything is handled online. No gap insurance is offered. USAA No insurer matches USAA for service to military members. Unfortunately, it's only available to active service members, their families and retired veterans. Average annual cost for full coverage: $896. Pros Superior financial stability rating from A.M. Best. Top-ranked purchase experience score from J.D. Power. Cons Missing gap coverage. Doesn’t offer interior vehicle coverage or new car replacement coverage. Limited availability. The Right One for You Competition in the insurance industry helps drive down prices and prompts insurers to offer money-saving features. For example, your carrier might reward you for a safe driving record and for having a long-term relationship with the insurer. The right insurer for you is highly rated for service, offers the exact coverage you want and does so at an unbeatable price. You should always gather multiple quotes before selecting an insurer, and make sure you get credit for all applicable discounts.
Want to Hop on the Amazon Train?
If your garage is anything like mine, it’s filled with a mountain of boxes from Amazon.
The online giant has done more to transform the retail business than anything else in the last 100 years. The company is expected to surpass $250 billion in worldwide sales in 2019, and $300 billion in 2020. That’ll put it close to Walmart, the world’s largest retailer.
Not bad for a company that was little more than a few employees and a dream 25 years ago.
Most analysts agree Amazon still has plenty of growth potential ahead of it, too. Online sales are still only about 10% of total retail sales. The company’s web services division hosts many of the world’s top websites. It has some 100 million Prime members, customers that pay $119 annually for faster shipping, a streaming video service and other perks.
That’s not all. Amazon owns Whole Foods, one of North America’s largest grocers. It dominates the e-book market through its Kindle service. It bought Zappos.com, the world’s largest apparel and footwear website.
The company also owns dozens of smaller assets that are too numerous to mention. Needless to say the company is a colossus, and it’s easy to understand why regular investors might want to own a piece of it.
Let’s take a closer look at how you can add Amazon stock to your portfolio.
Before You Begin
Like with any stock, there’s the risk that Amazon shares could go down over time. Although Amazon’s stock has done superbly well over the years, there’s no guarantee shares keep going up. In fact, Amazon shares have fallen by more than 50% on at least two occasions, and when the overall stock market falls, Amazon shares often fall by a greater amount.
If this risk of loss scares the daylights out of you, it’s best to stick with safer investments.
The first step toward buying Amazon stock is opening up an online brokerage account.
Setting up the Process
There are only a certain number of Amazon shares outstanding. Every time somebody buys one, they’re simply purchasing a share that’s already in existence. A broker’s job is to match up buyers and sellers, helping the two facilitate a transaction.
Before technology took over, this was done either face-to-face or over the phone. Up until the late-1990s, you needed to physically go see your broker, tell them your order, and they’d execute it. Commissions of 2-3% of the value of the transaction were common.
It’s easy to see why this was disrupted. It made zero sense.
The same transaction is done online today, and for a fraction of the cost. The only difference is investors got advice along with their trades back in the day, while everything is self-directed now. You go to your online broker and tell it what you want to do, rather than the broker telling you what they think should be done.
The first step to buying and selling individual stocks is acquiring a brokerage account. This can be as easy as a few steps if you bank with one of the big banks. They all have brokerage divisions, and opening an account isn’t much harder than telling the bank part to share your information with the brokerage part. You’ll be in business in a day or two.
It’s a little more complex if you need to open a new account from scratch. The brokerage will need a snapshot of your total financial life, doing everything from verifying your identity to asking about your net worth. It seems like an invasion of privacy, but the brokerage is required to ask these questions. Blame the feds, not the broker.
It doesn’t take much cash to get started, either. Many brokerages will allow you to open an account without any money in it. You’ll need to transfer initial capital over to the account to start buying stocks, but that’s as simple as paying a bill online.
Now It’s Time to Buy Amazon Stock
Your brokerage account is all set up and funded. Now it’s time to actually buy the stock.
The process is quite simple. Remember, trading stocks is one of the major ways your brokerage will make money. So they have a vested interest in making the process go as smoothly as possible.
You’ll either go to your brokerage’s website or app. The process is the same on either platform. You’ll search for the “trading” or “trade stocks” button. Click that and it’ll take you to the trading screen, which has a few different options.
Start out with putting the stock’s symbol in. We’re buying Amazon so we’ll put in its symbol, AMZN.
Next you’ll need to tell the software how many shares you want to buy. It won’t be very many, unless you’re a real baller. Amazon’s stock price is nearly $2,000. Don’t sweat it if you can only afford a share or two. The underlying value of each share is what counts, not the sticker price.
Finally, it’s time to tell your broker if you want a limit or market order. A market order buys shares at the going price, while a limit order insists on a certain price. Lots of investors are constantly buying and selling Amazon shares, so you’ll be fine going with a market order. Limit orders are generally reserved for stocks without a lot of volume.
Once you confirm all that, your brokerage will ensure you’re okay with the entire order. Note this is where the total commission is disclosed as well. Take a minute to make sure you didn’t make any typos and then confirm.
Congratulations. You’re the proud owner of Amazon stock.
The Bottom Line
I understand the desire to own Amazon shares. The company has killed it for 25 years now and looks poised to further secure its dominance going forward. Who wouldn’t want to own a small piece of a company like that?
Online brokerages have made it simple to buy and sell stocks, too. Millions of Americans are taking control of their retirement savings through self-directed trading, with many having great success at it.
Just remember one thing: Amazon stock is a risky investment. It could very well go down over the short-term. The important thing is to ride out these downturns. Don’t get excited if the stock doesn’t immediately go up. Long-term patience will win the investing game.