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.
ESG Investing
ESG investing, it may be an investing buzzword that you’ve heard thrown around in your circle. ESG investing is a popular term these days, but it wasn’t always that way. There was a time when companies valued shareholder profits above everything else, with little regard for the environment and social issues. Now, companies are recognizing that ESG investing doesn’t just make for good PR, it makes financial sense too.
In this article we’ll look at the basics of what ESG means, what ESG investing is, why it’s so popular right now and how you can invest in ESG funds. After reading this article, you’ll have a better idea how to go out and choose your own ESG fund.
What Does ESG Mean?
ESG is an acronym that stands for Environmental, Social and Governance. These company objectives play an important role in a specific type of investing called sustainable investing and socially responsible investing. Sustainable investing values companies who do good things, everything from following local labor laws to reducing their carbon footprint.
Investors who follow this investment strategy look at companies using these three objectives when evaluating a stock. If you look at stocks from an ESG perspective, along with using more traditional stock analysis, it’s known as ESG integration.
Anyone can become an ESG investor. All you need to do is learn the framework and apply it to investing decisions.
Don’t let the objectives fool you. ESG investments still aim to earn positive returns. But that’s not all these investments aim to do. They also aim to have a long-term positive impact on society and the environment, all while striving to accomplish the mission the business has set out for itself.
What Is ESG Investing?
ESG investing is when you only invest money in a way that promotes sustainability. An ESG investor often uses the factors to reward companies that meet its objectives and influence others who could be doing a better job of meeting them. For a lot of investors, when you understand the ESG factors of a company, it helps you understand its corporate purpose, strategy and management, among other things.
Why Is ESG Investing so Popular Right Now?
ESG investing can be traced back all the way to 2005 when it was first used as investment jargon. Since then, all the major stock exchanges in the world have introduced their own set of sustainability guidelines. For example, the New York Stock Exchange introduced the Principles for Responsible Investment (PRI).
Since then, more and more companies have recognized that sustainability is something important for them to consider (since their investors and customers value it). Today, there are over 1,600 companies with $70 trillion in assets that follow PRI. And the numbers speak for themselves. Simply put, ESG investing has gone mainstream and is no longer just a niche interest.
That being said, some institutional investors have resisted ESG investing. These institutional investors argue that a company’s first and foremost responsibility is to its shareholders, in spite of the environmental or social effect. But it’s increasingly becoming evident that ESG related issues can affect a company’s bottom line, both for the good and the bad.
In North America as well as Europe, ESG investing is not only seen as the right thing to do, but a smart move for a company financially.
ESG investing is in contrast to shareholder value theory, which was popularized in 1970 by Milton Friedman. Friedman said that a company’s only social responsibility was to maximize its profits for its shareholders, with environmental, social and governance considerations not as important.
Since then, modern investors have realized that short-term thinking in order to temporarily boost company returns doesn’t make sense, especially when it will have long-term negative consequences. It’s simply too high a price for society to pay.
ESG investors recognize that a company’s stakeholders aren’t just its employees, customers and suppliers. It includes a whole host of other people, including society in general.
Despite shareholder value theory aiming to maximize the returns of shareholders, investors are realizing that by treating stakeholders in a less than stellar way, it presents financial risks not only for shareholders, but for the company itself.
This helps explain why ESG investing has been growing in popularity, and it helps explain the rising value of ESG ETFs. ESG ETFs combine the best of both worlds in what investors are looking for: low fees and sustainable investing.
How You Can Invest in ESG Funds
The simplest way to invest in an ESG fund is by buying an ESG fund. However, this is often easier said than done.
When choosing between two funds that claim they abide by ESG investing principles, you can end up with a completely different investment portfolio. That’s why you’ll want to drill down and take a closer look at a fund.
You can figure out if a fund is an ESG fund by looking at its ESG rating. An ESG rating provides an objective overview of a company’s environmental, social and governance responsibility, but the rating has its shortcomings.
For example, a company could have a great environmental record, but a not so great record in terms of gender representation. You need to dig deeper for yourself.
Let’s say you’re concerned about climate change. It may surprise you to learn that many ESG indexes don’t have a problem listing ESG funds that are involved in fossil fuels or the oil and gas industry.
If you truly want to see where a fund’s priorities lie, you can look at its individual holdings, usually found on its website. This should give you an accurate view over whether this is an ESG fund you want to invest in.