Are you one of those lucky people with some extra cash on hand – perhaps several thousand dollars from some windfall like an inheritance or a bonus? Perhaps you're thinking of how to best make it work for you? Have you thought about how your choice might impact your insurance?
If you don’t need it for high-interest debt or to create that emergency fund you’ve always wanted, then you might consider paying off an auto loan, student loan, or even your mortgage. Since these are likely lower interest loans, you won’t save a lot on interest, but you could free up cash in your monthly budget that you can put to better use. But even if you can’t pay if off, the next best thing could be to pay it down. By reducing the loan principal, you can likely reduce your monthly payments. For much more on this, read Jean Chatzky’s (Fortune Magazine), to learn why you should pay off loans sooner rather than later.
And if you do pay off your car loan or mortgage, then don’t leave your insurance agent out of the loop. You’ll need to remove the lender from your auto insurance or home insurance policy. Just as important is to let your agent know if you get a new loan for a car or a home. Get all the details in this article from ERIE Insurance.
If it has been some time since you sat down with your insurance agent to review your auto and home insurance policies, then why not arrange a meeting now? Among other things, it will let you be sure that your policies are not listing outdated information such as lenders on paid-off loans. This will help you avoid having a payment for an insurance claim go to the wrong party.
Tags: Insurance claims, auto insurance, home insurance, mortgage, auto loan
The Daniel Howley Insurance Agency in Rockville, MD, is a full-service insurance agency offering auto/car insurance, homeowners insurance, business/commercial insurance and life insurance to all of Maryland (MD) and Virginia (VA) since 1969. Our experienced insurance agents welcome your inquiries and are glad to discuss your coverage needs at any time.