For years, the narrative around life insurance went something like this: Buy protection while you're young to replace your income so your family doesn't struggle if something happens to you.

And that message has clearly resonated. A good 51% of American adults say they have some life insurance coverage, according to LIMRA.

When it comes to buying life insurance, you have a choice. You could opt for a term life policy that offers limited coverage and no cash value accumulation. Or, you could buy whole life insurance, a type of permanent insurance that covers you for life and includes a cash value component. (Other forms of permanent insurance include universal and variable.)

While term life insurance holds appeal as the less expensive option, there's an inherent risk in buying it. In a nutshell, if you don't pass away by the end of your policy's term, you'll get nothing out of all of those premiums you paid (though you'll still be alive, so there's that).

With whole life insurance, you're guaranteed a payout. You can reserve the policy's death benefit for your loved ones upon your passing or tap your cash value for supplemental income in retirement.

In fact, you'll often hear whole life insurance touted as a useful retirement savings tool. But is it worth getting for that purpose?

Financial security that comes at a price

Life insurance is an inherently useful and important financial tool. But for many people, term life insurance can get the job done at a fraction of the cost.

Policygenius says that a healthy 30-year-old who doesn’t smoke might pay an average of $26 per month for a 20-year term life policy with a $500,000 payout. That same applicant would be looking at $450 per month for a whole life policy with the same benefit.

For this reason, proponents of whole life insurance tend to look beyond the "insurance" angle and incorporate whole life policies into the retirement planning equation. But while whole life insurance can provide policyholders with retirement income, it may not be the most efficient way to get there.

Whole life insurance lacks flexibility and efficiency in retirement planning

There are some use cases for whole life insurance in retirement planning. But Alex Langan, Chief Investment Officer and financial adviser at Langan Financial Group LLC, says point blank, "For most people in most situations, whole life insurance is not the right primary retirement savings vehicle. That's not a disclaimer. That's our honest assessment after working with clients across a wide range of financial situations."

For disclosure purposes, Langan Financial Group offers whole life insurance as part of its planning work, and in certain circumstances, advisers at the firm may be compensated for those recommendations.

The reason Langan doesn't usually recommend whole life insurance boils down to what the product is designed to do versus what long-term planners actually need.

"Whole life is built first around a permanent death benefit, with a savings component attached to it," Langan says. "Retirement planning is fundamentally about growth, flexibility, liquidity, and tax efficiency over time. Those aren't the things whole life is optimized for."

As Langan explains, whole life policies tend to grow more slowly than market-based alternatives. And since the costs are significant, especially in the early years, that's money that could instead go into an investment portfolio and generate stronger returns.

Derrick Schuler, CFP at Schuler Wealth Planning, agrees.

"Using whole life insurance as a retirement savings tool isn’t necessarily a waste of money, but there are much more efficient ways to save for retirement," he says.

Schuler formerly sold whole life insurance but no longer does. He makes recommendations on whole life insurance for clients, based on how it fits into their overall financial plan.

Schuler says that while whole life insurance accumulates a cash value that grows tax-deferred over time, "there are a lot of insurance costs, administrative expenses, and commissions built into the policy that can reduce the overall return on the cash value."

If retirement savings is the primary goal, says Schuler, then most people are usually better off first maximizing contributions to employer retirement plans, IRAs, and HSAs.

"These accounts generally offer lower costs, greater flexibility, and higher long-term growth potential than a whole life policy," Schuler insists.

Accessing funds from a whole life policy can be complicated

Another issue with using whole life insurance as a retirement savings tool, says Langan, is that accessing the cash value through policy loans or withdrawals comes with real trade-offs.

"Policy loans accrue interest and reduce the net death benefit while the loan is outstanding," he says. "If the loan is repaid in full, the policy can be restored to its original state. If it isn't repaid, the outstanding balance plus accrued interest is deducted from the death benefit paid to your beneficiaries."

Withdrawals work differently. They permanently reduce both the cash value and the death benefit and don't need to be repaid.

But, Langan cautions, "neither option works the way a straightforward account withdrawal does, and that matters when you're planning for retirement income flexibility."

There's also a timing issue Langan raises.

"Because of the way commissions and insurance costs are structured in permanent policies, it can take a meaningful number of years before the cash value exceeds what you've paid in," he explains. "That lag represents a real cost compared to other vehicles where contributions are working from day one."

When can whole life insurance actually make sense?

Langan says there are some scenarios where whole life insurance does make sense in the context of financial planning.

"The first is someone who has genuinely maximized every other tax-advantaged savings option available to them and is looking for additional ways to grow assets in a tax-efficient structure," he says. "At that point, the comparison set changes and whole life becomes more competitive relative to fully taxable alternatives."

Langan also says whole life insurance can fit into estate planning and legacy situations where a permanent death benefit is the actual objective.

"If someone needs a guaranteed death benefit regardless of when they die, and wealth transfer is a primary goal, permanent insurance makes structural sense because it's doing exactly what it was designed to do," he says.

Additionally, Langan says that whole life insurance could make sense as part of business planning. In that context, there are situations in which the guaranteed nature of the policy serves a specific functional purpose.

Of course, there's also a behavioral use case for whole life insurance.

"Some people know themselves well enough to recognize that they won't invest the difference between a term premium and a whole life premium," Langan says. "If the realistic choice is between a whole life policy that forces consistent contributions and builds cash value over time versus doing nothing because the money will otherwise be spent, a whole life policy is better than nothing."

But, Langan says, it's important to recognize that this still doesn't make using whole life insurance as a retirement savings vehicle an optimal financial strategy. Rather, he says, "It's a reasonable solution to a real behavioral challenge. There's a difference, and clients deserve to know which one applies to them."

Ultimately, Schuler says, it's important for savers to understand what life insurance is supposed to do — protect income, pay off debts, and provide for loved ones if something happens to them during their working years. Term life insurance can often provide that coverage at a fraction of the cost.

"For the average person looking to build wealth for retirement," Schuler says, "term insurance combined with disciplined investing will typically provide more insurance protection, more flexibility, and a larger retirement nest egg over time."

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More and more retirees are "retiring" from retirement.

Data from the National Institute for Occupational Safety and Health shows the number of retirement-age Americans in the workforce is growing.

And in a survey by Asset Preservation Wealth & Tax, 51% of respondents who'd reached retirement age said they plan to work indefinitely.

The reasons for retirees planning to work into their later years vary. Some simply have to from a financial perspective, while others want to live an active, purposeful life.

However, working during retirement brings challenges and trade-offs, especially when it comes to Social Security benefits, taxes and healthcare. The decisions you make about when to start claiming Social Security and whether you plan to keep working can have lasting consequences.

The pitfalls of claiming Social Security too early

A common phrase we hear is, "I'll just take my Social Security benefits at age 62." While it's true this is the first age you can start claiming benefits, doing so can backfire, particularly if you keep working.

If you claim and continue working before reaching your full retirement age, which is between 66 and 67 depending on your birth year, a portion of your benefits may be temporarily withheld owing to Social Security earnings limits.

For 2026, you can earn up to $24,480 before benefits will be withheld. In the year you reach full retirement age, the earnings limit increases to $65,160. After you reach your full retirement age, there are no earnings limits.

Upon reaching full retirement age, your benefit amount will be recalculated to give you credit for any benefits reduced and withheld.

Additionally, once you've started collecting Social Security, stopping and starting benefits is complicated and can permanently reduce your lifetime payments. It's not a switch you can easily flip on and off.

Bridging the healthcare gap: Age 62-65

Another major issue for people who claim Social Security benefits early is healthcare. Medicare eligibility doesn't begin until age 65, so if you leave your employer's health plan and retire at 62, you'll need to find coverage on the open market, which can get expensive.

Working part-time may provide access to employer healthcare, but that could put you at risk of exceeding the Social Security income limits. You could turn to private insurance, but the premiums can easily use up a large portion, or even all, of your Social Security check.

The three-year gap between age 62 and 65 is one of the most overlooked in retirement planning. I recommend sitting down with a financial adviser to go through all of your options before claiming early and potentially setting yourself up for financial failure, watching sky-high out-of-pocket premiums drain your savings faster than expected.

Income, taxes and the cost of working in retirement

Even after reaching full retirement age, when the Social Security earnings limit no longer applies, income from work can still impact your finances. That's because it depends on your total income.

If you're single and your combined income, the sum of your adjusted gross income (AGI), non-taxable interest and half of your Social Security, exceeds $25,000, or $32,000 for married couples, up to 85% of your Social Security benefits may be taxable.

In other words, the more you earn from working, the more you may have to give back in taxes. It's not necessarily a reason to stop working, but it does highlight the importance of strategically coordinating your income sources.

Knowing when to claim

Many people think waiting to claim Social Security until age 70 is always the best option, since benefits grow by about 8% each year after full retirement age until age 70. While that may maximize the amount you receive every month, it's not right for everyone.

For some retirees, the time value of money may matter more. For example, some may start taking benefits at 67 or 68 and use that income strategically by reinvesting it, reducing portfolio withdrawals or using it to strengthen their overall retirement cash flow.

There's also a break-even point, where the total amount collected by claiming early can surpass what you'd get by delaying. For married couples, it often makes sense to strategically stagger claims, with one spouse claiming earlier and the other delaying for a higher survivor benefit.

At the end of the day, there's no one-size-fits-all when it comes to claiming Social Security. It all comes down to finding the right balance of longevity, income needs and your overall financial plan.

Social Security should supplement, not replace, your income

Social Security was never designed to be the sole source of retirement income. It was meant to supplement, not replace, your paycheck.

You will likely need around 70% of your pre-retirement income to maintain your current lifestyle, and Social Security was only meant to cover about 40% of that.

That isn't to say Social Security doesn't matter. After all, those benefits come from decades of contributing payroll contributions. It's money you've earned. While the benefit may not be life-changing, it can still help cover major expenses, such as housing, travel or healthcare.

The importance of having a plan for claiming Social Security

Working in retirement can be incredibly rewarding, personally and financially. But it also requires strategic planning, especially if you plan to claim Social Security early.

Deciding when and how to claim Social Security is one of the most important financial choices retirees make because reversing your initial decision can be complicated and costly.

Before you claim, make sure you understand how your job, income and healthcare could affect your benefits. Working with a financial professional who can help you strategize Social Security with your overall financial plan can make a big difference. The right timing and strategy can help you keep more of what you've earned and lead to a more confident retirement.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

At a time when it feels like every news story is about how your costs are getting higher, USAA is bringing a little bit of financial relief to some of its car insurance customers in Florida. This week, the company announced a combination of rate cuts and direct dividend payments to eligible members that would total nearly $1 billion in savings.

The news comes just months after State Farm announced a similar dividend payout for its customers. So some drivers have been seeing at least a little relief even as soaring gas prices strain their wallets.

But which drivers are going to see discounts? Which ones will get a check in the mail? And how much savings can each person expect? Here's what we know so far.

Why is USAA giving out refund checks and rate cuts?

With this week's news, consumers see yet another example of why USAA is consistently named the favorite car insurance company in Kiplinger's annual Readers' Choice Awards. The popular car insurance provider that caters exclusively to military members and their families noted that recent policy reforms in Florida surrounding personal injury lawsuits have led to significant savings for the company.

In turn, USAA is passing some of those savings on to its members in Florida.

"Florida's civil litigation and tort reforms have curbed legal system abuse, helping reduce the legal costs that were a significant driver of premium increases, enabling USAA to pass meaningful savings directly to members," the company said in a press release.

The company noted that other states, including Georgia, Louisiana and New York, are also looking at reforming their legal systems. As more states crack down on legal system abuse, USAA might enjoy additional cost reductions in other states. Whether or not they'll pass some of those savings onto drivers in those states remains to be seen.

How much will Florida drivers get from USAA?

The exact amount of your dividend check will depend on various factors not yet disclosed by USAA. But the insurer did say in its press release that the average payment will be about $760 per USAA member, with as much as 25% of those eligible for a dividend payment getting over $1,000.

That's significantly higher than the State Farm refund checks that were announced in March. But since this payout is limited to USAA members in Florida, fewer members overall are going to see a check.

Those dividend payments are in addition to discounts that USAA says about half of Florida auto policyholders will get. The company has dropped rates in the state by about 14% on average over the last six months.

While USAA already tends to be favored for its competitive rates, it's always worth shopping for car insurance ahead of every renewal. Getting additional quotes ensures you're always getting the best possible rate for the coverage you need. So, if your policy is about to renew, use this car insurance tool, powered by Bankrate, to find your best rates today:

When will USAA refund checks go out?

According to the press release, USAA dividend checks will begin going out to customers on June 15. It's not clear how long it will take for every eligible member to receive their check. But, if you're curious to find out whether you're getting a check and when you can expect it, reach out to USAA directly to find out.

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If you've been shopping for insurance recently, you might have come across an offer from your alma mater. Many colleges and universities partner with insurance companies or affinity marketing organizations to offer insurance products to graduates, often positioning them as exclusive alumni benefits.

Depending on the school, these programs might offer access to life, health, travel, long-term care, auto or even pet insurance. The coverage is typically provided by a third-party insurer, but the university's branding and alumni connection can make the offer stand out from the other insurance advertisements competing for your attention.

These programs can be worth considering, but it's important to look beyond the school logo before signing up. As with any insurance purchase, you'll want to compare coverage, costs and policy features against other options on the market. Understanding how alumni insurance programs work and why universities offer them can help you decide whether the coverage is a genuine value or simply another marketing partnership.

What types of insurance do alumni programs offer?

Most alumni insurance programs don't offer one type of coverage. Depending on the university and its insurance partners, graduates might have access to a range of products, including life, auto, home, renters, travel, long-term care and pet insurance.

The offerings vary widely from school to school. For example, the Penn State Alumni Association partners with insurers to provide alumni access to auto and home insurance options. Meanwhile, the Columbia Alumni Association offers several life insurance products, including traditional group term life insurance and level term coverage designed to provide a fixed benefit for a set period.

Some schools offer an even broader menu of insurance products. The Alumni Association of the University of Michigan provides access to multiple types of coverage, including life, auto, renters and pet insurance.

Because each alumni program is different, it's important to review the available products and compare them with policies available through traditional insurance companies. Just because one university offers a particular type of coverage doesn't mean the same options will be available through your school's alumni program.

Whether the coverage is competitive

While alumni insurance programs often advertise special discounts or group rates, those offers aren't always the most affordable option available. Before enrolling, compare the policy's premiums, coverage limits, deductibles and exclusions with quotes from traditional insurance companies.

A discounted rate might sound appealing, but it's important to evaluate the overall value of the coverage, not just the price tag.

It's also important to understand exactly what type of policy you're being offered. For example, some alumni programs market simplified issue life insurance, which typically requires only a brief health questionnaire instead of a medical exam. While the streamlined application process can be convenient, simplified issue policies often come with higher premiums and lower coverage amounts than fully underwritten life insurance. As a result, you could end up paying more for comparable coverage.

The same principle applies to health insurance offerings. Some alumni programs provide access to group-style health plans that operate under different underwriting or eligibility rules than individual marketplace plans. While these policies may offer lower premiums or easier enrollment, they can also provide less flexibility in provider networks, benefits or coverage options.

Before purchasing any alumni-sponsored health plan, confirm that your doctors, specialists and preferred hospitals participate in the plan's network. Switching to a lower-cost policy might not be worth the savings if it forces you to change providers or pay higher out-of-network costs. Review the details carefully to ensure the coverage aligns with your financial situation, health needs and long-term goals.

Use the tool below, powered by Bankrate, to see how alumni-sponsored life insurance coverage stacks up against other policies:

The benefits and drawbacks of alumni insurance

There can be advantages to purchasing insurance through your alma mater. For example, health insurance obtained through an alumni program isn't tied to an employer, so you might be able to keep your coverage if you change jobs, retire early or start a business. If you're self-employed or don't have access to employer-sponsored benefits, an alumni insurance program could provide another option to explore.

Convenience is another potential benefit. Alumni insurance programs are often easy to access and might feature streamlined enrollment processes. If you're looking to add a policy quickly, such as travel insurance before a trip or supplemental coverage for a specific need, enrolling through an alumni program could be a simple and efficient solution.

However, convenience shouldn't outweigh cost and coverage considerations. As you compare policies, look beyond the premium and consider whether you'll lose access to discounts available through traditional insurers.

Multipolicy discounts, such as bundling home and auto insurance with the same carrier, can result in meaningful savings. Before enrolling in an alumni insurance plan, ask whether similar discounts are available and compare the total cost of coverage against other options on the market.

Before enrolling in auto Insurance available through alumni programs, use the tool below, powered by Bankrate, to compare rates, coverage options and potential savings from other insurers:

Why universities partner with insurers

Many alumni associations use partnerships with insurers as a revenue stream unconnected to dues. In this type of arrangement, an alumni association would give the insurer the ability to market to alumni, and the insurer would offer alumni a group rate or discount on coverage in return.

In exchange, the alumni association might receive compensation from the insurer, such as commissions, licensing fees or a share of the premiums generated through the program. This creates an ongoing revenue stream that can help fund alumni programming, events, scholarships and other association activities.

While universities and alumni associations often promote these insurance offerings as a benefit for graduates, they also have a financial interest in the partnership's success. As colleges look for new ways to support alumni organizations and diversify revenue sources, these types of marketing and financial partnerships have become increasingly common.

The trust factor behind school-branded financial products

There’s also a trust element behind alumni insurance programs, and you could be swayed into buying a policy that you might otherwise evaluate more critically. Your school’s branding on the marketing materials can make the offers feel safer or more credible, when the school might not have evaluated the offer’s actual value or performance.

Emotional ties and alumni loyalty might impact your purchase decisions, prompting you to choose this option because it’s coming from the university that was your home for years. Knowing the insurance would also support your alumni association might play on your sense of loyalty, influencing your decision.

That’s why it’s so important to remember that when you’re shopping for insurance, you need to separate nostalgia from your financial decision-making. It’s essential to choose insurance that’s the right fit for your individual needs, and that policy needs to be competitively priced.

If your alma mater’s insurance program isn’t the best choice for you, remember that you can always make a donation to your alumni association and continue supporting your school regardless of which insurance plan you choose.

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Most people don't think about insurance until they have to use it. That's not a knock — it's just reality.

Premiums are something you pay and hope you never need back. But here's the thing: Someone in your state is deciding how that system works. In 11 states that have elections for the position, you get a vote on who that someone is:

• California
• Delaware
• Georgia
• Kansas
• Louisiana
• Mississippi
• Montana
• North Carolina
• North Dakota
• Oklahoma
• Washington

The insurance commissioner is the single most powerful person in your state when it comes to how insurance works — or doesn't — for regular people.

• Premium increases? They sign off on those.
• Carrier exits? They approve or deny them.
• Whether your claim gets paid fairly, or you get five new claims adjusters? That traces back to enforcement decisions made by the commissioner's office.

In those 11 states, you get to pick who holds the job of insurance commissioner.

This is why it matters

So why does it matter? Let me give you a real example.

After the 2025 fires in Los Angeles, carriers started reassessing their California portfolios.

• Some insurers non-renewed tens of thousands of policies.
• Others made the decision to withdraw from the homeowners market.
• Others adjusted premiums by 30%, 40%, even 50% in a single renewal cycle.

Homeowners who'd been with the same company for 20 years received non-renewal notices with 30 days' warning. The ones who could find new coverage were paying double what they paid the year before. The ones who couldn't ended up on the FAIR Plan, which is technically insurance, but barely.

That situation didn't just happen. Policy decisions over the preceding decade and antiquated state propositions about how much reserves carriers had to hold (in the case of California), whether premium increases needed justification and how quickly non-renewals could proceed shaped the environment.

Every single one of them went through the commissioner's office. Yes, all of them.

In the states that don't elect an insurance commissioner, the governor makes an appointment, which means you have indirect input at best — you're voting for the person who picks the person who picks the regulator.

Which is fine, except when it isn't.

The difference between a good commissioner and a weak one shows up in whether your premium goes up 8% or 28% at renewal.

It also shows up when an insurance company becomes insolvent because it wasn't held to the proper standards of financial responsibility.

It shows up in whether the market stays competitive with four or five carriers competing for your business or whether you're stuck with one option that knows you have no choice.

How to find out what your commissioner has done

Look up who your current commissioner is. Look up what they've approved and denied in the last two years. Check whether consumer complaints in your state get resolved or buried.

That information is public, on your state's Department of Insurance website. You likely can check complaint ratios, premium-approval records, enforcement actions and more.

It takes about 10 minutes to find out whether your commissioner is doing the job you think they should be doing.

Then vote accordingly. Vote smartly.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Editor’s Note: This article is the last in a five-part special report exploring the connection between your money and your health. Other stories in the series look at 15 ways to lower your healthcare costs, how your finances affect your physical and mental health, the challenges of long-term care and managing the costs of mental health treatment.

If you're among the roughly 70 million people who get health coverage through Medicare, the federal insurance program for people age 65 and older and some younger people with disabilities, you're probably already aware of some of the big changes to the system in 2026 — changes that have hit budgets hard.

This year's 9.7% jump in premiums for Part B, which covers outpatient care, was the biggest increase in four years and eats up more than 25% of this year's 2.8% annual inflation adjustment (COLA) for Social Security benefits.

Meanwhile, cost pressures have caused some Medicare Advantage plans sold by private insurers to scale back extra benefits, such as dental, vision and hearing coverage, or eliminate others, such as allowances for transportation and over-the-counter purchases.

In some cases, private insurers have shut down plans or exited markets entirely. Those headline-grabbing shifts, however, aren't the only big changes to Medicare this year — and not all of the developments hurt your bottom line. You may benefit from new policies regarding drug pricing and telehealth services. But the new requirements for prior authorization in some areas and possible further shake-ups to Advantage plans? Not so much.

“There's a lot to think about and a lot to compare, and it can just be really overwhelming,” says Lindsey Copeland, director for federal policy at the Medicare Rights Center.

Here's the lowdown on this year's Medicare changes.

Some drugs are getting cheaper

New, lower prices went into effect on January 1 for 10 drugs covered under Medicare Part D, the first price reductions to be negotiated by Medicare directly with pharmaceutical companies under a landmark provision in the 2022 Inflation Reduction Act.

The medications include blood thinners Eliquis and Xarelto, diabetes drugs Jardiance and Januvia, and heart-failure treatment Entresto.

The nearly 9 million Part D beneficiaries who take these drugs will pay about 50% less on average than in 2025, according to the Centers for Medicare & Medicaid Services (CMS). But individual savings will depend on the particular drug and drug plan, and could range from a few hundred dollars to several thousand, says Gerard Anderson, a professor in the department of health policy and management at Johns Hopkins Bloomberg School of Public Health.

Lower, negotiated prices on an additional 15 drugs, including the diabetes and weight-loss medications Ozempic and Wegovy, will go into effect in 2027. A third round of negotiations, announced in January, will cover 15 more drugs, including Botox (to treat migraines and muscle conditions, not for cosmetic purposes), the GLP-1 diabetes drug Trulicity, and several cancer medications. Those prices will take effect in 2028.

What to do: If you have diabetes or another condition commonly treated by drugs whose prices have been negotiated by Medicare, but your particular medication is not among them, ask your doctor if it would be appropriate for you to switch to one that is. A 30-day supply of diabetes medications Januvia and Farxiga now costs 79% and 68% less, respectively, than their 2023 list prices. If you currently take other medications to treat the condition, such as Mounjaro or Afrezza, you could save a bundle.

You may also qualify for a temporary program, Medicare GLP-1 Bridge, that will cover GLP-1 drugs Wegovy and Zepbound for weight reduction this year. If you're enrolled in Part D, you'll pay just a $50 monthly co-pay for treatment between July 1 and December 31. You need preauthorization from your doctor.

Telehealth is sticking around

Before the pandemic, Medicare's telehealth coverage was generally limited to rural areas and required patients to travel to a designated clinic to receive care remotely. Many restrictions were lifted during COVID, making telehealth more widely available, but those benefits have been on the government's chopping block recently.

In February, Congress extended key provisions through 2027. These include allowing beneficiaries to receive services at home by video and audio, regardless of geographic location; audio-only visits for those who can't use video; and expanded coverage for remote care by physical and occupational therapists and other health providers.

“Telehealth has been an important tool to ensure that people can access the care they need, when and where they need it,” says Gretchen Jacobson, vice president of Medicare at The Commonwealth Fund.

What to do: Ask your doctor's office which appointments can be handled through telehealth, such as test result reviews or medication check-ins. Many practices that expanded services during the pandemic have kept it as an option.

Telehealth can't replace all types of primary care, however, such as wellness visits, immunizations, and some urgent or acute-care needs.

You may need to jump through a few more hoops

Under a six-year pilot program that launched in January, you now need prior authorization to receive certain medical services if you're covered under original Medicare and live in one of six states: Arizona, New Jersey, Ohio, Oklahoma, Texas or Washington.

The 17 procedures subject to artificial intelligence-assisted prior review include some steroid injections for pain management and some nerve-stimulation techniques used to treat Parkinson's disease, incontinence and sleep apnea.

The CMS says approval decisions will be made within 72 hours and that licensed clinicians, not AI or the outside organizations running the program, will make final coverage decisions.

But some policy experts have expressed concern over the potential impact. “The companies that have been hired to administer the approval process are incentivized to reduce spending, which means approving fewer services,” says Jacobson.

What to do: If you live in one of the affected areas and your doctor recommends one of the services identified in the pilot program, make sure the provider gets prior approval. Otherwise, you could be hit with a huge bill afterward.

Advantage plans could become more restrictive

In January, the Trump administration issued a proposal to keep reimbursement rates to Medicare Advantage insurers nearly flat next year, compared with the 4% to 6% boost insurers had anticipated. The news prompted dire warnings about the possible impact on enrollees.

“Flat program funding at a time of sharply rising medical costs and high utilization of care will impact seniors' coverage,” said Chris Bond, a spokesperson for AHIP, the national health insurance trade organization, in a statement at the time.

“If finalized, this proposal could result in benefit cuts and higher costs for 35 million seniors and people with disabilities when they renew their Medicare Advantage coverage in October 2026,” Bond said.

In early April, CMS announced the reimbursement rate had been finalized at 2.48%, higher than the initial 0.09% proposal, but probably not high enough to prevent changes in some plans for 2027.

What to do: If you're enrolled in a Medicare Advantage plan, carefully review the “annual notice of change” you get this fall for any adjustments to premiums, deductibles, co-pays and benefits. That will give you time to consider alternatives before open enrollment, which runs from October 15 to December 7.

If you sign up for an Advantage plan but then have second thoughts, you'll have another shot at choosing during the separate Medicare Advantage open enrollment period from January 1 to March 31. During this time, you can switch to a different plan or to original Medicare. Says Jacobson, “It's important to remember you have options.”

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Editor’s Note: This article is the fourth in a five-part special report exploring the connection between your money and your health. Other stories in the series look at 15 ways to lower your healthcare costs, how your finances affect your physical and mental health, the challenges of long-term care and what’s new in Medicare this year.

In 2023, Kent Scheibel finally found a psychologist who seemed like the perfect fit. The therapist specialized in treating people with bipolar disorder, which Scheibel, then 51, had been diagnosed with at age 20. After decades of trying to manage extreme emotional highs and lows, the treatment helped him find steadier footing at last.

The problem was the price. Scheibel was paying $175 a week out of pocket for therapy because the psychologist, like many mental health professionals, didn’t accept health insurance. By 2025, the expense had become impossible to sustain.

“I was feeling pressure financially,” says Scheibel, who was then self-employed as a life coach. “The first thing that goes is something like therapy. I guess you could call it a luxury even though it’s actually a necessity.”

Scheibel eventually took a full-time staff job selling insurance to qualify for employer-sponsored health coverage, a less expensive option than the $792 a month he’d been paying in premiums for a marketplace plan. He’s found a psychiatrist in his insurance network who has prescribed helpful medication. But he has yet to find an in-network therapist who meets his needs.

“My ability to function in life has to do with the care I get,” says Scheibel, now 53 and living in Marina del Rey, Calif. “I’m looking forward to having a therapist again, but it’s just not feasible financially right now.”

Scheibel’s experience underscores a difficult reality for millions of Americans: Getting mental health care can be a challenge. Paying for it may be even harder.

Nearly one in four adults in the U.S. experienced anxiety, depression or another mental, behavioral or emotional health condition in 2024, according to the latest data from the National Survey on Drug Use and Health run by the Department of Health and Human Services. The rate climbs to one in three for young adults ages 18 to 25, a group that often depends on a parent’s support — and health insurance — for care.

Yet despite how common mental health issues are, getting care is problematic for many people seeking treatment for themselves or someone they love. About half of those facing a mental health challenge in 2024 didn’t receive any treatment, according to the national survey.

Cost was one of the top barriers, cited by nearly two-thirds of adults 18 and older. About four in 10 didn’t have insurance coverage that would cover mental health treatment.

Those who do receive care often struggle to pay for it. Out-of-pocket costs for insured people who receive treatment for depression or anxiety, for instance, are almost twice as high as those for enrollees not being treated for a mental health condition, according to data from KFF, a nonpartisan health policy research organization.

Among adults with medical debt, 20% said they’d borrowed to pay bills for mental health treatment, a separate KFF survey found.

“These are choices no one should have to make,” says Jennifer Snow, national director of government relations and policy at the National Alliance on Mental Illness (NAMI). “You shouldn’t be forced to choose between your financial stability and the essential, life-improving care that you or your loved ones need.”

If your family is grappling with high out-of-pocket costs for mental health treatment, experts say there are steps you can take to help make those bills more manageable and avoid that trade-off.

Here’s what they recommend.

Why affordable care is elusive

It wasn’t supposed to be this tough. For decades, lawmakers at both the federal and state level have tried to require insurers to cover mental health and addiction treatment the same way as they cover physical health care — a concept known as parity.

The 2008 Mental Health Parity and Addiction Equity Act (MHPAEA), for example, required group health plans that cover mental health or substance use disorders to make treatment limits and financial requirements, such as deductibles, co-payments and coinsurance for those benefits, equal to those for medical care.

Two years later, the Affordable Care Act went further by requiring most individual and small-group health plans to include mental health and substance use treatment as essential health benefits. All 50 states and Washington, D.C., also have their own parity laws.

Together, the requirements have helped millions of Americans gain insurance coverage for therapy, psychiatric care and addiction treatment. But coverage on paper doesn’t always translate into care people can actually get.

Evidence, in fact, is plentiful that mental health treatment is still not on par with benefits for medical and surgical care. “No question, there is a big gap,” says Mark Covall, interim president and CEO of the National Association for Behavioral Healthcare.

One of the biggest challenges for people with coverage is finding mental health providers in their plan’s network. Insurers have struggled to build networks of mental health providers large enough to offer the same level of access that patients typically have for medical care, says Stoddard Davenport, who has researched disparities in care as a health care management consultant at Milliman, an actuarial and consulting firm.

Part of the problem is a nationwide shortage of mental health professionals, he says. But many therapists, psychologists and psychiatrists also choose not to belong to insurance networks because administrative requirements can be burdensome, and reimbursement rates are much lower compared with what other medical providers receive.

As a result, people with insurance often go outside their plan’s network to get care. A 2024 study by the Research Triangle Institute found that patients sought out-of-network care 8.9 times more often for psychiatrist visits and 10.6 times more often for psychologist visits than patients who went for medical and surgical office visits.

“Going out of network is almost always going to mean a significant increase in costs,” Snow says.

Even when people do find in-network care, out-of-pocket costs still can add up quickly. That’s because, despite parity laws, many insurers have continued to use stricter prior-authorization reviews for coverage, exclude key mental health and substance abuse treatments from benefits, and deny claims after treatment at a higher rate than they do for physical health care, according to a 2024 report to Congress on MHPAEA enforcement.

A 2024 federal rule addressed some of the disparity by requiring insurers to document how their mental health coverage plans work in practice and to measure outcomes, says Kaye Pestaina, a vice president at KFF, where she directs its program on patient and consumer protections. But the rule has faced legal challenges, and the Trump administration has not been enforcing some of its regulations, she says.

Know your rights around mental health care costs

If you have health insurance, the first step to getting mental health treatment at a price you can afford is understanding what your plan covers.

The MHPAEA doesn’t require employer group health plans to cover mental health and addiction treatment. But if they do, those benefits must be comparable to medical coverage. That means the plans typically can’t impose higher co-pays, stricter limits on appointments or separate out-of-pocket maximums for mental health services.

The parity law also applies to Medicaid plans and individual plans sold through the Health Insurance Marketplace, which are required to cover mental health and addiction treatment. It doesn’t apply to Medicare, although the program does cover a range of mental health services, including an annual screening for depression and individual and group therapy, as long as the provider is certified and accepts the insurance.

Signs that your health plan may be violating parity requirements include higher costs or fewer allowable visits for mental health services than other types of care, and requiring permission to get mental health care but not for other kinds of medical treatment and services, according to NAMI. Another red flag: None of the plan’s in-network mental health providers are taking new patients.

Before seeking treatment, ask your insurer about deductibles, co-pays and out-of-network reimbursement, as well as whether prior authorization is required. “You want to get as much information as possible up front about what you have to pay,” Pestaina says.

Also double-check with your insurer that any therapist, psychiatrist or other mental health professional you plan to see is actually in its network. Directories are often outdated and may include mental health providers who don’t accept new patients or have left the network, Pestaina says. If you contact several listed providers and can’t find one with availability, ask your insurer to identify an in-network provider who can see you. If one isn’t available, ask whether the plan will allow you to see an out-of-network provider at the in-network rate.

If your insurer denies coverage after you submit a claim for mental health treatment, you generally have up to 180 days from the date you’re notified to appeal the decision. If that’s turned down as well, you can request an independent external review. The denial notice should include information about assistance programs that can help you file an appeal, Pestaina says.

Look for lower-cost options

Can’t find a therapist, psychologist or psychiatrist in your health plan’s network who is accepting new patients? You might have other treatment options that don’t involve going out of network and being forced to pay more.

Telehealth is one of them. Your health plan might cover the cost of mental health care delivered remotely through online video conferencing. “That gets rid of geographical constraints to some extent,” Davenport says.

Your small town might not have a therapist, but a big city in your state could have several providers participating in your health plan’s telehealth network. Medicare also covers some telehealth services for mental health and addiction treatment.

Depending on your needs, your primary care provider might also be able to provide treatment or prescribe medication. “More mental health is seen in primary care than in the other setting,” says Benjamin Miller, a psychologist and adjunct professor at Stanford University School of Medicine.

There’s a growing trend known as the collaborative care model that integrates behavioral health managers and mental health clinicians into primary care practices. “It’s the easiest way to be able to have kind of a one-stop-shop, more-comprehensive approach to care,” Miller says.

Availability of this type of care varies by state. If your current primary care provider doesn’t offer integrated care, Miller recommends checking with other providers in your health plan’s network to see whether they do.

Negotiate a lower price

Therapists, psychologists and psychiatrists might be willing to adjust their rates. The key is knowing what to ask.

“Even if you have health insurance, one of the best things you can ask anybody is, Is there a difference in price if I pay cash or if I use my insurance?” Miller says. Also ask providers whether they use a sliding scale — that is, if they lower their rates based on a patient’s income or if the patient is experiencing financial hardship, he says.

Another option to keep down costs, if your health permits: Ask your provider whether you can meet less frequently, says Nancy Ruddy, a psychologist and behavioral health care consultant in Portland, Maine — say, every other week instead of weekly.

Explore other kinds of support

If the cost of traditional individual therapy is out of reach, there are other ways to get help that may be more affordable. Here are some of the approaches you might try.

Group therapy. Getting counseling in a group setting can cost half as much as one-on-one therapy, Miller says. Or there may be free peer-support groups in your community led by people with conditions similar to yours (to find out, check with community centers or the local branch of the Mental Health Association). NAMI also offers free groups for a variety of mental health conditions (find one here).

Employee assistance programs. Nearly all large and midsize U.S. companies, along with many small businesses, offer this free benefit, which provides short-term, confidential counseling for employees. The program typically covers three to six sessions, and counselors can help with referrals to other mental health care providers as well. “It’s a good place for people to start,” especially if you don’t need long-term treatment for a chronic condition, Ruddy says.

Certified Community Behavioral Health Clinics. These clinics are required to serve anyone with a mental health or substance use need, regardless of their ability to pay. The National Council for Mental Wellbeing has a list of CCBHCs by state. Telehealth services are available, and you don’t have to live in the state where they’re based to access them.

Student therapists. If you live near a university, you or your loved one might be able to see a student who is training to be a psychologist, social worker or family therapist. These clinicians-in-training typically charge much lower rates and are supervised by experienced mental health care providers, Ruddy says.

Online services. If you simply need some tips to get through a tough time, Ruddy suggests you look for therapist posts online that offer techniques to deal with conditions such as stress and anxiety. Look for videos that offer evidence-based strategies, she says. For example, mental health education platform Psych Hub has a YouTube channel featuring mental health experts.

Stay persistent

“All of these things may feel like you’re jumping through a hoop of fire backwards, blindfolded,” Miller says. He suggests trying to reframe how you think about the challenge: “It’s just trying to find a way you can get more timely access to the things that you have a right to get access to.”

Adds NAMI’s Snow, “Unfortunately, it’s set up that people have to stand up and fight for what they need.”

The payoff is usually worth it, says Kent Scheibel, who is all too familiar with how staying proactive about your care can make a meaningful difference in your overall well-being. “I’ve learned firsthand that without good mental and physical health, it’s difficult to achieve and enjoy anything in life,” he says. “Remember, you do have options.”

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Editor's Note: This article is the first in a five-part special report exploring the connection between your money and your health. Other stories in the series look at how your finances affect your physical and mental health, the challenges of long-term care, managing the costs of mental health treatment and what's new in Medicare this year.

Gas prices are soaring, the cost of beef is through the roof, and electricity bills have shot up everywhere. But in a year when the affordability of basic goods and services is causing great anxiety across the board, there seems to be no expense more worrisome to Americans than what they’re paying for healthcare.

The evidence is everywhere. Two-thirds of Americans now say they worry about how they’ll be able to afford healthcare for themselves and their families — overshadowing concerns about any other necessity, including utilities, food and groceries, housing, and gas, according to a recent poll from nonprofit health policy organization KFF.

And the majority, some 56%, say they expect the price of receiving care will become even less affordable this year.

"The problem of higher healthcare costs is bad, and it’s getting worse," says Caitlin Donovan, senior director at the nonprofit Patient Advocate Foundation.

The price of health insurance — the thing that’s supposed to protect you from high medical bills — has grown especially burdensome. That’s particularly true for many people who get coverage on the Affordable Care Act Health Insurance Marketplace.

Four out of five people who re-enrolled in marketplace plans for 2026 report their premiums, deductibles, coinsurance and co-payments are higher than last year, with about half saying they’re a lot higher, KFF says.

The benchmark premium is up 22% on average, compared with 2% average annual increases between 2020 and 2025, according to the Urban Institute. Meanwhile, the expiration of enhanced premium tax credits for people who earn more than 400% of the federal poverty level means those enrollees, on average, saw their premiums about double.

People who get health insurance through work or Medicare have been hit hard, too. Premiums for family coverage rose 6% last year for people with employer-provided insurance, who paid an average of $6,850 in premiums, according to KFF. And costs are expected to rise even more this year — 6.7% on average, the consulting firm Mercer projects, the biggest jump in 15 years.

Costs have risen even more for people 65 and older who are covered by Medicare. Monthly premiums for Part B, which covers doctor visits and other outpatient care, jumped 9.7% this year, to $202.90, dwarfing the 2.8% inflation adjustment in Social Security benefits.

As a result, the percentage of Social Security income needed to pay Medicare premiums has hit an all-time high, according to a recent analysis by the Center for Retirement Research at Boston College.

The upshot: About one-third of Americans now report making at least one trade-off with daily living expenses to afford healthcare, such as stretching out prescriptions or borrowing money, according to a poll from the West Health–Gallup Center on Healthcare in America.

While the burden is worse for people without insurance, almost three in 10 people covered by a health plan say they’ve made at least one trade-off. Even among adults in households earning $240,000 a year or more, 11% report making at least one trade-off.

"In the wealthiest country in the world, people shouldn’t be choosing between their health and their financial future," says Tim Lash, president of the nonprofit West Health Policy Center.

Fortunately, you have ways to ease the strain. Here are 15 of them.

1. Reassess your health insurance options every year.

Whether you get coverage from your employer, a government marketplace or Medicare, you have a chance to reconsider your options and switch plans each year during your provider’s designated open-enrollment season to save money and get better coverage for your needs. You shouldn’t automatically default to re-enrolling in your current plan.

Yet that’s exactly what many people do. About half of employees who get insurance at work spend less than an hour reviewing their choices, according to a survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research.

And most Medicare beneficiaries didn’t look at other options for coverage, such as switching Medicare Advantage plans or moving to traditional Medicare from an Advantage plan, during a recent open-enrollment period, KFF found.

The costs of inertia can add up, says Jake Spiegel, a senior research associate at EBRI. Formularies for prescription-drug coverage can change, for example, so a low-cost med you’re taking now might move to a higher tier with a heftier co-pay. Providers may move out of a network, which means you’ll pay more to visit them.

Spiegel advises running the numbers every year, taking into account your total out-of-pocket costs, not just premiums, based on what you think your healthcare needs will be.

For example, if you’re managing a chronic condition that requires frequent doctor visits and treatments, or you expect you’ll need surgery, it might make sense to elect a plan with higher premiums but lower co-pays when you receive care.

2. Consider an HSA, if you’re eligible.

A health savings account is available to those enrolled in high-deductible health plans (with a deductible of at least $1,700 for individual coverage or $3,400 for families in 2026) who have no other comprehensive health insurance coverage, aren’t enrolled in Medicare and can’t be claimed as a dependent on someone else’s tax return.

Because of a provision in the One Big Beautiful Bill Act, all bronze and catastrophic plans purchased on the ACA marketplace are now eligible for HSAs.

"HSAs have a triple tax benefit," says Carolyn McClanahan, founder of Life Planning Partners and a certified financial planner and medical doctor. You get a tax deduction on your contributions, earnings on those funds grow tax-free, and you can withdraw the money tax-free as long as you use it to pay for qualified medical expenses.

You can use the funds to cover ongoing expenses, or you can pay those bills out of pocket, then invest the funds and use them in retirement to cover medical needs. Starting at age 65, you can also take money from the account for non-medical spending without penalty, although you will owe income tax on the withdrawals.

In 2026, the HSA contribution limit is $4,400 for individuals or $8,750 if you have family coverage. People 55 and older can make an additional $1,000 catch-up contribution. Bonus: Some employers contribute to workers’ accounts.

Read more: How to Track Your HSA Receipts and Paperwork

3. Check for medical billing errors.

About half of medical bills have mistakes, Donovan at the Patient Advocate Foundation estimates. Review your statements, identify possible errors and, if you see something fishy, dispute the charge.

Only about six in 10 people with some concern about a medical bill reached out to their provider, but nearly three-fourths of those who suspected an error succeeded in getting the charge corrected, a 2024 study published in the JAMA Health Forum found.

"For people who did make the call, they were really more likely to get some relief," says Erin Duffy, a scholar at the USC Schaeffer Institute for Public Policy & Government Service and lead author of the study.

Wait to pay any medical bill you get until you’ve received the explanation of benefits (EOB) or Medicare Summary Notice from your insurer, Donovan advises.

If the amount your insurer says you owe doesn’t match up with the bill, there’s an error, and you should call the provider’s billing office and ask them to explain the discrepancy. Be persistent, says Donovan, who notes that it usually takes multiple calls to get a resolution.

4. Compare prices.

Getting an MRI or a hip replacement isn’t the same as shopping for a new appliance or a car. But the principle of checking costs from several providers to find the best price for what you need still applies.

And prices for common healthcare services do vary widely, even within the same geographic area. One study found, for instance, that the price for a lower-back MRI in the Miami area ranged from $186 to $1,423, while the cost of a hip or knee replacement around San Diego ran from a low of $20,305 to a high of $51,995.

Federal law now requires hospitals to post prices on their websites — including cash prices and the negotiated price for specific insurance plans — for 300 "shoppable services," such as a colonoscopy or knee replacement.

Many have personalized tools so you can see what your costs will be. You can also call the provider for an estimate.

5. Negotiate with your provider.

Once you have a sense of the costs from different providers, you can negotiate, even if you have insurance. "Ask what the cash price is," Donovan says. "If you know you won’t likely meet your deductible outside of some catastrophic event, sometimes it will save you money not to use insurance."

In fact, hospital prices for 70 common services, such as lab tests, imaging and routine procedures, were lower nearly half the time for patients paying in cash rather than using insurance, a study by researchers at the Johns Hopkins Bloomberg School of Public Health found.

You can also negotiate after the fact — say, if you’re stuck with a big bill because, as is common, the provider’s fee was much higher than what your insurer deemed "reasonable and customary."

In the JAMA Health Forum billing study, 62% of respondents who reached out to negotiate a bill received a price cut. Donovan suggests offering a percentage up front, then monthly payments for a certain number of months, with the total adding up to a percentage of the original bill.

6. Do an annual prescription review.

About 66% of U.S. adults report taking at least one prescription medication, with 31% taking four or more, according to KFF. More medications mean a higher risk of side effects and drug interactions, as well as higher costs.

It’s a good idea to review your prescriptions annually with your physician to make sure you still need them.

"Talk to your doctor about what you should and shouldn’t take — it could save you a lot of money," says Arthur "Abbie" Leibowitz, chief medical officer and president emeritus of Health Advocate, a provider of health advocacy and navigation, well-being and behavioral health programs.

Don’t forget any over-the-counter medications or dietary supplements that you take regularly. Americans spent almost $69 billion on dietary supplements last year, most of them over-the-counter purchases, according to Grand View Research.

7. Shop for better prices on medications.

While generic drugs are usually cheaper, sometimes insurers will cut deals with pharmaceutical companies that make the name brand more affordable, so check the formulary, says Leibowitz.

Health insurers often have preferred pharmacies with better prices, so see where you’ll get the best deal. You can compare prices at GoodRx.com. Mail-order pharmacies are usually cheaper and permit you to get a 90-day supply.

If you take medications with a high co-payment, check with the manufacturer to see whether it offers a discount program that reduces your co-pay and, if so, how the program works with your insurance. (Medicare recipients usually aren’t eligible, and some marketplace plans won’t count the manufacturer’s assistance toward your deductible.)

It’s also worth checking online pharmacies such as the Mark Cuban Cost Plus Drug Co., though that usually means paying out of pocket.

"If you have a comprehensive insurance plan, it usually makes more sense to get your drugs through your insurer, where you have a co-pay and your payment is helping you reach your deductible," says Anthony Wright, executive director of Families USA, a consumer advocacy organization.

But in some cases, he says, the self-pay price may be cheap enough so that it makes sense to bypass your coverage, even though the payment won’t count toward your deductible.

8. Know when to go to urgent care.

According to Venteur, a health-benefits technology company, the average urgent care visit in 2026 costs between $150 and $280 without insurance; it’s a $20 to $75 co-pay with coverage. An emergency-room visit costs $1,500 to $3,000 or more without insurance; the typical co-pay is $100 to $500 or more with coverage.

That math’s a no-brainer. "Urgent care isn’t a substitute for preventive care and a relationship with a primary-care provider, but in many instances, it can be a good alternative to an ER visit," Leibowitz says.

Urgent care can handle less-serious problems that sometimes end up in the ER, such as an ankle sprain, upper-respiratory infection or back pain, according to the Mayo Clinic. But with certain symptoms, or if you have underlying health conditions, it’s better to be safe than sorry. If you’re experiencing potentially serious symptoms such as chest pain, seizures, a sudden, severe headache, severe abdominal pain or serious bleeding, or you have a head injury or a compound fracture with a bone poking through, go to the hospital.

And if you get insurance at work:

9. Contribute to an FSA.

Most employers offer flexible spending accounts, which allow you to contribute pretax money, up to $3,400 in 2026, to pay for a wide range of out-of-pocket healthcare expenses, including deductibles and co-pays, glasses, dental work, medical equipment, and over-the-counter medications. (See your options at FSAStore.com.)

If you contribute the maximum and are in the 22% tax bracket ($50,401 to $105,700 for singles, $100,801 to $211,400 for joint filers), you’ll save $780 by using an FSA.

Take care to correctly estimate those expenses when you sign up, because any funds in the account you don’t use by the end of the year may be forfeited to your employer. Some companies have a grace period that extends the deadline to March 15, or they may permit up to $680 to be rolled over into the next plan year.

Check with your benefits department for your company’s policy.

10. Grab your freebies.

You might be surprised by the free or discounted services you can get through your employer’s wellness program, Leibowitz says. For example, programs to help you stop smoking or lose weight are common, often with a financial incentive for participation or success.

You may also find gym discounts or reimbursements (including subsidized fitness apps such as Peloton), on-site fitness classes, free flu shots, on-site screenings for cholesterol and other biomarkers, and stress-reduction programs.

If you're on a marketplace plan, also:

11. Try to qualify for a subsidy.

If you previously qualified for a premium credit but no longer do, you might be able to limit your income — specifically, your modified adjusted gross income (MAGI) — to qualify for subsidies.

For 2026 plans, your MAGI must be no more than $62,600 for an individual and $128,600 for a family of four to qualify. Maxing out an HSA can help reduce your MAGI, as can maxing out pretax contributions to retirement plans such as a 401(k) or traditional IRA.

You can talk to your tax adviser about whether other deductions or capital losses might make you eligible for subsidies.

12. Switch to a lower tier.

If you are in reasonably good health, you may be able to save substantially on premiums by opting for a bronze plan over silver-, gold- or platinum-tier coverage during the next open enrollment period.

The trade-off: You’ll incur higher out-of-pocket costs when you do need care. Gold plans, for instance, pay 80% of covered costs; bronze plans pay an estimated 60%.

You should always do the math to be sure. That’s particularly important for people whose income is less than 250% of the poverty level because they can qualify for extra savings on a silver plan, which could make it the best option.

You can run the numbers to compare at the KFF Health Insurance Marketplace Calculator.

13. Look for alternatives in your preretirement years.

Many adults between 50 and 65 turn to marketplace coverage to plug a health insurance gap between having a workplace plan and qualifying for Medicare — say, if they’re laid off or retire early.

This group already faces higher premiums, paying up to three times more for coverage than younger adults, and they are now being hit particularly hard by the expiration of enhanced premium tax credits.

"They make too much to be eligible for Medicaid and are not old enough for Medicare," says Matt McGough, a policy analyst at KFF.

If you have a spouse who is covered through work, see whether you can be added to their plan, or check whether you qualify for retiree coverage through a previous employer. Or, if you retire at 63½, compare the cost of a marketplace plan against 18 months of COBRA coverage through the company you’ve just left to tide you over until you can get Medicare, McLanahan says.

With COBRA, you’ll pay the full cost of your premiums, plus an administrative fee, so a marketplace plan may still be cheaper, but it’s worth comparing the costs and coverage.

If you're on Medicare, also:

14. Lower your IRMAA.

If your income is even a dollar over certain limits, you will pay a surcharge, called the income-related monthly adjustment amount (IRMAA), on top of the base premiums for Medicare Parts B and D.

This year, individuals making more than $109,000 and joint filers with incomes above $218,000 will pay between $284.10 and $689.90 per month for Part B, depending on income, compared with $202.90 without IRMAA. The surcharge is based on the income you reported on your tax return from two years ago.

You can try to lower your MAGI to stay below the IRMAA threshold or lower your surcharge tier. One strategy is to prioritize withdrawals from accounts that are taxed at lower rates than ordinary income, McLanahan says.

The usual order is savings accounts, regular brokerage accounts, HSAs and Roth accounts, she says. Withdrawals from accounts such as traditional 401(k)s or IRAs are taxed as ordinary income and could lead to a jump in MAGI.

If your financial circumstances have declined significantly from the year on which your current IRMAA eligibility is based because of a "life-changing event" such as retirement, divorce or the death of a spouse, you can appeal by filing a short form (SSA-44) with the Social Security Administration.

15. Sign up for Medicare as soon as you are eligible.

"It’s never advisable to delay Part B," says Gio Florez, the director of enrollment and community engagement at the Medicare Rights Center. If you do, you’ll permanently pay premiums that are 10% higher for each 12-month period you were eligible but didn’t sign up. There’s also a penalty for late enrollment in Part D.

Your initial enrollment period encompasses the three months before you turn 65, the month of your birthday, and the three following months.

To avoid penalties, you must enroll during that seven-month period, or you must have creditable coverage elsewhere, such as through an employer or spouse’s employer.

If your employer coverage ends, you need to sign up for Medicare within eight months for Part B and within 63 days for Part D.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Health savings accounts (HSAs) offer a rare triple tax advantage: Contributions are tax-deductible, investments grow tax-free and withdrawals for qualified medical expenses are tax-free.

Those tax benefits come with an important responsibility, though. If you take tax-free withdrawals from your HSA, you should be able to document that the money was used for qualified medical expenses.

While IRS audits involving HSAs are relatively uncommon, they do happen. And when they do, many account holders struggle to locate receipts or remember which expenses they reimbursed themselves for earlier. Creating a simple system to save and organize HSA receipts can help protect your tax benefits and make it much easier to respond if questions ever arise.

What records HSA account holders should keep

Many people don't realize that the IRS requires you to keep records supporting HSA withdrawals. The following documents can help substantiate qualified medical expenses and reimbursements.

• Itemized receipts: Receipts for qualifying medical expenses need to include details specifying the type of item or service purchased, the date, the cost and any taxes or discounts.
• Proof of payment: Keep proof of payment for each purchase, such as a credit card statement or a canceled check. To stay organized, pair the proof of payment with the corresponding itemized receipt.
• Explanation of benefits (EOB): Your insurance provider’s EOB details the services provided and the amount that insurance covers. It also outlines what you may owe and helps prove that a service qualifies for HSA reimbursement.
• Detailed notes: Take notes on who each expense was for and whether your health insurance reimbursed you for the expense.

The easiest ways to organize HSA receipts

Keeping your HSA receipts organized can make tax time easier and help you respond quickly if you're ever audited. Whether you prefer digital storage, spreadsheets or dedicated tracking tools, several methods can help you keep your records in order.

Cloud folders: Storing receipts digitally in the cloud can reduce clutter and make records easier to retrieve if you need them later. Scan receipts and organize them in folders by year, using clear file names so specific expenses are easy to find. Popular cloud storage services, including Google Drive, Microsoft OneDrive and Dropbox, can make it easy to access records from multiple devices and create backups.

Budgeting apps: Many budgeting apps can also serve as receipt-storage tools. Apps like Monarch, YNAB and Quicken allow users to attach receipts, notes and other documents to transactions. Storing receipts alongside the corresponding expense can make HSA recordkeeping easier and help ensure supporting documentation is readily available if you choose to reimburse yourself years later.

Spreadsheet tracking systems: A spreadsheet can help you track key details such as the expense type, date and amount paid. You can create your own tracker or start with a template from platforms like Canva. Tools such as Google Sheets work well if you don't have Microsoft Excel, and you can access them from multiple devices. Just remember that you'll still need a separate system for storing copies of receipts.

Apps designed for HSA management: Apps designed for HSA management can help you store receipts, track expenses and identify HSA-eligible purchases. Popular options include Reimbursable, which is available for Apple devices, and TrackHSA.

Save PDFs from providers: Many healthcare providers make receipts and statements available online. Downloading and saving PDFs directly from provider portals can help you maintain a paperless recordkeeping system.

Use HSA provider tools: Some HSA administrators offer receipt storage, expense tracking or mobile apps as part of their accounts. These built-in tools can be a convenient way to keep your records organized in one place. If you change jobs, transfer your HSA or switch providers, make sure you know how to download and retain your records so you don't lose access to important documentation.

Keep security in mind when using digital tools to store and track receipts. Look for tools that allow you to create backups, and be sure that you create a secure password and keep it safe to protect your data and privacy.

Why some people delay HSA reimbursements for years

HSAs allow you to delay reimbursement for qualified medical expenses for years, provided you keep accurate records. Some account holders intentionally pay medical expenses out of pocket and leave their HSA funds invested, giving the account more time to grow tax-free.

While this strategy can be appealing, it can also backfire. If you lose receipts or other documentation, you may not be able to prove those expenses were eligible for reimbursement years later. If you're considering delayed reimbursement, it's important to create a reliable system for storing and tracking receipts and other supporting documents.

Common HSA paperwork mistakes that can create tax problems

HSA holders sometimes make paperwork mistakes that can create tax issues, especially during an audit. If you lose receipts, you may not be able to prove or claim HSA reimbursement for that expense.

When you use your HSA, be careful about double-dipping with insurance or tax deductions. If an expense is covered by or reimbursed by insurance, you can’t claim it as an HSA reimbursement. And if an expense is reimbursed by your HSA, you can’t claim it as a medical tax deduction.

Reimbursing nonqualified expenses with your HSA is another potential issue. The IRS provides specific guidance about what qualifies as a qualified medical expense, which includes expenses medically necessary for the "diagnosis, cure, mitigation, treatment or prevention of disease." Cosmetic procedures, spa treatments, unprescribed massages and more are nonqualified expenses.

Don’t forget to document over-the-counter purchases or medical necessity letters, too. This documentation is key to proving that your expenses qualified for HSA reimbursement, so gather these documents at the time of the expense and keep them organized and safe.

A simple annual HSA cleanup checklist

At the end of each year and before tax season, take some time and clean up your HSA documentation. Doing so will help keep you organized and will make filing taxes and navigating a potential audit much easier.

The following steps can help ensure you have your HSA receipts and documents organized:

• Download annual statements
• Reconcile reimbursements
• Back up receipts digitally
• Review qualified expense lists
• Store records with tax documents

Your HSA is only as good as your records

Keeping good records can help protect your HSA tax benefits and give you peace of mind. By creating a simple system now, you'll make it easier to track expenses, document reimbursements and stay prepared if the IRS ever asks questions.

The best recordkeeping system is one you'll use consistently. Whether you prefer cloud storage, spreadsheets or an expense-tracking app, a little organization today can help safeguard your tax savings for years to come.

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Buying a new smartphone can set you back significantly. Americans spend an average of $634 on a phone, according to a 2025 survey from and premium models of the iPhone, Samsung Galaxy and other popular devices run more than $1,000. Those costs are likely one reason that people are hanging on to their phones for a while before upgrading, keeping them for nearly two years and five months, according to the Reviews.org survey.

To protect your pricey device, you can buy phone insurance. With these plans, which you may be able to purchase through your wireless carrier, the phone manufacturer or from insurance companies, you can submit a claim if your phone is damaged, lost or stolen. After you pay a deductible, which may range from about $50 to $250, you'll get a repair or replacement. Many insurance plans cost $10 to $20 per month.

Some credit cards offer phone insurance as a free benefit if you pay your wireless bill with the card; among them are American Express Platinum ($895 annual fee), Capital One Venture X ($395), Chase Freedom Flex, and the Wells Active Cash and Autograph cards, which are all included in our list of the best rewards credit cards.

As with other plans, these come with deductibles, and they impose coverage limits of $600 to $800 per claim. Keep in mind, however, that if your wireless carrier offers a discount for automatic payments, the discount may not apply if you use a credit card.

Weigh the options

Consumer advocates say that the math often favors skipping phone insurance, if you have to pay for it.

"When we gamed it out, you basically came out ahead in almost all situations without paying for the insurance," says Nathan Proctor, senior director of the Right to Repair campaign for U.S. PIRG, a nonprofit consumer advocacy organization. Most people won't file enough claims to make paying the premium and deductible worthwhile, Proctor says.

Still, in some cases, getting insurance may make sense. "If you're spending $1,500 or $2,000 on a smartphone — even if you're a careful user — I would recommend opting for some sort of smartphone insurance," says Louis Ramirez, deals editor-in-chief for tech-review site Tom's Guide.

Additionally, if you frequently use your phone in places where you're at higher risk of damaging or losing it — say, at the gym or while working outdoors — or if you're the parent of a teenager who is less than careful with their phone (or of a young child who likes to get their hands on your device), opting for insurance may not be a bad idea.

If you sign up for insurance, be sure to read the fine print. Check details such as the deductible amount and how many claims you can make per year; often, the cap is two or three claims. Also review the rules that determine whether your device will be repaired or replaced, as well as any coverage exclusions. Most plans don't include normal wear and tear, for example.

If you forgo insurance and damage your phone, going to an independent repair shop can be an efficient and affordable option. The cost of replacing a screen, for example, averages about $300, and you may pay less than that, depending on the model and availability of parts.

But more-advanced repairs, such as fixing a broken camera with complex features, may not be available at a shop, says Ramirez. In those cases, you may need a protection plan from the manufacturer, which can cover the gamut because it has unrestricted access to parts and knows the device inside and out.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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As summer approaches, so do the storms. Tornado activity often peaks in the spring and early summer, and the Atlantic hurricane season starts in June.

In 2024, there were 27 weather- or climate-related disasters that each had losses of $1 billion or more, according to the most recent data from the National Oceanic and Atmospheric Administration.

In case severe weather or another catastrophe hits, now is a good time to make sure your home insurance coverage is up to snuff. It's also a good idea to make a regular practice of reviewing your policy before it renews each year, says Susan Meyer, insurance analyst at The Zebra, a site for comparing insurance quotes.

ABCs of coverage.

First, assess some key coverages. Your dwelling coverage, otherwise known as Coverage A, pays to rebuild your home's physical structure, including framing, roofs, floors and chimneys, if it's damaged by fire, a storm, snow or other covered perils.

You may need to adjust your policy's dwelling coverage if you've renovated your home by, say, adding a bathroom or remodeling your kitchen. Rising prices for construction materials in recent years may push up the cost of rebuilding, too. Talk with your insurance agent or a local contractor to get an idea of the cost per square foot to rebuild your home.

Some insurance companies offer online calculators you can use to help determine how much coverage you need.

While Coverage A applies to your house, Coverage B protects other structures that are not physically attached to it, such as a fence, detached garage, shed or guest house. The Coverage B limit is typically set at 10% of the Coverage A limit.

If your dwelling-coverage limit is $400,000, for example, then your limit for other structures would be $40,000. Depending on the types of other structures you have on your property, you may need to increase the Coverage B limit.

Personal-property coverage, or Coverage C, protects possessions that you keep in your home, such as furniture, clothing and electronics. This coverage typically insures your personal property at 50% to 70% of your dwelling limit. If you make a high-value purchase, such as a diamond necklace or fine art, you may need to revisit your personal-property coverage.

While such items are protected by Coverage C, they may be subject to separate limits that insure them for less than their total value.

For example, your policy might impose a $2,000 limit for jewelry. You can purchase a rider that covers a specific item based on its appraised value. (Likewise, if an item depreciates in value or you no longer own it, you can lower the limit or remove the coverage.)

If you rent, you should get renters insurance to protect your personal property. You don't need to buy insurance for your home's structure, because your landlord is responsible for it.

Use the tool below to compare some of today's top home insurance offers, powered by Bankrate, and find a policy that works for you:

Protection against natural disasters.

Depending on where you live, you may need to get separate coverage that addresses certain events. For one, standard homeowners insurance includes coverage for wind-driven rain that comes in through your roof, but it doesn't protect your home if floodwaters enter it from the ground. For that, you need to buy a separate flood insurance policy.

Flood insurance is essential for those who live in high-risk flood zones. In fact, if you live in one of these areas and have a government-backed mortgage, your lender requires you to buy flood insurance. And given the rise in extreme rain events throughout the country, even those who live in regions not typically thought of as flood-prone may want to consider purchasing flood insurance.

You can buy it through the Federal Emergency Management Agency's National Flood Insurance Program. The average annual cost of an NFIP policy is $888 per year, according to an analysis of policyholder data from online insurance marketplace Policygenius. Renters who want to protect their belongings in case of flood damage also need to buy a separate policy.

Standard homeowners policies also exclude coverage for damage from earthquakes. In states at higher risk of earthquakes, such as California, buying an earthquake policy may be worthwhile. In California, the typical earthquake policy runs more than $1,300 yearly, according to LendingTree.

If you live in a coastal area that's susceptible to hurricanes, your policy may impose a separate deductible (the amount of money you must pay in a claim before coverage kicks in) for windstorms.

A hurricane deductible is typically a percentage of your dwelling coverage, often ranging from 1% to 5%. For example, if your dwelling limit is $200,000 and you have a hurricane deductible of 2%, you would pay $4,000 in a claim for hurricane damage. Some policies may apply the deductible only to named hurricanes; with other policies, the deductible may apply to all windstorms.

Keeping the costs in check.

Homeowners insurance premiums have climbed steeply. A 2025 report from the Consumer Federation of America found that U.S. homeowners saw their premiums rise by an average of 24% over the past three years. So it's as important as ever to make moves that help reduce your premiums.

One option is to raise your deductible. Increasing the deductible from $500 to $1,000 may lower your premium by 10% to 25%, depending on your location, insurer and home value, according to the Insurance Information Institute.

To ensure that you can pay a higher deductible out of pocket, stash away enough in your emergency savings to cover it.

Bundling your homeowners and auto insurance with one provider can also save money on insurance premiums. By adding certain protective home upgrades, such as motion-sensor lights or storm shutters, you may qualify for discounts, says Pete Piotrowski, chief claims officer at Hippo Insurance.

You may be able to get a lower rate by switching insurers. You can collect quotes from multiple insurance companies using sites such as Policygenius or The Zebra. Or work with an independent insurance agent, who can also help you make sure that your coverage is adequate. Search for one at .

If you live in a state that allows insurance companies to use credit-based insurance scores when making decisions about how to much to charge (California, Hawaii, Maryland, Massachusetts, Michigan, Oregon and Utah prohibit this practice), you can potentially lower your premium by practicing good credit habits, such as paying your bills on time and regularly checking your credit reports for errors or fraudulent accounts.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Do you really want to "win" with your insurance?

Stick with me here, because I know how this sounds. You pay premiums every year. The bill comes. You grumble. You write the check. Then the next year comes, and you do it again. No claim. No check from the insurance company. No parade. No balloons. No oversized novelty check like you just hit the jackpot on a game show.

So it is very tempting to think, "When do I finally get something back?"

I get it.

But here is the problem with that way of thinking: An insurance claim is not a lottery ticket. It is not a slot machine. It is not you pulling the handle every year with your premium payment and waiting for three cherries to line up.

Because when you "win" an insurance claim, something bad had to happen first.

Your house burned. Your kitchen flooded. Your car was crunched. Someone got hurt. A lawsuit landed in your mailbox. A tree came through the roof. A thief decided your belongings looked better in his garage than yours.

Bingo and cha-ching?

Not exactly.

Why your insurance just sitting there is a good thing

Insurance is one of the few products in life that you buy hoping you never have to use.

Think about that. You do not buy a refrigerator hoping it never gets cold. You do not buy a car hoping it never starts. You do not buy a cellphone hoping it never rings (although, depending on who is calling, I suppose there are exceptions on that one).

But insurance? You absolutely hope it just sits there.

Quiet. Boring. Uneventful.

And boring is good.

Let's use the slot machine analogy for a minute. Every year, you pay your insurance premium. Some people imagine that premium as the coin going into the machine. Pull the handle. Nothing. Pull the handle again next year. Nothing. Then, finally, a claim happens, and money comes out.

"See?" they say. "I finally won."

No. You did not win. You had a loss.

Translation: The insurance company did not give you a prize. It performed a contractual obligation.

That is a very important distinction.

It's a contract

An insurance policy is a contract. Not a favor. Not a gift. Not charity. Not "good vibes from a carrier." You agree to pay the premium. The insurance company agrees that if a covered loss happens, subject to the terms, conditions, exclusions, deductibles, limits, endorsements, definitions and all the other exciting bedtime reading in the policy, it will pay what it owes.

I know. That sentence was a lot.

Translation: You pay your insurance company, and if the covered bad thing happens, your insurance company steps up.

That is the deal.

Now, does every claim go perfectly? Of course not. I am an insurance professional, not Willy Wonka. I do not live in a factory where rivers of chocolate solve coverage disputes.

• Claims can be frustrating
• Claims adjusters can be slow
• Estimates can differ
• Coverage questions can get complicated
• Deductibles can surprise people
• Sometimes companies get it wrong

But the basic idea matters: A claim is not a bonus. It is the policy doing its job after something you did not want to happen happened.

Here is another way to think about it. You pay for fire extinguishers, smoke detectors, seat belts, airbags, alarm systems and maybe even a home security service. If the smoke detector screams at 2 in the morning because there is a fire in the hallway, do you say, "Fantastic! I finally got my money's worth!"

I hope not.

You say, "Get everyone out."

Then, later, when your heart rate slows down, you may be grateful the smoke detector worked. You may be grateful the fire department came. You may be grateful insurance is there to help put things back together. But you are not celebrating the fire.

Same thing with insurance.

The claim is not the good news. The coverage is the good news.

Big difference.

And that brings us to another common mistake: Measuring the value of insurance only by whether you filed a claim.

"I paid for 10 years and never used it."

Good.

Really good.

Your very own lazy superhero

If you paid for homeowners insurance for 10 years and never filed a fire claim, that means your house did not burn down. If you paid for auto insurance and never had a serious accident, that means you were not injured, sued or stranded on the freeway exchanging information with someone whose first sentence is, "I didn't see you."

If you paid for liability insurance and never got sued, congratulations. That is not wasted money. That is peace, stability and protection sitting quietly in the background like a very boring superhero.

No cape. No theme music. Just there.

The purpose of insurance is not to make you richer. It is to keep a covered loss from making you much poorer.

That is the part people miss.

Insurance is not designed to be an investment account. It is not a savings plan. It is not a casino. It is risk transfer.

Translation: You are taking a financial risk that could be too big, too sudden or too ugly to handle alone, and you are transferring some of that risk to an insurance company in exchange for premium.

That is why the premium exists.

And yes, premiums have been going up, up, up. Especially in California. Homeowners insurance has become harder to find, harder to keep and harder to afford. Auto insurance is not exactly throwing a discount party either. People are frustrated, and I do not blame them one bit.

When the bill gets bigger, the temptation to say, "Well, I better get something out of this," gets stronger.

But again, what does "getting something out of it" mean?

If it means your house burned and the carrier helps you rebuild, that is not a lucky day. That is a terrible day with a financial backstop.

If it means your car was totaled, but the policy responds, that is not a jackpot. That is a bad day made less financially destructive.

If it means someone sued you, and your liability coverage provides defense, that is not winning the lotto. That is the contract showing up with a lawyer when you really, really do not want to be alone.

Insurance is the friend who answers the phone at 3 a.m. Not because you are having a party. Because something went wrong.

What insurance is good for

So what should you want from your insurance?

First, you want the right coverage before the loss. Not after. After is too late. You cannot buy fire insurance while the flames are already taking a tour of the living room.

Second, you want limits that make sense. The least-expensive policy may feel good on billing day, but it will feel terrible on claim day.

Third, you want to understand your deductible. The deductible is your part of the deal. It is not a surprise cover charge at a restaurant. It is in the contract.

Fourth, you want to know the exclusions. Exclusions are the policy's way of saying, "Not this." Boring? Yes. Important? You betcha.

And fifth, you want an agent who will tell you the truth, even when the truth is not wrapped in a bow.

Because the right question is not, "How do I get my money back?"

The right question is, "If something terrible happens, will this policy respond the way I need it to?"

That is the whole ballgame.

You don't have to love it

Listen, I am not asking anyone to love paying insurance premiums. I have been in this business a long time, and I have yet to meet someone who frames their renewal bill and hangs it over the fireplace.

But I am asking you to look at insurance for what it is.

It is not a lotto ticket.

It is not a slot machine.

It is not a prize.

It is a promise written in contract language, backed by dollars, regulated by rules and tested when life decides to throw a brick through your plans.

You do not buy insurance because you want a claim.

You buy insurance because, if a claim happens, you do not want to face it alone.

So the next time you pay that premium and nothing bad happens, try this thought instead: "Good. I hope I never need it."

Because the best claim is the one you never have.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Is your car out of warranty? Are you concerned about potentially expensive repairs? Have you heard spots on the radio or seen TV or internet ads from companies offering an extended auto warranty that covers all sorts of expensive repairs on vehicles with expired warranties?

More importantly, are you tempted to buy one of these service contracts? If so, wait! If you do it, you could be ripped off.

While some of these companies do, on occasion, pay for repairs, I've learned from experience that at least a portion of the extended-warranty industry is a scam. (The exceptions are the programs offered by auto manufacturers.)

What I've seen myself is backed up by thousands of complaints filed with the Better Business Bureau and state agencies and posted all over the internet.

As of 2025, there were about 400 third-party "auto extended warranty providers" in the United States. Before you decide to work with one, Google it along with the words "scam," "complaints," "fraud" and "failed to refund my money" to get a sense of the customer complaints. If you notice a pattern, don't sign up.

The case is still being litigated, but a consumer fraud suit was filed against Endurance Warranty Services in Illinois in March 2025. The lawsuit alleged that "Endurance does not deliver on its contractual obligations, (its) claim process can take several weeks or months to render decisions on claims, and (it) has denied repair coverage without any justification."

Endurance has denied allegations of systemic bad-faith denials and says that it has paid out more than $300 million in claims since 2012.

The BBB's website notes that there have been "3,666 total complaints in the last 3 years" about Endurance. Yet, as of this writing, Endurance has an A rating from the BBB.

High grades from the BBB help to scam customers

The BBB enjoys a high degree of respect, and hearing or seeing the phrase "A-rated by the Better Business Bureau" is taken as a stamp of approval that we can rely on to trust that particular business.

However, most people do not know that the criteria used by the BBB to award A ratings have little, if any, correlation with negative reviews and complaints. Simply responding to a complaint — regardless of it being resolved — allows a business to retain an A grade.

The result: Some companies that are out-and-out frauds display their BBB A ratings on their websites and in their advertising.

(In prior articles, I have urged that state agencies and the Federal Trade Commission file suit against the BBB, which, in my legal opinion, becomes a co-conspirator through its practice of facilitating consumer fraud by awarding A grades to companies they know, or should know, are ripping off the public.)

Here's my experience with a sales representative from an extended-warranty company that began when I answered the phone on a Friday afternoon and was told wonderful things about an extended warranty that I needed to buy.

'How's your BMW doing?'

"Mr. Beaver, I need to talk with you about your 2019 BMW that is out of warranty, and I am calling from MyAutoGuard that offers an extended warranty that you need."

I get these calls all the time from different extended warranty companies. Sales reps try to build a sense of fear, stressing how expensive major auto repairs can be and how all my worries will be taken away when I agree to buy their warranty. "We are A-rated by the BBB" is regularly stressed in many of these pitches and on their websites.

Immediately, I found MyAutoGuard on the BBB website. It currently has no BBB rating, though the company touts an A rating on its website.

And these comments appear on the BBB site:

• "If I could have left a zero-star rating, I would have."
• "Shame on you scamming elderly people on fixed incomes and making it impossible to cancel."
• "This is another scamming company. All these companies need to be put out of business."

Going over the cost to replace a transmission, engine, you name it, but with MyAutoGuard, I was assured that "covered" items would be replaced at no out-of-pocket expense. I would also get 24/7 roadside assistance, free towing, rental car reimbursement and on and on.

The sales pitch often sounds broader than the contract

Typically, you will hear "full coverage, everything major, just like a warranty from the manufacturer, giving you peace of mind." This could lead you to believe it is "bumper-to-bumper protection" — and they use that term — when, in reality, the contract covers only a narrow list of named components and excludes many of the failures most likely to occur.

When there is a claim, a denial might be based on the vehicle's pre-existing condition, wear and tear, maintenance records or technicalities.

'Great, send me a sample contract that I can take to my mechanic'

I said to the sales rep, "This sounds interesting, but before signing up, I need to read your contract so that I have a good understanding of what I am buying. And I want to take it to my own mechanic for review."

At that point, things turned ugly. I am paraphrasing, but here is what that part of our conversation sounded like:

"Will you please send me a contract to review with my mechanic?"

"Only if you purchase our service."

"So, you expect me to hand over my credit card number without having a chance to understand what it is I am buying. Is that it?"

"You get the contract after the purchase is complete."

"If you buy a home, buy or lease a car or rent an apartment, they give you the contract to read. No one says, 'Only if you pay first will we let you read the contract.' So what prevents MyAutoGuard from sending me a sample contract to review?"

(The sales rep was becoming more and more nasty.) "You get the contract when you buy the warranty! That's it!"

I was tempted to ask for the name and telephone number of his probation officer, as he sounded like any number of con artists I've spoken with over the years, but I restrained myself.

"What happens if, when I get the contract, I discuss it with my mechanic the next day, and he tells me I do not need it, and I immediately notify your company? Will I get my money back?"

"Take that up with customer service!"

At that point, I hung up.

My recommendation

So, to be perfectly clear — and you can quote me to any sales con you speak to who won't send you a contract to examine unless you buy that warranty now — never buy an extended warranty or vehicle service contract, or anything, unless you are allowed to read the entire contract beforehand, without obligation, and have it reviewed by an independent mechanic, an attorney or a family member.

And, remember, no deal is so great that you must accept the offer right now. If you are told that, run!

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

If booking a flight lately feels more expensive and more confusing, that’s because it is.

Airfare prices are rising again, driven largely by higher jet fuel costs tied to geopolitical tensions, including the war in Iran. At the same time, airlines are leaning more heavily on dynamic pricing systems that adjust fares in real time based on demand, competition and even browsing behavior.

As a result, there are fewer predictable "sweet spots" for booking and more sudden price swings that can leave travelers second guessing whether to buy now or wait.

If you're planning summer or fall trips, the key question isn't just where to go. You'll also want to get strategic about when to book and how to avoid overpaying. Here are some tips to help.

How much more travelers are paying for flights

Airfare hasn't increased evenly across the board, but the trend is clear: Prices are trending higher, especially for peak travel periods and international routes.

Jet fuel prices surged from about $85 to $90 per barrel to as high as $150 to $200 per barrel in recent weeks, creating significant financial pressure across the airline industry, according to Reuters.

Domestic fares have seen moderate increases in many markets, while international flights, particularly long-haul routes, are seeing sharper spikes due to higher fuel consumption and constrained capacity. Flights to Europe and parts of Asia have been especially volatile, with prices fluctuating week to week.

Some routes are being hit harder than others. Flights from major hub cities might remain relatively competitive due to airline competition, while smaller regional airports often see steeper increases due to limited flight options and reduced seat inventory.

Another factor is that airlines have become more strategic about limiting discounted seats. That means travelers are less likely to stumble on the ultra-low fares that were more common even a year or two ago.

Why airfare prices are increasing

Several forces are converging to push ticket prices higher and keep them unpredictable.

Rising fuel costs are feeding directly into fares

Jet fuel is one of the largest operating expenses for airlines, often accounting for 20% to 30% of total costs. When oil prices climb, especially amid geopolitical tensions involving Iran and other key energy-producing regions, airlines typically pass at least some of those costs on to consumers.

What makes this cycle different is the speed. Fuel prices have been fluctuating quickly, and airlines are responding faster than they used to, adjusting fares in near real time rather than waiting weeks or months.

Dynamic pricing

Airlines have long used demand-based pricing, but newer algorithms are far more aggressive and responsive. Prices can now shift multiple times per day based on booking patterns, seat availability, competitor pricing, even seasonal demand signals.

This means travelers are less likely to see stable pricing trends. A flight that looks reasonably priced in the morning could jump significantly by evening if demand ticks up.

Strong demand (despite higher prices)

Even with inflation affecting household budgets, travel demand hasn't slowed as much as expected. Many people are still prioritizing vacations, experiences and visiting family, particularly during peak seasons such as summer and holidays. This sustained demand gives airlines less incentive to discount fares, especially when flights are already filling up.

Tighter seat inventory

Airlines are still operating with tighter capacity in some markets compared with prepandemic levels. That includes fewer routes, reduced flight frequency and, in some cases, staffing or aircraft limitations. Fewer available seats naturally push prices higher, particularly on popular routes or during high-demand windows.

Airlines are managing inventory more strategically

Another subtle shift is that airlines are holding back the lowest fare classes for a shorter period or releasing fewer discounted seats altogether. In other words, the "cheap seats" sell out faster, leaving more travelers choosing from higher-priced options.

7 best ways to save money on airfare right now

Even in a rising price environment, there are still ways to keep costs under control, but it requires a more proactive and flexible approach than in the past. Here are some things smart travelers are doing in an attempt to cut costs.

1. Book earlier, but still monitor prices

The traditional advice to book flights six to eight weeks in advance doesn't always hold up in today's market. For many routes, especially international trips, booking several months ahead can help you avoid last-minute price spikes tied to demand and fuel costs.

That said, it's still worth tracking prices after you book. Some airlines now offer fare credits if prices drop, and third-party tools can alert you to potential rebooking opportunities.

2. Be flexible with timing (even by a day or two)

Small adjustments to your itinerary can lead to meaningful savings. Flying midweek, particularly Tuesday or Wednesday, is often cheaper than weekend travel. Early morning or late-night flights can also come with lower fares.

If your schedule allows, shifting your trip by even one day in either direction can sometimes reduce costs significantly.

3. Use fare alerts and price-tracking tools consistently

Platforms such as Google Flights, Hopper and Skyscanner allow you to monitor routes and receive notifications when prices change. These tools are especially useful in an unpredictable market for travel, since it helps you spot dips rather than guessing when to book.

4. Check multiple airports and routing options

Flying out of or into a nearby airport can sometimes lead to lower fares. For example, choosing a secondary airport within driving distance might open cheaper routes or better airline competition.

Consider flights with layovers instead of nonstop service; it can reduce costs, particularly on long-haul trips.

5. Leverage points, miles and credit card perks

With cash prices rising, travel rewards can stretch further. If you've accumulated points through a travel credit card or loyalty program, this might be an ideal time to redeem them, especially for expensive routes where cash fares are inflated.

Some cards also offer travel credits, companion fares or built-in trip protections that can offset overall costs.

6. Watch for bundled fees and compare total cost

Base fares don't always tell the full story. Budget airlines may appear cheaper upfront but charge for carry-on bags, seat selection and other add-ons. Before booking, compare the total cost across airlines, including fees, to avoid surprises.

7. Consider shoulder seasons and off-peak travel

If your plans are flexible, traveling just before or after peak season can deliver better value. Early fall and late spring often offer a balance of good weather and lower demand, which can translate into lower airfare.

Should travelers book now or wait?

This is where many travelers are getting stuck, and there's no one-size-fits-all answer. If fuel prices continue rising or geopolitical tensions escalate, airfare could increase further. In that case, waiting could mean paying more later.

On the other hand, prices can still fluctuate, and occasional dips do happen.

As a general guideline, for:

• Domestic flights. Aim to book one to three months in advance
• International flights. Aim for two to six months ahead

If you find a fare that fits your budget and travel plans, it might be worth locking it in, especially if the airline offers free changes or credits.

A good rule of thumb is that if a fare is within your historical expectations (or slightly above), it’s often safer to book than gamble on future drops.

Are budget airlines still the cheapest option?

Budget airlines can still offer lower base fares, but the gap isn't always as wide as it seems. Many discount carriers charge additional fees for carry-on bags, seat selection and even printing boarding passes. Once those costs are added in, the total price can rival or even exceed traditional airlines.

Some budget airlines have reduced routes or frequency as well, which limits availability and flexibility. That said, they can still be a good option for short trips or travelers who can pack light and avoid add-ons.

How travelers can stay ahead of rising airfare prices

Airfare pricing is likely to remain unpredictable in the near term. Between fuel costs, global uncertainty and evolving airline strategies, travelers should expect continued fluctuating prices and options.

The good news is that you don't need perfect timing to save money. If you plan ahead, stay flexible and use the right tools, you can still find reasonable fares even in a rising market. Because in today’s environment, waiting for the "perfect deal" might be the most expensive move of all.

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For the past three years, shopping for insurance has felt about as productive as checking for flights during a blizzard. Carriers weren't writing. Premiums were climbing. And if you did manage to find a quote, it usually came in higher than what you were already paying.

So most people stopped looking.

Can't blame you. When every door is slammed shut, you stop knocking. But here's the thing: The doors are starting to open again.

Quietly. Slowly. The way March turns into April and you don't notice until the jacarandas are suddenly purple. But it's happening, in home insurance as well as in auto insurance.

I'm seeing carriers in California loosen their underwriting guidelines for the first time since the great pullback started. New companies are entering the state — names you probably haven't heard of yet, but they're capitalized, they're hungry, and they want to write business.

Existing carriers are expanding their appetite in ZIP codes they'd blacklisted 18 months ago. The FAIR Plan — which was never supposed to be anyone's first choice — is starting to shed policies back to the standard market, where they belong.

Translation: Competition is creeping back in. And competition is the only thing that ever makes your premium go anywhere but up.

Don't just sit there — do something

Now, I'm not saying rates are about to drop 30% and carriers are going to start sending you gift baskets. That's not how this works. Insurance companies are like ocean liners — they don't turn on a dime, and they don't apologize for the wake.

But the direction has shifted. In California, the insurance commissioner's Sustainable Insurance Strategy is actually doing what it was designed to do. Carriers are getting the rate adequacy they demanded. In exchange, they're writing again.

Here's where it gets interesting — and where many people get it wrong.

When the market tightens, your instinct is to freeze — don't touch anything, don't draw attention to yourself. That instinct makes sense when carriers are looking for reasons to non-renew you.

But when the market loosens, freezing is the most expensive thing you can do. You're sitting on last year's rate — which was priced for last year's market — while your neighbor three doors down just locked in a policy at today's rate with a carrier that actually wants their ZIP code now.

Same street. Same construction. Same fire zone. Different premium — sometimes by hundreds of dollars.

Why? Because one of you asked, and one of you didn't.

I've been doing this for 30 years — and yes, I started when I was in kindergarten — and I've watched this cycle play out enough times to recognize it.

• The carriers move first
• Then the agents notice
• Then the early shoppers get the deals
• Then the late shoppers wonder why they're paying more than everyone else

We're somewhere between step two and step three right now. The window is open.

For how long? Nobody knows. Markets turn, and markets turn again. A bad fire season this summer, a couple of carrier losses that spook the reinsurers, and that window could close faster than it opened.

It's time to reach out

So what should you actually do?

Simple. Pick up the phone. Send an email. Or walk into an independent agent's office — yes, we still exist, and no, we don't bite.

Ask one question: "Is there anything better out there for me right now?"

That's not a commitment. Not a binder. Just a question.

If the answer is no — if your current policy is still the best fit at the best price — you've lost nothing except maybe 10 minutes of your day. And you'll have peace of mind knowing you're not leaving money on the table.

But if the answer is yes? If there's a carrier that just reopened in your area, or a new entrant pricing aggressively to build market share, or a credit you qualify for that wasn't available last year?

Then you just saved yourself real money that will compound year after year. Money that stays in your pocket instead of padding a renewal you accepted because you didn't know any better.

The market is turning. It doesn't send you a postcard. It doesn't knock on your door. It just moves — and either you move with it, or you get left behind paying yesterday's prices in tomorrow's market.

Want to learn more about insurance? Visit KarlSusman.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The amount insurers pay out on home and car insurance claims has plummeted while the cost of your premiums have soared, according to a recent analysis by the Vanderbilt Policy Accelerator.

At a time when insurance companies are warning of the need for further rate hikes amid worsening climate change and the rising cost of home and auto repairs, this study says that they may already be charging most Americans far more than they need to remain solvent.

How did the study determine what portion of the premiums Americans pay was excessive? Where is all that extra money going if it's not going to claims? Most importantly, what can you do to cut your home and auto premiums at a time when all of your other bills are going up as well? Here's what you need to know.

Study argues Americans are being overcharged for insurance

Rate setting in the insurance industry is a complex and not very transparent process. Every company has its own set of risk factors and its own methodology for rating that it's reluctant to share with the public. Moreover, every state has its own set of rules around what insurers can and can't use when setting those rates. Some states even require companies to submit rate proposals to the state insurance commissioner for approval before raising premiums at all.

With that complexity in mind, what exactly did this analysis measure, and how did it determine what portion of premiums constituted an overcharge?

The Vanderbilt study, which was obtained exclusively by the Associated Press, looks specifically at what's called the loss ratio, or the gap between the amount insurers charge policyholders in premiums and the amount they pay out in claims every year.

For every dollar earned in premiums in 2024, the study says, companies paid out just 62 cents on claims on average. That's down nearly 20 cents since the 1990s, when companies averaged about 80 cents per dollar in claim payouts.

If the loss ratio in 2024 had instead been at that 80 cent level from years prior, Americans would have saved a combined $150 billion in that year alone.

According to the study, that $150 billion per year is going toward "corporate perks, corporate jets, stock-buy backs, excessive executive compensation, excessive dividends, excessive advertising, and excessive agent commissions.”

Insurance companies argue that's not the case. "Current loss ratios reflect the impact of enormous financial losses over the last several years and the steps insurers have taken (to) maintain and restore financial strength so funds are available to pay future claims," Don Griffin, vice president for policy and research at the American Property Casualty Insurance Association, told AP in an email.

How can you combat soaring insurance premiums?

The Vanderbilt study proposed a set of federal regulations to enforce a standard loss ratio for insurers nationwide in order to prevent excessive premiums. Right now, the insurance industry is regulated primarily at the state level, meaning the level of regulatory protections you enjoy depends almost entirely on which state you happen to live in.

Aside from waiting for those proposed federal regulations to become law or moving to a state with stronger consumer protection laws, what can you do to keep your insurance premiums under control at a time when loss ratios are apparently growing wider?

The most important step you can take is getting new quotes for your home and car insurance ahead of every renewal. Loyalty doesn't pay in insurance anymore. Any loyalty discount you may be earning for sticking around is unlikely to outweigh the incentive pricing insurers offer to woo new customers.

In the worst-case scenario, shopping around for new quotes every year will just confirm that your current price is the best you're going to find. In the best case, you could save hundreds every year for the exact same coverage.

Aside from switching your insurance every time you find a better deal, here are a few others effective strategies for lowering premiums without changing your coverage:

• Pay your policy in full up front rather than in monthly installments as many insurers offer a "paid in full" discount. This should work for both car and home insurance.
• Take a quick defensive driving course to save up to 10% on car insurance. Some states mandate discounts for taking defensive driving courses. But even if yours doesn't, call your insurer to see if they offer the discount anyway.
• If you're getting ready to buy a new car soon, check how much your favorite car models cost to insure first. Some models have far lower average premiums than others.
• Notify your insurer of any home safety upgrades you've made or plan to make, like installing a home security system or getting rid of a pool or trampoline.
• You may also be able to get discounts for home hardening upgrades and other projects that improve your home's ability to withstand weather-related hazards.
• Look for membership-related discounts from places like AAA, AARP or even Costco.
• Ask your insurer about senior discounts for home insurance if you're 55 or older.

Always scrutinize your insurance renewal quotes

Whether the soaring premiums are justified as insurance companies claim or excessive as the study suggests, the key takeaway for consumers is to always take a close look at that renewal offer. How is your insurer justifying those higher premiums? What discounts are they applying (or not applying)? Have any coverage terms changed?

Above all, remember that it doesn't hurt to shop around just to see how that renewal offer compares to what other insurers are willing to charge. Even if you really like your current insurer, you can always use those quotes to try to negotiate a better rate.

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Question: Our new health plan is HSA-compatible. I know these accounts are great to have in retirement, but it seems like such a hassle. We are not the most organized couple, and I worry we won't use it all. Is it worth it?

Answer: High-deductible health insurance plans can be wonderful for people who are generally healthy and don't tend to see the doctor often. For people who tend to have frequent medical needs, they can be expensive.

But there's a silver lining. If you're enrolled in a high-deductible health insurance plan, you might be eligible to contribute to a health savings account, or HSA. Many financial experts are quick to point out that HSAs are a great tool to have on hand for retirement.

That said, HSAs require good record-keeping. They also have strict rules. If you take a withdrawal for non-medical purposes, you'll face taxes plus a 20% penalty (though the penalty is waived once you turn 65).

You might be wondering if an HSA is worth the hassle. Here's why it might be, even for people who loathe paperwork.

HSAs offer tax breaks galore

The reason so many people use IRAs and 401(k)s to save for retirement is the tax benefits these accounts offer. Traditional IRAs and 401(k)s allow contributions to be made with pretax dollars. Roth IRAs and 401(k)s allow for tax-free gains and withdrawals.

But as Jeff Judge, CFP and managing partner at Chesapeake Financial Planners, likes to point out, with an HSA, you get all three.

"Contributions reduce taxable income, growth is tax-free, and qualified withdrawals are tax-free. No other account does all three," he says.

Judge also likes to point out that HSAs are far superior to flexible spending accounts (FSAs).

"FSAs cap your contributions lower, expire at year-end or close to it, and aren't portable when you leave your employer," he explains. "An HSA is yours permanently, the balance carries over indefinitely, and you can invest it once the balance clears your plan's threshold."

HSAs offer loads of flexibility

It's true that HSA savers must worry about penalties for non-medical withdrawals prior to age 65. But that aside, Judge says, these accounts are extremely flexible.

"You don't have to reimburse yourself in the year the expense occurred," he explains. "Reimbursements can be pulled years or decades later if the expense was qualified."

That's a big deal because HSAs grow tax-free. This means that if you incur a $1,000 medical expense now but can pay for it out of pocket, you can leave the money in your HSA and get reimbursed 20 years later, at which point that $1,000 is apt to be worth a lot more.

"I had a client who tracked medical receipts for 11 years in a simple folder on her computer, then pulled $23,000 in reimbursements tax-free in the year before retirement," Judge says. "The IRS doesn't require you to keep receipts in any particular format. They just need to be legible and show the date, provider and amount."

Judge also points out that after age 65, an HSA works like a traditional IRA for non-medical expenses, in that you pay ordinary income tax on withdrawals but no penalty. In other words, there's really no risk of ending up with "too large" an HSA balance.

As Judge points out, an average couple can expect to pay approximately $345,000 (after tax) to cover healthcare costs in retirement, according to Fidelity's latest projections. Having a funded, tax-free bucket specifically for those costs is crucial.

Do HSAs hold up to inflation?

Of course, parking cash in an HSA for many years might seem like a bad idea, given that inflation could erode its purchasing power. Judge says that's a legitimate concern.

"If the inflation-adjusted return on your HSA investments is negative, yes, the tax benefit can erode," he says.

The key, therefore, is to invest your HSA strategically rather than keep your unused funds in cash.

"HSA funds invested in a diversified equity portfolio have historically outpaced medical cost inflation over long horizons," says Judge. "The mistake isn't treating the HSA as a long-term vehicle. The mistake is leaving the money in cash inside the account instead of investing it."

Try not to treat your HSA as a checking account

Another HSA mistake you might make? Dipping in regularly when you have other options for covering medical expenses, says George Dimov, CPA and founder of Dimov Tax.

Dimov says that if you constantly take HSA withdrawals to pay for medical bills, it won't function any differently than an FSA. That greatly erodes the benefit.

Tracking health care expenses can be a bit of a burden. But Dimov says it's worth doing.

"The HSA is not about convenience," he insists. "It is actually about doing the opposite of convenience. The whole strategy is paying bills out of pocket when you can afford to and letting the HSA grow."

That said, developing an efficient tracking system could make the process easier. That could mean scanning receipts and storing records digitally or using an app. It pays to spend some time developing a system, making sure it's backed up, and adding it to your digital estate plan.

Once you get into the habit of tracking HSA expenses, it might become less of a pain. That way, you get to reap the benefits of tax-free growth on your money while legally shielding income from the IRS along the way.

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You might have heard that taking a defensive driving course — sometimes called a driver improvement course or something similar — could lead to car insurance discounts.

But you might not know that some states require insurers to offer those discounts. You also might not know just how affordable the courses are and how big of a discount you can get for taking one.

Most eligible courses can be done completely online and take four to eight hours to finish. Often, insurers will keep the discount in place for three years after the date the course was completed. At that point, you can take the course again to get the discount for another three years.

Let's say you're paying $2,697 per year, the current national average cost of car insurance, and after taking the course, you get a 5% discount (the low end of what most states below mandate). That means you'd save a little more than $130.

Many of the eligible online courses I found (and linked to below) cost around $25. The course would pay for itself in premium savings in a matter of months.

States where drivers are entitled to a discount after taking an online driving class

These are the states where I could verify that some form of mandated discount exists. There might be other states not in the table that have less specific policies or states where no mandate exists but your insurer will still offer you a discount anyway:

Even if you don't find your state on the list, it's worth calling your insurer to see if you can save on car insurance by taking the course. A 5% discount on your policy is more than enough to make the short, online course worth your time.

If your current insurance company doesn't offer a defensive driving course discount, that might be your cue to switch your car insurance to a company that does.

Which online defensive driving courses are eligible for the insurance discount?

This can vary by state, but in most cases, a course from any of the following providers will be eligible for the discount, provided you meet any other eligibility criteria required in your state:

• AARP Smart Driver online course. An online course taken at your own pace. Price: $30 (AARP members get a 10% discount).
• AAA Roadwise Driver. An online course taken at your own pace. Price: $25
• Safe2Drive. An online course taken at your own pace. Price: $14.95 and up, depending on state (most states are $24.95)
• DriveSafe Online. An online course taken at your own pace. Price: $24.95 and up
• National Safety Council. An online course taken at your own pace. Price: $54.10 for the general defensive driving course or $29.99 for the mature driver course.

Before enrolling, make sure the course you choose is approved for the discount in your state.

What to know before enrolling in a defensive driving course

Whether you live in a state with laws about discounts or not, there are usually some conditions and caveats you should understand before enrolling. Namely, in some states, if you cause an accident while the discount is applied to your rates, your insurer might be allowed to remove the discount.

In other states, if you're taking the defensive driving course because of a court order (e.g. — as a condition of a traffic violation penalty), you can't use it to get a discount on insurance.

However, it might still be used to take points off your driving record in many states, and that could translate to lower premiums indirectly, as fewer points might be viewed as less risk to the insurer.

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Senate Bill 1486 is currently awaiting a vote in the Illinois Senate, and it's already being met with a mix of enthusiasm and disdain. Illinois Secretary of State Alexi Giannoulias has championed it as a set of strong consumer protections for Illinois drivers. But some in the insurance industry are saying the new regulations will lead to rate hikes or more policy cancellations.

With such mixed messaging coming out about this bill, Illinois residents might be concerned and confused about what the new law would mean for their budget.

If passed, it could have a real impact on both your home and car insurance premiums, so it's important to dig into the weeds and see what it's about.

What would Senate Bill 1486 do?

The sweeping consumer protection bill includes a lot of new regulations aimed at targeting everything from junk fees to fraud to unfair insurance rates. Here's a look at just the pieces of the bill that would impact what you pay for home and auto coverage:

• Insurance companies would have to provide you with 60 days notice if they plan to raise your home or car insurance rates by more than 10% at your next renewal.
• An insurance company wouldn't be allowed to shift costs related to out-of-state risks onto Illinois policyholders. For example, an insurance company doing business in multiple states can't charge Illinois homeowners more to offset the higher cost of claims they're paying out after a natural disaster in, say, California or Florida.
• Illinois's existing laws about excessive or unfair rate-setting practices would now apply to car insurance (as well as home insurance).
• The state's Department of Insurance would now have a more clear process for enforcing those existing laws.
• The bill will also cut the class time required for seniors (55-plus) taking a defensive driving course for a premium discount. If passed, you'd qualify for the discount after just four hours instead of eight hours.

If passed, these new regulations would go into effect in Illinois on July 1, 2027.

The reasoning behind Senate Bill 1486

The proposed policy changes are the result of concerns raised during Giannoulias's Driving Change campaign, which highlighted "how insurers use socio-economic data including credit scores, ZIP codes and age to set rates in ways that disproportionately impact seniors, working families and communities of color."

According to the Driving Change campaign page, full coverage car insurance rates shot up 18% on average in Illinois from 2023 to 2024.

In an independent study commissioned from O'Neil Risk Consulting & Algorithmic Auditing (ORCAA) and released by the secretary in April, car insurance rates across the state appeared to be tied, in part, to factors that aren't directly related to the actual risk of insuring the driver.

Poor credit, for example, can result in premiums that are almost triple what a driver with excellent credit would pay for the same coverage, despite credit scores not being directly related to a person's ability to drive safely.

This can be especially hard on seniors who face higher car insurance rates due to their age. For those on a fixed retirement income, it can be difficult for their budgets to absorb 10% or more rate hikes every year — especially if their driving record remains clean and all that's changing is their age.

In one public comment published on the Driving Change campaign page, an Illinois driver notes that her car insurance jumped from $75 per month to $212 per month the year she turned 65, despite a perfect driving record.

Is Senate Bill 1486 good news or bad news for Illinois policyholders?

In a policy brief on the Illinois bill, the Insurance Information Institute said, "The measure would add new regulatory layers that could impede the accurate pricing of risk while doing nothing to address the underlying causes of rising premiums."

The III argues that the new restrictions on how companies set rates "could erode the policyholder surplus insurers are required to keep on hand to pay claims" If that happens, insurers might choose to either raise rates to replenish the surplus or pull out of riskier states.

The institute also notes that, when factoring in median household income, insurance rates in Illinois are already more affordable than the national average.

However, the new law would not prevent insurers from raising rates in response to increasing risk in Illinois. It's specifically targeting the use of factors that aren't strongly linked to risk when setting rates, and to the cost-shifting practices some companies use to offset higher costs in states that are prone to more expensive natural disasters.

If an insurance company can clearly show that the rates charged reflect, in the words of Senate Bill 1486, "an actuarially sound estimate of the expected value of all future costs" of the individual risk, it should have no problem remaining in compliance with the new law.

Overall, this legislation looks like good news for Illinois homeowners and drivers. It will give those facing steep renewal rates more time to shop around and switch car insurance (or home insurance) if they find a better price, and it will limit the use of less relevant factors (like your credit score) in determining the rates you pay.

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For the fourth year, we're pleased to present the winners of our annual Readers' Choice Awards. In a survey we conducted on Kiplinger.com in January and February, more than 4,200 readers rated the financial products and services they use in 13 categories, from credit cards and banks to brokers, wealth managers and annuity providers. The results here offer valuable insight into the everyday experiences that Kiplinger readers have with their financial providers.

Respondents made their judgments on such criteria as their interactions with customer service, the likelihood they would recommend the product or service to others, and their overall satisfaction with it. They also had the option to leave comments about their providers, and we have shared some of them here (remarks may be lightly edited for length and clarity).

For each category, we've listed an overall winner that earned the highest total score as well as other providers that earned above-average ratings for the various criteria that readers assessed. Our thanks to all of you who participated in the survey.

Kiplinger Readers' Choice Awards: Homeowners Insurance Companies

We asked readers to judge their homeowners insurance provider according to how competitive the rates are, how positive the experience has been when filing a claim and how likely they would be to recommend the company to others. Companies that earned top marks on home insurance tended to be highly rated for auto insurance, too.

OVERALL WINNER: USAA

Outstanding for:

• Competitive rates
• Claims experience
• Most recommended

USAA received top scores and rave reviews from many Kiplinger readers, who praised the company for its competitive rates and smooth claims experience. One reader called USAA "the gold standard for service," while another said they check quotes every year and "USAA is always the best coverage for the money."

USAA offers home insurance nationwide, but you must be a military servicemember, a veteran, or the spouse or child of a USAA member. For those eligible, USAA is often the best deal around when it comes to affordable premiums and top-notch customer service. Many Kiplinger readers reported sticking with the provider for decades, with no plans to leave anytime soon.

Highly-Rated Providers

Erie

Outstanding for:

• Competitive rates
• Claims experience
• Most recommended

One Kiplinger reader called Erie "great to work with when you need to make a claim." The company's home insurance policies were highly rated across all the criteria we asked about, making it a close second to USAA and an excellent choice for those who don't qualify for USAA membership.

ut you must live in one of the 12 states where Erie offers coverage: Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin. Washington, D.C., residents can also get a policy from Erie.

Amica

Outstanding for:

• Claims experience
• Most recommended

Readers appreciate Amica's home insurance especially for its top-notch claims experience. The insurer earned the highest score on that criterion, and many readers commended the quality of service, with one saying, "Amica customer service is exceptional. We were newly returned customers after several years bouncing between other insurance companies, and we filed a house claim the first year. Their estimator was quick to respond, fair in their assessment and payment. Our premiums did not increase due to the claim."

AAA

Outstanding for: Competitive rates

AAA is well-known for its emergency roadside assistance, members-only discounts and other perks of joining the auto club.

But it also offers home insurance, which readers rated highly for competitive rates. And the rates may be even better when you bundle your homeowners policy with AAA’s auto insurance. Readers also praised AAA auto insurance for its affordable premiums this year.

Farm Bureau

Outstanding for: Claims experience

The American Farm Bureau Federation is an agricultural organization with farm bureaus located in all 50 states, providing a wide range of insurance policies and services.

This makes it a uniquely useful choice for homeowners with niche insurance needs —such as the ability to insure large acreage or a farm — that can be hard to find from other insurers. And, says one reader, "the customer service is excellent."

Mercury

Outstanding for: Competitive rates

Mercury offers home insurance in select states, and offerings vary. But if you live in a state where Mercury is available, consider bundling your home policy with the company’s equally affordable auto insurance for even better rates. "I live in southern California, and the home insurance rates have skyrocketed in recent years. I bundle my auto and home policy with Mercury, and it appears to be the best deal I can find," says a Kiplinger reader.

Kiplinger Readers' Choice Awards Categories

• Readers' Choice Full-Service Brokers*
• Readers' Choice Wealth Management
• Readers' Choice Cash Back Credit Cards*
• Readers' Choice Airline Credit Card Rewards Programs*
• Readers' Choice National Banks*
• Readers' Choice Internet Banks*
• Readers' Choice Auto Insurance Companies
• Readers' Choice Homeowners Insurance Companies
• Readers' Choice Annuity Providers*
• Readers' Choice Tax Software*
• Readers' Choice Peer-to-Peer Payment Services
• Readers' Choice Awards Travel Rewards Credit Cards*

How Readers Chose the Winners

Kiplinger readers were invited to take the Readers' Choice Awards survey on Kiplinger.com between January 22 and February 19, 2026. The survey asked respondents to choose the financial product or service that they most frequently use in 13 categories: brokerage firms, wealth managers, IRA providers, cash-back credit cards, travel rewards credit cards, airline credit card rewards programs, national banks, internet banks, annuity providers, homeowners insurers, auto insurers, tax software and peer-to-peer payment services.

We asked readers to rate each provider they selected on a scale of one to 10 based on a few criteria. In many categories, readers rated the strength of customer service, how likely they would be to recommend the product or service to others, and how satisfied they are overall with the provider. In some categories, we included more nuanced criteria. With wealth management firms, we asked respondents to rate the trustworthiness of a firm's advisers and the quality of its financial advice and retirement-planning services. For IRA providers, respondents assessed the mix of investment choices available to them. For peer-to-peer payment apps and tax software, respondents evaluated ease of use, and for auto and home insurance companies, readers judged the competitiveness of rates and strength of the claims experience.

We calculated an average (mean) score for each criterion with each provider. We also calculated an overall mean score for all providers for each criterion we asked readers to judge. We compared individual provider mean scores with the overall mean, and the three highest-scoring providers that had a score above the overall mean won an "outstanding" accolade; in cases of a tie, more than three providers are named, and if fewer than three qualifying providers achieved an above-average score, only those providers are named "outstanding." In each category, providers are generally listed in descending order by the number of criteria for which they received the "outstanding" designation — so a product or company that is deemed "outstanding" in three areas, for example, is listed before a provider with one or two "outstanding" awards.

To choose an overall winner in each category, we added together the mean scores for each criterion rated for each product or service. The provider with the highest total score in each category took the prize for overall winner.

*Because of a technical issue during the 2026 survey data collection, some providers that readers evaluated in certain categories, marked with an asterisk, were ranked using patterns from the 2025 consumer survey data.Affected were three of 18 brokerage firms, six of 20 cash-back credit cards, two of 15 travel rewards credit cards, one of 13 airline credit card rewards programs, three of 33 banks, two of 14 annuity providers, and one of eight tax-software products. All other categories fully reflect 2026 data. All results represent actual Kiplinger reader feedback.

For the fourth year, we're pleased to present the winners of our annual Readers' Choice Awards. In a survey we conducted on Kiplinger.com in January and February, more than 4,200 readers rated the financial products and services they use in 13 categories, from credit cards and banks to brokers, wealth managers and annuity providers. The results here offer valuable insight into the everyday experiences that Kiplinger readers have with their financial providers.

Respondents made their judgments on such criteria as their interactions with customer service, the likelihood they would recommend the product or service to others, and their overall satisfaction with it. They also had the option to leave comments about their providers, and we have shared some of them here (remarks may be lightly edited for length and clarity).

For each category, we've listed an overall winner that earned the highest total score as well as other providers that earned above-average ratings for the various criteria that readers assessed. Our thanks to all of you who participated in the survey.

Kiplinger Readers' Choice Awards: Auto Insurance Companies

Readers rated their auto insurance provider based on how competitive the rates are, their experience with filing claims and how likely they are to recommend the insurance company to others. These companies stood out from the pack in our survey.

OVERALL WINNER: USAA

Outstanding for:

• Competitive rates
• Claims experience
• Most recommended

For the second year in a row, USAA is the top choice among Kiplinger readers for both auto insurance and home insurance, earning plaudits for its affordable rates and exceptional customer service.

Overall, readers appreciate how responsive and knowledgeable the customer service team at USAA is, as well as how easy it is to get a human on the phone when you need them. "You never have to call back later to inquire about some part of the policy. You always get someone to talk to immediately," says one respondent.

Given that readers report a similar satisfaction with the provider's home insurance, many said they have both policies through USAA to take advantage of a bundling discount. And some said that they go so far as to get all of their insurance policies through USAA.

USAA's nationwide membership is available to military servicemembers and veterans, as well as the spouses and children of USAA members.

Highly-Rated Providers

Erie

Outstanding for:

• Competitive rates
• Claims experience
• Most recommended

Erie rivaled USAA across the criteria we asked readers to rate, tying the overall winner when it comes to affordable premiums and coming in a close second with how likely readers are to recommend the insurer.

One reader mentioned Erie’s "excellent and immediate service" when filing a claim, and many reported that Erie often offered the lowest rates when they shopped around to compare quotes.

Amica

Outstanding for:

• Claims experience
• Most recommended

Amica tied USAA when it came to claims experience this year, with one reader praising Amica's "high quality, responsive customer service" and another deeming Amica's handling of claims "superb."

The care that agents show clients counts, too: "Amica agents are kind," a respondent says. "My car was totaled in a horrible accident about seven years ago, and their main concern was always my well-being. Their rates are good, and they are easy to work with."

AAA

Outstanding for: Competitive rates

For AAA members, getting a quote on car insurance from the auto club just makes sense. According to Kiplinger readers, AAA often wins out on rates, and some also pointed to strong customer service.

Says one respondent, "I've had at least four claims handled with outstanding efficiency and great outcomes. The network of mechanics, body shops, and service centers that you can pick is extensive."

Farm Bureau

Outstanding for: Claims experience

Farm Bureau offers a wide variety of insurance policies, and both their auto insurance and home insurance policies rated highly for a positive claims experience among Kiplinger readers. According to one reader who had to file a car insurance claim last year, "Farm Bureau was absolutely top-notch, handling everything efficiently and with great communication throughout the process. ‘Seamless’ is the best description I can come up with."

Mercury

Outstanding for: Competitive rates

Among the auto-insurance winners, Mercury earned the highest score for offering affordable premiums. With prices going up all around, opting for an insurer that stands out for low rates can be a good way to keep monthly costs down. Mercury offers coverage in 11 states.

Kiplinger Readers' Choice Awards Categories

• Readers' Choice Full-Service Brokers*
• Readers' Choice Wealth Management
• Readers' Choice Cash Back Credit Cards*
• Readers' Choice Airline Credit Card Rewards Programs*
• Readers' Choice National Banks*
• Readers' Choice Internet Banks*
• Readers' Choice Auto Insurance Companies
• Readers' Choice Homeowners Insurance Companies
• Readers' Choice Annuity Providers*
• Readers' Choice Tax Software*
• Readers' Choice Peer-to-Peer Payment Services
• Readers' Choice Awards Travel Rewards Credit Cards*

How Readers Chose the Winners

Kiplinger readers were invited to take the Readers' Choice Awards survey on Kiplinger.com between January 22 and February 19, 2026. The survey asked respondents to choose the financial product or service that they most frequently use in 13 categories: brokerage firms, wealth managers, IRA providers, cash-back credit cards, travel rewards credit cards, airline credit card rewards programs, national banks, internet banks, annuity providers, homeowners insurers, auto insurers, tax software and peer-to-peer payment services.

We asked readers to rate each provider they selected on a scale of one to 10 based on a few criteria. In many categories, readers rated the strength of customer service, how likely they would be to recommend the product or service to others, and how satisfied they are overall with the provider. In some categories, we included more nuanced criteria. With wealth management firms, we asked respondents to rate the trustworthiness of a firm's advisers and the quality of its financial advice and retirement-planning services. For IRA providers, respondents assessed the mix of investment choices available to them. For peer-to-peer payment apps and tax software, respondents evaluated ease of use, and for auto and home insurance companies, readers judged the competitiveness of rates and strength of the claims experience.

We calculated an average (mean) score for each criterion with each provider. We also calculated an overall mean score for all providers for each criterion we asked readers to judge. We compared individual provider mean scores with the overall mean, and the three highest-scoring providers that had a score above the overall mean won an "outstanding" accolade; in cases of a tie, more than three providers are named, and if fewer than three qualifying providers achieved an above-average score, only those providers are named "outstanding." In each category, providers are generally listed in descending order by the number of criteria for which they received the "outstanding" designation — so a product or company that is deemed "outstanding" in three areas, for example, is listed before a provider with one or two "outstanding" awards.

To choose an overall winner in each category, we added together the mean scores for each criterion rated for each product or service. The provider with the highest total score in each category took the prize for overall winner.

*Because of a technical issue during the 2026 survey data collection, some providers that readers evaluated in certain categories, marked with an asterisk, were ranked using patterns from the 2025 consumer survey data.Affected were three of 18 brokerage firms, six of 20 cash-back credit cards, two of 15 travel rewards credit cards, one of 13 airline credit card rewards programs, three of 33 banks, two of 14 annuity providers, and one of eight tax-software products. All other categories fully reflect 2026 data. All results represent actual Kiplinger reader feedback.

Many Americans are dealing with medical debt, often from bills that showed up when they had the least ability to pay them.

Negotiation isn't a niche tactic these days — it's part of the process.

The difference now is that you actually have leverage in the form of access to real pricing data, better enforcement and clearer rules.

We're going to focus on what actually moves the number on your bill, what you can do before you ever get on the phone and how to manage your payment options.

What happens before you get your medical bill

When you're billed for a visit to your doctor or for a procedure, the insurance claim goes to your insurer, who applies your deductible, copays and coinsurance and sends you an explanation of benefits, or EOB. The EOB is not the bill.

The actual bill can sometimes show up before the EOB, sometimes after. And sometimes the numbers between the two don't line up.

Billing errors can happen because of incorrect coding, services being billed that weren't performed or documentation that doesn't match the care you actually received.

If something feels off, don't guess. Ask for an itemized bill. You need the medical codes that were used, the dates of care and line items. That's what you'll actually work from when you're negotiating.

The following terms matter, but only to the extent they affect what you owe:

• A deductible is what you pay before insurance does anything
• A copay is fixed amount per service
• Coinsurance is the percentage applied after the deductible
• The out-of-pocket max is your ceiling for in-network care

Many people are surprised when they're billed for out-of-network care. The federal No Surprises Act covers a lot of those cases now, but not all. It's worth checking out what the law says before assuming you're stuck with the bill.

The No Surprises Act also requires most health care providers to provide insured people a good faith estimate of the bill before an appointment or procedure.

Hospital pricing strategies in 2026

Hospitals used to operate behind a wall of inflated "chargemaster" prices. These haven't disappeared, but they're harder to hide.

Now:

• Hospitals have to publish standard charges: Gross, cash and negotiated rates
• Health plans have to show what they actually pay
• Estimator tools are easier to use and more accurate

You can now see how inconsistent pricing is.

Private insurance pays about 250% of Medicare rates on average. Sometimes more.

What that means is that Medicare sets a standard reimbursement rate for medical procedures. For example, if Medicare pays $1,000 for a knee surgery, a private insurer might pay $2,500 for the exact same procedure, so that's 250% of the Medicare rate.

This gap exists because private insurers negotiate rates separately, and hospitals often charge them significantly more. That gap is also what you can point to when you ask for a reduction in your bill.

Now that health care providers have to be more transparent, consumers can see that prices aren't standard. There's a range. And when your bill sits at the higher end of that range, you can ask for it to be brought closer to the more typical benchmark.

Facility fees are another quiet problem. You go in for something routine, and suddenly there's a separate charge just for the setting.

Ask about facility fees upfront. While asking doesn't mean you won't be charged, it's still useful to know in advance so that when you see your itemized bill, you can ensure it was applied appropriately.

You can also compare what the same service would cost in a non-hospital setting and ask about financial assistance or hardship-based adjustments.

Strategies for negotiating medical bills

Instead of immediately picking up the phone after you get a medical bill you think is too high, take the time to prepare for the negotiation.

If you bring up a vague complaint — saying something like, "This bill seems too high" — nothing will happen.

If you begin the negotiation with specifics, billing departments are more likely to take you seriously.

What you should do first:

• Look closely at the itemized bill. Look for duplicate charges, services you didn't receive and mismatched dates. These errors happen more often than people expect, and they're not small.
• Match the bill against your EOB. If something was denied or adjusted, find out why. Simple fixes can change the entire balance.
• Check the network status of all of the providers. Sometimes multiple providers are involved in your care. One out-of-network anesthesiologist can account for a major spike in your bill. This is where No Surprises Act protections may apply.
• Use estimator tools to explore prices. FAIR Health Consumer and Turquoise are good ones where you can establish a reasonable price range for the care you received.

If you're uninsured, ask your provider for the cash price of your care and inquire about their financial assistance policies. Nonprofit hospitals are required to have them. Don't assume you won't qualify.

When you're ready to negotiate, remember that clarity about what you're asking for is what matters the most.

First, ask to speak with a patient financial counselor. If you can't pay, say so right away. If you want a lower bill, keep it simple.

• Reference specific charges, rather than make general complaints
• Use actual numbers, especially Medicare comparisons
• Ask about discounts (such as prompt pay, cash rates, charity care)

Document everything in the negotiating process — names of the people you talked with and when and what they said. Get confirmations in writing before you pay anything.

If a claim was denied and it looks fixable to you, request resubmission. Then escalate through your insurer if needed.

This part isn't quick. It's a process.

Using technology and resources

A few resources and organizational tips that can help:

• Your insurer's cost estimator and messaging system
• A basic spreadsheet to track the calls you make and your outstanding balances
• Put everything in writing where possible

If the process gets overwhelming, consider contacting an organization that might be able to help, such as Patient Advocate Foundation or Dollar For. Your local medical system might also have a program that could help, such as Trinity Health of New England's RIP Medical Debt.

You don't need to figure everything out yourself.

Post-negotiation: Managing and paying medical bills

If you can't settle the debt in a lump sum, consider asking for a payment plan.

Jeffrey Zhou, CEO and founder of Fig Loans, works with borrowers navigating tight budgets where one unrealistic payment can throw everything off.

"The mistake we see most often is people agreeing to a number they know they can't sustain, just to close the situation. It feels like progress in the moment, but it usually leads to missed payments and more pressure later.

"The better move is to be upfront about what you can actually afford and lock that in from the start."

Many providers offer a payment plan with a 0% interest rate, though some might try to route you to third-party financing. Be careful there.

Medical credit cards and deferred-interest plans might look manageable — until they're not. One missed payment, and the math changes quickly. A smaller, consistent payment is better.

Luckily, things are improving with credit reporting. Paid medical collections are no longer reported, and many smaller debts have been removed. There's also a push to remove medical bills entirely from credit reports.

But unpaid medical bills can still go to collections.

How to avoid future billing issues

Most problems can be caught early. Before you get care, if possible:

• Check costs
• Confirm network status of the providers involved
• Ask about facility fees
• Request written estimates

These steps are even more important in areas like behavioral health, where treatment plans can span multiple services over time.

If you're getting care that combines both mental health and substance use support, such as dual diagnosis treatment, get clarity upfront on what's included, how it's billed and whether different providers or facilities are involved, because that's where unexpected costs tend to show up.

When you arrive for care:

• Double-check the insurance details
• Ask about financial assistance screening

After you've received care:

• Read every correspondence you receive
• Compare the bills to the EOBs

Flag issues quickly — waiting makes everything harder.

Ultimately, negotiating with your health care provider to try to lower your medical bills is less about a single quick fix and more about an organized process that requires preparation, clear communication and persistence.

Related Content

• How to Handle Costly Medical Bills — Smartly
• Health Care Cost Basics: What You Can Expect to Pay and Ways to Save
• Average Cost of Health Care by Age and US State
• 6 Steps to Quickly Build Your Emergency Fund
• Gen Z's Biggest Money Mistakes (Plus, Small Wins That Fix Them)

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Several Michigan parents are facing fines and car insurance issues tied to garaging rules, after running into problems insuring vehicles for children attending college out of state, according to ClickOnDetroit.

While these cases are surfacing in Michigan, the underlying rules apply nationwide. Car insurance companies base your policy on where a vehicle is primarily kept, and that can create complications in common situations such as college moves, temporary relocations or splitting time between two states.

Understanding how garaging addresses work can help you avoid unexpected fines, denied claims or even canceled coverage.

What 'garaging' means in car insurance

Insurers price car insurance policies based on where your vehicle is typically kept overnight, known as your "garaging address." This is the location where your car is parked most of the time.

While that's often your home address, it could also be a parking garage or another regular location.

That address plays a key role in determining your premium. Insurers evaluate factors tied to the location, including traffic volume, population density and risks such as theft or vandalism, to assess how likely you are to file a claim.

For example, a vehicle garaged in a rural area with fewer cars on the road and lower crime rates generally presents less risk. As a result, drivers in those areas might pay lower insurance rates than those in more densely populated or higher-risk locations.

This isn't just a Michigan problem

Insurers use garaging ZIP codes in every state to price policies, so this is not just a Michigan issue. States such as Florida and New York have stricter and more complex coverage requirements, and moving or temporarily relocating your vehicle can significantly change what you pay.

You're generally required to update your garaging address when your vehicle’s primary location changes. That includes situations in which a child takes a car to college out of state. Even if the move is temporary, insurers focus on where the car is kept most of the time.

Because your garaging address directly affects your rate, failing to update it could violate your policy terms. In some cases, insurers might treat this as rate evasion or misrepresentation, which can lead to denied claims, higher costs or even policy cancellation.

The college student insurance gray area

When students are in college, their cars often split time between their home and school location. Car insurance companies can approach that situation differently.

Some insurers allow students to remain on their parents’ car insurance policy while attending school out of state. Others might require students to buy a separate policy if they register the vehicle in the state in which they’re attending school.

Regardless of the rules an insurer sets about whether a college student can stay on a parent’s policy, most insurers typically require you to update the garaging address if the car is kept elsewhere most of the year.

Confusion and cost surprises can happen when parents don't realize that they need to update the garaging address even when a child makes a temporary move to go to college. Parents might consider that child’s official address as still being their home residence, but for insurance companies, the physical location of the vehicle is what matters.

What happens if you get it wrong

If you fail to update your vehicle’s garaging address, the consequences can be costly. Your insurer might deny a claim or reduce the amount it pays. In some cases, your policy could be canceled for misrepresentation.

In stricter states such as Michigan, there can also be legal consequences. Drivers might face fines or other penalties, even if the error was unintentional and the garaging address was not updated by mistake.

Some families are also being told they must register and insure a vehicle in the state where it is primarily used. In one case reported by ClickOnDetroit, a student from Michigan was pulled over while attending college in Texas and fined $750 because the car was still registered and insured in Michigan, despite being kept out of state.

How to avoid a costly car insurance mistake

To sidestep an expensive insurance error, take a few minutes to confirm where your car is garaged for most of the year and make sure that information is accurate and up to date with your insurer.

Before anyone on your policy moves, heads to college or plans an extended stay elsewhere, contact your insurance provider to update the garaging address. Requirements can vary by insurer, so it is important to ask exactly what is needed in your situation.

If the vehicle will be used in more than one location, such as splitting time between home and school, ask your insurer how to handle a multilocation arrangement so there are no gaps in coverage.

Keep in mind that a change in garaging location can affect your premium. Moving from a rural area to a more urban setting, for example, might increase your rate. Review the updated cost and, if needed, compare quotes from other insurers to see if switching could help you save.

Use the tool below, powered by Bankrate, to explore and compare some of today's top offers:

Why your car's location matters more than you think

Car insurance garaging rules can have real financial consequences, and many drivers are unaware they exist. While recent stories out of Michigan highlight the issue, these rules apply nationwide, meaning drivers in any state could face similar problems.

Taking a few minutes to check in with your insurance provider can help ensure your garaging information is accurate, especially if anyone on your policy is planning a move or extended stay elsewhere. A quick update now might help you avoid denied claims, higher costs or unexpected fines later.

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April is distracted driving awareness month and the safety statistics show that awareness is needed. Despite laws in most states banning the use of phones while driving, distracted driving remains a deadly and expensive problem in the United States.

29% of car accidents are caused by distracted driving, resulting in over 3,200 deaths and causing an estimated $395 billion in damages each year, according to a 2024 report by the National Highway Traffic Safety Administration (NHTSA).

The same report said one of the biggest challenges to addressing the problem is "the breadth of distraction sources and activities available to a driver." In other words, it's not just your phone. As technology continues to advance, the distraction is now coming from inside the car. New features meant to make driving more comfortable and stress-free end up encouraging drivers to pay less attention to the road.

You're driving distracted more often than you think

The NHTSA describes three types of distraction and you're almost certainly falling into at least one of them as you drive. Those distractions are visual, manual or cognitive:

• Visual distractions require you to take your eyes off the road, putting you at risk of not seeing a potential hazard.
• Manual distractions require you to use your hands for something other than driving, delaying your ability to react to hazards as quickly as you might need to.
• Cognitive distractions take your mind off of the task of driving, making you less alert to your surroundings.

Most distractions fall into two or more categories. Texting, for example, fits all three: it takes your eyes off the road, your hands off the wheel and your attention away from driving.

But even if you're smart enough to avoid texting while driving, you're likely engaging in activities that distract you in at least one of the three ways described above.

Not happy with the song on the radio? Changing the station or skipping to the next song on Spotify is a manual distraction. Unsure of where your next turn is? Your GPS navigation system is a visual distraction. Driving in a car with handsfree calling capabilities? You might have your eyes on the road and your hands on the wheel, but now your mind is distracted by the task of talking on the phone.

Your car isn't helping you stay focused on driving

As vigilant as you try to be, modern cars come with multiple features that make it easy to get distracted and may even make you feel safe enough to pay a little less attention. One of the culprits is your car's infotainment system.

A report by the AAA Foundation for Traffic Safety evaluated the infotainment systems of 40 different vehicle models, ranging from high-end Audis to entry-level Toyotas measuring the time it took drivers to complete tasks using systems in 2017 and 2018 vehicles. 29 of the models studied were found to have systems that made "high demand" or "very high demand" of your attention. The remaining 11 still commanded "moderate demand" of a driver's attention.

The ratings were based on how often the technology required your visual or cognitive attention and how long it took to complete a given task. This included common tasks you might do while driving like program your navigation, use voice commands, make a call, or adjust your audio entertainment.

The Tesla Model S, for example, allows drivers to search the internet while driving and features so much information on the screen that navigating the different menus and submenus can take up a lot of the driver's time (and attention). The voice commands meant to allow drivers to complete tasks without their eyes or hands were still slow, error-prone and imposed a high cognitive demand on drivers. Tesla isn't alone. The report found similar issues with many of the other cars studied.

The other major culprit of distracted driving is the rise of self-driving and driver assistance technologies.

At a board meeting last month, the National Transportation Safety Board (NTSB) urged congress to establish minimum safety standards for this technology following two fatal crashes linked to Ford's Blue Cruise system.

Ford's driver assistance system promises "hands-free highway driving," according to the manufacturer's website. The automated features can accelerate, brake and steer the vehicle for you.

The website also says drivers are supposed to keep their eyes on the road while using the feature. Cars with the technology also come with internal cameras that are meant to detect if a driver's eyes are no longer on the road. But the NTSB investigation into the two crashes alleges that these cameras failed to detect that, in both accidents, drivers were not looking at the road at the time of the crash.

“Our brains are just wired in that if we think that a system is going to take over and reliably handle a driving task, we get bored and we look for something else to do,” said Cathy Chase, president of Advocates for Highway and Auto Safety, during the board meeting.

While the focus was on the recent crashes involving Ford, the NTSB stressed that this is an industry-wide problem. As more and more carmakers add self-driving or driver assistance features to their vehicles, it's going to enable more and more drivers to use their "hands-free" driving time to navigate their increasingly distracting infotainment systems.

How to drive safely in a distracted world

With distractions everywhere, it can be difficult to stay focused on the road. But even partial distractions — like struggling with a voice command system or trying to skip a song you’re tired of hearing — can be dangerous.

Here are a few tips to help minimize distractions and drive more safely.

Program your navigation and audio before you drive
Some cars already limit your ability to program these things while the vehicle is in drive. But even if yours doesn't, you should get yourself set up before you hit the road. Cue up a long enough playlist to cover the length of your drive, for example.

If your steering wheel has volume or skip buttons, use those instead of the touchscreen. If you need to adjust your navigation, pull over to do so.

Don't take calls or answer texts (even with voice-to-text) while driving
If it's urgent enough to answer right away, pull over. If it's not worth pulling over to respond, it can wait until you're done driving.

Some phones allow you to turn on a driving mode which will temporarily pause notifications while you're on the road and automatically send a message to callers or texters, letting them know that you can't answer right now. Using this can help reduce the temptation to respond immediately.

Limit or avoid the use of assisted driving features
As the Advocates for Highway and Auto Safety president mentioned during the NTSB meeting in March, assisted driving features can lull you into a false sense of security. Sticking to old-fashioned manual driving keeps you more engaged with the task at hand.

Use Android Auto or Apple CarPlay instead of your car's native system
In the distracted driving report mentioned earlier, AAA found that both Android Auto and Apple CarPlay were still potentially unsafe, but they were far less demanding of drivers' attention than the sometimes clunky proprietary systems designed by automakers.

This isn't always an option in all cars. But if it is an option in yours, use it (just not while you're driving).

Don't assume other drivers are paying attention
With the rise of driver-assist technology and in-vehicle touchscreens, more drivers on the road may be distracted. An attentive driver might brake or slow down when traffic changes—but a distracted one may not react in time. That makes it even more important to stay alert and responsive behind the wheel to protect yourself.

Take a defensive driving course to boost your skills
There are many defensive driving courses available, including plenty of convenient online options. These cover everything from recognizing hazards to best practices for handling various road conditions. Some of it is sure to be a repeat of things you already know, but you'll likely learn a few new things as well.

If you're not convinced a course is worth your time (or money), remember that many insurers offer discounts on your premium if you take an approved course. They typically take about six hours to complete and can help you save on car insurance.

Just make sure you choose an approved defensive driving course, like one of the following:

• DriveSafe Online
• AARP Smart Driver Course
• Safe2Drive
• I Drive Safely
• National Safety Council (NSC)

Don't let a false sense of security lull you into an accident

Between the built-in car features that are demanding your attention and the convenience features that make you feel safe enough to take your eyes or hands off the task for a minute or two, it's getting easier to forget that you're sitting in a 4,000-pound hunk of metal barreling down the road at high speeds.

But driving is, in reality, the most dangerous mode of transportation by a long shot. According to the Bureau of Transportation Statistics, the overwhelming majority of transportation fatalities occur on highways.

In 2023, for example, over 40,000 of the 42,920 transportation deaths in the United States happened while driving. Likewise, over 99% of the 2.4 million transportation injuries that were reported that same year occurred on the road. The stats are similar for other years. By staying alert and minimizing your use of those convenient features your new car has (at least while driving), you can reduce your risk of becoming part of that statistic.

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Alongside surging gas prices and a stubbornly high grocery bill, home insurance premiums have also been creeping up over the last few years.

In the last year alone, average home insurance rates climbed 6%, according to the Federal Reserve Bank of St. Louis. That's more than double the overall pace of inflation for the same time period.

For those who are retired or near it, the idea of runaway premiums eating up more of your fixed income might feel daunting. Fortunately, there are steps you can take now to reign in rising rates.

From senior discounts to planning ahead for insurance costs in retirement, here are six ways to keep your premiums under control as you get older.

Ask your insurer about senior discounts

You won't get a senior discount from every insurance company, but a few do offer them. The age that qualifies as "senior" will vary, as will the discount amount. But, it never hurts to call up your insurer and ask if they offer one.

If the answer is no, you can make it a criteria when shopping for home insurance ahead of your next renewal. Get a few quotes from competitors, then call up the top two or three options you such as to ask whether senior discounts are available.

While you have a representative on the phone, go ahead and ask about any other discounts they offer, too. You might be missing out on some easy ones, like paperless billing discounts — a discount for opting into emailed statements instead of mail.

Look for membership-related discounts

If you have a membership such as AARP, AAA or even Costco, you might be able to leverage it for lower rates. While none of these memberships provide insurance directly, all three have partnered with third-party insurance providers to offer special, members' only pricing.

Rates and availability will vary depending on where your home is located. It's always a good idea to check what insurance-related perks any of your memberships offer.

Make home security upgrades

Boosting your home's defense systems with DIY home security upgrades — think installing a video doorbell or adding smart cameras to the exterior of your house — can help deter burglars. Some insurers offer discounts to homeowners who have these systems.

With any of these security upgrades, the key to getting any potential discounts is to call your insurer. If you're not sure you'd want to invest in the changes if you weren't getting a rate cut for them, call the insurance company first to find out what kind of discounts are available and what criteria you'd need to meet to get them.

Pay your policy in full up front

Nearly all insurance companies will offer a 5% to 10% discount off your premium for paying the full amount for the year up front rather than in monthly installments. Dip into your savings to pay it in full right now, then, pay back your savings with the monthly installments you were planning to send your insurance company over the year.

Pro tip. If your insurer doesn't charge an extra fee for using a credit card, pay your annual premium with a rewards credit card to stack cash back or points on top of your paid-in-full discount. Make sure you have the cash on hand to pay off the credit card in full right after.

Include higher deductibles in your retirement plan

You don't have to be over a certain age to enjoy lower premiums in exchange for agreeing to higher home insurance deductibles. But when you're living on a fixed income, it can be hard to have that kind of flexibility.

If you plan ahead, however, it can be a great way to lower your monthly bill while still protecting your home from catastrophic losses. With this strategy, you're basically agreeing to only use home insurance for major disasters — damage in which the repair bill would irreparably hurt your retirement savings.

If you can plan ahead to set aside a healthy home maintenance fund to cover higher deductibles, you'll have enough savings to cover small-to-medium repair jobs as they happen without needing to make a claim. Then, set your deductible as high as you can comfortably afford and enjoy both the discount from having higher deductibles and from being claim-free for longer periods of time.

Check insurance rates before you downsize

Whether you're dreaming of moving to popular retirement destinations such as Florida or Colorado or you're choosing a new state for other reasons, make sure you check average home insurance rates before you move.

Even if you're using your equity to pay for all or most of your next home in cash, your savings from ditching a mortgage could be all but erased by a $10,000-plus home insurance bill.

But even in states with notoriously expensive home insurance (such as the aforementioned Florida), premiums vary widely from one county to the next.

You don't necessarily have to give up your retirement plans. You just need to do your research first to pick a location that fits your budget as well as your lifestyle.

Related content

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Question: We're retiring at 63 with $5.7 million. My wife wants to buy long-term care insurance, but it's very expensive. I think we can just self-insure. Who's right?

Answer: If you're retiring with a large sum of money, you may be aware that there's one expense that could eat away at your nest egg over time — health care. Even if you're relatively healthy at the start of retirement, there's no guarantee you won't end up with medical issues later on.

Furthermore, as you age, you might eventually need more than just medical care. You might also need custodial care, or non-medical assistance with everyday living.

Unfortunately, that type of long-term care is not covered by Medicare. And if you're footing the bill yourself, you should know it could be a big one.

On a national scale, the annual median cost of a non-medical in-home caregiver was $80,080 in 2025, according to CareScout. Assisted living, meanwhile, cost the typical resident $74,400.

If you need a nursing home, you might really pay a bundle. The annual median cost for a shared nursing home room was $114,975 in 2025. For a private room, it was $129,575.

These are just averages and can be considerably higher in some parts of the country. For this reason, pre-retirees are often advised to look into long-term care insurance.

The problem with long-term care insurance, though, is that it isn't cheap. According to the American Association for Long-Term Care Insurance, as of 2024, the average annual premium for a $165,000 policy with no inflation adjustment was $950 for a single male and $1,500 for a single female when purchased at age 55. That same policy for a 55-year-old couple averaged $2,080 a year.

If you and your spouse are retiring at 63 with $5.7 million, you might assume that you have enough money to cover long-term care expenses as they arise. But your wife might prefer the protection of long-term care insurance. Here's how to figure out the best way to pay for this potentially large expense.

You probably have enough money to skip the insurance

As of 2022, the average household made up of people your age had about $538,000 in retirement savings, according to the Federal Reserve. For a nest egg that size, a single year of long-term care could be catastrophic. For a $5.7 million nest egg, even a few years of long-term care might only make a dent.

"With $5.7 million in liquid assets, this couple doesn’t need long‑term care insurance from a purely financial standpoint," says Michael Murray, AIF, CPFA, and President at Peabody Wealth Advisors. "If they’re comfortable absorbing the risk, self‑insuring is entirely reasonable. At this wealth level, long‑term care coverage isn’t about preventing financial ruin. It’s about reducing uncertainty."

That said, the benefit of having long-term care insurance, says Murray, is predictability. With insurance in place, you may not have to take a six-figure withdrawal to cover long-term care.

Even if you have a large nest egg, an expense that large can be uncomfortable. It might also get in the way of inheritance plans. So there's a value in having that protection, even if you technically have enough money saved that you don't need it.

As Dan Peterson, President and Managing Partner at E4 Insurance Services, explains, "Insurance is a transfer of risk. When you buy long-term care coverage, you pay a known cost so that an insurance company will absorb an unknown future cost."

He suggests that high-net-worth people determine exactly which assets would fund their care. Then, he says, it's important to see how that impacts overall financial plans.

If you come to the conclusion that you can absorb a few years of long-term care costs without impacting your goals, you may be able to skip the insurance. Otherwise, buying a policy could make sense.

Your wife's feelings are valid

If your wife seems more worried than you are about long-term care, there may be a reason for that.

"Statistically, men die earlier," Murray explains, "which means wives often shoulder caregiving responsibilities — an emotionally and physically draining role that can shorten a caregiver’s lifespan."

Furthermore, Murray says, if the husband passes first, the surviving spouse may need to rely on children or paid care. Insurance can help ease that burden.

You may want to consider a different type of coverage

For some people, a reason not to buy long-term care insurance is that if you don't end up using it, you're potentially giving up a lot of money that could otherwise become part of your estate plan. That's why Murray suggests a different approach to buying coverage.

"Many high‑net‑worth households gravitate toward hybrid life/long-term care policies funded with a lump sum," he explains. "If they never use the benefits, the remaining value passes to heirs or charitable causes, which feels more like repositioning assets than spending money on something they may never use."

Peterson agrees. A hybrid policy, he says, can still return value to your family if care is never needed.

"Instead of writing a blank check from your portfolio, you dedicate specific dollars to protect both your income plan and the people you care about," he says.

Read More

• I Tried a New AI Tool to Answer One of the Hardest Retirement Questions We All Face (Long-Term Care)
• How to Manage Longevity Risk in Retirement: 10 Solutions
• We're 64 With $4.3 Million. I Want to Retire Now and Pay for Health Insurance Until We Get Medicare. My Wife Says We Should Work. Who's Right?
• I Want to Retire, but I Have to Keep Working so My Adult Kids Have Insurance

Building a good relationship requires a solid foundation, and that foundation is almost always trust. But when it comes to your life savings, trust can feel like a very rickety bridge to cross.

It is completely understandable that many people hesitate to work with a financial professional. Handing over the keys to your financial future — and granting access to your hard-earned accounts — to someone you don't know is scary.

Because of this fear, many people decide to just "stay put" and do nothing, which can be risky in its own way.

One of the biggest sources of confusion is that the term "financial professional" is a broad umbrella. It covers many different roles, and unfortunately, not all of them are held to the same rules or standards.

To make the best decision for your family, you need to know who is sitting across the table from you. Are they a broker, an insurance agent or an investment adviser representative operating under a fiduciary standard when providing investment advisory services?

Here is a simple breakdown of the differences.

The broker: Focused on transactions

Think of a broker primarily as a facilitator of trades. Their main job is to execute transactions, like buying or selling stocks for you.

Brokers are often compensated through commissions. While they certainly want your account to grow, their primary responsibility is often to the brokerage firm they work for, not necessarily to you personally.

They might be excellent at picking a stock, but brokerage services are usually just one small piece of a much larger financial puzzle.

The insurance agent: Focused on products

Some professionals specialize strictly in insurance. While they might sometimes use the title "financial professional," their training and credentials often center specifically on insurance products, such as life insurance or annuities.

Their recommendations are generally limited to the products they sell. While insurance is a vital part of a financial plan, an agent's duty is different from that of a comprehensive planner.

If you talk only to a hammer, everything looks like a nail; if you talk only to a product salesperson, the solution to your problem will likely be a product, not a plan.

The investment adviser representative: Focused on you

This is where the distinction becomes important. A financial adviser who serves as an investment adviser representative and is required by law to act in a fiduciary capacity when providing advisory services — and who may carry the CERTIFIED FINANCIAL PLANNER® (CFP®) designation — has different obligations

As an investment adviser representative, I am required by law to operate under a fiduciary standard when providing investment advisory services.

In plain English, this means I am legally and ethically obligated to act in your best interest when I am delivering advice or managing assets in that capacity. I cannot recommend a product just because it pays me more or helps my firm. I must put your needs above my own.

If there is any potential conflict of interest, an investment adviser representative must disclose it to you upfront when acting in an advisory capacity. It is a relationship built on total transparency.

Why the CFP® designation matters

You might see many letters after a professional's name, but CFP® is one of the most rigorous designations in the industry. It isn't just a certificate you get for attending a weekend seminar.

To earn it, a professional must:

• Study broadly. Complete heavy coursework covering retirement planning, taxes, investments, estate planning, insurance and risk management.
• Pass the exam. Pass a comprehensive and notoriously difficult certification exam.
• Keep learning. Commit to ongoing continuing education to stay sharp on changing laws and strategies.
• Be ethical. Adhere to strict ethical standards enforced by the CFP Board.

Because of this training, a CFP® professional creates a comprehensive plan. They don't just look at your investment account — they look at your taxes, your estate, your insurance and your life goals to make sure everything works together.

A practical example: The 'retirement ready' test

Imagine a couple, Bob and Linda, who are five years away from retirement. They have $500,000 saved and want to know if they can retire.

A broker might look at their portfolio and say, "Let's move this money into these high-growth stocks to try to double it before you retire."

An insurance agent might say, "You should put this money into an annuity to guarantee income."

An investment adviser representative operating under a fiduciary standard when providing investment advisory services will ask, "What do you want your retirement to look like?" They might find that Bob and Linda don't need to double their money — they just want to preserve what they have. The adviser would analyze their spending, Social Security timing and tax liabilities before recommending any specific product.

The value of a rational guide

Beyond the math, a fiduciary adviser acts as a rational guide. Money is emotional. Markets go up and down, and it is easy to make panicked decisions that could hurt your long-term wealth.

An investment adviser representative offers objective guidance to help reduce your stress. They educate you on the pros and cons of options so you aren't guessing. They monitor your financial plan regularly, adjusting the sales as your life changes or regulations shift.

Successful financial relationships aren't about hot stock tips — they are about trust, open communication and knowing that the person guiding you is legally required to act in your best interest within the scope of providing investment advisory services.

Dan Dunkin contributed to this article.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

I am currently covered by my wife's health care insurance, which is better than the plan my employer offers. However, her plan doesn't offer a health savings account (HSA).

Fortunately, my company has a flexible spending account (FSA) plan, which can be used to pay for most of the same expenses as an HSA.

In 2025, I signed up for an FSA for the first time. It was near the end of the enrollment deadline, and I elected a total plan-year pre-tax contribution amount of $1,000 without digging deeply into the details of the plan.

Had my employer structured its FSA in a less generous way, my lack of due diligence could have cost me dearly.

HSAs vs FSAs — the differences matter

HSAs are available only for employees enrolled in a high-deductible health plan (HDHP). FSAs are generally offered to those in non-HDHPs.

Both plans enable employees to make pretax contributions that can be used to pay for out-of-pocket medical and dental expenses. Both accounts can generally be used to pay for chiropractic care, weight-loss programs and qualified prescription and over-the-counter medications.

But there are key differences. Once employees enroll in Medicare, they can no longer contribute to an HSA, but they can continue to make FSA contributions.

HSA funds remain in the account until employees use them. They can take their HSA to another employer or move it into a special HSA with a brokerage company when they retire.

HSAs assets grow tax-free, and there are never any taxes on withdrawals if they're used to pay for qualified health care expenses.

FSA contributions, on the other hand, follow a use-it-or-lose-it rule. You elect to contribute a certain amount during a plan year. If you don't use the entire amount you contribute, you might end up forfeiting that balance.

In my situation, I had $400 left in my FSA at the end of 2025. When the new plan year started on January 1, any new claims could be paid for only by my 2026 plan-year contributions.

Understandably, I was worried that I would lose this leftover $400 and called my FSA provider to express my concern. This was a very useful call, since the plan representative patiently described the options some FSA plans can offer to help employees avoid losing their unused contributions.

Grace periods

Some FSAs allow employees a grace period of up to two and a half months to make new claims that are paid by previous year's contributions.

For example, for a plan year that technically ended on December 31, 2025, employees could continue to use their 2025 balances to pay for 2026-plan year claims until March 15, 2026.

'Run-out periods'

Many plans also offer a "run-out period" after the plan year ends. During this time frame, which generally lasts 90 days, employees can still file previous-year claims on remaining funds.

For example, for an FSA whose plan year ended on December 31, 2025, employees could file leftover claims for 2025 medical expenses against their remaining 2025 balance until March 31, 2026.

My plan doesn't offer a grace period. And its run-out period would be no use to me since I didn't have any additional 2025 medical expenses to claim.

FSA rollovers to the rescue

However, to my relief, my FSA plan allows me to roll over up to $660 in leftover 2025 contributions to my 2026 account after 90 days have passed.

I can tap these assets to pay only for 2026 plan-year expenses. And if I have combined 2025/2026 contributions left at the end of the year, I will be able to roll over only the 2026-adjusted maximum of $680 into my 2027 balance.

While all FSA plans can offer run-out periods, they can either offer grace periods or rollovers. They can't offer both.

Personally, I'll take the rollover option anytime.

Another misconception corrected

Until my call with the FSA plan representative, I always thought that I needed to have sufficient funds in my FSA to pay for any claims.

For example, in February, I wanted to use my FSA debit card to pay for a $200 dental bill, but as of the end of January, only $85 in pretax contributions had been deducted from my paycheck.

The representative assured me that I can start making claims up to my 2026 full-year FSA contribution of $1,000 even if the money isn't in the account yet.

That's because the FSA provider (and my employer) assume I'll continue to work there the entire FSA plan year. If I leave my company midyear with claims that are higher than my actual contributions, I will have to reimburse my employer out-of-pocket for this overage.

Conversely, if I leave with unused contributions remaining in my FSA account, I'll have to forfeit them.

That's fair. Unlike HSAs, contributing to an FSA can be a bit of a gamble. You have to calculate the risk of possibly losing what you've contributed if your health care costs are minimal during a plan year.

That's why you should avoid the mistake I made when I enrolled and carefully estimate what your qualified health care costs will be for the plan year — because you can't change your contribution amount when the enrollment period ends.

And it's important to know which provisions — if any — your employer allows to help you potentially avoid losing unused FSA funds.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Picture this: You're enjoying a leisurely drive when a vehicle makes a sudden stop in front of you. Okay, no worries, you brake. But then, an odd thing happens. The car in front of you reverses course and crashes into you.

The fun doesn't end there. The driver of the other vehicle gets out and delivers an award-winning performance. Either he complains of severe neck pain, or maybe he distracts you just enough while additional people climb out of the car, all claiming they were passengers injured in the crash.

This is a common example of an auto insurance scam, and not only can it ruin your day, but it can also impact your wallet with higher insurance premiums. I'll cover some of the most common scams impacting drivers and what you can do to protect yourself.

The scams spiking your insurance premiums

"Auto insurance scams fall into three buckets," Michael Giusti, an insurance analyst with InsuranceQuotes.com, told Kiplinger. They are:

• Hard fraud: This is where a driver makes a false claim that you hit them, when in reality, they braked to cause the accident
• Soft fraud: With these cases, an accident happens, but someone exaggerates the damage to their car or makes false medical claims
• Consumer: Ghost agents contact you through social media or messaging apps, promising you exceptionally low rates if you pay in cash today

And every false claim can impact how much you pay for insurance. Why? "Insurance is a risk-sharing venture," Giusti remarks. "It means auto insurance companies will want to recoup those costs, and higher premiums can be the result of that."

Auto insurance fraud costs Americans $308.6 billion annually, or $932.63 per driver, according to the Coalition Against Insurance Fraud. Therefore, knowing the red flags can help you spot fraud and stop it before you become a victim.

Unlocking the scammer's playbook: Common red flags to watch

Let's start with how you buy your auto insurance. If you do so through an independent broker or an insurance company, you don't have to worry about ghost agents scamming you.

And if you're looking to lower insurance costs, beware of deals that are too good to pass up. "Ghost insurance agents will reach out to you through social media or messaging apps promising super-cheap rates if you act now," Michael adds. "Then they can use AI to create documents that make it seem like they work for a reputable insurance agent."

Instead, use this Bankrate tool to find affordable insurance rates:

On the driving end, some of the most common scams involve:

• The swoop and swat: One vehicle stops in front of you, then a vehicle creeps up behind to ram you
• Paper collisions: Drivers will use a damaged vehicle and crash into you, claiming you caused the damage
• Exaggerated claims: The accident might be real, but the damage or medical claims are exaggerated to earn a higher settlement
• Buying coverage after the fact: Some may drive uninsured, purchase insurance after an accident and lie about when the accident happened
• Repair shop scam: Some repair shops use accidents to scam insurance companies by inflating repair costs, using cheap parts or charging without doing repairs. They might also try to get you in on the scam, stating that you won't have to pay the deductible and that they'll handle it with insurance.

How do you find a reputable repair company that your insurance company approves? Research several nearby, staying away from shops with common complaints, such as long wait times, faulty repairs or inaccurate billing.

Referrals also work well, provided your insurance carrier approves the repair shop.

How to protect yourself from scams

What happens if you notice something not right going on? "Insurance companies pay close attention to fraud, so be sure to contact your insurance provider first," says Michael. "Each state also has an insurance regulator who examines fraud."

Another option is to install a dash cam. It can record everything, supporting your claims to the police or court. Some newer cars also have mirrors that record video with replay capabilities — Tesla models are among these.

Below are three highly rated dash cameras that have useful features like wide viewing angles, high-resolution recording and app connectivity to help capture what happens on the road.

And if you're involved in an accident, "Take pictures of everything. The other driver, passengers, the vehicles involved, the road, skidmarks and anything else in the accident scene," Michael recommends. The more evidence you're able to present, the better protected you'll be.

Stay sharp: Information is your best defense against elaborate scams

Thieves have become adept at scamming insurance companies. By trusting your gut and staying informed about the latest scams, you can protect yourself if a staged accident happens.

Remember, your insurance carrier can be your best advocate when it comes to reporting fraud. They take it seriously because it impacts their bottom line. In turn, reporting it can protect yours.

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If your travels bring you to my town, and you'd like a great cup of espresso and a dose of neighbors acting un-neighborly, please drop by our office.

While I fix the coffee, my wife, Anne, will hand you a box filled with emails, photos, video clips and frustrating correspondence from readers who have begged neighbors to please trim or remove trees that pose an imminent, direct risk of harm.

Fans of Judge Judy will immediately see a parallel: Some dog owners — who left their dogs off leash and someone was bitten — remain in complete denial of all responsibility, despite clear evidence of fault.

They love their dogs and can't grasp that their well-trained bundle of face-licking joy is still an animal who might not always be a good boy, and possibly, because of his breed, could be excluded from homeowners insurance coverage.

A eucalyptus that is taller than a nearby utility pole and transformer

I have often been asked for help by readers across the country who have tree issues with neighbors, and generally, we have a good outcome — when dealing with reasonable people. And then there are people like "Beth" who have stubborn neighbors.

"Mr. Beaver," Beth wrote, "all of the old, classic houses on our block have been transformed into professional offices. We are across a narrow alley from 'Rick.'

"Rick has a giant eucalyptus tree that is taller and less than four feet from a utility power pole with a high-voltage transformer on top. We retained a certified arborist whose report stated, 'These are fragile trees, and, even without wind, they can often break and fall. If it does — and in the direction of the pole, wires and high-voltage transformer — an explosion and resultant fireball will endanger the neighborhood.'

"We sent Rick a copy of the report in a polite text and offered, at our expense, to trim the tree, but Rick replied, in so many words, 'Pound sand!' What can we do?"

She sent me the text chain. Where she was polite and focused on the good of the neighborhood, Rick was just plain nasty. It made me angry, and I wondered how someone becomes so cynical and uncaring about his impact on his neighbors.

So, what can you do when dealing with neighbors who just do not care to protect even themselves?

You begin by proving their negligence

First, we need to eliminate the "act of God" defense insurance companies often raise that goes something like this: "So sorry, but this was an act of God that could not have been predicted, and the insurer is not responsible."

Until that happens (don't hold your breath), this is what you can do on your end: Create a paper trail showing that your neighbor was notified about the tree's dangerous condition. Follow these steps:

1. Speak to your neighbor.

When you speak with them, give them a polite letter that could resolve the issue without further action. It should explain your concerns about the hazard the tree poses to your property and the neighborhood's safety.

You'll also want to talk to them outside, where you can point to the specific tree. If possible, ask a family member or friend to video the discussion, unseen, so you have proof that the discussion occurred. (It is legal to do this.)

While you're talking, adopt the attitude, "If something were to happen, consider that your homeowners insurance will try to deny coverage and say that you, personally, have to pay for the damage, and my letter will show them that you were on notice and not trying to deny being aware of the issue."

This protects you significantly because you'll have proof that you let the neighbor know about the hazard, and while they disagreed, they can't claim ignorance of the issue.

2. Document everything.

Take photos and video that clearly show the tree's defects — overhanging dead branches, significant lean, visible fungus/decay.

3. Hire a certified arborist.

You should hire someone who has a tree risk assessment qualification (TRAQ) and ask them to do a Tree Risk Assessment Report that identifies the tree as a "hazard." This is a powerful tool for establishing negligence.

4. Obtain two to three written estimates for the cost of trimming or tree removal.

This will show your neighbor the exact financial scope. Maybe let them know that they will look like miserly cheapskates should the issue wind up in the newspaper or on the local news. (If your neighbor is strapped for cash, offer to help cover the cost of the trimming or removal.)

5. Bring the issue to the attention of local media.

They love stories like these and often enjoy getting involved in a way that resolves an infuriating safety issue like this.

6. Notify county/city code enforcement and your local energy supplier.

Many municipalities have ordinances that require homeowners to manage hazardous conditions on private property. Getting someone to actually do something might be a long shot, but it's worth a try.

The takeaway: Your best bet is to bring this issue to the attention of your neighbor. That way, the insurance company can't claim your ignorance as a basis to avoid accepting the claim.

Trees add beauty and value to our homes, and we need to take care of them, especially when they become a danger to our homes and neighbors. After all, a tree that falls onto a transformer and catches fire could wipe out an entire neighborhood, not to mention kill people.

And since I don't like to end on a negative note, consider this: We owe it to our trees — especially beautiful trees that provide shade in summer — to care for them. We also owe our neighbors protection from anything that could harm them.

Trees, and other beautiful vegetation, existed before mankind and will hopefully remain on this earth long after we're gone. Give them a chance at survival — inhibit their tendency to lose a limb — and Mother Nature will reward us.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

IRS tax season is upon us, but if the first time you turn your attention toward taxes every year is when you're gathering documents to file, the chances are you're missing out on some loopholes that can help lower your tax obligation.

These tips can help you (legally) reduce what you owe every year.

1. Supercharge your retirement savings with the mega backdoor Roth

Roth IRAs have both income and contribution limits set by the IRS, making direct contributions to Roth IRAs generally unavailable to some high earners.

One workaround for those high earners is the mega backdoor Roth strategy in which after-tax contributions are made to a 401(k) and then converted to a Roth 401(k) or Roth IRA.

Only employer plans allowing after-tax contributions are eligible for this strategy. This option might be worth exploring with your financial adviser if your income is too high to contribute to a Roth IRA, allowing you to increase the tax-free savings in your retirement accounts.

2. Turn your HSA into a stealth retirement account

Health savings accounts (HSAs) are designed as tax-advantaged accounts to hold funds for medical expenses, but a loophole allows you to stealthily use your HSA as a retirement account of sorts.

Since HSA funds don't expire every year, the funds can continue to grow tax-free. And since contributions to HSA accounts can be tax deductible, your annual taxable income can be reduced by your HSA contributions.

Withdrawals aren't taxed as income as long as the funds are used for medical expenses (those age 65 or older can use the funds for non-medical expenses without penalty but with the funds taxed as ordinary income).

HSAs don't have required minimum distributions, making them incredibly flexible in retirement.

Of course, HSAs can also be valuable as a way for those with high-deductible health insurance plans to pay their medical expenses, but when used as a stealth retirement account by those who qualify for these accounts, HSAs can nicely augment additional retirement funds.

3. The charitable 'bunching' strategy that doubles your deduction

Your generosity to the causes you care about can help lower your tax obligation, but if you're taking the standard deduction every year, there's a chance you're missing out on the opportunity to maximize your deductions.

A donor-advised fund (DAF) allows you to contribute assets (such as cash, stock and real estate) to an established, managed fund. Since the donation goes into the fund, there is some flexibility as to when you can take the deduction.

Even if the assets aren't allocated to a charity immediately, you can still take the deduction right away.

Since DAFs allow flexibility in what you can contribute, the potential for lowering capital gains tax by donating appreciated assets shouldn't be ignored.

Donating appreciated stocks directly into a DAF (instead of selling the stock and donating the proceeds) maximizes your impact while potentially lowering the tax you owe.

4. Family payroll power: Pay your kids and cut your taxes

Hiring your children to work for your business can make a lot of sense from the perspective of positioning them to live productive lives (or perhaps even someday become your successors), but it also makes sense when it comes to reducing your tax obligation.

The wages you pay your children for their work can be deductible as a business expense and, depending on their age and income, might not be taxable to them.

The trick here is that your children must actually work for you (you can't just add them to the payroll), the pay must be appropriate for their role, and you must keep records of their employment just as you would with any other employee.

Consider maximizing the benefits by having your children contribute to a Roth IRA with their wages, making the arrangement a win/win for you and them.

5. Harvest losses to offset gains (even in good years)

Contrary to what you might have heard, tax-loss harvesting isn't just for down markets. Instead, it's a potentially effective way to reduce what you owe in taxes while also balancing your portfolio.

Losses can offset capital gains, then up to a $3,000 loss can be claimed on your taxes against your ordinary income annually. Any remaining loss can be carried over into subsequent years.

You're not allowed to turn around and repurchase the stocks you sold at a loss (or stocks that are "substantially identical") within 30 days of the sale if you're claiming the loss.

But tax-loss harvesting is one of the simplest legal tools to fine-tune your taxable income and keep your portfolio efficient.

Like any of the other loopholes mentioned above, tax-loss harvesting is a strategy that should be discussed with your financial adviser to ensure it's something for which you qualify and that it's done correctly with proper documentation throughout the process.

Any strategy that reduces your tax bill can theoretically invite additional scrutiny from the IRS.

These strategies are legal methods for reducing your tax bill — they're not covert schemes that will automatically raise red flags and trigger an audit. Use these loopholes correctly and you may just reduce the amount of money you owe to the IRS.

I often speak with the families I serve about seeking joy. What brings about joy during tax season? A lower tax bill, of course.

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal, and/or tax advice. Investment advisory services offered through CWM, LLC, an SEC Registered Investment Advisor. Mitlin Financial is located at 140 Adams Avenue Ste. B-12 Hauppauge, NY 11788

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Medicare Advantage plans, formally Part C of Medicare, offer Medicare beneficiaries an alternative to original Medicare and have been successful in signing up Medicare-eligible Americans. However, 2025 was tough for Medicare Advantage plans and their customers. Policy changes during the past year have impacted deductibles, out-of-pocket costs, provider networks and prior authorization determinations.

The changes "have contributed to increased confusion, lower member satisfaction and a widespread lack of trust among Medicare Advantage plan members," according to J.D. Power's 2025 U.S. Medicare Advantage Study.

Among its findings, the study showed a 29-point drop in overall customer satisfaction with Medicare Advantage plans, led by a decline (39 points) in members' overall level of trust in their Medicare Advantage plan.

Not all Medicare Advantage programs are alike, however. Plans that provide new digital tools, broader networks and social support services. are more likely to win over subscribers, according to the J.D. Power Study.

Medicare Advantage (MA) enrollment has surged from just 19% of the eligible population in 2007 to 54% in 2025. This majority share represents 35 million out of the 62.8 million beneficiaries with both Medicare Parts A and B. While MA enrollment grew at a robust 9% annually between 2007 and 2024, that momentum is beginning to shift; since February 2025, plans added 1.1 million subscribers, marking a more modest 4% increase. Notably, the bulk of recent growth (83%) is driven by Special Needs Plans (SNPs), which are tailored specifically for individuals with chronic conditions, complex healthcare needs, or dual eligibility for Medicaid.

What Medicare Advantage plans offer

Unlike original Medicare, which is government-run insurance, Medicare Advantage plans are administered by private insurance companies. These plans cover the same benefits of original Medicare and typically include extra coverage such as out-of-pocket maximums and funds to cover dental or hearing exams and fitness benefits. Most Medicare Advantage plans also include prescription drug coverage at no additional cost to the beneficiary.

In 2026, the out-of-pocket limit for Medicare Advantage plans cannot exceed $9,250 for in-network services and $13,900 for in-network and out-of-network services combined. While traditional Medicare has no out-of-pocket cap on spending, Medicare Advantage plans have limited provider networks and apply cost management tools such as prior authorization, which traditional Medicare generally does not. In 2026, Medicare began testing out an AI-powered prior authorization plan in six states.

What Medicare Advantage enrollees like about their plans

The 2025 U.S. Medicare Advantage study by J.D. Power measured the customer satisfaction of Medicare Advantage enrollees and the most important factors driving customer satisfaction. This year, the study reflected how Medicare Advantage insurers and polices were impacted by policy changes that impacted many facets of member care and costs. The overall satisfaction rates have dropped, primarily as a result of a loss of trust.

“With so much rumbling in the marketplace right now about increased government oversight, policy changes, and profitability challenges confronting Medicare Advantage plans, it can be misleading for plans to conclude that the significant decline in member satisfaction is a byproduct of changes that are outside their control,” said Christopher Lis, managing director of global healthcare intelligence at J.D. Power.

Key findings of the 2025 study:

• The factors that drive customer satisfaction: Respondents gave Medicare Advantage plans an overall customer satisfaction score of 623 (on a 1,000-point scale). This is a 29-point drop from last year's score of 652. The top drivers of customer satisfaction for top plans are new digital tools, broader networks and social support services.
• Lack of trust drives satisfaction decline: A 39-point drop in members' overall level of trust in their Medicare Advantage plan was the primary cause of the decline in customer satisfaction. Factors such as product/coverage offerings meeting needs and the ease of doing business also saw significant declines in this year’s study.
• Plans that deliver "digital satisfaction" score higher overall: The ability to engage with members through digital channels resulted in higher satisfaction. Digital satisfaction was, on average, 98 points higher among members of the high-performing plans. More of these members (52%) "find the features or tools offered on their plan’s website very easy to use" as opposed to lower-performing plans (40%). That's probably why only 76% of members of low-performing plans have used their member portal vs 85% of high-performing plans.

Overall customer satisfaction index ratings for Medicare Advantage plans in surveyed states

Medicare Advantage subscribers in Pennsylvania (653), Michigan (647) and Ohio (649) give the highest satisfaction to the Advantage plans in their states, with survey respondents giving plans in Pennsylvania the highest marks among the 10 states surveyed. Georgia (622), Texas (607) and New York (600) had the lowest overall customer satisfaction scores and New York had the lowest of all states in the study.

Blue Cross Blue Shield plans topped the overall satisfaction rating for five states (Illinois, Michigan, New York, Ohio, and Texas). UnitedHealthcare was a distant second with top ratings from only two states (Georgia and North Carolina). Humana finished last in three states (Michigan, North Carolina, Ohio) and was second from the bottom in four states (California, Georgia, Pennsylvania and Texas).

How the study was conducted:

The 11th annual U.S. Medicare Advantage Study is based on eight factors (in order of importance): level of trust; able to get health services how/when I want; helping to save me time or money; product/coverage offerings meet my needs; ease of doing business; people — representatives, call center agents; resolving problems or complaints; and digital channels.

The 2025 U.S. Medicare Advantage Study is based on the responses of 10,888 members of Medicare Advantage plans in 10 market-based U.S. regions: California, Florida, Georgia, Illinois, Michigan, New York, North Carolina, Ohio, Pennsylvania and Texas. It was fielded from January through June 2025.

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Car insurance rates have been soaring since the pandemic. But now, some drivers insured by State Farm could soon receive dividend checks, a share of the company’s profits, tied to those higher premiums. The news comes as loyalty in the insurance industry declines in response to those surging rates.

In 2025, the number of customers who re-shopped car insurance hit a record high of 57%, according to a J.D. Power analysis. More concerning for insurance providers is that rates of switching rose even among customers thought to be the most likely to stay put: those who bundle multiple policies with one insurer.

With customers more willing to jump ship for a better deal, insurance companies are finding ways to lower rates, offer discounts and, in State Farm's case, hand out cash to existing customers. Here's everything we know so far about the dividend checks, including eligibility criteria and payment amounts.

Dividend checks and rate cuts coming for millions of State Farm customers

In February, State Farm announced $5 billion total in cash back payments to car insurance policyholders, the largest dividend payout to customers in the company's history. The exact dollar amount each eligible customer will get will vary, but State Farm says the average check will be $100 per vehicle.

The major insurance provider is in a good position to offer these payouts. Consistently ranking as one of the most popular car insurance companies, State Farm reported an underwriting gain in 2025 of $1.5 billion, after reporting losses three years in a row prior to last year.

The gain came despite losses in its home insurance segment and was driven almost entirely by growth in car insurance policies.

Alongside dividend checks going out to customers, the company also announced lower premiums. The rate cuts announced will result in $4.6 billion in savings nationwide, with each eligible customer seeing an average of 10% lower premiums. Still, it's always worth shopping for car insurance ahead of each renewal to make sure you're getting the best deal available for the coverage you need.

Even with a 10% rate cut at State Farm, you still might find better rates elsewhere, especially as insurers compete on price in a market in which customers are more willing than ever to switch. Even if you don't find a better deal, there's no harm done by shopping around. In the worst-case scenario, taking a few minutes to compare quotes before renewing will confirm you're getting the best price for your car insurance.

Who is eligible for a dividend check from State Farm?

According to the statement released by State Farm, 49 million insured vehicles qualify for the one-time payouts expected to arrive sometime this summer. As mentioned, the average payout will be $100 per car, but the exact amount you get depends on the state you're in and the amount you pay in premiums.

In Oklahoma, for example, eligible customers are those who have an active private passenger auto policy as of December 31, 2025. The dividend payment those customers will receive will amount to 10% of the premiums paid during a predetermined period, for an average of about $112 per car.

The company has not yet specified exactly how or when customers will get paid, beyond stating that payments will go out this summer. But a State Farm spokesperson told CBS that more details will be announced in the coming months and confirmed that the cash payments will not come in the form of a statement credit.

This article will be updated as more details come to light to make sure anyone eligible has the information they need to get their payout.

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In recent columns, I have written about longevity literacy and the need for long-term-care planning. To see how women fit into this picture, I interviewed Maddy Dychtwald, cofounder of AgeWave, a research and consulting firm focused on aging, and author of Ageless Aging: A Woman's Guide to Increasing Healthspan, Brainspan and Lifespan. Dychtwald interviewed dozens of researchers, scientists and physicians for her book, and these are some of her key takeaways.

What do women in particular need to know about aging?

For women, there is good news, bad news and better news. The good news is that we have won the longevity lottery; on average, women live between five and six years longer than men. The bad news is that we spend more years in poor health in our later years. We are twice as likely to suffer from cognitive decline and Alzheimer's.

What's the better news?

Up to 90% of our health and well-being is within our control. We used to think genetics was the be-all and end-all in determining our health, but now we know that lifestyle and environment have far more to do with how well we live than we thought.

Can you give an example?

If there were a silver bullet, it would be exercise. If you exercise regularly, the impact on heart and brain health can be extraordinary. And muscle strengthening is the longevity superpower. Building your muscle strength can reduce the risk of dementia, improve your mood and lower the risk of chronic ailments such as heart disease and stroke.

You say that social connections are also crucial.

Healthwise, loneliness is the equivalent of smoking 15 cigarettes a day. That doesn't mean you have to be a social butterfly. You just need a handful of people — your spouse or partner, a best friend — whom you can go to for companionship. And don't neglect what we call micro connections. Smile and strike up a conversation with the clerk at the supermarket checkout line.

What advice do you have for women who are single?

Women seem to thrive with strong networks, so build your support ecosystem. Cultivate a few close friends. Make sure you know your neighbors. Have a physician you can count on to answer your calls in an emergency. Strengthen your social network via micro connections. Also, you need to have clear legal and financial documents and a financial plan.

How should women approach long-term care?

Start the conversation early with your family, friends or trusted advisers. Let them know what your wishes are and how you plan to pay for the costs, whether through savings, long-term-care insurance or tapping home equity.

Many people assume that long-term care will mean a nursing home, but that's not always the case. For an older woman who is single, living in a planned community that offers services and socialization can be a great option. It's not about looking at your ultimate decline but about preserving dignity, control and a sense of choice.

Let's talk about finances.

Your earning power is one of your greatest longevity assets, so keep working as long as you can. While you're in the workforce, take advantage of contributions to your 401(k) or similar retirement plan, and automate wherever you can. When you retire, consider part-time work, eliminate debt, create a little security with paycheck-for-life insurance products.

Talk about finances with your spouse or partner and with your friends. Having the right knowledge is a powerful tool. Financial literacy is longevity literacy.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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In January, a Florida resident filed a class action lawsuit alleging that GEICO added two strangers to her car insurance policy as named drivers without her consent. The additions increased her premiums as a result.

The complaint filed last month alleges that many other drivers nationwide have experienced the same thing with GEICO and is now seeking refunds for all customers impacted by this practice.

For GEICO's part, the insurance company argues that it acted in full compliance with the terms of its car insurance policies. So, what exactly happened and how can you avoid ending up in a similar situation? Here's what we know so far.

What is the GEICO class action lawsuit about?

According to the complaint filed on January 28, GEICO used a third-party source to match licensed or permitted drivers to addresses. Based on that data, GEICO sent an email to the policyholder stating that another driver was associated with her home address. The email gave her 15 days to respond and noted that if there was no response, the driver would be added to her policy.

The email read, in part, “If this person is insured elsewhere and should not be listed on your policy, please contact us at the number below with the name of the insurer and the policy number.”

The problem? The policyholder says she had no idea who the person was. GEICO was effectively asking her to provide insurance information for someone she did not know.

In December of that same year, the same thing happened again, with another unknown driver added to her policy. In both cases, her premiums increased as a result of the added drivers.

According to the complaint, the policy does not allow GEICO to add unknown drivers to a customer’s car insurance policy and does not include any provision stating that silence — meaning a lack of response to the emails — can be treated as consent.

In a motion to dismiss filed in 2025 related to an earlier version of the case, GEICO argued that it followed standard practice and did not breach any specific provision of its policy. The policyholder did not respond to either email within the 15-day window and continued paying the higher premiums.

However, as the complaint notes, because car insurance is required in every state, canceling coverage immediately after a rate increase may not be a practical option.

Because the case is still in its early stages, it’s unclear who will ultimately be included in the class action lawsuit or how much any potential payout might be if the court rules in the plaintiff’s favor. The legal team is seeking to expand the case nationwide, alleging that similar issues have affected customers outside of Florida.

If you’ve experienced a similar situation, you may want to monitor the case or consult an attorney to better understand your legal options.

What can you do to avoid this situation?

Something similar happened to me with a different insurance company a few years ago. The company found my siblings' information and sent me a notice that they would be added to my policy unless I could prove that they didn't live at my address.

While they weren't strangers as they are in this case, my siblings live in different states and already have their own car insurance. Still, the burden of proof was on me if I didn't want to pay extra to cover drivers who did not live at my address.

So, what's your best course of action to avoid ending up in a similar situation? Here are a few tips:

• Check your insurance policy regularly to make sure the details, including the drivers listed, are accurate. This is one of many reasons an annual insurance review is so important.
• If you receive a notice stating that additional drivers are associated with your address, contact your insurance provider directly using the phone number or website listed on your policy. Even if you don’t have documentation yet, ask what information would be required to resolve the issue.
• If you know the drivers, reach out to them and ask for the information or documents requested by your insurance.
• If you don’t recognize the drivers, contact your insurer and ask what proof is needed to remove them.
• Even if you never receive a notice like this, it’s important to keep an eye on your monthly spending. If your car insurance is set up on autopay, you could miss a premium increase because the payment is automatically deducted.

Whether the Florida courts determine that GEICO breached its contract or not, you certainly shouldn't be paying extra to cover drivers you don't know. But the outcome of this lawsuit could determine whether or not it's your responsibility to make sure the drivers listed on your policy are correct.

In the meantime, consider shopping for new car insurance after resolving the issue or before your next renewal. Comparing quotes can help ensure you’re not overpaying, especially if your premium increased unexpectedly. If you decide to switch, you can provide feedback to the insurance company that did this, explaining precisely why they lost your business.

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If you're receiving a life insurance payout, you've already got more than you need on your plate. The last thing you want to deal with right now is an IRS audit for not paying taxes you didn't even know you owed. The good news is you probably won't have to.

For the majority of beneficiaries, life insurance proceeds are not taxable. At both the federal and state level, the death benefit isn't treated as taxable income. Even if you're borrowing against your life insurance, you wouldn't owe taxes on the cash unless the policy is canceled or lapses before you repay it.

However, as with most things in life, there are exceptions to the rule. For example, while the cash paid out from the policy itself may be tax-free in most cases, interest earned when you invest it or stash it in a high-yield savings account isn't. The IRS might also take a cut in certain other situations as well. So, before you use your life insurance proceeds, it's worth double-checking that you really don't owe any taxes on it.

When is life insurance taxable?

In many situations, life insurance payouts are tax-free. But there are some important exceptions that you need to know if you've received or expect to receive life insurance benefits. Here are some of the most common exceptions when you would need to pay taxes on your life insurance proceeds:

• You earned interest on your life insurance benefits, either because you opted for installment payments or because you're keeping it in an interest-bearing account. In this case, you would be taxed on the interest only, not on the principal payout.
• You receive the death benefit as an annuity. An alternative to receiving the death benefit in installments is to essentially use the cash to buy an annuity. This is a form of guaranteed income payments that some people use to fund their retirement. You'll be subject to annuity taxation. That typically means owing taxes on the interest that the annuity earns, but not the principal death benefit used to pay for it.
• You received the death benefit early. Some policies allow for early access to benefits if the insured person is diagnosed with a terminal illness or meets other qualifying conditions. You may be taxed on the payout in this scenario.
• Your cash value is worth more than the premiums you paid. If you have whole life insurance, your policy may be building cash value. For now, it's tax-deferred. But if that value exceeds the total amount you paid in premiums when you withdraw, you'd owe taxes on the profit.
• The policy was sold or surrendered. If you no longer need life insurance, you may have the option to sell it to someone else or surrender it back to the company. This usually isn't an option for term life insurance, but it may be for other types. In both cases, you'd receive a cash payout for the policy. If that payout is higher than what you paid in premiums, you'll be taxed on the excess.
• The life insurance was part of a large estate. If the death benefit is paid to the policyowner's estate or is otherwise included as part of their taxable estate, it might be subject to estate taxes. This will happen if the total value of the estate exceeds federal or state thresholds. As of 2025, the federal threshold is $13.99 million, though, so most people won't have to worry about this.
• The life insurance was an employer-paid group plan. If you received a payout worth more than $50,000 from an employer-paid life insurance policy, the death benefit might be taxable.

Aside from the situations above, there might be other exceptions that make all or some of your life insurance proceeds taxable depending on who owns the policy, who the beneficiary is and how it's paid.

If your situation is anything other than a standard lump-sum death benefit received after the owner of the life insurance policy has passed, it's worth double-checking to make sure you understand the tax laws surrounding the payment.

Tax laws are complicated

While the short answer is no, life insurance benefits are generally not taxable, the above shows that there are a lot of caveats and exceptions to that rule. When you factor in state-level variations in policy and the uniqueness of your individual circumstances, it can get even more complicated.

So, if you expect to receive a payout from life insurance, whether it's a death benefit or another form of withdrawal from your policy, it's worth consulting a financial adviser or tax expert to get custom advice tailored to your situation.

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You've probably heard of no-fault states in the context of car insurance. But if you don't live in one of the 13 states known to have that system, you probably think those rules don't apply to you. Depending on which state you live in, you could be wrong.

The distinction between a no-fault state and an at-fault state is far from black and white. That's especially true in the four states below that still have some tricky no-fault car insurance laws you need to know about.

If you don't brush up on the rules, you could end up paying extra for insurance you don't really need. To keep your coverage levels and premiums right where you want them, here's what you need to know if you live in or are moving to what you thought was a straightforward at-fault state.

What’s the difference between at-fault and no-fault car insurance?

At-fault (also called tort) states require the driver who caused the crash to pay for injuries and damages through their insurance. In these states, drivers typically file claims against the at-fault driver’s liability coverage and might sue for additional damages if needed.

No-fault states, on the other hand, require drivers to carry personal injury protection (PIP). After an accident, drivers file injury claims with their own insurance first, regardless of who caused the crash. Lawsuits are usually limited unless injuries meet certain thresholds.

Some states blur the lines between these systems by requiring insurers to offer or include PIP coverage even though they operate primarily as at-fault states.

States with an at-fault system but some tricky no-fault insurance laws

Here’s how each state’s hybrid rules work in practice.

Arkansas

Arkansas has a tort (or at-fault) system, but still requires insurers to offer you personal injury protection coverage. That means when you're shopping for car insurance, the quotes you see will include that coverage unless you actively opt out of it.

PIP can come in handy because it usually means a quicker payout than waiting for fault to be established before filing against the at-fault driver’s insurer.

However, note that PIP is primarily for medical expenses and lost wages. If you have good health insurance, the medical expense side of that won't necessarily be an issue. As far as lost wages are concerned, it might not be worth filing a claim if you only miss a day or two of work. Workers with paid sick leave might not be eligible to claim lost wages at all.

If you do opt to keep the PIP coverage automatically included in your Arkansas car insurance policy, it's probably worth bumping it up above that $5,000 minimum to really make the coverage worthwhile.

Maryland

Like Arkansas, Maryland is a tort state that doesn't mandate drivers carry PIP, but does mandate insurance companies offer it. As with Arkansas, the coverage will automatically be included in any policy you buy in the state unless you opt out.

With a minimum coverage limit of just $2,500, this amount of PIP is less useful than the minimum in Arkansas. If you do want to keep the coverage, get quotes for higher coverage levels.

Remember that in a tort system like the one in Maryland, you have the right to sue the at-fault driver for your injuries, economic losses and your non-economic losses (pain and suffering).

That process will take longer than filing a PIP claim with your own insurer. But, if your PIP coverage is capped at $2,500, you might end up needing to go the lawsuit route anyway after an accident because that limit will be exhausted pretty quickly.

Another tricky thing about Maryland's insurance laws is the way the uninsured motorist coverage works. Technically, the minimums listed above are the minimums you need to maintain. But, if you were to increase your liability insurance, companies are required to automatically increase the uninsured motorist coverage to match that.

You have to opt out of matching coverage by asking to lower the uninsured motorist coverage back down to the minimum.

Oregon

Oregon is a special case. It's a tort state (meaning you reserve all your rights to sue the at-fault driver), but it also mandates a minimum level of PIP. You can't opt out of it like you can in the other states on this list.

What does that mean for drivers in an accident? Basically, you have two options if you aren't at fault. If you're not at fault, you can choose not to use your PIP coverage and file a claim with the at-fault driver's insurance for both bodily injuries and property damage.

Your second option, if you don't want to wait for fault to be determined, is to file a PIP claim with your own insurance right away, then file a claim with the at-fault driver's insurance afterward to recoup those costs. If there's still damages leftover after exhausting both your PIP coverage and the other driver's liability coverage, you can sue them for the rest.

Note that in Oregon, your insurance company can demand reimbursement on a PIP claim if the other driver's insurance ends up paying you. The company can do the same if you win a settlement in court.

Texas

Texas's car insurance laws operate a lot like Arkansas or Maryland. PIP isn't mandatory but the minimum coverage listed above is automatically included unless you opt out. The same goes for the uninsured motorist coverage. You must reject both coverages in writing if you don't want them included in your policy.

Otherwise, Texas is a tort state where drivers retain all rights to sue the at-fault party for injuries and damages.

If you haven’t compared auto insurance quotes recently, you could be paying more than necessary. Use the tool below to explore and compare some of today's top auto insurance offers, powered by Bankrate:

The difference between no-fault and at-fault isn't always clear

As the states above make clear, car insurance laws can vary widely and even broad distinctions aren't as clear cut as you might think. No-fault states are widely misunderstood by drivers. Even fewer drivers are aware that you might still be facing some confusing no-fault laws in states that are supposed to have an at-fault system.

Whether you've been in the same state for years or you just moved, it's worth taking the time to learn exactly how the laws work where you are so you can better understand your rights and requirements when it comes to buying car insurance and filing claims after an accident.

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You've heard the advice to shop around for new quotes once in a while to see if you can beat your insurance company's renewal offer. But what if you shop around ahead of every renewal? And what if you get a better quote somewhere else every time? Is there any reason you shouldn't hop from one provider to another every year (or every six months) to get the best price?

The short answer is no. If you're constantly seeing lower prices elsewhere, there's not really a good reason to choose the more expensive premium just for the sake of not being a policy hopper. Despite the loyalty discounts your current provider might be offering, loyalty rarely pays in insurance.

With that said, there are some tradeoffs you make by frequently switching your insurance, and there are some considerations to keep in mind before jumping ship. Here are some of the things you might be sacrificing by switching – whether or not they matter depends on your situation.

You'll lose out on certain discounts

Say you previously bundled your home and auto insurance to take advantage of a discount your insurance company was offering. Now, you've found cheaper car insurance through another provider, but your home insurance isn't up for renewal yet, or you still like the price you're paying where you're at.

Before making the switch, find the breakdown of how your current premium was calculated. If you've bundled multiple policies, get the breakdown of each policy in the bundle.

As an example, I bundled home and auto last year because the same company offered the best price for both – and it was even better after the bundle discount. This year, I was able to find a lower price on car insurance from another provider.

Before switching, I checked my current paperwork to see how much of a discount I was getting on home insurance by bundling. The discount was about $200. Meanwhile, the competitor's quote for car insurance was about $500 lower than the renewal offer. So I switched. Even though my home insurance premium will go up a bit when I lose that discount, I'm still paying less overall than I would be if I'd kept the bundle.

But, if the price difference you see isn't enough to offset any discounts you'll lose, it's probably better to stay.

Another common discount that you could lose when you switch is your loyalty discount. This is a modest premium discount that sometimes gets bigger the longer you've stayed with the same company. But the loyalty discount isn't always better than the introductory rates a company will offer to win over a new customer, so it's always worth shopping around at each renewal.

You may not be eligible for certain benefits

Beyond certain discounts, there are other perks sometimes tied to how long you've been with your insurance company. The main one here is accident forgiveness. This is a benefit that basically shields your policy from a rate hike following an accident.

Sometimes, it's based solely on your driving record. In that case, whether you're a new or long-term customer doesn't matter. What matters is how long it's been since you last had an accident. But some companies restrict accident forgiveness to customers who've been with the same provider for a certain length of time.

Is accident forgiveness worth staying with your current insurance provider despite the higher premium? That depends. If you don't have any accidents on your record and you're a safe driver, maybe not. If you've already had an accident and used this perk to keep your premium lower, you might want to stay to keep it active.

Do you know whether the new, lower quote you found already factors in that accident on your record? If not, the lower premium from the competitor is likely to jump once the company checks your claim history. If yes, then your current provider's accident forgiveness isn't really saving you money.

Make sure the coverage is comparable before switching insurance

If you get a new quote that's a lot lower than your renewal offer, you might be ready to take the leap. But before signing that paperwork, make sure to compare the policies side by side. Is the coverage actually the same? Are there any exclusions the new policy has that the old one doesn't?

If you got a quote for a policy with, say, a higher deductible than you currently have, have you compared that to what your current company would charge if you raised your deductible by the same amount?

Shopping around is a great time to reevaluate your coverage needs and see what tweaks you can make to save. But if you're making any changes to your coverage, get a quote from your current provider for that changed coverage, too. That way, you're comparing apples to apples to make sure you're truly getting the best available price.

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In most states, car insurance follows an at-fault or tort system, in which the driver who caused an accident is responsible for paying for damages. But if you live in one of the 13 states below, you're subject to what's called a no-fault system.

In a no-fault system, it's not that no one is responsible for an accident. In most states, the driver who caused the accident is still on the hook for property damage. Instead, states with these laws handle injury claims differently and place restrictions on your right to sue the at-fault driver.

Beyond these high-level similarities, every no-fault state is unique in how their laws work. Some are "pure" no-fault states, while others have a confusing mix of no-fault and tort systems. Here's an overview of how no-fault car insurance laws work in every state that has them and what drivers need to know when shopping for car insurance in each one.

How no-fault car insurance works

Under a no-fault system, drivers generally file injury claims with their own insurance after an accident, regardless of who caused it. This coverage typically comes through personal injury protection (PIP), which helps pay for medical expenses and sometimes lost wages or other injury-related economic losses.

Property damage, however, is usually still handled through the at-fault driver’s insurance.

Another key difference is lawsuits. In many no-fault states, you can only sue the at-fault driver if your injuries meet certain legal thresholds, such as exceeding a dollar amount or involving serious injury.

Unless noted otherwise, no-fault laws apply only to bodily injury claims. Property damage typically still follows fault rules.

States with no-fault car insurance systems

Delaware

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $15,000 per person / $30,000 per accident
• When can you sue the at-fault driver? No restrictions on your right to sue

Delaware shows why no-fault laws can be confusing. The state requires drivers to carry PIP coverage, but it does not limit your ability to sue an at-fault driver.

After an accident, your own PIP coverage pays medical expenses and certain injury-related costs regardless of who caused the crash. However, you can still file a lawsuit against the at-fault driver for additional damages, including pain and suffering, without meeting an injury or dollar threshold.

The main restriction is that you can;t recover expenses already paid through your PIP coverage. For example, if your medical bills total $20,000 and your PIP policy covers $15,000, you could only pursue the at-fault driver for the remaining $5,000.

Florida

• Liability insurance required: Property damage only
• Minimum personal injury protection (PIP): $10,000
• When can you sue the at-fault driver? When medical expenses or lost income exceed PIP limits, or injuries involve permanent injury, significant disfigurement, loss of a major bodily function or death

Florida is the only state where you're not required to carry bodily injury liability insurance. Because of this, your PIP coverage will definitely come in handy, as there's a good chance the other driver doesn't have any liability insurance to cover your injuries.

After an accident, your PIP policy covers medical expenses and certain lost wages, regardless of who caused the crash. If your costs exceed your PIP limits — or your injuries meet Florida’s serious injury threshold — you might file a claim against the at-fault driver.

Because some Florida drivers carry little or no bodily injury liability coverage, many experts recommend purchasing higher PIP limits and adding uninsured or underinsured motorist coverage to help protect against out-of-pocket expenses.

Florida still follows an at-fault system for vehicle damage. Drivers typically file property damage claims through the at-fault driver’s insurance to cover repair costs.

Hawaii

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $10,000
• When can you sue the at-fault driver? When medical expenses or lost income exceed $5,000, or injuries involve permanent loss of a body part or function, serious disfigurement or death

Hawaii's no-fault system is typical of most no-fault states. You still need to carry liability insurance. But a driver's right to sue the at-fault party is limited to accidents where the injuries or damages exceed a certain threshold.

After an accident, PIP typically covers medical expenses and certain lost income regardless of fault. Property damage, however, still follows fault rules, meaning drivers usually file claims through the at-fault driver’s insurance or rely on their own collision coverage.

Kansas

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): Structured benefits (see breakdown below)
• When can you sue the at-fault driver? When medical expenses exceed $2,000, or injuries involve permanent loss of a body part, disfigurement, certain fractures, permanent injury or death

Kansas follows a traditional no-fault structure but stands out because of how its PIP benefits are divided into specific coverage categories rather than a single coverage limit.

Drivers must carry liability insurance and PIP coverage, and lawsuits against the at-fault driver are limited unless injuries exceed Kansas’ legal thresholds.

Kansas requires minimum PIP benefits that include:

• $4,500/person for medical expenses
• $900/month for disability/loss of income (for one year)
• $25/day for substitution benefits
• $2,000 for funeral expenses
• $4,500 for rehabilitation or re-employment training
• $900/month for disability/loss of income (for one year) for survivors
• $25/day for substitution benefits for survivors

Because benefits are divided into separate categories, drivers can exhaust certain coverage types even if they have not reached their total available PIP benefits.

Kansas drivers should review how their PIP benefits are allocated, since individual coverage categories can run out before total coverage is exhausted.

Kentucky

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $10,000 (automatic unless rejected)
• When can you sue the at-fault driver? When medical expenses exceed $1,000 or injuries involve broken bones, permanent injury, disfigurement or death — unless you opt out of no-fault coverage

Kentucky is a “choice no-fault” state, meaning PIP coverage is automatically included in car insurance policies unless drivers formally opt out.

Drivers who keep PIP coverage must meet the state’s injury or expense thresholds before suing an at-fault driver. However, drivers who file a no-fault rejection form with the state can opt out of PIP and regain full rights to sue without meeting those thresholds.

Even drivers who opt out must still carry “guest PIP,” which provides injury protection for passengers and pedestrians involved in an accident. Opting out of Kentucky’s no-fault system can expand your legal rights but might increase financial risk after an accident.

Massachusetts

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $8,000
• When can you sue the at-fault driver? When medical expenses exceed $2,000 or injuries involve permanent disfigurement, bone fractures, loss of a body part, loss of vision or hearing or death

Massachusetts follows a relatively straightforward no-fault system. Drivers must carry liability insurance and PIP coverage, which pays medical expenses and certain injury-related costs regardless of who caused the accident.

Drivers can file a lawsuit against the at-fault party when injuries meet Massachusetts’ legal thresholds or medical expenses exceed $2,000. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

Because Massachusetts has a relatively low threshold for lawsuits, drivers might want to consider carrying higher bodily injury liability limits to help protect against potential claims.

Michigan

• Liability insurance required: Bodily injury and property damage (with special rules)
• Minimum personal injury protection (PIP): Historically unlimited, though drivers may now choose lower limits if eligible
• When can you sue the at-fault driver? For excess economic losses after PIP is exhausted, or for pain and suffering if injuries involve serious impairment, permanent disfigurement or death

Michigan has one of the most distinctive and complex no-fault systems in the country.

After an accident, drivers typically file claims through their own insurance for both medical expenses and economic losses, regardless of who caused the crash. Property damage claims between Michigan drivers are also largely handled through their own policies rather than the at-fault driver’s insurance.

Because Michigan historically required unlimited PIP coverage, most drivers are unlikely to exceed their medical coverage limits. Lawsuits are generally limited to cases involving serious injury, permanent disfigurement or death, although drivers might also pursue claims for economic losses that exceed their selected PIP coverage.

Michigan also handles vehicle damage differently than most states. Since PIP does not cover vehicle repairs and property damage claims against another Michigan driver are limited, collision coverage is especially important. The state offers three collision coverage options:

• Limited collision: Covers damage only if you are 50% or less at fault
• Standard collision: Covers repairs regardless of fault
• Broad form collision: Covers repairs regardless of fault and waives your deductible if you are less than 50% at fault

Michigan also allows drivers to file a “mini-tort” claim to recover part of their collision deductible from the at-fault driver.

Recent reforms allow drivers to choose lower PIP coverage limits, which can reduce premiums. However, drivers selecting coverage below $250,000 must meet certain eligibility requirements, such as qualifying health coverage through programs such as Medicare or Medicaid.

Michigan drivers rely heavily on their own insurance after accidents, making collision and PIP coverage choices especially important.

Minnesota

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $40,000 ($20,000 medical / $20,000 non-medical)
• When can you sue the at-fault driver? When medical expenses exceed $4,000 or injuries involve permanent disfigurement, disability lasting 60 days or more, dismemberment or death

Minnesota follows a traditional no-fault insurance system. Drivers must carry liability insurance and PIP coverage, which pays medical expenses and certain economic losses regardless of who caused the accident.

Minnesota requires at least $40,000 in PIP coverage, split evenly between medical expenses and non-medical costs such as lost wages or replacement services. Drivers can file a lawsuit against the at-fault party if injuries exceed the state’s legal thresholds or medical expenses surpass $4,000. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

Minnesota also requires out-of-state drivers to carry PIP coverage while operating a vehicle in the state. Many insurers automatically adjust coverage to meet Minnesota’s requirements, but drivers should confirm coverage before traveling.

New Jersey

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $15,000
• When can you sue the at-fault driver? Only for serious injuries such as loss of a body part, significant disfigurement, displaced fracture, loss of a fetus, permanent injury or death — unless you choose an unlimited right-to-sue policy

New Jersey is a choice no-fault state, but unlike Kentucky, drivers cannot opt out of PIP coverage. Instead, drivers choose between limiting or preserving their right to sue.

Most policies default to a limited-rights option, which restricts lawsuits against at-fault drivers unless injuries meet the state’s serious injury threshold. Drivers can choose an unlimited right-to-sue policy, which typically increases premiums but allows lawsuits without meeting those thresholds.

After an accident, PIP coverage pays medical expenses and certain injury-related costs regardless of fault. Property damage claims still follow fault rules and are usually handled through the at-fault driver’s insurance.

New York

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $50,000
• When can you sue the at-fault driver? When economic losses exceed $50,000 or injuries involve dismemberment, fracture, loss of a fetus, loss of use of a body part or function, inability to perform normal activities for at least 90 of the 180 days following the accident or death

New York follows a traditional no-fault system. Drivers must carry liability insurance and PIP coverage, which pays medical expenses and certain economic losses regardless of who caused the accident.

New York requires one of the higher minimum PIP coverage limits at $50,000. Drivers can file lawsuits against at-fault parties if injuries meet the state’s serious injury threshold or if economic losses exceed PIP coverage limits. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

North Dakota

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $30,000
• When can you sue the at-fault driver? When medical expenses exceed $2,500 or injuries involve dismemberment, permanent disfigurement, disability lasting more than 60 days or death

North Dakota follows a traditional no-fault insurance system. Drivers must carry liability insurance, PIP coverage and uninsured/underinsured motorist coverage, making the state’s minimum insurance requirements more comprehensive than many others.

PIP coverage pays medical expenses and certain economic losses regardless of fault. Drivers can file lawsuits against at-fault parties if injuries meet North Dakota’s legal thresholds or medical expenses exceed $2,500. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

Pennsylvania

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $5,000
• When can you sue the at-fault driver? For serious injuries such as permanent disfigurement, serious impairment or death — or if the at-fault driver was uninsured, intoxicated or driving an out-of-state vehicle, unless you choose full tort coverage

Pennsylvania is a choice no-fault state that gives drivers the option to choose between full tort and limited tort coverage when purchasing insurance.

Drivers who select limited tort coverage typically pay lower car insurance premiums but can only sue an at-fault driver if injuries meet Pennsylvania’s serious injury threshold or involve certain exceptions, such as accidents involving uninsured, intoxicated or out-of-state drivers.

Drivers who choose full tort coverage pay higher premiums but retain unrestricted rights to sue for damages after an accident.

Regardless of tort selection, drivers must carry PIP coverage, which pays medical expenses and certain economic losses regardless of fault. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

Utah

• Liability insurance required: Bodily injury and property damage
• Minimum personal injury protection (PIP): $3,000
• When can you sue the at-fault driver? When medical expenses exceed $3,000 or injuries involve dismemberment, permanent disfigurement or death

Utah requires drivers to carry liability insurance and PIP coverage, but its minimum PIP requirement is among the lowest of any no-fault state.

Utah’s PIP coverage applies only to medical expenses by default. Drivers must purchase additional coverage if they want protection for lost wages or other economic losses.

Drivers can file lawsuits against at-fault parties if medical expenses exceed $3,000 or injuries meet Utah’s legal severity thresholds. Property damage claims still follow fault rules and are typically handled through the at-fault driver’s insurance.

No-fault insurance is often misunderstood, so it's worth knowing your state's laws

As you can see from the variation in laws from one no-fault state to the next and even a few at-fault states, no-fault insurance can mean a lot of different things. What it (almost) never means is that you can't file a claim with the at-fault driver's insurance after an accident.

It's worth taking a closer look at how the system in your state works so you know exactly what your options and your rights are if you get into a car accident in your state.

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If you own a second home, such as a vacation property, second home insurance can help protect both the home itself and your finances. But coverage becomes more complex when someone else lives in the property, making it essential to choose the right type of policy for your situation.

Several insurance options may apply to a second home, including homeowners, landlord and rental policies. Each is designed for different living arrangements, and the right choice depends largely on how the property is used and who occupies it.

That distinction matters more than many homeowners realize. In fact, insurers often focus less on who owns a property and more on who lives there — a difference that can determine whether a claim is covered or denied.

Why who lives in your home matters to insurers

A recent case in Massachusetts demonstrates the issues that can arise when someone else lives in your home. According to Insurance Journal, the Massachusetts Appeals Court ruled that a property owner’s grandson was not a member of the household for insurance purposes; the court upheld the insurer’s right to deny a claim the property owner had filed involving the grandson.

In this case, occupancy mattered more than property ownership for insurance purposes.

Who lives in your home directly affects the level of risk insurers take on, which can change the type of coverage you need. If a property is your primary residence, owner-occupied homeowners insurance is typically appropriate. This type of policy covers the home’s structure, your personal belongings and personal liability.

If you own a property but do not live there, you’ll generally need a non-owner-occupied or landlord policy instead. These policies still protect the structure of the home, but they’re designed to account for tenant-related risks, including liability coverage for injuries that occur on the property.

It’s also important to clearly distinguish between long-term guests and tenants. In many cases, a guest staying temporarily in your home may be covered under your existing homeowners' insurance. However, once someone is considered a tenant, landlord insurance is typically required to ensure you’re properly protected.

Family relationships don’t automatically change that classification. If a family member lives long-term in a secondary home where you do not reside, insurers may still treat that person as a tenant. In many policies, a stay of 29 days or more can trigger a tenant classification, though the exact threshold varies. Because definitions differ by insurer, it’s best to confirm how your provider categorizes occupants and adjust your coverage accordingly.

Common situations where coverage can quietly change

Shifting living situations can cause your coverage to change, and you might not even be aware of it:

• An adult child or grandchild living in your secondary home for more than 29 days is typically considered a tenant, which usually requires a landlord policy rather than standard second home insurance.
• If you inherit a home during probate, you will need to take out a new policy once the home is transferred to your name. The type of policy will depend on factors like whether it will be a second home and who will be living there.
• Second home insurance may be suitable for a vacation property used only seasonally by you. However, if you rent the home out — even part of the year — you’ll generally need a rental or landlord policy.
• If you allow a family member to stay in your second home temporarily, they may initially qualify as a guest. Once their stay extends beyond 29 days, however, insurers may classify them as a tenant, triggering the need for landlord coverage.

What kind of insurance you may actually need

Below are some of the most common types of insurance that may apply.

• Homeowners insurance is intended for your primary residence. It protects your home’s structure and your possessions, and it includes liability coverage for you and your family.
• Landlord or dwelling policies are designed for properties you own but don’t live in. They generally cover the structure of the home and include liability protection if a tenant or visitor is injured on the property.
• Umbrella liability policies provide additional liability protection once the limits of your primary insurance policies are reached. They can help cover bodily injury, property damage and certain personal injury lawsuits, and they often include legal costs such as attorney fees and settlements. Umbrella policies typically do not cover your own injuries, damage to your personal property or losses resulting from criminal or intentional acts.

Use the tool below, powered by Bankrate, to explore and compare some of today's top home insurance offers:

How liability claims can affect your finances beyond the property

Liability claims can have significant impacts on your finances, including:

• Personal assets at risk: If a liability judgment or settlement exceeds your insurance policy’s limits, you are responsible for the remaining balance. Depending on state law, creditors may be able to place liens on personal assets — including home equity — to recover what is owed.
• Future insurability: A large liability claim could prompt your insurance provider to cancel your policy. It may be harder to find insurance coverage because of the past claim, and you might need to purchase high-risk insurance, which has more expensive premiums and is more limited than standard home insurance policies.  
• Higher premiums and non-renewals: Your insurer might not renew your policy after a liability claim. If they do renew the policy, your claims history could drive up your premiums, even if you shop around for a new insurance policy.

What to check before — and after — someone moves in

Before and after someone moves into your property, make sure that you have the right insurance for the specific situation:

• Notify your insurer: Contact your insurance provider before someone moves in and confirm the planned move-in date.
• Confirm occupancy classification: During that conversation, verify how the insurer will classify the individual(s) living on the property. This is the time to confirm whether your current policy is appropriate or whether you need different coverage so the policy is in place before occupancy begins.
• Review liability limits: Having someone live on your property can increase liability risk. Review your liability limits and consider whether increasing coverage or adding an umbrella policy makes sense.
• Document how property is used: Keep records of how the property is used, including rental agreements if applicable and how often the home is occupied.

When keeping the property vacant may still carry risks

With all of the nuances that come with someone living in your home, it might seem like keeping the property vacant could be safer. Unfortunately, vacant properties are exposed to other risks, including:

• Vacant home exclusions: Many homeowners' insurance policies limit or suspend certain coverages if a home is vacant for an extended period, often 30 to 60 days. After that point, claims may be reduced or denied unless you have a vacant home policy in place.
• Maintenance and injury claims: Problems such as burst pipes or leaking water heaters can worsen in vacant homes because issues may go unnoticed for weeks. As a result, claims can be more severe, and insurers may require vacant home insurance to maintain coverage.
• Vandalism risks: Vacant homes may be an increased target for vandalism, leading to potential damage.

How this fits into today’s housing and inheritance reality

Second home insurance is becoming more important as changing housing arrangements and inheritance trends leave more homeowners responsible for additional properties. Aging parents may move into an adult child’s second home, and multi-generational living has become a practical, cost-saving option in today’s economy. Estate settlements can also result in inherited homes that sit vacant for a period of time, while ongoing housing affordability challenges are pushing families to share properties more often.

When the people living in a property change — or when a home shifts between being occupied, rented or vacant — insurance needs can change as well. Making sure you have the right coverage helps protect not only the property itself, but your personal finances. A quick call to your insurance provider can help confirm that your policy matches how the home is actually used, so you’re protected if the unexpected happens.

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Every time your car insurance is up for renewal, you're faced with the decision of where to set your car insurance deductible. If you raise it up a bit, you could save on car insurance premiums each month. If you lower it, you could ensure that an accident won't completely wipe out your savings or, worse, push you into debt.

But, how high a car insurance deductible is too high? How low is too low? As with most personal finance questions, there's no one right answer. That's why rules of thumb like the one-month car insurance deductible rule can be a useful way to ballpark the right amount for your budget.

How does the one-month rule for setting your deductible work, and is it a good rule for every driver? Here's what you need to know as you shop for car insurance.

What is the one-month car insurance deductible rule?

The one-month rule for setting your car insurance deductible argues that you should choose the amount based on how much you put in savings in one month. That way, if you get in an accident, you would simply have to spend your monthly savings on the repairs instead of stashing it in, say, your high-yield savings account.

In that scenario, the savings you've built up until then will remain untouched, and you'll be back to building it up again by the next month.

This is a good idea that would reduce the risk of a car-related emergency derailing your financial goals for longer than one month. And, for those who put away a good amount each month, it's an easy rule of thumb to balance the cost of car insurance with the financial risks of getting in an accident.

What if you aren't saving much (or anything) each month?

The one-month rule is a realistic rule of thumb for many drivers. But it doesn't quite work for those who aren't setting anything aside in savings each month – or not enough to meet even the lowest available deductible. For example, if you've retired, you typically switch from saving to spending what you've worked so hard to save.

Whether you're living on a fixed income or paycheck-to-paycheck, in these cases, the one-month rule isn't going to work for you. So, how should you choose a car insurance deductible?

For most in these scenarios, the answer is likely to push the deductible as close to the lowest available one as you can while still being able to afford the premium. This will make your monthly bill a little more expensive, but also make your expenses more predictable.

For retirees in particular, how much that predictability is worth depends on how confident you are in your savings. Are you already withdrawing the maximum your savings can bear and worried you might run out? Then, you definitely want to lower that deductible as much as possible to reduce the risk of an emergency knocking you off track.

On the other hand, if your retirement fund is healthy and you've padded your monthly budget with plenty of extra for nonessentials like travel and entertainment, you can instead set your deductible at, say, one month's worth of nonessential spending. That way, in the worst-case scenario, an accident will just mean one month of skipping out on your usual fun or travel plans.

Should your deductible be lower for luxury or collector cars?

Your car model does impact your premium, but should it impact your deductible, too? Not necessarily. The premiums for luxury, exotic or classic car insurance are already going to be higher than they are for a less valuable ride. So, the amount you're saving by raising your deductible from, say, $500 to $1,000, might seem negligible.

At the same time, if you drive a high-end or specialty car like this, you've likely already budgeted for higher repair and maintenance costs. And, if you've been restoring a collector car yourself, you're probably handy enough to take care of some of the needed repairs on your own.

With all of that in mind, you may be able to stick to the one-month rule, or you may even be able to raise the deductible even higher, knowing that you've either got the cash or mechanical skill to cover the less costly repairs.

Choose a car insurance deductible that your budget can bear

The underlying idea with the one-month rule is that your car insurance deductible should be set at a number that won't derail your financial plans for an extended period of time. As you play around with the different deductibles available, think about how long it would take you to recover from an emergency at those different amounts.

If money is tight and even a $500 emergency would be a stretch, accept the higher premium to keep that deductible lower. If you've got a healthy emergency fund or plenty of wiggle room in your budget – even if it means skipping a couple of weekends out or postponing a vacation – go ahead and raise that deductible to enjoy lower car insurance rates.

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For many homeowners, the idea that an insurance company might quietly fly a drone, or pull satellite images, over their house feels unsettling. Not because they’re hiding something, but because home insurance has traditionally involved human judgment: an adjuster on the ground, a phone call, a chance to explain.

Now, more insurers are using aerial imagery to evaluate homes for underwriting, renewals and claims decisions. In some cases, policyholders say those images led directly to higher premiums or outright nonrenewal without warning.

That push and pull between speed and privacy feels especially real in California right now, where the insurance market is already under a lot of pressure.

A growing trend of insurers in the sky

Insurance companies are increasingly using aerial photos from drones, satellites and aircraft to assess property risk. Images may be taken at renewal, after a claim or even mid-policy, often without the homeowner’s knowledge.

The practice drew national attention after NPR reported on homeowners who said they lost coverage or were asked to make repairs after insurers flagged roof wear, debris or vegetation visible only from above. Some homeowners told NPR the images were outdated or misinterpreted.

In California, local outlets, including ABC7 Los Angeles, have reported similar complaints. In one case, a homeowner said her insurer declined to renew her policy after drone images allegedly showed roof and yard issues that she said did not reflect the home’s current condition.

How insurers are using aerial imagery

From the insurer’s perspective, aerial imagery solves several problems at once. It’s faster than scheduling in-person inspections, cheaper than sending adjusters into the field, and allows companies to review thousands of properties consistently, especially in disaster-prone areas.

Insurers also say remote inspections help them respond more quickly to climate-driven risks like wildfire exposure and storm damage, which have become harder and more expensive to assess in person.

Here are some types of imagery insurers use.

• Drones: Short-range, high-resolution images often used after claims or during renewals
• Satellite images: Broad coverage, sometimes months old, commonly used for underwriting
• Manned aircraft: Used for regional scans, especially in wildfire- or hurricane-exposed areas

What insurers look for in aerial images

• Roof condition (missing shingles, discoloration, sagging)
• Overhanging trees or vegetation touching the roof
• Debris, clutter or objects insurers consider fire or safety hazards
• Additions or structures not listed on the policy

When aerial photos affect your policy

Aerial imagery can influence your homeowners insurance in ways that may not be obvious until you receive a notice in the mail. Insurers commonly use these images during renewal reviews, after a claim is filed or as part of broader risk reassessments in high-risk areas.

If something in the photo raises a red flag, whether it’s a roof that appears worn, tree limbs hanging too close to the house, or items in the yard that an insurer considers debris, that image can factor into decisions about your premium or whether your policy is renewed at all.

In some cases, homeowners are told they must make repairs or clear certain issues within a set timeframe to keep coverage in place. In others, the insurer may raise rates or decline to renew the policy entirely, citing increased risk.

What frustrates many policyholders is that these decisions can be based on images taken from afar, sometimes without context. A shadow, seasonal debris or an image captured before recent repairs may not reflect the home’s actual condition. But it can still carry weight in underwriting decisions.

Homeowners do have rights, though those protections vary by state. Insurers are typically required to provide advance notice before a nonrenewal or major policy change, and many states allow policyholders to request the images used in the decision.

Some regulators also require insurers to give homeowners an opportunity to correct or dispute what the photos show. Still, if these processes aren’t clearly explained, it can lead to confusion about how to push back or even what they’re pushing back against.

How states are protecting homeowners’ privacy and insurance rights

Regulators are beginning to take notice, though rules differ widely by state and continue to evolve. Some states have issued guidance to insurers, while others are considering legislative or regulatory responses.

In many cases, these are guidance statements, proposed rules or regulatory expectations rather than hard statutory bans, and enforcement varies.

• California: Lawmakers have proposed measures that would require insurers to notify homeowners before using aerial imagery and to provide copies of images upon request. The goal is transparency, especially in a market already plagued by nonrenewals.
• Pennsylvania: Insurance regulators have reminded carriers that aerial imagery alone may not meet the legal threshold for a “significant change in risk” required to justify nonrenewal.
• Rhode Island: Regulators have signaled that insurers should rely on relatively recent imagery when making underwriting or nonrenewal decisions, rather than photos that may no longer reflect current conditions.
• Louisiana: Louisiana requires that aerial imagery used in insurance decisions meet freshness and relevance standards, particularly in post-disaster contexts. Regulators expect insurers to distinguish between storm-related temporary conditions and long-term risk factors.
• North Carolina: North Carolina guidance encourages insurers to supplement aerial imagery with additional verification when photos are unclear or inconclusive. The state has pushed back against nonrenewals based solely on images that don’t clearly show damage.
• New Hampshire: Regulators in New Hampshire stress that aerial imagery should not replace physical inspections when images raise questions. If a photo suggests a problem but doesn’t conclusively show damage, insurers are encouraged to take additional steps before acting.
• Texas: State law restricts drone-based surveillance of private property in many circumstances, which has raised questions about how insurers and their vendors collect and use aerial images in underwriting.
• Michigan: Guidance emphasizes accuracy and due process, urging insurers to share images and give homeowners a chance to dispute findings before adverse action.
• Massachusetts: Proposed legislation would regulate how aerial imagery can be used in underwriting and require formal appeal processes alongside nonrenewal notices.
• Connecticut: Regulators have stated that while aerial imagery can be used, it should not trigger nonrenewals for purely cosmetic or minor issues.

Steps to take if a drone photo impacts your policy

For homeowners, the concern isn’t just losing insurance. It’s the feeling of being judged by an algorithmic snapshot taken without consent. Privacy advocates argue that secret flyovers erode trust, especially when the images are never shared or explained.

If you’re affected, here are a few things you can try:

• Requesting the images used in the decision
• Documenting repairs or corrections with your own photos
• Filing a complaint with your state insurance department if you believe the action was unfair
• Shopping other carriers, including regional or mutual insurers with different underwriting practices

What’s next for aerial insurance reviews

Aerial imagery isn’t going away. As climate risks rise and insurers seek efficiency, remote inspections will likely become more common (not less). But regulators are signaling that speed can’t come at the expense of fairness.

The next phase may be about balance: allowing insurers to use modern tools while ensuring homeowners have notice, access to information and a chance to respond. For now, consumers who value privacy and clarity may need to be more proactive than ever about what their insurer sees from above.

Need a home insurance quote? Use the tool below, powered by Bankrate, to explore and compare some of today's best offers:

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No one wakes up in the morning planning to get into a car accident. You don't put it on the calendar between doctor's appointments and meetings at work. It just happens.

One second, you're driving along, thinking about what to have for dinner, and the next second, your heart is trying to exit your body through your throat.

This is the moment when adrenaline kicks in, logic leaves the building, and people start doing things they later wish they hadn't done.

So let's talk about what to remember after a car accident while your brain is still capable of absorbing the information and before real life decides to test you.

Picture this. You're stopped at a light. You hear a screech, then feel a thud, and suddenly your car feels like it got drop-kicked, and you're the ball. Your pulse is racing, your hands are shaking, and someone is already getting out of the other car, looking very confident about whose fault this was. Always the other person, right?

Slow down, take a breath

This is not the time to debate fault. This is not the time to apologize like you knocked over a stranger's drink in a bar. This is the time to slow everything down.

The very first thing you do is stay calm. Easier said than done, but super important. Panic makes people say dumb things, forget basic steps and skip important details. You don't need to be a Jedi Master, but you do need to be functional.

Think: Humans first, vehicles second.

Once you've confirmed that the world hasn't ended, check for injuries. Yourself first, then anyone else in your car. If someone is hurt, immediately call 911, full stop. Cars are replaceable. People are not.

If the accident is minor, the police may not need to respond. If they were to visit the scene of every accident, they would never have time to do anything else. You should definitely call them if someone is hurt or if there's serious damage or a dangerous situation, such as a blocked road.

If it's a low-speed fender bender in a parking lot, you can simply exchange information and move on.

Put your phone to good use

If everyone is OK, you can move into documentation mode by using the voice recorder or video camera on your phone. Audio is fine, but video is better. Just hit record and let it run. You're not filming a documentary or an episode of Stranger Things, so don't worry about how it looks.

The point is to create a record while events are fresh and people are still saying what they're going to say (though you should be quiet — more on this later). The recording accomplishes two things:

• It captures details you might forget later.
• It keeps the interaction calmer. Most people tend to behave better when they know there're being recorded.

Walk around your car. Walk around the other car. Get the damage from multiple angles. Get the license plates. Get the intersection. Get the skid marks, if there are any.

You want to capture all the information you can get. You are building a time capsule of what things looked like before anyone has a chance to change their story. And yes, they most certainly will and do.

Record the people, not just the cars

Now comes the part everyone forgets until it's too late. Document the people involved. Take photos or video of the other driver's license, proof of insurance and registration. Don't feel awkward about it. This is standard procedure.

If they hesitate, that's a red flag. You would be surprised to find out how other people magically claim to have been in that other car, or even driving the other car. Truly. So record the people in the other vehicle so there's a record of who was there.

Then do the same for yourself and anyone in your car. It may feel strange, but it matters. Injuries aren't always obvious in the moment. Shock masks pain, and even if you think all is well, your body and brain are not in their normal state, whatever that may be.

Having a visual record of who was involved helps later if questions arise.

Don't admit to anything

This is where people accidentally light their own legal house on fire.

Do not admit fault at the scene. Not to the other driver. Not to a witness. Not even to anyone in your own car.

You are shaken. You do not have all the facts. You do not know how events will be interpreted later.

You may think you are at fault, but you could find out later that you're not. It happens.

But if you open that door and say the words, "Sorry, my fault," you could be shooting yourself in the foot. And not just the little toe.

Report the accident to your insurance company

Once you've left the scene and your hands have stopped shaking, report the accident to your insurance company. Call them. Use their app. Call your agent or broker. Pick one and do it promptly.

Timely reporting matters. Policies require it.

Carriers can help guide next steps. Delays only create confusion and complications.

This is where a good agent or broker can make all the difference in your world. Even if you're not sure whether you want to pursue a claim, getting the accident on record protects you. You can always decide later how far to take it. You cannot rewind time and report it earlier.

If you walk away unharmed, be happy

If you can walk away from a car accident, you should be thankful — genuinely thankful. Not everyone does.

I'm speaking from personal experience here, having lost my uncle in a major accident that took him from us suddenly.

Cars are heavy, fast and unforgiving. Even low-speed accidents can turn serious in an instant.

Walking away with nothing more than a racing heart and some bent metal is a gift, even if it doesn't feel like one in the moment.

Be prepared, don't assume

Knowing what to do ahead of time turns chaos into a checklist:

• Stay calm
• Check for injuries
• Don't admit fault even if you believe you're the culprit
• Record audio (video if possible)
• Capture photos
• Document everyone involved
• Report the claim
• Breathe and thank your lucky stars

Insurance exists for these moments, for the unexpected interruption that turns a normal day into a story you didn't ask for, but no doubt you will tell your family and friends.

If you remember nothing else, remember this: After an accident, you are not there to solve everything. You are there to preserve facts and protect yourself.

Because the best accident outcome is the one where everyone goes home. Everything else is paperwork.

Want to learn more about insurance? Visit icgs.org.

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• Help! My Car Was Totaled. Should I Repair and Keep Driving It or Buy a New One?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Having car insurance is supposed to protect you after a crash, helping cover repairs and medical costs when something goes wrong.

But some recent cases in Michigan in which people were reportedly denied claims because they didn't list their children with their insurance providers are raising questions about little-known household disclosure rules that can affect whether coverage applies at all.

In some states, insurers require policyholders to list not just drivers, but everyone who lives in the household, including children. If that information is missing, even unintentionally, a routine accident can turn into a costly financial nightmare. Here’s what drivers should know about how these disclosure rules work and why they matter.

What happened in Michigan

WDIV, the local NBC affiliate in Detroit, has been reporting on cases in which people say they were denied coverage after an incident because they failed to document their children with the provider.

Insurers in Michigan often require applicants to disclose all household residents, including non-drivers, when underwriting personal injury protection (PIP) coverage. Under Michigan's no-fault law, PIP benefits attach to the named insured and household relatives, and failing to list them can affect eligibility for coverage.

The reported cases include an Oakland County driver who submitted a claim after getting in a crash while her 12-year-old daughter and her daughter's friend were in the car. The driver submitted a claim that included a police report showing children were in the vehicle at the time of the crash.

Weeks later, WDIV reported, she received a letter stating the claim would not be paid and that her policy was being canceled retroactive to her last renewal date because a nondriving child who lived in her home wasn't listed on her policy's PIP form.

How Michigan's no-fault and PIP system works

Michigan is one of a handful of states with a no-fault auto insurance system, which means each driver's own insurance pays for certain costs after a crash, regardless of who caused the accident.

Under Michigan's no-fault law (PDF), all drivers are required to carry PIP as part of their auto insurance. PIP is designed to cover medical bills, lost wages and other accident-related costs for the insured and eligible household members, no matter who was at fault.

State statute defines PIP benefits broadly: Coverage applies to the named insured, their spouse and relatives domiciled in the same household who suffer accidental bodily injury in a motor-vehicle crash. Because of this definition, insurers use household resident information to determine who is eligible for benefits under a policy.

Why insurers require all household members to be listed

When it comes to PIP coverage, car insurance companies assess risk based on who lives in the household, not just who is licensed to drive. For example, a household with multiple drivers has a greater risk of getting into a car accident than a household with just one driver.

Additionally, because PIP benefits extend to household relatives, insurers might face higher potential medical payouts in households with more dependents, including children, even if those children never drive.

As a result, insurers can require customers to disclose all household residents, and that information might be collected through applications, renewal forms or periodic verification requests. As these recent denials show, failing to provide complete household information can have serious financial consequences.

Why many drivers don't realize who must be listed on their policy

Part of the problem is that many drivers are unclear about who needs to be listed on an auto insurance policy. Some assume only licensed drivers must be disclosed, while others might not realize that children, roommates or adult children who move back home can also count as household residents under insurance rules.

There's also a lot of confusion around the difference between a temporary visitor and a household resident. Most policies allow permissive use, meaning liability and collision coverage might extend to someone who occasionally borrows your car, such as a friend visiting for a weekend.

But if that visitor establishes a long-term presence, they'll be considered a resident, and you'll need to update your insurance information to reflect that. State laws differ on the number of days that determine when a visitor becomes a resident, so it's a good idea to contact your insurance company with any questions.

Is this only happening in Michigan?

Michigan's no-fault system makes disclosing dependents particularly important, but similar household disclosure clauses exist in many states. Even where no-fault laws don't apply, insurers nationwide often require customers to list all their household residents, not just licensed drivers, though enforcement and penalties can vary.

Twelve states and Puerto Rico require mandatory no-fault insurance with PIP benefits, including Florida, Hawaii, Kansas, Massachusetts, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah, in addition to Michigan. The structure and specific requirements of PIP vary by state, however, and not all no-fault systems are identical.

Drivers everywhere should review their own policy language. Check your declarations page and any forms you've signed, and contact your insurer to correct any missing or outdated household information.

What this means for policyholders

It's important to be detail-oriented and accurate when completing any paperwork for your insurance provider. This is a good time to:

• Review your declarations page and application disclosures. Carefully re-read the instructions and make sure you've shared all relevant and required information with your insurer.
• Confirm who must be listed as a household member. If you assumed that you only needed to list drivers, double-check and contact your insurance company to make sure this is accurate.
• Notify insurers of changes in household composition. If you have a baby, get married or if an adult child moves back home again, promptly notify your insurance company so they can update your policy.

Rather than assuming your coverage rules, it's best to contact your agent or insurer directly, especially if you're dealing with a complicated situation or unusual household composition.

What to do if a claim is denied over household disclosures

If your insurer denies a claim over household disclosures, start with the following steps:

• Request a written explanation: Ask for an explanation in writing, and request your insurer cite specific policy language that explains the reason for the denial.
• Ask to correct or reinstate your coverage: In some situations, your insurer might be willing to help you correct or reinstate your coverage. Now is the time to ask for details about what changes you need to make to correct the issue.
• Consult a professional: Contact an insurance attorney or state insurance regulator for additional help. These professionals might be able to help you find a solution.

Don't delay these steps. It's important to act quickly after receiving a denial, especially if medical bills or vehicle damage are involved. These situations highlight how small details in insurance paperwork can carry major financial consequences.

For families, especially those with children or changing household arrangements, knowing exactly who must be listed on an auto policy could make the difference between a paid claim and a costly legal fight.

Need a car insurance quote? Use the tool below to explore some of today's top car insurance offers, powered by Bankrate:

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If you'd like to have a stronger relationship with your primary care doctor — and quick access to them when you want to chat or schedule an appointment — direct primary care may be worth a look. With a DPC arrangement, you pay a membership fee, and in exchange you get unlimited access to certain primary care services, such as disease screenings, chronic-condition management and laboratory tests. DPC practices don't accept health insurance, and you pay the membership fee out of pocket.

Compared with a traditional primary care office, which may manage thousands of patients, a DPC practice sees an average of 413 patients, according to the American Academy of Family Physicians (AAFP). With a smaller load, DPC doctors can usually offer same-day or next-day appointments and spend more time with patients.

Teresa Lovins, a primary care physician and owner of Lovin My Health DPC in Columbus, Ind., says that she sees patients for an average of an hour, allowing her to discuss their medical concerns in depth. The average primary care appointment lasts about half an hour, according to a 2024 study from the Journal of the American Medical Association.

Direct primary care is similar to concierge care, another membership-based model for primary care. Both involve a relatively small group of patients and focus on personalized services. But concierge memberships often cost more, with the annual tab ranging from $2,000 to $10,000, depending on the services you sign up for, according to consumer website ValuePenguin.

That compares with a typical annual cost of $600 to $1,200 for direct primary care, according to the AAFP. Concierge practices usually offer more in-depth physical exams and screenings. And concierge care doctors may bill your health insurance company for certain services.

Although the number of DPC practices has risen to more than 2,700 across the U.S., according to advocacy group DPC Frontier, they’re not available in all areas. You can see whether any DPC practices are near you with online directories, including mapper.dpcfrontier.com and dpcalliance.org/find-a-dpc-physician.

Covering the costs

Your DPC membership fee includes the cost of most preventive and primary care services. But you'll need to have health insurance to get coverage for emergency room visits, care from specialists, surgical procedures and other services your primary doctor does not provide, says Moti Gamburd, chief executive officer of home health care agency CARE Homecare, in Los Angeles.

One option is to use a high-deductible health plan, which offers lower premiums and a larger deductible than a typical policy. If your high-deductible plan is paired with a health savings account, you can set aside pretax money (up to $4,400 for self-only coverage in 2026, or $8,750 for family coverage) in the HSA and use it tax-free for qualifying medical expenses.

Good news on the HSA front for DPC patients: Beginning January 1, 2026, direct primary care membership fees are a qualified medical expense for tax-free HSA withdrawals, thanks to provisions in the One Big Beautiful Bill Act. HSA funds may cover up to $150 monthly for individuals, or $300 monthly for a family membership.

Additionally, the law clarifies that enrolling in a direct primary care arrangement does not disqualify someone from being able to contribute to a health savings account if they also have an eligible high-deductible health policy.

Previously, DPC patients who had a high-deductible policy could be barred from contributing to an HSA.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Most people don't think of their insurance company as their best friend — unless your idea of friendship involves premiums, paperwork and hold music that sounds like it was recorded a hundred years ago.

But stick with me here: Your insurance, the right insurance, deserves a little gratitude.

Let's be honest. Insurance has a PR problem. Nobody throws a party when they renew a policy. People don't carve "I ❤️ My Homeowners Insurance" on a tree trunk or engrave "Best Policy Ever" on a trophy.

When things go wrong, the first complaint is almost always, "Why is this so complicated?" or "Why is this costing so much?" or the classic, "Why did it take forever to get paid?"

There are real reasons to grumble about insurance. But before we throw the whole concept out like yogurt past its expiration date, let's look at this relationship through a realistic lens, rather than an emotional one.

What people complain about

Let's start with the obvious criticisms people have about insurance:

Insurance is expensive. Of course it seems like it is. Nobody signs up thinking, "I'm so excited to give money to an invisible service I'll use only if my universe collapses." Premiums are a cost you pay before anything happens. Wallets don't like that. Especially if you never actually have a claim. Money is going, going, going … gone.

Policy language is confusing. Policies read like they were written by people who lost a bet about who could use the most semicolons in a paragraph. You need a translator just to understand what coverage A does vs coverage B. And don't look to AI for help. It'll probably just add to your confusion.

Processing claims takes forever. If you've ever filed a claim and felt like you were waiting for paint to dry on a glacier, you are not alone.

The fine print is annoying. Exclusions, sub-limits, endorsements … and it feels like you need a secret decoder ring to figure out what's covered. And yes, font sizes vary.

Those complaints are real, and they matter. But they tell us what people don't like, not why those perceptions exist.

More importantly, they gloss over what insurance actually does, which is step in when life smacks you upside the head (a hard smack, at that) and leave you in a better place than you would have been without it.

The friend you hope you never have to rely on

Think of insurance as the friend who shows up when your kitchen floods at 3 a.m. You're not thrilled you needed help, but that friend dropped everything (in this case, sleeping) and headed over to bail you out (literally).

Here's the part most people forget: The entire point of insurance is to avoid financial devastation when something bad happens. When you have a good policy and a company that stands behind it, it does that remarkably well.

Let's tackle the common complaints with a dose of reality and a little gratitude.

It costs too much. Yes, insurance costs money. A lot of money. And, sadly, you don't get a refund when you don't file any claims. But without it, you're self-insuring. That's code for "if anything bad happens, you'll have to pay for it all by yourself."

Imagine paying the actual replacement cost for your home after a fire. That's not a hypothetical. That's a real bill that lands in your inbox with zero regrets attached.

Policies include confusing language. Yes, policy language is dense. And yes, it often feels like it was written by a committee of people who really wanted everyone to not understand it. That's not the fault of the insurance company — it's a result of how litigious people can be.

Insurance policies are legal contracts that need to cover all possible outcomes, from the obvious to the bizarre. That requires precision, which often reads like an instruction manual for building a quantum computer.

Besides, you don't have to decode it alone. A good insurance agent or broker exists precisely to translate that language into English: "This covers X but not Y, and here's what that means for you."

If you still "don't get it," it's on you to ask for clarification. And if your agent can't clearly explain it, find one who can.

Processing claims takes forever. Or does it? No one enjoys a drawn-out claims process. Waiting for claims adjusters, answering documentation requests and making back-and-forth calls is about as exciting as reading a phone book with mittens on. (Show of hands — or mittens — do you even remember what a phone book looks like?)

But context matters. The claims process is an investigation. The carrier must verify what happened, how it happened and whether the policy applies. That takes time.

The better the documentation you provide — photos, receipts, timelines — the faster the process goes. That's more on us as consumers than the insurance company.

Fast claims aren't magic. They are the result of preparedness, cooperation and a company with the systems to pay what's owed without losing its shirt. Not all insurance companies are created equal, far from it.

And here's the kicker: Without an insurance company reviewing and paying claims, you'd be writing the checks yourself. No one wants that.

The fine print feels shady. Until you realize why it exists. I get it. People hate fine print. Really hate it. They consider exclusions personal insults rather than clarifications to prevent later misunderstandings.

But exclusions aren't designed to frustrate you. They are designed to define what is and what isn't covered. A policy can't cover everything everywhere always without becoming economically impossible. Translation: You would not want to pay the premium required for 100% coverage.

Good coverage actually works when you read and understand it before a claim

One of the funniest insurance phenomena is that some people have strong opinions about their policy without reading it. That's like criticizing a car for not having good brakes without ever test-driving it.

Entire websites have been built to complain about one insurance company or another.

Are the complaints real? Probably. Do they represent only a handful of problems out of tens of thousands or hundreds of thousands of claims? You betcha.

Insurance is only as good as the coverage you understand and maintain. If you don't know you need scheduled coverage for valuables, or flood coverage, or an earthquake policy, the policy isn't failing you, you're failing you.

Here's the part where the gratitude arrives, disguised as plain old logic

Insurance exists to protect you from the financial side of life's worst moments. Without it, you would be on the hook for losses that could wipe out your savings, destroy your retirement plans and bankrupt your family. It happens all the time.

That's not trivial. So insurance isn't optional if you want economic stability. It's not something to shrug off because a quote didn't show a dramatic price reduction this year. Good insurance coverage doesn't make bad things not happen. It makes bad things not destroy you.

So this is why insurance can be your best friend (even if it sounds weird): Friends protect one another. They show up when it matters. They help you when things get bad. They make you feel safe. Your insurance company, when chosen wisely and understood properly, does exactly that.

It's not perfect. It's not always fast, glamorous or intuitive. But it is reliable in the ways that count the most — financially and practically.

And if you can find an agent or broker who actually gets you, explains things without sugarcoating and has your back while filing a claim, then yes, your carrier becomes a partner. Not a faceless name on a document, but a real ally in the story of your financial life.

So take a moment to thank the insurance you do have, and if you still don't think it's good enough, shop for something that actually deserves your gratitude.

Because good insurance, like your best friends, shows up when you need it most.

Want to learn more about insurance? Visit icgs.org.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Women have long been the chief operating officers of their households — the ones who remember the dentist appointments, plan the birthday parties and keep everything running thanks to countless tabs open 24/7 inside their heads.

I get it, because I'm a wife and mom first. But we can't let the invisible labor and emotional burden of the day-to-day stand in our way of long-term planning.

Married or not — and it should be noted that more Millennials are unmarried than previous generations at the same age — women need to be the chief financial officers of their households. The stakes are high.

Women, on average, live longer than men. And women are projected to control two-thirds of America's wealth by 2030, according to a 2025 report by McKinsey & Company.

That shift is already underway and makes 2026 an ideal year for women — single, married, divorced, widowed, raising a family or empty nesting — to shore up their finances and plan for their future.

Here are six savvy financial moves women at every age and stage of their financial journey should make this year.

Savvy Move No. 1: Organize your documents now

Often, people wait until tax time to tidy up their financial lives, but this annual ritual represents only part of the picture.

What if everything related to your financial life and life in general — not just the things you need to hand to your accountant or access for your tax filing — was organized all year long, year after year?

Imagine the space in your brain you'd free up knowing that receipts, account statements, insurance policies, powers of attorney and other estate planning documents, birth certificates, passports, Social Security cards and more were all in one place?

You can do this electronically, of course. But there's something about the assurance of having hard copies on hand. You can create your own filing system or check out products like the Nokbox, which offers fireproof boxes with files labeled for everything you need to organize.

You could do this in one afternoon and call 2026 the year you truly got your financial house and your life in order.

Savvy Move No. 2: Tackle debt and make savings automatic

Pay down your debt and begin to save 20% of your gross income.

Many financial advisers will favor saving over paying down debt if you can make more in interest on money you sock away.

And, of course, not all debt is equal. Your mortgage is different than your credit cards.

Still, too much debt can impact you psychologically and make it harder to get to your bigger financial goals, so plan to knock it down so you can build up your savings.

Ways to make your savings automatic include contributing the max to your employer-sponsored retirement plan and directing a certain portion of money each month to your emergency savings (or cash equivalent) account and 529 education plans if you are saving for college.

Making it automatic keeps you from automatically spending it.

Savvy Move No. 3: Build a cash cushion

Building on the savings theme, it's always a good time to beef up the "heaven help us" account. Strive for having six months' worth of living expenses available in case of emergency.

People often think that means in case of a job loss, and that's a big one. But other stuff can happen, too. You could need to step back at work to care for a child or aging parent.

There are other ways to ensure cash flow beyond savings. For example, it's smart to have a home equity line of credit in place for emergencies, just so long as you don't spend it all on home projects, credit card debt or vacations.

This line of credit can be a lifeline and also buy you time to build up your cash cushion.

Savvy Move No. 4: Protect yourself

Review your insurance coverage — life, health, disability, auto, property and casualty. Are beneficiaries up to date? Do you have enough? Are there policies you don't have in place but should?

Ask yourself what has changed. If you're starting a family, it might be time for you or your partner to add a term life policy to replace future income in a worst-case situation.

Or perhaps you have life insurance but not disability insurance. Did you know you are more likely to become prematurely disabled than to die prematurely?

Or, if you have a new teenage driver in the house, you might consider taking out an umbrella insurance policy.

Savvy Move No. 5: Audit and review investments

You should understand the purpose of and timeline for each investment — along with your risk tolerance — so that you can determine the right asset mix for each investment portfolio.

For example, perhaps your first baby is now a high school senior; it's probably time to dial down the aggressiveness of that 529 college savings plan.

Maybe you plan to retire sooner than you originally anticipated, or you just got a dream position and plan to extend your career.

Either way, you will want to adjust the asset allocation and corresponding level of risk on your retirement plan investments.

Savvy Move No. 6: Dare to dream

Please take a moment to dream big. Not just about 2026. But about what you want for your life years into the future.

Why are you working so hard right now? What is your "why"?

Short-term, tactical goals are nice. But the big picture — retiring when you want, vacationing when and where you want, starting a business, buying a beach house, living abroad, setting up a philanthropic organization or foundation — is even richer.

If you know what you're working, saving and investing toward, the better your chances for staying on the path to getting exactly what you envision and deserve in 2026 and beyond.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Your home is a major investment, and you can protect that investment with home insurance. But if you pass away and your beneficiaries can't pay your mortgage, your home could be sold or foreclosed on.

Mortgage protection insurance offers you extra reassurance by paying off your mortgage after your death. Some policies also offer riders that extend coverage to pay your mortgage if you become disabled and can’t work.

Mortgage protection insurance can provide you peace of mind and may make sense for many homeowners, but it's important to understand how this insurance works and its drawbacks to decide if it’s right for you.

How mortgage protection insurance works

Mortgage protection insurance is an optional policy that's designed to pay off your mortgage balance if you die during the coverage period.

The coverage is equal to your outstanding mortgage balance, and you’ll typically pay monthly premiums for a term that matches your mortgage loan term. The monthly premiums stay the same for the life of your insurance policy, but the benefit amount shrinks over time as you pay down your mortgage.

Mortgage protection insurance usually covers the principal and interest portions of your mortgage, but other expenses like property taxes and HOA dues are excluded.

If you pass away, your mortgage insurance will pay off your remaining mortgage balance, so your family doesn’t have to worry about that expense. Your family will still be responsible for those excluded expenses, like property taxes.

While mortgage protection insurance is typically designed to pay off your mortgage if you die, some policies allow you to add riders that expand coverage.

A disability rider may cover your mortgage payments if you become disabled and are unable to work. A job loss rider can help cover your monthly mortgage payment for a limited time if you involuntarily lose your job.

Mortgage protection insurance vs. private mortgage insurance

Mortgage protection insurance is easily confused with private mortgage insurance, but these policies function differently. Mortgage protection insurance is an optional coverage that protects you and your family by paying your mortgage balance if you pass away.

Private mortgage insurance works differently, protecting your lender if you default on your loan. In most cases, lenders require private mortgage insurance if you put less than 20% down on a home, and this coverage isn’t optional.

Mortgage protection insurance vs. traditional life insurance

Both mortgage protection insurance and traditional life insurance take effect after you pass away, but they work differently. Mortgage protection insurance is more limited than a traditional life insurance policy, and it pays only your mortgage. The funds go to your mortgage lender, not to your beneficiaries.

Traditional life insurance provides a benefit directly to your beneficiaries after your death. Your beneficiaries can then use that benefit however they choose, including to pay the mortgage, to cover home repairs or to pay for funeral costs and other expenses. In some cases, you can even use your life insurance benefits while you're alive.

Life insurance is generally more flexible than mortgage protection insurance, and it may be more affordable to get. However, some life insurance policies require a medical exam, and if the exam reveals health issues that make you a higher risk, you may be charged higher premiums.

Mortgage protection insurance doesn’t require a medical exam, which can be helpful if you don’t qualify for traditional health insurance or if you have a condition that means you’ll pay higher premiums.

Pros and cons of mortgage protection insurance

Like any insurance product, mortgage protection insurance involves trade-offs between cost, coverage and flexibility.

To decide if mortgage protection insurance is right for you, it’s important to understand its pros and cons.

Pros

• No medical exam required: Since you don’t need to have a medical exam to get this coverage, mortgage protection insurance might be the only option if you have health issues that make it difficult to get traditional life insurance coverage.
• Premiums are predictable: Your mortgage protection insurance premiums stay the same for the life of your policy. These predictable premiums make it easy to budget for your insurance.
• Peace of mind: Knowing that your home will be paid off if you pass away can give you and your beneficiaries valuable peace of mind.

Cons

• Higher cost: Mortgage protection insurance costs more than an equivalent life insurance policy for healthy buyers.
• Declining benefits: Since mortgage protection insurance pays off your mortgage balance, the policy’s benefits actually decline as you pay off your mortgage each month. Though the benefits shrink, you’ll still pay the same monthly premium.
• Limited usage: The benefits can only be used to pay the mortgage, and they’ll be paid directly to your mortgage lender. Your family can’t use the benefits for any other purposes.

Who should consider mortgage protection insurance?

Mortgage protection insurance may make sense depending on your situation. If your beneficiaries will inherit limited assets to cover the mortgage after you die, mortgage protection insurance can help pay for this major expense. It could help your family to be able to remain in your home without having to worry about the mortgage.

This coverage can also be an appealing option if you don’t qualify for affordable life insurance. While it’s more limited than a life insurance policy, mortgage protection insurance can still help you to cover the expense of your home’s mortgage for your beneficiaries after your death.

You might also choose mortgage protection insurance simply because you want to ensure that your heirs aren’t burdened with a mortgage payment. Ensuring your home will be paid off can help reduce their stress during a highly emotional time.

Alternatives and smart shopping tips

Carefully consider whether mortgage protection insurance or another type of insurance might be better for you. Term life or permanent life insurance might make more sense if you’re in good health and can qualify for low rates, as well as if you know your beneficiaries will need funds to pay for other expenses, like funeral costs, after your death.

Remember that mortgage protection insurance is optional, and lenders cannot require you to purchase this coverage. It’s up to you to decide whether this type of policy makes sense.

As you shop, take the time to get quotes from multiple providers. You may want to get quotes for different riders, too, which can extend your coverage so that it applies to different situations, like if you’re disabled and can’t work.

Be sure that you completely read the policy terms and that you understand any exclusions before you choose which policy is right for you.

Explore and compare some of today's top home insurance offers with the tool below, powered by Bankrate:

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A Health Savings Account (HSA) is often viewed as a tool for current medical expenses, but its "triple-tax advantage" makes it one of the most powerful and flexible retirement savings vehicles available. By strategically saving and investing your HSA funds during your working years, you can unlock the full potential of these accounts to cover health care costs and even supplement your income in retirement.

After age 65, the account can even serve as a supplemental income source. At that point, the 20% penalty for non-qualified medical withdrawals disappears, leaving the funds subject only to standard income tax — similar to a traditional IRA or 401(k).

The triple-tax advantage

The core strength of the HSA lies in its three layers of tax benefits:

• Tax-deductible contributions: Money you contribute goes in tax-free or is tax-deductible if you contribute post-tax
• Tax-free growth: Your investments and interest grow tax-free
• Tax-free withdrawals: Withdrawals are tax-free if used for qualified medical expenses at any age

When you reach retirement, the third benefit becomes even more versatile.

What Can You Spend HSA Funds On in Retirement?

Health care is often the single largest expense for retirees. Your HSA is perfectly designed to meet this need in the most tax-efficient way possible. The ability to reimburse yourself for Medicare premiums, coinsurance, co-payments and deductibles can put a significant sum back into your pocket.

At any age, money withdrawn for qualified medical expenses is completely tax-free and penalty-free. In retirement, this can include:

Covering long-term care costs

Long-term care expenses often go unplanned, although 56% of people will need long-term care services within their lifetime. The Life Insurance Marketing and Research Association (LIMRA) estimates that only 3% of Americans over 50 have any long-term coverage (LTC). As noted, you can use HSA funds to pay LTC insurance premiums for yourself or your spouse; a portion of that payment is tax-free as a qualified medical expense.

The amount you can withdraw annually that will be treated as qualified medical expenses depends on your age. It is equal to the IRS tax deductible limits for LTC insurance and is indexed for inflation annually.

Limits on HSA reimbursement for long-term care insurance premiums:

Age attained before close of year/2026 annual limit
40 or less $500
More than 40 but not more than 50 $930
More than 50 but not more than 60 $1,860
More than 60 but not more than 70 $4,960
More than 70 $6,200

Pay out-of-pocket now, reimburse yourself later

One strategy to stretch your HSA is to pay current medical expenses out-of-pocket with non-HSA funds and keep the receipts for reimbursement at a later date.

Because your HSA funds never expire, you can let the balance grow and invest tax-free for decades. Then, in retirement, you can reimburse yourself for those previous, qualified expenses — potentially pulling out a large, tax-free lump sum that can be used for any purpose. Be sure to keep meticulous records of all receipts.

Remember that any expenses incurred before you established your HSA aren’t considered qualified medical expenses and aren't eligible for reimbursement.

An important difference between HSAs and FSAs: Unlike FSA accounts, there is no time limit to request HSA reimbursements. You can pay for qualified medical expenses out of pocket and reimburse yourself days or even decades later. You might not need to submit receipts to your HSA provider to get reimbursed, but keep those receipts for tax purposes.

Favorable rule changes when you reach 65

Once you reach age 65, your HSA essentially transforms into an even more flexible Traditional IRA or 401(k). At this age, you can take penalty-free withdrawals for any reason.

• Before age 65: Withdrawals for non-medical expenses are taxed as ordinary income and subject to a 20% penalty.
• At age 65 and older: The 20% penalty disappears. Any withdrawal used for non-medical expenses is treated just like a withdrawal from a traditional 401(k) or IRA: it is taxed as ordinary income, but is penalty-free.

HSA "don’ts"

1. Don't contribute to your HSA if you're within six months of applying for Medicare

This can be a costly mistake. If you're 65 or older, your Part A coverage will start up to 6 months back from the date you sign up for Medicare or apply for benefits from Social Security. You're not eligible to make contributions to your HSA after you have Medicare. If your Medicare Part A coverage overlaps with when you made contributions, you may have to pay a tax penalty.

2. Don’t use your HSA for Medigap premiums

As Medigap premiums aren’t considered qualified expenses for HSA purposes, they will be subject to income taxes. As you get older, chances are good you’ll have other medical expenses that would be a better use of those funds, because those expenses allow you to take advantage of the HSA's most powerful advantage: tax-free withdrawals to pay medical expenses. And those funds will continue to grow when they remain in the account for use at a later time.

3. Avoid non-qualified withdrawals by obtaining medical necessity documentation

For any non-traditional expense you intend to treat as a qualified medical expense, ensure you have a letter of medical necessity from your provider. For instance, expenses for modifications to your home or vehicle due to a disability or physical limitation.

And keep all your receipts and invoices, especially for any lodging or travel expenses. This documentation can be essential if there are any questions about a claim.

Important considerations for retirees

• Stop contributing when enrolling in Medicare- A critical rule to remember: You cannot contribute to an HSA once you enroll in Medicare (Part A and/or Part B). And, because anyone receiving Social Security is automatically enrolled in Medicare Part A and Part B when they turn 65, it's essential to plan your final contributions carefully. You should stop contributing to your HSA six months before your intended Medicare enrollment date to avoid potential tax penalties.
• No required minimum distributions (RMDs)- Unlike traditional retirement accounts, 401(k)s, or traditional IRAs, an HSA is not subject to required minimum distributions (RMDs) at age 73. This allows your money to continue to grow tax-free for your entire life, making it an excellent asset for long-term health planning and estate purposes.
• The spouse and beneficiary factor- If your spouse is your beneficiary, the HSA can simply transfer to them upon your death, and they will continue to enjoy the same tax advantages. If a non-spouse is named as the beneficiary, the account typically loses its HSA status and becomes taxable upon transfer.

HSAs offer unique benefits to retirees

The strategic use of an HSA in retirement is financial planning. By maximizing contributions, investing wisely, and carefully documenting your medical receipts, you can ensure that your HSA provides the ultimate financial security — tax-free money for medical expenses and penalty-free flexibility for all other needs after age 65.

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There's a new threat that could force Americans to scrap their early-retirement plans: skyrocketing health care costs. The enhanced Affordable Care Act (ACA) subsidies that expired at the end of 2025. That means 24 million Americans will see a sharp spike in their health care costs unless Congress extends the money-saving premium tax credits.

The most at-risk segment of the population relying on ACA health insurance is middle-income Americans aged 50 to 64. This group is still years away from being eligible for Medicare coverage and faces a doubling or tripling of medical care costs, according to data from KFF, an independent health policy organization.

The scrapping of this key ACA subsidy, coupled with the estimated 18% increase in premiums for ACA Health Insurance Marketplace plans, is making health care unaffordable for many Americans. Early retirees and the self-employed, who don’t get health coverage at work or through Medicare, would see some of the steepest increases, KFF data show.

Half of ACA enrollees eligible for the enhanced tax credit are ages 50 to 64, according to KFF. "It’s a budget buster," said Jamie Cox, managing partner at Harris Financial Group. "Health insurance is there to basically save your life. But it can also kill your retirement."

Just how much will ACA premiums rise?

The out-of-pocket marketplace cost increases are sizable enough to blow a hole in many Americans' retirement plans.

A 50-year-old would see their annual costs nearly double from $5,328 to $9,828, KFF estimates. The enhanced subsidies kick in when an individual’s income is 400% higher than the federal poverty level, or income of around $62,600 or more.

A 60-year-old with an income just about the subsidy cutoff line ($62,700, or 401% of the federal poverty level), for example, could pay roughly $9,600 more per year, or $800 more a month for a mid-range ACA marketplace plan, according to KFF.

A 64-year-old nearing the Medicare start age of 65 could see their annual costs more than triple from $5,328 to $16,500, an annual increase of more than $11,000, adding nearly $1,000 to their monthly cost.

"Older marketplace enrollees face some of the largest financial burdens if the enhanced tax credits expire," KFF policy analyst Matt McGough noted in a blog post.

Premium payments in 2026 for people currently receiving the tax credit will more than double, from $888 in 2025 to $1,904 in 2026, if ACA enhanced premium tax credits expire, according to KFF.

It's a catch-22 for most Americans: Many can't afford health insurance, but they can't do without it, either.

Will Congress rescue ACA premium affordability?

There is, of course, hope that Congress will act soon to extend the enhanced subsidies. The House of Representatives on Jan. 8, 2026, passed a three-year extension of ACA subsidies. But it's unclear whether the Senate will take up the House measure, amend it, and sign off on it.

The Senate has been hammering out its own deal, which would extend the federal health-insurance subsidies for two years. This shorter extension window, though, would likely come with limits, such as income caps to reduce the number of Americans eligible for the subsidy and antifraud measures.

Stay tuned to see how the Senate moves forward on this key affordability issue early in 2026. Keep in mind as well that President Donald Trump has indicated that he may veto any efforts to extend ACA subsidies.

The ACA cost increases are a wake-up call. Americans who get coverage through the marketplace may get a brief reprieve if Congress extends the subsidies. But it doesn't change the longer-term affordability challenge: health care costs are becoming increasingly cost-prohibitive for many Americans and, as a result, are forcing many older Americans to redo the math to see if they are financially able to retire early or if soaring health insurance costs are effectively wrecking their plans.

The ever-rising cost of health care may also force early retirees who have already stopped working to revisit their decision and re-run the numbers to see if they can still afford to stay retired. The rising cost of health care might also emerge as a top budgeting concern for proponents of the so-called FIRE movement (Financial Independence Retire Early) who save the bulk of their income and live frugally so they can stop working as early as their 30s and 40s.

No doubt, health care costs, which have always been a concern for retirees, are now more top of mind than ever. "The cost of health care is one of the major issues and concerns for most of our clients and retirees," said Rob Williams, head of wealth management research at Charles Schwab. "So, if you're planning to retire early, making sure you can manage and pay for any health care costs you have is significant."

Health care challenge for everyone: building rising costs into a retirement plan

The challenge, of course, for anyone wanting to retire early or who is already retired but too young to qualify for Medicare, is to build these extra costs into their financial plan. Unfortunately, many Americans have not done so. One in five Americans (and 25% of Gen Xers between the ages of 46 and 61) say they have never considered health care needs during retirement, according to Fidelity Investments' most recent Retiree Health Care Estimate report. And nearly two of 10 Americans (17%) said they have "taken no action at all when it comes to planning for health expenses in retirement."

Adding to the financial challenge is the fact that the median retirement age is 62, or three years before Medicare eligibility, according to the Transamerica Center for Retirement Studies. The reasons people retire earlier than initially planned include health reasons (46%), job loss (16%), organizational changes (16%), job unhappiness (14%), and retirement buyout (9%), according to Transamerica. Somewhat troubling is the fact that only 21% retired early because they could afford to do so.

Cox says the health care cost challenge is not just an issue facing ACA marketplace users, but also a budgeting obstacle for all Americans, whether coverage is obtained through the marketplace, an employer, or directly from a health insurer. "This is a universal problem across both public and private health insurance," said Cox.

Harris Financial Group, for example, provides financial planning advice to Verizon employees and retirees that helps them understand and optimize the money and benefits they receive from the company. Cox says Verizon’s highly subsidized, once-stable union health care plan is also set for a steep premium increase in 2026.

"Health care costs have increased to the point where even my union people have seen their health care premiums double starting this year," said Cox. "Some people's premiums are going to go up from like $600 to $1,800. It's almost like a second mortgage."

The potential financial fallout from skyrocketing health care premiums is real for early retirees, says Cox. "It evaporates their discretionary spending budget," he adds. "Their discretionary budget is now health insurance. They're not taking trips or doing as many things retirees normally do. And many of them are trying to re-enter the workforce just to get health insurance."

Cox says one of his clients, an ex-Fortune 500 executive with plenty of money who was considering early retirement, opted instead to stay on the job to keep his affordable health insurance coverage.

One short-term fix is to dip into your emergency fund to pay the higher premiums. But tapping a rainy-day savings account over the long haul to make health insurance payments isn't ideal, says Williams. "An emergency fund is traditionally used to cover something like a car repair or some other emergency, not an ongoing expense like health care premiums," said Williams.

How early retirees can plan for rising health care costs

Build extra costs into your financial plan. If you can, make adjustments to your saving, spending, and investing to help you cover the higher health care costs. In short, if you want to retire early, build higher expected costs into your budget now. "Covering these higher medical expenses might require cutting other expenses in your budget, or lead some people to find part-time work to earn additional income," said Williams.

Withdraw from savings. Tapping savings, whether from a high-interest-bearing savings account, a brokerage account, or a retirement plan like a 401(k) or IRA, can help make up the difference between last year’s premiums and future higher premiums.

Digging into your retirement savings, however, is not ideal, as it will shrink your nest egg and reduce the growth potential of your retirement account, says Cox. "It's a more painful option," said Cox. Taking distributions from your retirement account, however, could make sense if you're close to age 65 when Medicare kicks in, adds Cox. "It’s not a great strategy if you're in your 50s," Cox added.

Wait it out until Medicare kicks in. If you're 63 or 64 and just a year or two away from Medicare, you might simply bite the bullet and crimp and save or tap savings to pay the higher premium until more affordable Medicare coverage kicks in at age 65. One of Cox's clients, a husband and spouse on Verizon's union health care plan, for example, both turn 65 this year. The couple's combined insurance premium will drop from $2,700 to $700 when they switch over to Medicare.

Shop around for a better deal. If you're seeking lower premiums, shop around. Just like shopping for a new car or big-ticket items like home appliances, conduct research to find a health care policy that offers similar coverage to 2025 at a lower sticker price.

Consider jettisoning adult children from your plan. You might be able to net savings if you take your adult children under age 26 off your family health care plan and put them on their own plan, says Cox. "People of this age tend to pay less in premiums because they're generally healthier," said Cox. This money-saving strategy can work if the employer's "family" premium is priced much higher than "employee + spouse" coverage and the adult child moves to a cheaper individual policy.

The bottom line: if your health care costs are going up sharply, you must find a way to "bridge the gaps." You must fund both the gap between your old premium and your new, higher premium, as well as the years before you are eligible for Medicare coverage, says Williams.

Said Williams: "Have you planned for that gap? What are your assets to bridge the gap? What strategies will you employ?"

Read More

• The Average Cost of Health Care by Age and US State
• Average Net Worth by Age: How Do You Measure Up?
• How to Retire at 50 or 55
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