Indians in Los Angeles
College Income Share Agreement

College Income Share Agreement

by Sudha Shan

What is a college income-share agreement? A college income-share agreement, or ISA, is a contract between a student and a college where a student receives education funding from the college today in exchange for agreeing to pay a percentage of future earnings to the college for a specified period of time after graduation. The idea behind ISAs is to minimize the need for private student loans, to give colleges a stake in their students' outcomes, and to give students the flexibility to pursue careers in lower-paying fields. Purdue University was the first college to introduce such a program in 2016. Under Purdue's ISA program, students who exhaust federal loans can fund their education by paying back a share of their future income, typically between 3% to 4% for up to 10 years after graduation, with repayment capped at 2.5 times the initial funding amount.1 A handful of other colleges also offer ISAs; terms and eligibility requirements vary among schools. ISAs are considered friendlier than private student loans because they don't charge interest, and monthly payments are based on a student's income. Typically, ISAs have a minimum income threshold, which means that no payment is due if a student's income falls below a certain salary level, and a payment cap, which is the maximum amount a student must pay back relative to the initial funding amount. For example, a payment cap of 1.5 means that a student will pay back only 1.5 times the initial funding amount. Even with a payment cap, a student's payment obligation ends after the stated fixed period of time, regardless of whether he or she has fully paid back the initial loan. 1 U.S. News & World Report, September 26, 2018 IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable--we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Copyright 2019 by Broadridge Investor Communication Solutions Inc. All Rights Reserved.
Back To School Traffic Laws.

Back To School Traffic Laws.

by Shiva Gupta

The Arcadia Police Department wants to remind our residents that students are headed back to school. Remember to allow a little extra time if your travels take you near any of the schools in Arcadia, or if you are taking your kids to school. The Arcadia Police Department Traffic Bureau hopes this 2019-2020 school year will be exciting and successful. With that in mind, we would like to remind all students and parents of the shared responsibility they have of understanding and obeying traffic laws that help maintain safety in and around our school zones. For this purpose, we have provided a list of the most commonly violated traffic laws in our City’s school zones, allowing you to make a conscious and informed effort to create a safe environment for your fellow students, and or your children. PARKING LAWS California Vehicle Code section 21458(a) describes rules for curb markings. 1. RED Curb indicates no stopping, standing, or parking, whether the vehicle is attended or unattended, (No Student Drop Off or Pick Up in Red Zones) 2. YELLOW Curb indicates stopping for the loading or unloading of passengers or freight (20 Minutes For Material & 3 Minutes For Passengers) 3. WHITE Curb indicates stopping for the loading or unloading of passengers (3 Minutes for Passengers) 4. GREEN Curb indicates time limit parking specified by local ordinance (24 & 30 Minute Zones) 5. BLUE Curb indicates parking limited exclusively to the vehicles of disabled persons V.C. 22500(H) DOUBLE PARKING Prohibits stopping, parking or standing of any attended/unattended vehicle on the roadway side of any vehicle stopped, parked or standing at the curb or edge of a highway (Often seen as parents drop off/pick up children in the lanes of traffic) V.C. 22500(b) Park in Cross Walk Prohibits the stopping, parking, or standing of any attended/unattended vehicle in a crosswalk V.C. 22500(e) Park in Front of Public Drive Prohibits stopping, parking, or standing of any attended/unattended vehicle in front of a public driveway V.C. 22500(i) Bus Zone Prohibits stopping, parking, or standing of any attended/unattended vehicle alongside a curb authorized for the loading and unloading of passengers of a bus, when indicated by a sign or red paint on the curb. V.C. 22502 Parking Over 18” from Right Hand Side of Curb / Parking on Wrong Side of Street Every vehicle stopped or parked upon a roadway…shall be stopped or parked with the right-handwheels of such vehicle parallel with and within 18 inches of the right-hand curb, except that motorcycles shall be parked with at least one wheel or fender touching the right-hand curb. V.C. 22514 Park Near Fire Hydrant No person shall stop, park, or leave standing any vehicle within 15 feet of a fire hydrant. EXCEPT, If the vehicle is attended by a licensed driver who is seated in the front seat and who can immediately move such vehicle in case of necessity. Side Note—If the curb next to the fire hydrant is painted red, the vehicle stopping or parking to facilitate student pick up or drop off could still be cited for stopping/parking in a red zone ENFORCEMENT Officers commonly enforce parking laws in school zones by means of video enforcement. Officers may use video cameras to record violations as they occur and then mail the registered owner of the violating vehicle a citation for the observed violation. It is important to remember that the registered owner is the person receiving the citation, not the driver of the vehicle. The registered owner is responsible to resolve the citation. If parking citations are not cleared, either by dismissal or payment, the registered owner may not be able to renew their vehicle’s registration until the citation has been cleared by the DMV. Vehicles that have five or more citations on file are subject to impound, per California Vehicle Code section 22651(i)(1). The enforcement of parking restrictions and traffic laws in our school zones helps maintain vehicle and pedestrian safety, reminds drivers and pedestrians of their responsibility to share the roadway, and hopefully serves as a deterrent to prevent persons from future rule-breaking. MOVING & NON-MOVING VIOLATIONS V.C. 22101(d) Disobey Traffic Control Devices (No Left Turn, No Turn on Red, Yield, or No U-turn Signs at an Intersection) When official traffic control devices are placed as required in subdivision (b) or (c), it shall be unlawful for any driver of a vehicle to disobey the directions of such official traffic control devices V.C. 21461(a) Failure to Obey a Posted Sign (No left turn, No U-Turn, No Student Drop Off Signs, etc) It is unlawful for a driver of a vehicle to fail to obey a sign or signal or to fail to obey a device erected or maintained by lawful authority of a public body or official. V.C. 22103 No U-turn in Residential District No person in a residential district shall make a U-turn when any other vehicle is approaching from either direction within 200 feet, except at an intersection when the approaching vehicle is controlled by an official traffic control device. V.C. 21950(a) Drivers Yield to Pedestrians in Crosswalk The driver of a vehicle shall yield the right of way to a pedestrian crossing the roadway within any marked crosswalk or within any unmarked crosswalk at an intersection. V.C. 21950(b) Pedestrian to Exercise Due Care This section does not relieve a pedestrian from the duty of using due care for his or her safety. No pedestrian may suddenly leave a curb or other place of safety and walk or run into the path of a vehicle that is so close as to constitute an immediate hazard. No pedestrian may unnecessarily stop or delay traffic while in a marked or unmarked crosswalk. V.C. 21950(c) Drivers to Exercise Due Care The driver of a vehicle approaching a pedestrian within any marked or unmarked crosswalk shall exercise all due care and shall reduce the speed of the vehicle or take any other action relating to the operation of the vehicle as necessary to safeguard the safety of pedestrians V.C. 21954(a) Pedestrians Outside of Crosswalks Every pedestrian upon a roadway at any point other than within a marked crosswalk or within an unmarked crosswalk at an intersection shall yield the right of way to all vehicles upon the roadway so near as to constitute an immediate hazard. V.C. 21955 Jaywalking Pedestrians shall not cross the roadway at any place except in a crosswalk between adjacent intersections controlled by traffic control signal devices or by police officers. (Example: Duarte Road between Santa Anita & El Monte = Jaywalking) V.C. 21100.3 Disobey a Crossing Guard It is unlawful for any person to disobey the traffic directions of a person appointed or authorized by local authority to regulate traffic pursuant to subdivision (e) of Section 21000 when such appointee is wearing an official insignia issued by the local authority and is acting in the course of his appointed duties. V.C. 22350 Unsafe Speed (School Zone) When signs are posted for a “School Zone—When Children Present”, the speed limit is reduced to 25 MPH. This applies whenever children are present (Before, During & After School). V.C. 23123(a) Talking on Cell Phone While Driving (18 + = Adult) & V.C. 23124 Cell Phone Under 18 Yrs. Adults shall not drive a vehicle while using a wireless telephone unless hands-free. Minors may not use cell or hands-free device. V.C. 23123.5 Texting While Driving A person shall not drive a motor vehicle while using an electronic wireless communication device to write, send or read texts. H&S 118948(a) Smoking in Vehicle It is unlawful for a person to smoke a pipe, cigar, or cigarette in a motor vehicle, whether in motion or at rest, in which there is a minor (someone under 18 years old). For the purpose of this section, “To smoke” means to have in one’s immediate possession a lighted pipe, cigar, or cigarette containing tobacco or any other plant. SEATBELT LAWS The driver and all occupants of a moving vehicle must properly wear safety belts, as they were designed to be worn. The shoulder strap must be worn over shoulders, not under. V.C. 21212(a) Helmet Laws A person under 18 years of age shall not operate a bicycle, a nonmotorized scooter, or a skateboard, nor wear in-line or roller skates, nor ride upon a bicycle, a nonmotorized scooter, or a skateboard as a passenger, upon a street, bikeway, as defined in Section 890.4 of the Streets and Highways Code, or any other public bicycle path or trail unless that person is wearing a properly fitted and fastened bicycle helmet that meets the standards of either the American Society for Testing and Materials (ASTM) or the United States Consumer Product Safety Commission (CPSC), or standards subsequently established by those entities. This requirement also applies to a person who rides upon a bicycle while in a restraining seat that is attached to the bicycle or in a trailer towed by the bicycle.

Do I Qualify For The 199A QBI Deduction ?

Do I Qualify For The 199A QBI Deduction ?

by MYRA Wealth… The Tax Cuts and Jobs Act introduced the 199A deduction in 2018. Taxpayers earning domestic income from a trade or business operating as sole proprietorships, partnerships, S corporations, or LLCs may be eligible for this deduction. This 20% deduction against qualified business income will be effective until the end of 2025 unless extended by Congress. While it is attractive, 199A has complex requirements. Here’s an overview of this new tax provision and how it may benefit you. What is the 199A Deduction? This deduction allows pass-through entities with domestic businesses to reduce their Qualified Business Income (QBI) by up to 20%. QBI refers to the U.S. income of the business excluding investment income from: Dividends and any dividend income equivalent Interest income not allocable to the business Capital gains and losses For a sole proprietor, the qualified business income (QBI) refers to the profit or loss from the business as reported on Schedule C of Form 1040. What does "Pass-Through Entities" refer to? Pass-Through Entities refer to S corporations, LLCs, sole proprietorships, and partnerships where the tax is imposed on the personal tax return of the owner and not on the business. In other words, the income "passes through" the business and falls on the individual. How do I know if my business is a pass-through entity? If you are not paying income tax for your business by filing a separate Corporate Tax Return (Form 1120) but you are declaring income from all sources including that business in your personal tax return (on Schedule C of Form 1040), your business is a pass-through entity. Where does the name "199A" come from? This deduction comes from Section 199A of the Tax Cuts and Jobs act, hence the name. It is also referred to as the 20% Qualified Business Income (QBI) of Pass-Through Entities since it applies to businesses where income is taxed on the personal tax return of the owner or the partner. Who needs to know about this deduction? Who can take this deduction? The 199A deduction is applicable to those who are earning income from a pass-through business but has exceptions. The amount of the deduction will also depend on certain thresholds. If you are at or below a taxable income of $315,000 (for joint filers) and $157,500 (for single filers), any type of pass-through business can take the full deduction. Above this income threshold, the deduction is based on whether you are a specified service trade or businesses (SSTB) or not. The law designates certain trades or businesses as SSTBs including the following: Athletics Accounting Health Actuarial sciences Law Consulting Investing Financial services Investment management Trading Any other business or trade whose primary asset is reliant on the skill or reputation of the company’s employees When the taxable income is between $315,000 to $415,000 (for joint filers) and $157,500 to $207,500 (for single filers), SSTBs and non-SSTBs can still get the deduction with limitations. Above the $415,000 / $207,500 thresholds, SSTBs are not allowed to apply the 199A deduction. Meanwhile, non-SSTBS will compute the deduction subject to the limit imposed by wages paid by the business and/or the property owned. Anyone performing services as an employee is disqualified from taking this deduction. Why should you care? The 199A deduction provides significant tax savings. With the 20% deduction, a taxpayer on the top bracket paying 37% will only pay taxes based on 80% of their QBI. This decreases the effective tax rate to 29.6%. How does it work? Anyone who owns or is a partner in a pass-through business, you may qualify for the 199A deduction. Here is a flow chart to help you determine how 199A works. How can you maximize your 199A deduction? 1. Keep your income under the threshold. Below the $315,000 threshold for joint filers and $157,500 threshold for other taxpayers, the deduction is less restrictive. The nature of your business will not matter either. If your income goes over the limit, consider accelerating deductions, deferring income, or making additional contributions to your retirement plans including IRAs, 401(k)s, and defined-benefit plans. 2. Make changes to owner wages. You can’t get a 199A deduction on your income from compensation. To maximize QBI and get a larger 199A deduction, you can decrease the compensation you receive as long as the amount is still reasonable compensation. Take note that this compensation will be considered under the W-2 limitation. 3. Shift money from guaranteed payments to income. Avoid guaranteed payments to partners since this will not increase the wage limitation computation or the QBI. A better way to enjoy benefits under the 199A deduction is to opt for priority allocation of profits. Doing this can be tedious as the partners have to renegotiate an allocation with substantial economic effect. They need to amend the partnership agreement. 4. Invest in REITs. Income from qualified REITs and Publicly Traded Partnerships (PTPs) are not subject to the SSTB limitation or a W-2 limitation. These income sources are eligible for a 20 percent deduction. The only component to consider is the overall limit based on the taxable income over net capital gains. How can you “structure” to avoid personal service business designation? Due to the explicit disqualification of businesses engaged in providing personal services, many taxpayers are looking for ways to be eligible for the deduction. There is a de minimis exception for SSTB. This exception sets a minimum threshold for businesses to escape the SSTB designation in any of the following circumstances: Gross receipts from SSTB is 10% or less if total gross receipts is $25 million or less, or Gross receipts from SSTB is 5% or less if total gross receipts is more than $25 million Taxpayers looking to infuse qualified business into a disqualified business have to meet the requirements above to get the 20% deduction under 199A. Another approach is to create a separate entity which provides business and administrative support to a disqualified business. Forming a new LLC to provide alternative services to the business is safer. For instance, if an LLC leases a building to the business, that LLC can qualify for 199A deduction provided that rental payments are at a justifiable rate. Main Takeaways About the 199A Deduction For SSTBs the best way to enjoy the 199A deduction is to keep taxable income below the threshold. Under the new tax law, no entity is penalized but many businesses may be disqualified from taking the 199A deduction. Businesses other than SSTBs should consider strategies to increase W-2 wages if their income is above the threshold. Plan strategies on how to increase or decrease QBI depending on your income level. Plan with Caution: Beware of Anti-Abuse Rules The 199A deduction is a new tax item which is open to interpretation. In fact, the IRS just issued a new regulation to guide taxpayers. Always keep anti-abuse rules in mind when drafting a tax minimization plan. The IRS and the Treasury have specific rules for employees shifting to independent contractors and for SSTB businesses creating another entity to get the 199A deduction. At this point, it’s better to consult an expert to have a solid grasp of your options and if the strategies you plan to implement is actionable. While understanding this deduction provides significant tax savings, remember that 199A is just a single consideration of your tax-planning roadmap. You need to think how the recent changes in the tax law affect you on a macro level. Doing this will help you implement a better strategy to minimize taxes. Looking for help with the 199A QBI Deduction or your 2018 Tax Filing? Are you looking for financial advice tailored to your unique needs as a US immigrant? Get In Touch with a MYRA Wealth Advisor today or learn about our Services.

Can I Use Restricted Stock Units To Qualify For A Mortgage?

Can I Use Restricted Stock Units To Qualify For A Mortgage?

by MYRA Wealth

Is your employer offering restricted stock units as part of their compensation package? When it comes time to apply for a mortgage for a home purchase, one logical question is: do my RSUs count as part of my income?

Myth 2 : Life Insurance Through your Job Is Sufficient

Myth 2 : Life Insurance Through your Job Is Sufficient

by Financial Literacy

Group Life Insurance Can Give People a False Sense of Security A life insurance policy provided through your job is a great benefit, but it may not provide enough protection for you and your family. Life insurance from your employer, called group term life insurance, is offered for free or at a low cost, and typically provides basic coverage of at least one year of your salary. Some employers offer inexpensive supplemental life insurance of one to three times an employee’s salary. Usually, a medical exam is not required. This type of life insurance has its pluses and minuses. Its advantages include: Affordability: Employers often offer basic coverage at no cost or for a small fee. And supplemental coverage generally costs less than an individual term life insurance policy of the same face value. Insurability: Most people qualify for coverage under a group life insurance policy. It also provides for people with health issues, which could make them uninsurable otherwise, or require them to pay high premium amounts for the insurance they need. Convenience: It’s easy to sign up or qualify for, and generally a medical exam is not required. The disadvantages are: No Portability: In most cases, your coverage from a group life insurance policy ends when the job ends. In circumstances where you can continue the coverage, you are responsible for the entire cost, and you may have to take a medical exam. No options: Your employer determines the features of the life insurance policy, so you may be missing out on a product that better suits your needs. Fiercely Protect Your Family and Your Future It’s up to you to get life insurance protection that safeguards your family and fits your needs, whether or not you remain with your employer. Contact a licensed WFG insurance agent for help finding a life insurance policy that works for you.
ICE is at your door. What do you do?

ICE is at your door. What do you do?

by homeis

Immigration and Customs Enforcement (ICE) — the federal law enforcement agency in charge of arresting, detaining, and deporting undocumented immigrants or documented immigrants with criminal convictions — is reportedly begiun nationwide raids, potentially impacting thousands of immigrant families.

Dealing with law enforcement can be stressful, so it’s important to know your rights before you’re face-to-face with ICE agents. While there’s never any guarantee that law enforcement officers will follow the law, here’s what they can and can’t legally do to you and what you can legally demand.

Don’t Open the Door:

Like police, ICE can’t enter your home without a warrant signed by a judge. You can ask ICE to slide their document under the door, if they have one, to determine whether or not it's a judicial warrant.

Ask to Speak to a Lawyer:

A good immigration lawyer can help guide clients through the complicated and often confusing system of immigration law, so find one in your area and discuss your status with them, not with law enforcement. If you're at risk, try to speak with an attorney as soon as possible.

The American Immigration Lawyers Association’s Immigration Lawyer Search lets you specify what kind of immigration law you need help with, i.e., “Deportation - Removal,” and search your local area if you enter a city name or zip code; you can even search by last name if you’re familiar with a lawyer in your area by name but not sure how to find them.

Remain Silent or Tell ICE You Wish to Do So:

You have the right to remain silent in any interaction with an ICE agent, and you can tell them so. What you say can be used against you in immigration court or deportation proceedings, so always be cautious of what you say to ICE or law enforcement and ask to speak to a lawyer before any communication takes place.

Don’t Sign Anything:

Unless you’ve already spoken to a lawyer who advises it you shouldn’t sign any documents ICE asks you to. According to the Miami Herald, signing a document provided by ICE may mean you’re signing your own deportation order.

Don’t Lie or Provide False Documents:

Lying to ICE agents can be dangerous. Providing false documents can be used against you in court proceedings.

Don’t Flee or Resist Arrest:

If you run from ICE, the results can be deadly not just legally dangerous. People who help an immigrant escape ICE can be charged with things like obstruction of justice by the Department of Justice, as was the case with a judge who let an immigrant escape after a court hearing. People who attempt to physically stop an arrest can also be charged with resisting a public officer.

You Don’t Have to Tell Them Where Someone Else Is:

You’re under no obligation to tell ICE where someone they’re looking for is, but you shouldn’t lie. Instead, ask the agents to leave contact information.

You’re Allowed to Ask for an Interpreter:

If an immigrant placed under arrest is not an English-speaker, they can ask for an interpreter during their detention process with ICE.

You Should Make a Plan With Family or Loved Ones:

In the event you are detained, it’s wise to have an action plan in place to handle any immediate concerns like child and pet care, and long-term issues like home maintenance and collecting mail. Attorneys also advise that loved ones have on hand the name and contact information for an attorney so they can make contact in the event of an arrest.

Keep Learning and Building Networks:

No one resource can prepare you for every possible ICE raid. But massive compilations of resources that cover workplace considerations, community preparedness, and more are available online from the information service Informed Immigrant and as collaboration projects between immigration groups.

Stay Safe homeis!

What are the terms and deductions on my pay stub?

What are the terms and deductions on my pay stub?

by MYRA Wealth

Your American pay stub may look foreign to you. Here's a guide to understanding all the terms and deductions. Plus: what to do if there's a mistake on your pay stub.…

Visa-free travel for Indians with US Visa

Visa-free travel for Indians with US Visa

by homeis

An Indian passport allows you to travel visa free to a few countries like Nepal, Bhutan, HongKong, parts of the Caribbean and even Ecuador and Haiti! However, your Indian Passport does not give you the same travel privileges that your American friends enjoy.

Thankfully, your US visa adds more power to your travel plans. Your US Visa can enable you to travel visa free to several amazing destinations worldwide. 

Countries to which you can easily travel with your US Visa:

  1. Aruba: Indian citizens with a valid US Visa can stay up to 30 days)
  2. Albania: Valid multiple entry USV isa lets you stay up to 90 days 
  3. Antigua and Barbuda: You can get a visa on arrival if you have a valid visa for the USA or Canada
  4. Bermuda: US multiple entry visa holders can stay up to 90 days
  5. Belize: No visa required for holders of multiple entry USA Visa holders however Indian nationals have to pay a repatriation fee.
  6. Colombia: Visa not required for Indians with a valid US Visa
  7. Costa Rica: 30 days for valid US visa holders
  8. Dominican Republic: 90 days for holders of a valid US Visa
  9. Georgia: 90 days for holders of valid US Visa
  10. Guatemala: No visa required for holders of valid US Visa
  11. Honduras: Visa free entry to holders of a valid US visa
  12. Mexico: No visa required for valid US visa holders for tourist or even business purposes
  13. Montenegro: 30 days for valid US visa holders
  14. Nicaragua: 90 days with a fee of USD 20 for valid US visa holders
  15. Northern Marianas: No visa required for US visa holders as it is part of the US commonwealth
  16. Panama: No visa required for valid US visa holders
  17. Philippines: 14 days visa free for valid US visa holders
  18. Puerto Rico: No visa required for valid US visa holders
  19. Serbia: No visa required for 90 days for valid US visa holders 
  20. Taiwan : 30 day online travel authority available to Indians with valid US visa 

Happy Travels!

Behind the curtain: How your insurance premium is determined

Behind the curtain: How your insurance premium is determined

by Financial Literacy

Ever wonder why you’re paying the premium you’re paying? It’s not arbitrary. Read on to take a peek into some factors that can determine the amount you’ll pay. An insurance company acts as source of money to pay benefactors in case an insurance contract is triggered. Insurance companies use statistics and probability projections to determine how much money someone should pay into the pool based on the probability that person will make an insurance claim. There are many factors that play into this premium amount, but typically those who are more likely to make a claim are required to pay more into the pool. How insurance works The concept itself is relatively simple: bad things happen sometimes and people want to avoid financial ruin that could arise from those bad things. To maintain peace of mind, or sometimes by law, people and/or companies will obtain insurance to reduce the risk of ruin. People also use insurance to “make themselves whole” again after financial issue, such as a car accident or the loss of income. All those who want to obtain an insurance policy apply to be part of a pool. The insurance company then calculates how many people are in the pool, how much money they’ll probably need to pay insurance claims, then calculate each individual’s risk to the company. For example, let’s take 500 people who want car insurance, and they drive similar cars in similar driving styles. Out of these 500 people, the company analyzes historical data from the pool and then anticipates that three people per month will make claims. Additionally, the company calculates the claim amounts based on past data and the characteristics of pool members, like driving style, location, and type of vehicle. Then the insurer adds up those claims, divides the amount by the number of members (500 here), and tells each member to pay 1/500th of the claim amount. The result is that no single person is devastated by a single catastrophic event, all 500 people have a way to cover themselves if that event happens to them, and each person only pays 1/500th of a claim each month. Which factors affect premiums Which factors affect premiums on an insurance policy vary widely across insurance types. Driving style and vehicle value are obvious determining factors in car insurance. But so are other factors you may not be able to change, like location: those who commute to work spend more time in their cars and thus increase the probability of having an accident, simply for being in the car longer. Health and life insurance focus on healthy lifestyles. If you’re more likely to live longer and require less medical attention, the lower your premiums. Renters and homeowners insurance consider the value of the property and the contents therein. Insurance policies will also vary based on the amount of coverage they offer. If your fire insurance only covers $2,000 worth of possessions, all things being equal, you’re probably going to pay a lower premium than someone who wants $20,000 of coverage. Reducing your premiums To avoid frequently making lower-risk members pay for the claims of higher-risk members, not everyone is thrown together in the same pool. If you can adjust your personal factors so that you’re entered into a different pool, you might see substantial reductions in your insurance premium. Your insurance company or agent should be able to help you identify which factors you score high for in riskiness so you can try to reduce your costs. For example, if you smoke, quitting may greatly reduce your premiums (although you may have a waiting period like 12 months after you quit in order to qualify as a non-smoker). If you have several speeding tickets, ask how much a driving school certificate might help reduce your premiums. The takeaway here is that your riskiness is based on a quantification of factors and the probability that any one of those factors will trigger a claim. The expected cost of covering the claim is then multiplied by the probability the claim will occur. Similarly risky people will be grouped together, then asked to pay their portion into the pool of expected claim payouts. Changes you can make in your lifestyle may add up to significant savings with your premiums.