Smart Money: Local insurance agents provide problem-solving ability

Bruce Williams is a national radio talk show host and syndicated columnist.

Dear Bruce: I need to price check some car insurance and don't know where to go. I am afraid of giving so much information on the Internet. P.S. I have teens. J.L. Lindstrom, Calif.

Dear J.L.: Lots of luck. Your postscript may be goosing the number substantially, since no insurance company is enthusiastic about insuring a teen-age driver. You will have to check to see if your area has competitive terms or if you have to take what you can get. I would dissuade you from using the Internet.

While you may pay a little more, I believe that you are far wiser to have a local agent. There are some direct companies that may be a little cheaper, but, in my opinion, they are not the best buy.

Insurance is a service-oriented enterprise, and I want a living, breathing, local person that I can deal with in the event of problems.

That said, there are one or two national companies that do not use an agency staff which have earned a good reputation.

Dear Bruce: I recently paid my homeowners insurance for one year. The insurance company apparently punched in the wrong numbers and took a lot less money out of my checking account. I immediately sent a second check, because I didn't want to jeopardize my insurance. The bank figured out what they had done wrong and took the entire balance of the first check plus the second.

As a consequence, I was without funds for eight days. They did return the extra money, but I wanted to be certain that I was never without coverage. Was there anything else I could have done? S.F., Grass Valley, Calif.

Dear S.F.: The first thing that you should have done, assuming that you have an agent, was to apprise him of the problem and let him deal with the insurance company.

He could have assured you in writing that there would be no interruption of coverage because of the mistake. In doing what you did, you effectively set yourself up.

In this computer world, it's just people punching in numbers nothing personal. I think that it was straightened out rather expeditiously. I could see a problem of this kind going on for months.

Dear Bruce: We have had a wonderful little dog for almost three years. For whatever reason, he has suddenly taken to nipping people when they approach him, so we are concerned about liability. He hasn't done any damage, but there's always the possibility.

How do we handle this? Don't tell us to get rid of the dog; that's not going to happen. C.H., via e-mail

Dear C.H.: One thing that comes to mind is that you might consider neutering your dog, if it has not been done. Discuss this with your vet. Oftentimes male animals that have been neutered have better tempers.

Hopefully, you have a homeowners or renters insurance policy this would protect you in the event of liability. In most states, if a dog bites, no matter the provocation (with a couple of exceptions), the dog is wrong.

I hesitate to suggest a muzzle, but if he's going to be exposed to people, that might be the only solution.

Keep the dog on a leash and teach him proper behavior.

Check with your attorney, but I believe that he or she will tell you it's unwise to put a "beware of dog" sign up on your home. It may indicate you are aware of a problem and increase your liability. Please consult your attorney in this matter.

Dear Bruce: A large life insurance company suggested I invest a large sum of money ($50,000) in a fixed annuity as a tax shelter for these funds during this time of economic downturn.

The interest on the annuity is currently in the 4 percent range, which is better than the 2.25 percent that the money is earning in a CD.

Could you advise me on the other options? Is it wise to lock this money into an annuity for six years?

If I want any of it, I have to borrow my own money back at 8 percent. I'd be interested in your comments on this. J.J., Milton, Fla.

Dear J.J.: Given the volume of inquiries on this topic, it needs to be addressed once again.

Generally speaking, I am not enthusiastic about annuities for the very reason you outline. They are guaranteed in the neighborhood of 4 percent, but if you have to get at your money for whatever reason in the first six years, you will be heavily penalized.

I don't know that there is any great advantage, other than some contracts allow you to move the money from one investment to another without any consequence. Unless you know that you will have almost no need for the capital, it's not a good move.

If you were to buy a long-term (five-year) CD, there would be penalties for withdrawing your money.