Consumer questions: Cost of living in SF

January 23, 2009 12:00:00 AM PST
Michael Finney answers your consumer questions on homeowner's insurance, cost of living in San Francisco, and the worth of the dollar

Collecting homeowner's insurance

Question: "I have a question on insurance. I have a homeowner's association and they paid for my fire and structure insurance, and then I accidentally paid for different coverage. Basically it's the same thing for less, 10 years. What recourse do I have collecting from my old insurance?"

Answer: He probably thought he bought the same thing, but it's slightly different. He probably overpaid because he bought structure and his homeowner's insurance already covers that. But what he is also getting covered is everything in his home, so it's probably not as bad as he thought. Does he have any recourse? Unfortunately, not. However, what he can do is talk to his insurance company and ask them to kick him back some of the money in order to keep him as a customer.

How low can the dollar go?

Question: "Do you think it's possible that the U.S. dollar eventually, over time, goes to zero given our crazy deficits and massive trade deficits in the world?"

Answer: It is unlikely that will occur. That said, most rich people keep about 10 percent in gold, platinum, silver, etc., just in case. So if you want to hedge your bets you can head that way. More likely what we're going to see is massive inflation at about two, three, four years from now. So as inflation moves up you have to keep an eye so that your investments and savings follow that. Expect the dollar to bounce back in the long-term, but not the short-term.

Cost of living in San Francisco

Question: "Where is San Francisco ranked among the most expensive cities to live in?"

Answer: As expensive as San Francisco is, it's probably not as bad as you think. San Francisco is now No. 5 in the nation. Somehow, Los Angeles is more expensive. The official Ford's ranking in order are New York, Los Angeles and Miami. Worldwide, San Francisco is ranked 78th.

Spencer's Question: " If the Obama administration is successful in getting banks to lend more money, will we start to see better interest rates on our savings?"

Answer: We're expecting our savings rates to go up because we think banks are going to come back to the way we used to use them 20 years ago. For the last 10 years, even 15, if you had money in a bank you would receive 0.8 percent in interest. There was no reason to put your money there. They think now that banking is going to go back to the way it was. So what we're looking for, not immediately, but as inflation takes off and banks start competing for the money and we start lending in more normal patterns, we think that's what we're going to see and that interest rates are going to go up.

For more of Michael Finney's consumer stories and advice, visit 7 On Your Side.