Entries Tagged 'General Insurance' ↓

My office swayed a few days ago; yes it was an aftershock. Shortly afterwords, my phone rang consistently. I knew what was coming. Do you have Earthquake Insurance? A short time after, this girl named Irene came up the East Coast. Again the ringing began. Do you have Flood Insurance?

The answer to both questions is yes. Now that we are all in clean up mode and the worst is behind us, it is time for everyone to consider reviewing their insurance coverage. Earthquakes can be covered on your existing Homeowners Policy by endorsement or as a separate policy. Flood Insurance is available. Reach out to my office to review the options. The next quake and Irene are coming; we just don’t know when. Be prepared. Remember, insurance is an investment.

There are two main types of fixed annuities: life annuities and term certain annuities.

Let’s look at life annuities.

Fixed annuities are purchased from insurance companies or financial institutions with a lump-sum payment or a series of payments made over time.

The money invested in the annuity is guaranteed to earn a fixed rate of return throughout what is called the accumulation phase of the annuity.

Life annuities pay a predetermined amount each period until the death of the annuity holder.

Straight life annuities are simple.

They pay a set amount per period to the annuity holder until he or she dies.

There is no payout to beneficiaries when the annuity holder dies.

Because there is no other type of insurance component in this type of annuity, it is less expensive.

But there are several other kinds of life annuities.

They differ in the insurance components they offer the annuity holder.

In other words, they may alter the payout in the event of something negative happening to the annuity holder, such as sickness or early death.

For example, life annuities with a guaranteed term allow the annuity holder to designate a beneficiary, so if the annuity holder passes away before the term ends, the beneficiary will receive the sum of the money not paid out.

Similarly, joint life with last survivor annuities continue payments to the annuity holder’s spouse after the annuity holder dies.

They also allow the annuity holder to designate additional beneficiaries to receive payments in the event of a spouse’s sooner-than-expected death.

Annuities are clearly complicated.

It is therefore best to contact my office if you are interested in an annuity.

As a small-business owner, you are accustomed to taking risk.

After all, building a business takes a lot of hard work and effort with little guaranteed reward.

One way to reduce risk and save money on insurance premiums and claims is to know how to appropriately respond to an accident or injury.

Fortunately, with a bit of planning and preparation, it’s possible to dramatically impact the outcome of an accident.

Following are some tips to help you reduce risk and make sure everyone remains as safe as possible:

1. Remain Calm and Objective: Even if you suspect an employee contributed to the accident or that the accident is unrelated to the workplace, it is important to remain as levelheaded as possible. Treat every accident as legitimate and respond to the situation with appropriate measures, including first aid or medical attention, and refrain from voicing personal concerns, objections or accusations.

2. File Accident Reports: Workers’ compensation laws vary from state to state, but it is important to file an accident report as soon as possible if there are job-related injuries. Be sure to collect a statement from anyone involved in an accident, as well as from bystanders. Remember, several different agencies and organizations may be involved, including your commercial auto policy, small-business liability, personal umbrella policy and workers’ compensation, depending upon the nature of the accident and persons impacted. If you suspect foul play or intentional misrepresentation, contact the police and your insurance agent as soon as possible.

3. Document Everything: Take plenty of photographs, obtain written statements and retain all records related to an accident for at least seven years even if there were no additional claims. Obtain an accident report and copies of any other documents that may be pertinent. In the event a problem arises later on, you will have all the necessary information required to respond to a claim.

4. Prevention Is the Best Practice: Without a doubt, the best defense is a good offense when it comes to responding to accidents. Protect yourself by creating a comprehensive safety process that covers how accidents are to be reported, the use of company property and other expectations. Be sure every employee is provided with a copy when hired. It’s a good idea to work closely with your insurance agent to make sure the policy reflects the forms of coverage held by your company and to identify potential areas of concern.

5. Review Annually: Gaps in coverage can easily occur when new assets or employees are brought on board, so be sure to review policies and coverage options at least annually. Workers should be notified in writing of major modifications to the safety policy with a letter of acknowledgment included in personnel files for future reference.

6. Obtain Legal Advice When Needed: If you aren’t sure about your options, it might be worth the time and effort to have your attorney review items beforehand. Common examples include filling out insurance forms, meeting with insurance representatives and even signing checks. In most instances your insurance agent will be able to provide the guidance and information needed, but specialized circumstances may dictate the need for additional counsel or legal advice.

Enterprise Risk Management (ERM) is a term making the rounds through small business entities across the nation.

There are a number of things you should know about ERM.

ERM refers to the methods and processes adopted by a business to control risk.

Forms of Risk Commonly Managed

There are several areas that may fall under the ERM category:

• capital management
• financial management
• operational risk
• strategic risk

Each area presents unique liabilities, which can be detrimental to the health of a company. Properly managed, each possible problem is defined and then weighted according to the likelihood and impact. Steps are then taken to reduce risk.

Issues and Insight

Research indicates that nearly 45% of small business owners do not have an ERM in place, yet more than one in three also indicate they were caught off guard by an operational surprise. Unfortunately, in an effort to avoid problems and limit risk, some small business owners actually create even larger problems by implementing ineffective protocols or even illegal provisions. It’s essential to work with a knowledgeable insurance agent to avoid complications.

Those seeking funding should also implement an effective ERM as soon as possible. Standard and Poor’s and banks intend to incorporate ERM into credit rating scores by the end of 2010.

Flood insurance might be one of the most important forms of protection the average homeowner ever purchases.

Unfortunately, it’s also one of the most easily overlooked. A standard homeowners policy does not offer flood protection.

Following are some of the reasons flood insurance should be at the top of your insurance portfolio:

1. Revised FEMA Maps

Millions of homeowners across America have been surprised to learn they need to purchase flood insurance for the first time. New homebuyers and even sellers should make a point of obtaining up-to-date plot maps to determine if they fall within the new  flood zones implemented by the Federal Emergency Management Agency. Find out whether you are affected. Otherwise, the mortgage company is likely to purchase a policy on your behalf.

2. High Risk

Even if your property doesn’t fall within a known flood zone, it’s often a good idea to purchase a flood insurance policy. Flooding is one of the most frequent high-dollar claims submitted. In fact, flooding is more likely to take place than is fire or other named hazards.

3. Big Damage Claims

Many homeowners make the mistake of thinking they are covered for flood-related damages when, in fact, they are not. Flooding is caused by more than merely rising water. Other common causes of flood-related damage are broken pipes, storm surge, rain and, of course, flash flooding. Unfortunately, the time to obtain flood insurance is before it’s needed. Don’t wait until storm season to obtain quotes, as it’s often too late. Most flood policies go into effect 30 days after purchase.

To determine if you’re fully covered in the event of flood-related damage, simply call my office.

Remember, flood-related damage is the single most common cause of additional property destruction after a hurricane, storm surge or even earthquake.

Nearly every item in your home is subject to water damage, including drywall, electrical systems, furniture, and other belongings and household items. Don’t wait until the weather channel says a named storm is one state away and you’re now on the watch list.

Most investors understand that the basic benefit of fixed annuities is that they offer the potential for a guaranteed payment. Regardless of whether the economy or markets are performing well or poorly, an annuity pays a minimum amount of income every month. But just how much money should you put in an annuity versus other investments?

When it comes to fixed annuity allocation, some financial advisors recommend that you put no more than a third of your assets into annuities. Others recommend that you limit it to three-fourths of your assets. But that’s a big difference.

The reason for the discrepancy is that some financial advisors feel they can get better returns for their clients by investing in a diversified portfolio of securities. But that’s a harder sell today than it used to be, given the huge losses the stock market has experienced in the past few years.

So how much money should you allocate to a fixed annuity? As is the case with any element of a portfolio, fixed annuities are best used in moderation. That’s because they’re a compelling way to guarantee a certain amount of fixed income in retirement. If overdone, however, they can rob a portfolio of flexibility.

No single answer fits every investor, but one guideline is to use an annuity to cover your basic living expenses. You may have to put a significant part of your nest egg into the annuity to receive the amount you need, but you’ll know it will be there, through good times and bad.

Now you can get all the latest insurance updates from the Ed Stracar Blog as tweets. Follow me on twitter and receive automatic updates!

People visiting my site have seen this logo and wondered what it stood for. NSACE stands for National Society of Agents for Consumer Education. This is a group formed whose purpose is to provide communication and education with regard to insurance protection. My philosophy has always been that insurance is an investment of your hard earned dollars. I do not view insurance protection as a sales transaction, but rather a continuous fact finding excercise where I learn from the client and educate the carriers; I meet the needs and educate the insured. I say continous because our lives are constantly changing…new cars, relocation, additional family members, business transitions, health issues. The list goes on and on. We all experience it everyday. Your insurance investment is never stagnant. It needs to be revisited and adjusted through regular reviews. The NSACE understands the importance of communication, education, and consumer protection. This is why I am proud to be one of its charter members.

Have a question on what your insurance dollars are covering? Send me an email or visit my Protect You Better Website: http://delawareinsurance.protectyoubetter.org/

What you’ll discover in this report:

• Surprising secrets about what is and what is NOT covered in a standard Homeowner’s Policy for your boat
• Clear up the common confusion about the different kinds of “watercraft” insurance…most owners don’t know this!
• How to save money on boat insurance…
• A special kind of insurance you may need to have…depending on what you do with your boat…
• Insurance jargon demystified! What are you really getting? Find out here…

They are called pleasure boats or pleasure crafts, but, let’s face it, sometimes they’re a “pain.” They are expensive, to say the least — and potential danger comes with the pleasure.

They are, after your house(s) and maybe your car(s), possibly your most valued assets. You can choose to own and operate a boat, yacht or Jet Ski without insurance (although some marinas and yacht clubs won’t let you dock your craft unless you have coverage). However, that’s not a very smart choice.

* Note. If you have a homeowner’s insurance policy you may have some coverage for your watercraft but it is very, very minimal. A typical homeowners policy will pay as much as $1,000 to repair damage to your boat, but — guess what? — that damage has to occur while the boat is at your home. This is not exactly the kind of damage coverage you need. In addition, there may be some liability coverage. Some, but hardly enough.

You could gamble and not buy insurance for your watercraft, but that’s a big gamble. You’re risking not only losing or severely damaging the boat in an accident without compensation, but possibly your other assets if your boat causes damage and/or injuries to other boats and/or boaters.

Lots of Options…How to Choose

First, you need to know that there are three types of “boats.”

• Anything less than 16 feet long is usually called “personal watercraft” by insurers. This includes Jet Skis, Waverunners, Tigersharks, Wet Bikes and Sea Dog “cycle” style models, as well as Jazz and Rage “mini boats.”
• “Boats” are 16 feet to 25 feet, 11 inches.
• Anything at least 26 feet long is classified as a “yacht.”

You will find that insurers have varying appetites for these types of watercraft. For this insurance, smaller is often not better. In fact, personal watercraft tends to be more accident-prone than most kinds of boats and yachts.

Some insurers won’t provide coverage for your personal watercraft at all or will only provide coverage if it is part of a larger policy. Your policy should include coverage for injuries to you and your passengers, the craft itself, liability (for damage and injuries to other crafts and people) and theft.

* Note. If you use your watercraft for water-skiing, you need to get coverage for this exposure as well. (It usually needs to be added to a standard policy.) You can also get coverage for the trailer(s) you use to transport the watercraft.

Insurance for Powerboats, Sailboats

In the insurance world, “boats” are usually smaller powerboats and sailboats. Standard policies for boats cover damage to the craft, usually on what is called an “all-risk” basis. In this case, all-risk includes damage caused by fire, lightning, theft, vandalism and windstorms.

The coverage is usually available for the boat itself, outboard motor(s), the boat’s trailer and personal property on the craft that is part of the normal operation of the vessel. Some insurers offer separate coverage for fishing equipment, cell phones and computers that are aboard the boat.

The standard boat policy also provides liability coverage, which is usually offered in increments of $100,000 to as much as $1 million. Therefore, it is similar to auto insurance liability in terms of what is available.

Many standard policies also cover medical expenses incurred by you, your family and any other passengers on the boat. Some policies also provide coverage for injuries caused by uninsured boaters or by boaters who don’t have enough insurance. If this sounds like uninsured motorist coverage in an auto insurance policy, it basically serves the same purpose.

* Tip. If you’re shopping for boat insurance, it’s wise to consider only those policies that offer this coverage. Discuss this with your agent.

Insurance for Yachts

If your watercraft is 26 feet or longer, you will need to buy yacht insurance, which provides basically the same coverage as boat insurance, but the terms are different. Under a boat policy, coverage for damage to the craft is called “physical damage.”

Under a yacht policy, the term is “hull.” Liability coverage under a yacht policy carries the name “property and indemnity,” which insurance people often abbreviate to P&I. As with boat liability coverage, P&I is available in increments of $100,000. Depending on the size of your craft, you can buy P&I limits from $2 million to as much as $50 million.

* Note. Like boat insurance, you should seek a yacht policy that offers coverage for medical payments (for you and your passengers) and uninsured boaters.

The cost of your boat or yacht policy is based on a variety of factors: horsepower; how fast it moves (it can cost as much as 50% more to insure a speedboat than it does a sailboat of similar size); where it is to be used; age of the craft and experience of the vessel’s operator.

* Tip. Insurers often offer premium discounts of 5% to 20% to those boat/yacht owners who have taken an approved boating safety course. (In some states, such courses are required to operate a boat or yacht.) Premium discounts are available, from some insurers, for newer vessels and protective devices (depth finders, ship-to-shore radios, burglar alarms). You can also save money on the policy by electing to take a higher deductible.

Like boating itself, watercraft insurance is not cheap. As such, it truly pays to shop around. There are a lot of different policies and coverage options available. Some policies might be significantly cheaper than others, but they don’t offer the coverages you need.

* Tip. This is a complex area of insurance with lots of options. Talk to your agent. Let him or her assess the many options out there and find the coverage that best suits your needs and best protects your assets.

You’ve just started your vacation. You’ve arrived at your destination by plane, collected your luggage, and are in the process of renting a car. You’ve given the person behind the counter your driver’s license and credit card, and now you are being asked if you want to buy “coverage” from the rental car company.

Do you need it?

Probably not, but how can you be sure? The best way is to be prepared and know the answer to this question before you leave on your vacation.

Why shouldn’t you buy insurance from a rental car company? The person behind the counter is (usually) not a licensed insurance professional. He or she is not conversant with insurance laws and won’t know whether or not your personal auto policy covers you when you rent a vehicle (in most circumstances, it does).

Some rental car company personnel may say you are required to buy the coverage (not true) or you will be personally liable for any damage to the car while you’re renting it (most likely, not true).

This Coverage Is Incredibly Expensive

* Fact. While it’s true you could be making a costly mistake if you need the rental car coverage and don’t buy it, you’re also making a costly mistake if you buy it when you don’t need it.

Rental car insurance is incredibly expensive. On a daily basis, which is how it is sold, the rental car coverage can cost 10 to 20 times more than your personal auto policy. If you buy all the coverages offered by the rental car companies, you could easily double the daily cost of your rental vehicle.

So who needs to buy the rental car coverage? Well, here’s who doesn’t. If you have insurance for your own cars, including collision and comprehensive coverages, you don’t need the rental car insurance – provided you are not renting the vehicle for business purposes.

If you’re on vacation, no problem. Just say no. If you’re on vacation but planning to do some business, you’re probably OK. But you should talk to your auto insurance agent if you mix business and pleasure on the trips where you plan to rent a car.

* Note. One thing to keep in mind: Your collision and comprehensive coverages on your personal auto policy have deductibles (the amount you must pay before the insurance kicks in). Those deductibles apply to damage to rental cars as well.

What if You Don’t Carry Collision Coverage?

So what happens if you don’t carry collision and comprehensive coverages on your own cars? Many people don’t, particularly if they have vehicles that are at least 10 years old.

* Note. If you don’t have collision and comprehensive, your personal auto policy won’t cover damages to the rental car if it is in an accident, stolen, vandalized, collides with an animal or burns.

So what should you do?

You can risk it, not buy the rental car company’s collision damage waiver (CDW) or loss damage waiver (LDW), and hope you don’t have an accident or encounter anything that damages the vehicle. You’ll save money, but it might not do much for your peace of mind, particularly if you’re driving in a strange city or area.

* Tip. If you’re averse to risk, you probably should buy the CDW or LDW. Some rental car companies offer some options with their CDWs or LDWs. Some come with deductibles, like regular collision and comprehensive coverages, while others provide first-dollar coverage.

First-dollar coverage comes at a higher price and some options limit the coverage. In other words, after a certain amount of damage to the vehicle, say $5,000, you would be responsible for paying the remaining damage costs.

What if You Damage Another Vehicle When You’re Renting a Car?

What about damage or injuries you cause to other vehicles and people while you’re driving the rental car? If your personal auto policy includes liability insurance (most states require some level of such coverage), your policy will pay for any damage or injuries you cause to other cars or people – up to the limits of the policy, of course.

* Note. If you are comfortable with the amount of liability coverage you have for your own cars, you don’t need to buy additional liability insurance for vehicles you rent.

If you don’t have liability coverage – if you don’t have a car, you’re probably not going to carry auto insurance – you actually may not need to buy the rental car company’s liability policy, either.

Most states require rental car companies to provide some liability coverage to you at no charge. The limit of the free liability coverage is equal to the state’s minimum liability limits.

Is this enough? Probably not, and certainly not if you cause a serious accident.

The minimum liability limit requirements are something like no more than $15,000 for injuries to any one person, no more than $30,000 for injuries to all persons, and no more than $5,000 for damage to the vehicle(s) you hit. That’s not much at all.

* Tip. If you have any assets to protect, you should strongly consider purchasing the rental car company’s liability coverage, which costs $7 to $15 a day depending on the state and level of coverage you choose. Higher liability limits mean higher daily costs.

If you have any concerns about whether you need to buy the coverages offered by rental car companies, you should talk to your auto insurance agent. Rental car insurance can double your daily rate. That’s a lot to pay for something you don’t need.