Entries Tagged 'Personal Insurance' ↓

During times of grief, insurance and taxes are the farthest things from your mind, but they must be dealt with at some point. If you’ve recently inherited a home from a loved one, there are some important details that you may not have considered.

Think insurance first

One of the first things you’ll need to do is contact your insurance company. Just because the occupant of the house expired doesn’t mean the policy has as well. Ask the insurance company to add your name as the primary insured person, and check to see how long the policy will remain active. This will ensure that any claims filed during this period will be covered.

If you choose to keep the inherited property, it’s a wise move to review the insurance policy before automatically opting for the same coverage. Depending on the area, a home could have appreciated greatly over the years, and the coverage amount needs to reflect current value.

If you rent it

If you choose to rent out the property, speak to my office about additional coverage specifically tailored to rental properties. You’ll likely need to increase your liability coverage and revise the personal property section of your policy.

Although your insurance policy regards a home as a structure, our office doesn’t; we understand the stress and can help you through the tough decisions so your inheritance will pay off, either as an option to live in or as a source of rental income or cash from its sale.

Paying for one’s own vehicle in addition to gas and insurance is just too costly for many Americans today, according to Matt Moore, vice-president of the Highway Loss Data Institute (HLDI).

As a result, the number of people who are using other methods of getting from place to place – such as car shares or rentals – is on the rise.

But if you don’t own your own vehicle, you don’t need auto insurance – right? Wrong. In some states, you aren’t allowed to drive anyone else’s vehicle without your own insurance. But fortunately, “named non-owners insurance” is available for those who don’t own vehicles, but may rent or drive others’ cars.

Named non-owners insurance provides bodily injury and property damage coverage, and is attached not to a vehicle, but to the “named” policyholder. It covers you in any vehicle you drive. Without it, you could be sued if you cause an accident driving someone else’s vehicle. For example, you borrow your friend’s car and cause an accident. If he or she has minimum liability on the car, and the liability coverage maxes out, your named non-owner policy will kick in to cover what’s left.

This coverage works for those who regularly rent cars or drive others’ vehicles, car-share participants, and those who are required to file an SR-22. Generally, named non-owners insurance is a great option for many people.

If you plan to own a car sometime in the future, it maintains your good-driver status, but more importantly, it offers peace of mind.

When buying car insurance, many people think they know what they’re doing, but are unaware of some of the misconceptions they hold that may lead to some serious mistakes. This is particularly true when buying coverage without professional guidance. My office is a great resource in helping you avoid the following five common mistakes made when buying auto insurance.

Assuming state minimum liability limits are sufficient: Everyone likes to save money, but you need to balance that with ensuring you are getting adequate protection. State minimums are not enough. For the extra, say, $10 you save by paying only for state minimum coverage, you may risk being underinsured and facing $300,000 in out-of-pocket costs as a result.

Raising deductibles to $1,000 to save $10: Unless you’re a high-risk driver who is paying thousands of dollars for full coverage, increasing your deductibles – particularly comprehensive deductibles – won’t pay. Reserve that major choice in case you should have a major violation or a series of accidents and tickets.

Leaving out information about household drivers: Sometimes you just don’t think: You might believe you can save by not mentioning household drivers who would likely generate higher premiums. In fact, you’re actually opening yourself up to denied claims or a felony charge for insurance fraud.

Buying collision coverage for a 10-year-old car: Unless it’s a stated value classic or custom car, you don’t need to pay full coverage for damage to your vehicle. Effectively, you may be paying more in premiums than the car’s worth. The best rule of thumb: Once annual premiums for full coverage are over 10 percent of current value, drop your collision coverage.

Not insuring custom parts or modifications: If you’ve sunk $10,000 on rims, tinted windows, top-of-the-line stereo systems and chrome, you need to protect your investment. Some policies may cover up to $2,500 in custom parts, but that’s obviously insufficient.

In the U.S., there are more than 280,000 regulated “home daycares” (also known as “family daycares”) that are run out of residences. It seems that in-home daycare is a popular choice for parents . . . and a booming business. Whether you operate a daycare center or simply provide childcare for family or friends, if you receive compensation for it, the operation becomes commercial, with the attendant risks and legal concerns. All childcare providers are potential lawsuit targets, so at minimum, you’ll need liability protection. Here are some facts you should be aware of:

Homeowners insurance: As of 1991, homeowners insurance excludes liability protection related to home-based commercial activities. Furthermore, the majority of homeowners insurance policies specifically exclude liability coverage for claims arising from home childcare businesses. Homeowners insurance endorsements may provide limited protection, but few insurers offer it. When it is available, it’s often restricted, limiting you to the care of three or four.

Coverage: Business liability insurance is the best choice. There are a range of commercial childcare policies, many offering protection for professional liability claims, which homeowners insurance endorsements don’t cover. These policies differ greatly in coverage and exclusions. Usually, there are exclusions for claims dealing with the administration of medicine, field trips, transportation, pets, or “attractive nuisances,” such as pools or trampolines.

As for liability limits, you should have at least $1 million of coverage on a per-claim occurrence.

Have you ever looked at your insurance policy and wondered what these two lines mean?

• Uninsured/Underinsured Motorists Coverage Property Damage (UMPD/UIM-PD)
• Uninsured/Underinsured Motorists Coverage Bodily Injury (UMBI/UIM-BI)

It’s not as it seems – you’re not paying for coverage for people who can’t afford it, you’re paying to protect yourself. UMBI pays for your injuries, and UMPD, for your vehicle’s damages if you’re involved in an accident with another driver who either doesn’t have insurance coverage or doesn’t carry sufficient insurance to pay for the damage. It also kicks in if he or she commits a hit-and-run. For example:

Jack doesn’t have insurance. He crashes into you, leaving you with $50,000 in medical bills and $15,000 in vehicle damages. Your policy’s UMBI/UMPD would pay for both, up to its UMBI/UMPD limits.

You live in Delaware, which requires $15,000 per person/$30,000 per accident in bodily injury coverage, and $10,000 in property damage liability. Jack only carries state minimum liability limits. He crashes into you, resulting in $50,000 in your medical bills and $15,000 in vehicle damage. His policy would pay $30,000 of your medical bills, $10,000 towards your car’s damage, and your UIM-PD/UIM-BI would pay the difference.

Always match UMBI/UMPD limits to your liability limits – don’t insure someone else for more (or less) than you insure yourself.

If you own vacant land, you may assume it doesn’t need insurance, but unfortunately, that’s not true.

Vacant land can be a breeding ground for liability lawsuits. You’re responsible for what happens on your property, meaning any accidents to others could cause you big headaches. Although you’re not legally required to carry vacant land insurance, doing so will protect your other assets. If someone is hurt on your property, you could be sued. Vacant land insurance will help pay for injured parties’ medical expenses, legal expenses, and certain types of property damage.

Why do I need vacant land insurance?

If you suspect trespassers may be using your land, you probably need it; if you permit people to use your land, and they pay you for the privilege, you’re liable for anything that may happen to them. Even if they don’t pay, you’re liable, but not to the same extent.

What can happen?

• Hunters and fishermen pose heightened risks of injuries or fatal wounds. Even when it’s something that could be considered their fault, such as falling into a creek.
• ATV accidents: There were 1,701 ATV rider deaths during a five-year study, conducted by The Insurance Institute for Highway Safety in 2013. One could have been on your land.
• Hikers unfamiliar with the terrain can be injured, with resulting liability claims.

Protect your assets

Insuring land isn’t difficult, and it’s reasonably priced, especially if it’s an extension of homeowners or farmers liability policies. However, you may also need umbrella insurance, which will add liability coverage from $1 million to $5 million. If a lawsuit maxes out a homeowners or farmers policy liability limits, this coverage kicks in.

To decide if you need vacant land insurance, consider your land’s current use and assess possible risks. Also, know your state’s landowner laws. We will help you determine if and what coverage you may need.

When buying auto insurance, you may be tempted to opt for the liability limits your state legally requires you to carry, and pay lower premiums. However, this can be a dangerous decision.

If you’re at fault for an accident, the liability portion of your policy would pay for two things:

• Bodily injury liability would pay for another person’s medical expenses.
• Property damage liability would pay for damage you cause to another person’s property.

If damages and medical expenses exceed the policy’s limits, you’re responsible for them out-of-pocket. If you can’t pay out-of-pocket, you could be sued, and if found liable by courts, your assets could be seized or wages garnisheed.

According to the AAA, the average auto accident costs roughly $26,000. In some states, required liability limits would barely begin to cover the costs of repairing or replacing vehicles, other property damage, or medical expenses.

For example, Ohio only requires $12,500 in bodily injury coverage and $7,500 in property damage protection. If you plow into a Porsche with two people inside who require emergency medical care, you could end up paying hundreds of thousands of dollars from your own pocket because of insufficient coverage.

Carry at least $50,000/$100,000 in bodily injury liability (limit per person/limit per accident respectively), and $25,000 in property damage. If that’s too costly, carry $25,000/$25,000 plus $25,000 for six months to a year, and step it up the following year. You’re unlikely to see skyrocketing rates, because you’re establishing “financial responsibility” as a policyholder, meaning cheaper rates in the long run – another reason minimum coverage isn’t really the cheapest.

Carrying state minimum liability simply means you’re legal to be on the road – it doesn’t mean you have sufficient protection. Call my office to find a coverage you feel adequately protects you. Then be confident that your financial future is secure – at least insurance-wise.

When searching for ways to lower insurance premiums, you don’t have to look very far. By going over your policy and goals with my office, you can find ways to save on your current policy. Here are three ways to get lower rates on your current policy.

Cut extra fees

Ask if you’re paying extra for such conveniences as monthly installment fees. If you pay your premium monthly, virtually every insurance carrier will charge you an installment fee of up to $5 a month.

By paying your premiums in full, or as much as possible over a couple of months, installment fees will be lower or removed completely (when paid in full). Setting up an electronic funds transfer (EFT) from your bank account can reduce or eliminate fees as well.

Some carriers also provide “paperless discounts,” easily obtained by agreeing to have all your policy documents sent electronically.

Improve your credit

Credit ratings are significant factors when calculating premiums. Some companies have become so strict with this they’ll sometimes refuse to write a policy for someone with poor credit, and existing policyholders may see premium increases at renewal or even policy cancellation notices for a worsened credit rating. The takeaway: improving your credit can help lower your rate.

Avoid making small claims

You don’t necessarily have to make a claim for minor damage. For example, if your rear-view mirror breaks, instead of filing a comprehensive claim, you could absorb the cost yourself. Most claims, regardless of size, will affect premiums for three to five years, and claims history plays a big role in premium calculations.

As well, once you’ve paid the deductible, you may end up paying more in higher premiums than by covering it yourself.

Go For the Win-Win

By working with my office, you can avoid the disruption and frustration of looking around and reduce your premiums – a win-win

When you begin shopping for collector car insurance, ensure you familiarize yourself with the different coverage types available and the eligibility guidelines. Below is information on the coverage available for your collector car and eligibility guidelines. Ask your insurance professional for details and advice on the best type for you and your car.

Actual cash value: Similar to standard auto insurance, unless you can prove it is an “exception” to depreciation, you’ll receive whatever it would cost to replace the car, less depreciation. If the car is totaled, the most you can hope for is what you paid for it. With actual cash value, you can choose your comprehensive and collision deductibles.

Stated value: The insurer will pay the insurance value you’ve put on it. You’ll need to prove via appraisals that the car is worth your stated amount. This may sound easy and as though it’s the best option, but most insurers won’t agree to full-stated value coverage, and it generally carries a $1,000 deductible.

Agreed value: This is the most common coverage type for collector cars, and refers to values you and your insurer agree upon. There usually isn’t a deductible.

Eligibility: Rating factors used to assess eligibility are those used in standard policies, but some factors are weighted more heavily when applied to antique car insurance. Some policies have monthly mileage limitations, normally about 250 miles. If you drive the vehicle only a couple times a year, or to parades or shows, ask for a lower mileage limit. It may mean a cheaper premium.

For affordable premiums and to maintain eligibility, you need to

• maintain a good driving record
• show a 10-year driving history
• not include on your policy teenage drivers or drivers with poor records
• ensure the vehicle is in a safe place – preferably in a locked area – and parked off-street
• prove another car is used for daily transportation

People are working at home more than ever now. However, few realize they need special insurance for their home-based business. After all, they have homeowners insurance…they’re covered through that, aren’t they?

Unfortunately not. But if you didn’t know this, you’re not alone: According to the Independent Insurance Agents and Brokers of America (IIABA) 60 percent of home-based businesses lack sufficient business insurance coverage.

There are three types of insurance designed specifically for home-based businesses:

Homeowners insurance policy riders

Adding a rider to your homeowners insurance is the most economical, with an average cost of under $15 a year to obtain about $2,500 in additional coverage. This isn’t a lot, but it will often make a big difference to smaller companies; this option is usually only available to businesses with $5,000 or less in gross annual business and not much equipment.

In-home business policy

This policy is more appropriate for someone with several employees and a lot of business traffic in and out of their home. It provides more coverage for a variety of incidents, on average $10,000 or more, and costs about $200 a year on average. This policy also includes general liability coverage from $300,000 to $1 million, and limited coverage for loss of valuable documents or information, off-site business property coverage, and use of commercial equipment.

In most cases, you also will be covered for lost income and continuous overhead expenses (such as Internet service, website hosting, and phone service) if your business closes temporarily.

Business owners policy

Also known as a “BOP,” this is what most small- to medium-sized businesses need, and it is a great choice for home-based businesses that have items manufactured or produced elsewhere but run the business from home. It’s also good for those who make products at home to sell elsewhere or online. It includes all the coverage options seen in an in-home business policy, but on a larger scale.

Peace of mind

Paying for additional insurance policies may seem like more bills added to the pile, especially when you’re starting out and want to minimize your expenses. However, it’s one of the most important things business owners can do.

The consequences to a home-based business of not having the right commercial coverage can be dire. Losses will have to be paid out of your own pocket. If you can’t cover them, you could face lawsuits and may be forced to release assets such as your home, savings, business, or more.

Worst case scenario: You may have to return to being an employee to pay off the judgment through your wages. Until a judgment is paid, your assets will continue to be seized, likely meaning you’ll have to shut your doors for good.

Of all the worries you have as a small home-based business, having the right insurance coverage will minimize at least one; effectively, having the right insurance provides peace of mind.

Look at it as an investment equal to the protection you may get from working for someone else.