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Auto Insurance Considerations for Young Singles

7/31/2015

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Auto Insurance Considerations for Young Singles

As long as you live with your parents and don’t own your own vehicle, you are eligible to remain on your parents’ auto policy. Staying on their policy saves money because parents are considered lower-risk drivers than young singles. However, many people buy their first car as a young single. If you do, insurance companies will require you to purchase your own insurance policy to avoid any potential legal confusion about who owns the vehicle and is responsible for its use.

In most states the law requires you to maintain auto liability insurance to cover losses that are caused by your negligence, and sometimes you are required to carry personal injury protection coverage. To avoid penalty, pay your premiums on time, and don’t let your coverage lapse to save money in the short-term. If you do, you may be putting yourself at substantial financial risk as well as negatively affecting your insurance history.

There are several ways that you can prudently control your costs for auto insurance:

When buying or leasing your first car, remember to consider the cost of insurance in your financial calculations. Insurance rates vary with the type and model of vehicle, so check out these costs before you decide which car to purchase. For example, SUVs, convertibles and performance vehicles typically cost more to insure than other cars.

While auto policies are an important way to protect your financial health, younger drivers usually own fewer assets and require less liability coverage. However, an accident claim can take a long time to settle, while assets may continue to increase. In such a case, your assets could outgrow your coverage even after an accident has occurred. Consider assets that you may accumulate in the next year or two, when determining your liability limits.

To control costs, parents should also ask about an “accident forgiveness” clause that promises not to raise premiums if a student gets into one minor accident. They should also consider raising the policy’s deductible and only allowing their child to drive the family’s oldest, least expensive car. In addition, parents might consider purchasing an older car for their child and foregoing comprehensive and collision insurance on that vehicle.

If you purchase a used car, or your parents give you their old car, you might consider dropping the collision coverage as a way to cut expenses. With older cars, the cost of collision coverage can exceed the value of the car.

You might also consider raising the deductible for your comprehensive and collision coverage. A higher deductible will lower your premium cost.

Seriously think about commuting to your job via public transportation, rather than by driving. Your premiums may be lower if you limit your vehicle use to weekly recreational activities.

If you will be traveling extensively or will be deployed in the military for an extended period of time – and no one will be driving your vehicle – you may be able to suspend some or all of your coverage to save on premium payments. You should check out and choose a policy that specifically allows for full or partial suspension.

Taking a defensive driving course may help lower your premiums.

And, of course, it’s wise to maintain a good driving record – one devoid of tickets, accidents, and Driving While Intoxicated citations.

For those of you in school, it’s also advantageous to maintain good grades, and inform your insurance company every semester, as they often offer preferred rates and discounts to young people who do so.

College Students and Auto Insurance: Parents and college students should do some homework regarding auto insurance. If a college student is going to be using the family vehicle when visiting home, parents should make sure the child is listed by name on the family’s auto insurance policy. If the student will be taking a car with them to school, parents should check the specific rates for the college’s city and state before deciding whether to keep their child on the family’s auto policy. In addition, the insurance company should be notified each semester if the student maintains good grades, as that accomplishment might lower premiums.

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Insuring Jewelry

7/30/2015

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Most homeowner policies provide very limited coverage for jewelry. The reason? Jewelry is high-valued (especially in relation to its size), is easily lost or destroyed and is vulnerable to theft (as well as fraud). If you only own a modest amount of jewelry (say just a few hundred dollars), perhaps the limited coverage provided by a basic policy is adequate. However, when high values are involved, consider buying special insurance coverage. A few options are available such as buying supplemental insurance that is attached to your homeowners or tenant's policy or purchasing a separate jewelry policy.

Discussing what is needed and expected from separate coverage is very important. Does the coverage consider jewelry values that increase over time? Does it cover mysterious disappearance (when you know the property is gone, but can't pinpoint when and how the property was lost) and other causes of loss, or just fire and theft? Discussing the coverage also helps you understand the steps you must take to make sure that you keep the maximum coverage in force and whether the coverage you receive is worth the additional price.

Documenting The Jewelry's Value

If the jewelry has just been purchased, a store receipt or certificate should establish the insured value. However, as time passes or circumstances change, the insured value must be reevaluated, perhaps by seeking an appraisal (expert opinion). Getting an appraisal that affirms your jewelry's current value is an excellent way to assure that your property is properly protected. Of course, make sure that you work with a competent appraiser (check their credentials and number of years of experience). It is also helpful to talk to a potential appraiser. Does she seem to have the necessary expertise? How willing and able is she to explain her work? There are several professional jewelry and appraisal associations that can give you information on appraisers and appraising methods. All of these items are important, especially since you have to pay a fee for an appraiser's services.

Handle With Care

Once you're certain about the value of your jewelry and the adequacy of its insurance coverage, you need to properly handle your jewelry. After all, who wants to actually file a claim? If you own a significant amount of expensive jewelry you may want to look into other precautions such as:

Get new appraisals every two or three years, sending a copy to your insurer
Take photos of your jewelry from several angles; again, share copies with your agent or insurance company
Consider a quality in-home security system, including a hidden vault or storage area
Take care on where and when your jewelry is worn to try to avoid becoming a theft target
Keep original receipts and all appraisals, especially if they demonstrate that the jewelry's value is appreciating
Ask your jeweler whether they have access to "Gemprint," or a similar jewelry identification system that documents a jewel's distinctive markings much in the manner of fingerprinting.
Consider storing jewelry that is rarely worn in a bank or saving institution’s vault. (Note that such special storage often qualifies for an insurance premium discount)

Again, your first step is to talk to one of our insurance professionals since he or she shares your concern that you have the protection you need at a price you can afford.

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Business Owners Dealing With Indirect Loss

7/29/2015

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A business owner wants to protect company assets and one way to achieve this is by handling direct threats to buildings, equipment, office furniture, etc. However there is another area of concern that is critical for survival – addressing indirect threats.

Example: Paula’s Dry Cleaning suffered a minor fire caused by dryer that short-circuited. While the actual fire damage was negligible, it was accompanied by a lot of smoke and residue. The dryer could be repaired and cleaned in a few days, but the premises would take three weeks to properly clean and decontaminate.

In this case, the business owner's loss of use of her store was a far greater loss than the actual damage to the physical item (dryer). Depending upon the type of loss and the type of business you operate, intangible or indirect losses (also known as Time Element losses) may threaten your operation's financial health as seriously as any direct loss.

Direct Versus Indirect Damage

Direct damage refers to tangible damage to property. A fire occurs to a warehouse. That warehouse has experienced direct damage. Time element damage is not as clear. It refers to property being damaged or destroyed and then the business must stop operations until the property is repaired or replaced and normal operations resume. The amount of the loss is not always dependent on the value of damaged property. Rather, it is related to the impact the loss has on regular operations.

Insurable Vs. Business Risk

Tangible losses are not the sole cause of time element losses. Any event that interrupts operations causes a time element loss.

Example: A printing plant’s employees go on strike for two months, closing down operations.

Example: A local restaurant featuring Australian cuisine loses 80% of its business when customers’ tastes change.

However, these are business risks and are not eligible for protection under most insurance contracts.

Securing Coverage

If you decide to purchase coverage against indirect loss, be sure that it addresses any loss of business income as extra expenses that are created by a direct loss. Getting adequate protection means you'll have to determine the level of income coverage you may need, the likely length of business interruption you may suffer and the importance of continuing operations. Once you determine your priorities, you can find matching coverage.

Example: An insurance agent’s office is severely damaged by fire. She keeps a full set of backup files at a remote location. The agent will not actually lose any income because of the loss of her office, but she will need to rent temporary replacement space, furniture, equipment, communications services, etc. She will also incur significant costs to notify clients and insurers and other expenses to maintain her operation while she rebuilds or finds a new office.

You have invested a lot in your business. It is important to be sure that you take the steps to deal with both direct and indirect sources of loss. As usual, it is always a good idea to discuss your questions and needs with one of our insurance professionals.

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BOAT THEFT

7/28/2015

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More than 1,000 boats are stolen every month. If you are a boat owner, learn some easy and effective ways to protect your craft from theft.
Spokespersons: Robert Bryant, National Insurance Crime Bureau; Lt. Lee Polfray, Marine Investigator

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Is Your Car Worth Less Than Your Loan?

7/27/2015

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Currently, car loans may last as long as four to six years and leases are becoming more expensive. Whether your vehicle is a coupe, sedan, van, sports utility vehicle, hybrid, or truck, your vehicle’s value will depreciate very quickly. A rapid loss of actual value accompanied by a longer loan obligation spells trouble.

It isn’t unusual for the amount of the unpaid loan and lease balance to become much larger than the vehicle's value. This disparity exists over much of the loan or lease period. Making matters worse is that this gap is usually only discovered after a total loss. After the insurer pays its obligation, you may have to pay the bank or leasing company thousands of dollars out of your own pocket. The situation is an unfortunate side effect of the need to extend financing to accommodate extremely expensive vehicles. However, there are a couple of solutions to the dilemma.

The Auto Loan/Lease Coverage Endorsement

This optional coverage is available from a variety of insurance companies. The form provides coverage for the following:

Leased vehicles - Reimburses you for the difference between the amount due under the terms of the lease and the actual cash value of the auto in the event of the auto's total loss.
Owned vehicles - Pays any outstanding indebtedness incurred by you for that financed new vehicle in the event that there is total loss or damage to the vehicle and the amount due under the finance agreement is greater than the actual cash value of the automobile.

On smaller, partial losses, an insurer will normally pay to have the damages repaired or parts replaced, and the lease or loan gap coverage option is not a factor.

Exclusions

Generally this optional coverage excludes items such as overdue lease payments, penalties (for excessive use, abnormal wear and tear, or high mileage), security deposits, costs of warranties or various types of credit insurance, or carryover balances from a previous lease.

Auto Replacement Cost Coverage

For an additional premium, a new car owner may buy coverage to settle major losses based on the vehicle's replacement cost rather than its depreciated value. There are some limitations, such as:

the coverage is usually only available for new or nearly new (six months or less) cars
there may be a maximum dollar amount that applies to a total loss
the coverage may only be available for the first few years of the car's useful life

If you have a newer vehicle and are concerned that you could suffer a large out-of-pocket expense if your car is totaled, you should talk to one of our qualified insurance professionals to answer your questions. You may find that the extra protection is worth the extra cost.

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Insurance for Garage Operations

7/24/2015

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IMPORTANT – This discusses Garage Coverage. This program is very widely used, but was recently replaced by the Auto Dealers Program.

Garage operations are businesses that have hybrid coverage need. With such businesses, the lines between the general liability for the operations and the automobile liability exposures blur and overlap. A general liability policy does not provide enough coverage and a commercial auto policy provides too much. Fortunately there is a way to properly handle this need. The Garage Coverage Form contains premises liability, products liability, automobile liability and automobile physical damagecoverages. Operations that should be protected with the Garage Coverage Form include the following:

franchise and non-franchise auto dealers
truck dealers
motorcycle dealers
snowmobile and recreational vehicle dealers
new and/or used trailer dealers
vehicle repair shops
service stations
storage garages and
public parking places

The Garage Coverage Form is flexible, having the ability to cover a wide variety of automobile loss exposures. Besides covering vehicles that are owned by the covered business, it may also cover vehicles that are non-owned (rented or borrowed), trucks and other non-private passenger vehicles, trailers and mobile equipment. Coverage may even apply to vehicles that are privately owned by employees, but were involved in a work-related loss; say an employee who has a collision in his personal car while returning from picking up lunch for his boss and co-workers.

A garage policy may also be written to customize how coverage applies to different types of vehicles. For instance, Joe's Towing Service has a fleet of four tow trucks, as well as a sedan used by the owner. The towing service also does repairs and regularly has customer vehicles on their premises. Rather than having both liability and physical damage on all cars the services either owns or handles, Joe selects the following:

·        Liability and Physical Damage - for his two newer tow trucks and his sedan.

·        Liability only - for his two, older tow trucks

·        Physical Damage Liability only - for vehicles belonging to customers

Like other types of policies, a garage coverage form also provides legal defense coverage. In other words, the policy handles the costs associated with defending the policy owner against claims and lawsuits. This protection does not affect the separate limits of insurance that are selected for the liability coverages.

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10 Insurance Smart Things to Consider Before Starting a Business.

7/23/2015

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Make sure you understand how your state defines “employee” as it relates to workers’ compensation insurance and what coverage you may be required to carry

Before you begin a new “sharing economy” business, make sure you understand all the legal and regulatory requirements. For insurance purposes, once you begin earning income from renting out personal property, you may be considered a home-based business.

If you’re considering a business partnership, look into Key Person life insurance – coverage that makes each partner the other’s death beneficiary – before you form the company. Doing so early helps mitigate risk.

If your business owns or leases a vehicle, make sure the business name is listed on the policy as the principal insured.

If you use your personal vehicle to conduct business, consider increasing your liability limits. Premiums likely will be higher, but having additional coverage to protect business assets will be beneficial in the event of an accident-related lawsuit.

If you lease space, do not rely on your landlord to provide coverage for your business property. The building typically is insured only for the basic structure and common areas.

If you purchase business interruption coverage – insurance to cover expenses in the event of a business shutdown – make sure you have sufficient funds to tide you over for the first few days. Interruption coverage typically does not kick in for a specified time period after a disruption occurs.

Educate yourself about the safety history of your industry. The risk assigned to a business for general liability coverage is impacted by the number of claims filed within that industry or the probability of a claim for a similar company.

Be sure your group health coverage fits your team. For example, if most employees are planning children soon, pregnancy-related coverage will be important. Businesses with fewer than 25 employees who purchase group health insurance through Small Business Health Options Program (SHOP) marketplaces may be eligible for tax credits.

To save money and simplify paperwork, consider purchasing group insurance in packages, i.e., health, disability, vehicle, etc., from the same provider.

www.insureuonline.org/smallbusiness

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Life Insurance Quiz

7/22/2015

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Do you know the difference between Term and Whole life insurance? Permanent versus Variable policies? Make sure you understand the basics about life insurance.

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Which Homeowners Policy Is Right For Me?

7/21/2015

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If you own a home; you’ll want to think about the best way to insure it. One goal is to match your needs to the right company. Some companies like new, high-valued homes while some companies do well with older or historic preservation homes. Others are comfortable with country homes or old farm homes. It pays to shop around, both for the best coverage and for a company that likes your type of home.

There are two common levels of coverage that you may consider:

Named causes of loss coverage-The policy only covers certain causes of loss to your property. You must prove to the company that one of the covered causes damaged your property.

Risks of physical loss–This covers all causes of loss except those that are excluded. The company must prove that one of the excluded causes of loss damaged your building.

You may want to discuss other types of homeowners coverage if you own a different type of residence such as a modular home, mobile home, apartment, town home, condominium or you have personal living space in a commercial building.

A Basic Homeowners policy usually provides the following:

Coverage for your building (ask about coinsurance and replacement cost issues).
Coverage for your outbuildings - garages, sheds, barns, cabanas
Coverage for personal property is usually 50-75% of your building limit
Limitations - many policies have special limits on certain types of property, such as theft loss to Jewelry and gems ($1,000), Furs ($1,000), Gold, silverware, pewter ware ($2,500), Guns ($2,000), Building supplies - no coverage for theft. Further, very little coverage may be available of other types of property, regardless of the cause of loss, such as, money, stamps, fine arts, antiques, electronics, boating equipment, etc.
Limited coverage for personal property that is permanently kept at storage facilities.

Additional living expense - pays the extra cost of temporary housing, food and other increased costs of living when you are forced from your home by a covered cause of loss.
Liability coverages - should you accidentally injure other people or damage their property
Defense costs - includes hiring and paying for a lawyer (if necessary) and paying most court costs.
Medical payments coverage is for minor injuries to people other than residents of the household. You don't have to be sued or be negligent.

If this short article has raised more questions about your coverage…good. Contact our office to get the answers (and the coverages) you need.

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Motorcycle Insurance – Part Three

7/20/2015

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In Motorcycle Insurance parts one and two, we discussed the basic coverages available for protecting against losses to the motorcycle and protecting motorcycle operators against loss they may cause to others.

Motorcyclists make up a small fraction of the vehicles that occupy our roadways and, due to weather conditions and changes of seasons, the number of cycles in operation changes drastically throughout the year. Motorcycles, like all other vehicles, are frequently involved in traffic accidents. Unfortunately, since motorcycles are smaller than all other types of motorized vehicles and as users are exposed, rather than enclosed; the consequences of motorcycle losses are severe. Compared to accidents involving enclosed, four-wheeled (or greater) vehicles:

motorcycles are usually totaled (cost to repair exceeds value of cycle) in a far higher percentage of incidents
motorcycle riders and passengers are far more likely to be killed
motorcyclists are more vulnerable to loss caused by distractions
a higher percentage of fatal accidents involve drivers at extremes (young, inexperienced operators and senior drivers who may have deteriorated driving skills)
Poor driving conditions (darkness, snow, ice, rain, fog) have a greater adverse impact on motorcyclists
motorcyclists are more prone to speeding, increasing the likelihood of a crash occurring as well as substantially increasing the chance of a fatal result

Motorcycle operators should avoid behaviors and situations that make a dangerous situation deadlier. It is important that cyclists get proper instruction and licensing to operate motorcycles. Cycles should be operated in a manner to compensate for the fact that many drivers of other vehicles fail to see motorcyclists. Motorcyclists should wear properly rated helmets. Unfortunately, national statistics indicate that helmet wear is declining, even though most states have mandatory helmet laws. While drinking and driving is never a good idea, it is even a more serious problem with motorcycle operation. A higher percentage of fatal cycle accidents involve alcohol use.

While insurance protection is important; motorcyclists are best served by having a mindset to minimize or avoid motorcycle accidents.

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<<Previous

Auto Insurance Considerations for Young Singles

Insuring Jewelry

Business Owners Dealing With Indirect Loss

BOAT THEFT

Is Your Car Worth Less Than Your Loan?

Insurance for Garage Operations

10 Insurance Smart Things to Consider Before Starting a Business.

Life Insurance Quiz

Which Homeowners Policy Is Right For Me?

Motorcycle Insurance – Part Three

Did You Know?

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