Insurance gap needs to be filled

Many people who could use additional auto insurance protection may not find that out until it's too late. They would have a better chance of not facing that gap if the governor approves legislation encouraging, although not requiring, drivers to choose to buy greater liability insurance.

The bill, sponsored by the chairmen of the insurance committees, Sen. James L. Seward, R-Oneonta, and Assemblyman Joseph Morelle, D-Rochester, and passed overwhelmingly in both houses is expected to reach Gov. Andrew M. Cuomo's desk soon.

It goes to the heart of what consumers often think they're getting and the reality that can hit them.

New York motorists tend to increase their liability insurance to protect other motorists from their negligence beyond the legal limit of $25,000 per individual and $50,000 per accident. And that's good because according to the Insurance Research Council, about 5 percent of cars in New York were uninsured in 2009. That places New York at the very lowest end of states by percentage of uninsured motorists, but that's still a big number.

So what about those people who have already opted to increase their liability insurance?

What they don't know - and may find out painfully after a serious accident - is that their increase in liability insurance coverage was not matched by an increase in their supplementary uninsured/underinsured motorist (SUM) insurance. This is the insurance that provides coverage in the event that they are the victims of an accident with an uninsured or underinsured driver.

It isn't until the unpaid bills start to show up that many discover they did not, in fact, have the coverage they expected.

Consumer advocates point to the case of Staten Island residents Victor and Wilma Rao, who were hit by an uninsured ex-convict who was driving drunk. The local business owners had purchased additional liability insurance but did not have additional SUM coverage.

Both were seriously injured. Because the other driver had no insurance, the couple had to take care of hospital and rehabilitation bills that piled up above the $25,000 minimum uninsured/underinsured coverage they had.

New York's legislation would establish the default setting for SUM coverage at the amount chosen by the consumer for liability. It is aimed only at consumers choosing liability coverage above the statutory minimums, and should cost less than $100 per year for most policyholders.

Again, this is not a requirement. The supplemental insurance, for those who can afford it, is a prudent investment. This law will ensure that they know about it.

Source: http://www.buffalonews.com/apps/pbcs.dll/article?AID=/20120919/OPINION/120919009/1074

The importance of long-term insurance

Long-term disability insurance and long-term care insurance are difficult issues to talk about.

For starters, there are many situations where these types of insurance are never needed at all. If someone passes away very suddenly, the money spent on these insurances goes for naught.

In some situations, the premiums might simply be beyond what they can actually afford. These types of insurance are not free, after all.

In my view, the benefits of long-term disability and long-term care insurance are worth the cost, but only if you’re in a position to afford it without putting your finances into crisis mode.

So, what are these policies?

Long-term disability insurance is a type of insurance that provides you with some portion of your salary in the event that you’re no longer able to work because of your job. Some employers offer this coverage directly, but in many cases, you have to obtain it yourself.

Long-term care insurance is a type of insurance that pays for some or all of the costs of your long-term care if you find yourself in a situation where you need extensive care for your health. Often, this occurs near the end of one’s life, when medical issues begin to mount.

In both cases, you need to fully understand what is being insured when you get the policy. While some policies are very strong, others are full of loopholes which minimize what the insurance company would have to pay.

So, when do you need these policies?

If you’re a professional who earns an income that your family simply could not live without, you should strongly think about long-term disability insurance. There are many situations where your ability to do your job could be limited severely without taking your life (blindness, severe injury, brain trauma, countless diseases). If you’re making a strong income and your family relies on that, you should think about this type of insurance.

On the other hand, long-term care insurance appeals more to retirees and people approaching that age. The goal with long-term care insurance is to make sure that you’re covered as well as possible should you need long-term care during your final years. If you have a spouse, a large part of the reason for obtaining the insurance is to protect your partner.

In either case, get the insurance only if it doesn’t break the bank for you. Most of the time, the cost is on the order of a hundred dollars (or two) per month, depending on your specific situation. Get it if you can afford it, because the peace of mind it can give you is worth it.

http://www.csmonitor.com/Business/The-Simple-Dollar/2012/0910/The-importance-of-long-term-insurance

Why You Should Have Umbrella Liability Insurance

Umbrella liability insurance is an inexpensive way to protect you and your property from lawsuits. You don’t need it if you have relatively little at stake, but “if you’ve accumulated some assets and have a home, it makes sense to have the policy,” says Rob Seltzer, a CPA in Los Angeles. He recommends that you add an umbrella policy, which starts at $1 million of coverage, to protect against lawsuits even if your net worth is far less than that. The policies protect future income as well as assets and also cover legal fees. 

Insurers generally require that you have at least $300,000 in liability coverage on your home and automobile before you can buy umbrella coverage, which picks up after you’ve exhausted your homeowners and auto liability limits. The first $1 million of coverage generally costs $200 to $400 a year; the next $1 million runs an additional $75 to $100.

Raising your auto and homeowners deductibles from, say, $250 to $1,000 would offset the cost of $1 million in umbrella coverage, says Seltzer. “If you are in a car accident and have to come up with an extra $750 for the deductible, that’s not going to kill you. But if something really bad happens, that $1 million umbrella policy is a savior.”

To buy the coverage, start with your auto- or homeowners-insurance company, which may give you a discount for keeping your business in-house. If your company doesn’t offer affordable umbrella coverage, ask an independent insurance agent for quotes.

Source: http://www.kiplinger.com/columns/ask/archive/why-you-should-have-umbrella-liability-insurance.html 

More information at: http://www.mainlineinsurance.com/public/umbrella_liability.asp

Landlord Insurance

Landlord Insurance is a special type of homeowner's insurance specifically designed for property owners who rent all or part of their property to others. Like a standard homeowner's policy, a landlord's insurance policy will usually cover damage to the building and the owner's belongings. The policy also includes liability coverage and medical coverage for injuries on the property. With the exception of the owner's property that is stored and used on the premises, the interior contents of the building will not be covered.

Understand your coverage options
Specific coverage varies with the policy, with additional options increasing its cost. One way to lower the price is to increase the deductible amount for each claim. Deductibles are the amount that you are required to pay in the event of a property loss. Deductibles typically range from $100 to 5% of the building coverage amount.

Comprehensive insurance will cover loss from all causes unless specifically excluded. Lower cost policies may limit coverage to specifically named situations or "named perils." Lower cost "actual cash value" policies will reimburse the owner for the value of the property less depreciation. Higher cost "replacement value" policies will reimburse the cost of replacement, but only if a replacement is actually purchased.

Actual cash value coverage factors in depreciation when paying claims but has a lower premium. Replacement cost coverage pays the full replacement cost of building damage; however, the landlord must rebuild the property to receive reimbursement of the full replacement cost.

A landlord's policy may also include additional features specific to the landlord-tenant activities being conducted on the property. One common option reimburses for loss of rental income during a period in which the property becomes uninhabitable. Landlord's insurance may also include extra coverage due to increased risks associated with doing business with tenants. These include coverage for legal fees and extra liability coverage, including coverage for libel, slander and discrimination claims.

Urge your tenants to buy Renter's Coverage
It is a good idea to require your tenants to purchase rental insurance. A landlord's insurance policy will generally not insure a tenant's property located in a rental unit. The tenant must either self-insure or purchase his own renter's insurance policy. Nonetheless, a tenant may benefit from a landlord's insurance because it may compensate the tenant for damages and losses under the landlord's liability coverage. Additionally, a tenant may be spared the inconvenience of relocating if insurance payments enable the landlord to make needed repairs in a timely manner.

How much coverage to buy?
If a property is mortgaged, the lender will usually require an insurance policy sufficient to cover the outstanding loan balance. Coverage above that level and extra coverage options are completely up to the landlord. Generally, the decision of whether to insure requires an assessment of the potential saved premiums against the risk of bearing all costs associated with a future loss or claim. When considering insurance on property which has significant value and which can be associated with liability claims, only very high net worth individuals are likely to find complete self insurance a viable option.

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In summary, landlord insurance protects property investors from financial risk in the event the property is damaged or individuals are injury on the property. Investors must make a business decision about how much coverage to purchase on the building and the extent to which they need coverage for loss of use or lost income. However all investors should purchase liability insurance to protect against the potentially catastrophic medical and legal costs associated with lawsuits from individuals who are injured on the property.


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Why are some cars more costly to insure than others?

A variety of factors influence how much you pay for auto insuranceincluding your age, driving record, gender, how many miles you drive, where the car is garaged, and the vehicle's make and model.

Even when all other factors are equal, the price of insurance can vary widely by type of vehicle. Generally, the more expensive a car is, the more costly it is to insure. That's because a high-end luxury sedan will cost a lot more to repair or replace than a modest family car, and insurers are well aware of the difference.

In setting the premium, insurers consult a database that shows the number and type of insurance claims filed for each vehicle make and model. Some vehicles have a heavier claim history than others.

Small cars and car insurance
For instance, smaller cars tend to be associated with more injury and collision claims than larger vehicles because they tend to get into more accidents. That may be due to who drives them--namely young people with limited driving experience.

Small cars as a group also tend to be less safe than large, heavy cars, which are better able to absorb the energy of a crash than smaller cars.

Among the cheapest vehicles to insure are minivans, largely because of the good safety records of their typical drivers--soccer moms. Minivans also are not designed for speed or to whip in and out of traffic, so they don't encourage unsafe driving. The most expensive vehicles to insure are ultra-luxury cars and high-end sports cars.

Get car insurance quotes for various vehicle makes and models you're considering before you make a final decision when shopping for a new or used car.


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How do I take a home inventory?

A home inventory may not seem like a high priority on your list of things to keep up with as a homeowner. However, in the event that your home was destroyed in a fire or other peril, this list will be one of your greatest assets.

A home inventory is a detailed list of all of your home contents. In the event that disaster strikes your home, this list will help you remember all of your personal belongings so that you can report your entire loss to your insurance company. Contents coverage (or coverage C) is the portion of a homeowners insurance policy that provides coverage for the items inside of your home.

In the event of a disaster striking your home the loss can be overwhelming and many homeowners can not remember everything that they had in their home before the loss. A home inventory will keep you from forgetting important items and help speed up the claims process.

Also, when taking a home inventory take note of any particularly high-value items such as pieces of jewelry, furs or collectible items. Some of these items have coverage limits associated with them which may leave some of your possessions under insured. Ask your insurance agent if you need an endorsement, or rider, on your policy in order to adequately cover these items.

When taking an inventory of your home, be sure to include everything you own except vehicles, animals and items that are insured under other policies. It is important to keep this document in a safe place outside of your home- such as in a safe deposit box or at a relative's house.

A few helpful reminders for creating your home inventory:

• List every item of value in your home
• Include serial numbers of items anywhere you can
• Continuously update your home inventory as you acquire new items
• If you have the receipt- include it!
• Take Photos- take close-up and wide-angle shots, use a color camera or video camera if possible and have a family member in all pictures to help prove ownership.

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Why You Should Have Umbrella Liability Insurance

I already have $400,000 in liability coverage on my auto-insurance policy. How do I determine whether I need to add an umbrella liability insurance policy to my coverage? How much would an umbrella policy cost?

Umbrella liability insurance is an inexpensive way to protect you and your property from lawsuits. You don’t need it if you have relatively little at stake, but “if you’ve accumulated some assets and have a home, it makes sense to have the policy,” says Rob Seltzer, a CPA in Los Angeles. He recommends that you add an umbrella policy, which starts at $1 million of coverage, to protect against lawsuits even if your net worth is far less than that. The policies protect future income as well as assets and also cover legal fees.

Insurers generally require that you have at least $300,000 in liability coverage on your home and automobile before you can buy umbrella coverage, which picks up after you’ve exhausted your homeowners and auto liability limits. The first $1 million of coverage generally costs $200 to $400 a year; the next $1 million runs an additional $75 to $100.

Raising your auto and homeowners deductibles from, say, $250 to $1,000 would offset the cost of $1 million in umbrella coverage, says Seltzer. “If you are in a car accident and have to come up with an extra $750 for the deductible, that’s not going to kill you. But if something really bad happens, that $1 million umbrella policy is a savior.”

To buy the coverage, start with your auto- or homeowners-insurance company, which may give you a discount for keeping your business in-house.


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