Thursday, October 20, 2016

When Rams Ram

When Robert came into the office and showed us the pictures of a herd of rams running in front of his car, I thought it was the perfect time to make sure everyone knows what happens if a ram decides to ram your vehicle. It's also important to know the difference in coverage between a ram ramming your car and your car ramming a ram (there is a difference)!

When a RAM decides to ram you: If a ram decides to challenge your car to a battle, you can expect your insurance company to cover the claim under your comprehensive - other than collision - coverage. Even though, technically, the ram collided with your car, it should be considered a comprehensive claim because you did not collide with the ram. The distinction between the two is important because, for the most part, a comprehensive claim will NOT raise your insurance premiums but a collision claim will!

Comprehensive claims are for things that happen TO your vehicle but not as a result of your driving. Hail, wind, vandalism, theft and a ram ramming your vehicle are all examples of comprehensive claims. Because things that happen TO your car are usually no fault of your own, most insurance companies do not count a comprehensive claim against you and do not raise your insurance rates. Unless you have comprehensive coverage on your vehicle, you will be on your own to cover the cost to fix any damage from your car from these types of events.

Comprehensive coverage is usually required by your lender if you have a loan on your car, and the insurance company will give you a comprehensive deductible (typically $500-$1000) that you are responsible for paying if you file a comprehensive claim. If you own your vehicle outright you may choose to remove the comprehensive coverage in order to lower your insurance premiums but, you'll be solely responsible for the damages if your vehicle is damaged.

When YOU ram a ram: Chances are, if you ram a ram, it will be on accident and not on purpose. However, if you (your vehicle) runs into a ram, most insurance companies will consider that to be a collision claim because your vehicle collided with the ram. Collision claims ARE typically counted against you if the collision is considered to be your fault. So, if you are sitting at a stop light and someone rear ends you, the collision would not be your fault and your insurance rates should not be affected.

However, if a ram runs across the road and you collide with it, most insurance companies will consider that to be an at-fault collision and increase your rates. You may be asking why it would be considered your fault if the ram ran out in front of you? Because you are expected to be in control of your vehicle and avoid objects in the road. Sometimes your only option is to hit the ram instead of running into another vehicle or driving off the road. It happens, but it is still considered an at-fault collision because you collided with the ram.

In Colorado, a deer is about the only animal that you can collide with and have it count as a comprehensive claim instead of a collision claim. Dogs, horses, rams, etc. usually fall under the collision coverage of your insurance policy. Of course, you must purchase collision coverage for your vehicle in order for your insurance company to pay a claim. On the flip-side, if there were no other vehicles involved and no tickets issued, you may choose to pay for the damage of colliding with a ram out of your own pocket in order to keep your insurance company out of it and avoid having your insurance premiums go up.

It can get a little confusing, I know. The easiest thing to do if you find your vehicle in a confrontation with a ram is to call your local, professional agent and ask for advice. Every situation is different and it's important to have a pro to discuss your situation with.

Tuesday, April 12, 2016

Does My Home Need Flood Insurance?

If you’ve lived in Colorado for very long, you know that with the warmer temperatures and summer season, we get a lot of rain as well. In fact, sometimes we get monsoons! Depending on where you live in El Paso county, you may find a lot of water making its way toward your home over the next 4-6 months. If you’re worried that some (or a lot) of that water may find its way into your home, you may want to consider flood insurance. Here’s what you need to know:
Your home insurance probably will not cover any type of flood damage. To be clear, a flood is NOT water that comes from inside of your home from a broken pipe or leaky dishwasher. A flood is from external, natural running water that enters your home, either from rainfall, standing or running water or even from underground.

Home insurance typically excludes flood damage to both your home and your belongings. Occasionally, there could be some coverage provided if the actual flood damage was preceded by another event that allowed the flood damage to happen. For example, if wind blew out your windows, allowing the rain to enter your home or (with some companies) if your sump pump fails and allows water to enter through your basement, there MAY be coverage. However, coverage for flood damage under your normal home insurance is rare and should not be relied on.
Insurance companies typically provide flood insurance through the National Flood Insurance Program. In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves. The NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding. El Paso county and most of Colorado participate in the NFIP.

Does the National Flood Insurance Program cover everything that happens to my home and belongings if it is flooded? Unfortunately, not, but it does cover a lot. For homes that do NOT have a basement, most of your home and contents should all be protected by your flood insurance policy (up to the coverage limits that you purchase). However, things work differently if your home DOES have a basement. Here is what is and isn’t covered, according to the NFIP:
Flood insurance covers your home's foundation elements and equipment that's necessary to support the structure (for example: furnace, water heaters, circuit breakers, etc.). It's important to note that some items in your basement are covered under building coverage (like a furnace, hot water heater and circuit breaker) and others are covered under contents coverage that must be purchased in addition to building coverage (for example, your washer and dryer, or your freezer and the food in it). The NFIP encourages people to purchase both building and contents coverage. Flood insurance does not cover basement improvements, such as finished walls, floors, ceilings or personal belongings that may be kept in a basement.”

Is flood insurance expensive? It depends. If your property is not in an actual flood zone, it would qualify for a Preferred Risk Policy. Preferred Risk Policies cover everything that a regular policy covers but at a substantial discount. Most homes in El Paso county (but not all) qualify for a Preferred Risk Policy. Depending on your coverage choices, a Preferred Risk Policy will cost between $130 - $460 per year.
If, however, your home lies within a flood zone, flood insurance prices will vary dramatically. There are 26 different flood zone levels, each with its own insurance rates. The higher the flood zone, the more likely the property is to experience a flood and the more expensive the flood insurance will be.

Can I start my flood insurance right before a storm starts? Unless you are required to have flood insurance for a home loan closing, there is a 30 day waiting period before coverage begins on flood insurance policies. The time to buy your flood insurance and get the coverage for your property is 30 days (or more) before the rain clouds gather above your home!

To find out if you’re property is in a flood zone or to get a flood insurance proposal, contact our office at 719-685-8585 and we’ll be happy to help.

Thursday, January 7, 2016

Doing What You Don't Want Today So You Can Do What You Do Want Tomorrow

My brother (Robert) went in for his annual skin check today - something he hates doing. Unlike me, he's always been prone to sunburns and, now that he's getting a little older, skin cancer (or pre-cancer, at least). The reason he hates going in for his annual check is because he almost always has to have pre-cancerous spots either frozen or cut off. He comes back to the office with a few bandages and a few red spots and then, for the next few weeks, he has to deal with people asking him about the red spots on his face while he's healing.

But as much as he dislikes getting poked, prodded, frozen and cut, he does it anyway because he knows it will help him do something he does want to do in the future - live a long, cancer free life! He knows he needs to be vigilant with his annual checks and consistent about removing spots that could turn into something worse if not dealt with early.

It would be easier for him to ignore the warning signs, skip the doctor and avoid getting poked and prodded, but he knows that if he only thinks about what he wants today, a time will come where it will be too late to take care of his tomorrows. He knows that putting things off may be easier and feel a little better today but it will only make things harder to fix in the future (or maybe impossible).

The same rules apply to retirement plans and preparing for the future. While it is far easier to put off saving and thinking about retirement in order to buy an extra latte or go out a few more times a month, the longer you put it off, the harder it is to catch up on your savings in the future. However, the sooner you start doing what you don't want to do (skipping a latte in order to fund an IRA, for example), the easier it is to do what you want later in life (like retiring with a bunch of money).

Saving for retirement is one of those things that is easy to put off because retirement seems so far away. But when it comes to the amount of money you have waiting for you in retirement, the amount of time you have can either be your best friend or your worst enemy. One of the keys to having boatloads of money in retirement is giving your money plenty of time to grow. Here's an example from Business Insider magazine that shows the difference of starting earlier vs. starting 10 years later:

"Consider two hypothetical savers, Emily and Dave. Emily puts $200 per month into a retirement account with an estimated 6% rate of return starting at 25. Dave starts saving $200 per month at 35, just 10 years after Emily. Both continue to add $200 each month until they retire at 65.

By the time they are 65, Emily has contributed $96,000, while Dave has contributed $72,000.
Here's the trajectory of both of those accounts:

Emily started saving just 10 years earlier and put in only about 33% more money into her account than Dave put in his. But by the time they are both ready to retire, Emily has almost twice as much as Dave — Emily has $402,492, and Dave has $203,118. That extra 10 years of compounding returns has made Emily's situation far better than Dave's when they are 65."

The moral of the story and the example from Business Insider is simple, the earlier you start, the better off you are. If you think it's too late for you because you didn't start early enough, you'll still be better off in retirement if you start saving today than if you beat yourself up about it for the next year or two before finally starting!

If you don't know where to start or what to do, call the office and make an appointment to come in for a visit. We've got a Chartered Financial Consultant in the office that can help answer questions and lay things out for you in a way that's simple and easy to understand. And if you come in within the next few weeks, pay no attention to the red spots on his forehead!

Tuesday, August 27, 2013

Is That Considered A Flood?

With all of the heavy, heavy rains we've been getting across the city of Colorado Springs and surrounding areas (and the flooding that's been coming along with it), it seems like a good idea to make sure you know what is and is not considered a flood as well as what is and is not covered under most home insurance policies when it comes to flood damage.

First, what is considered a flood? The dictionary defines "flood" as a rising and overflowing of a body of water onto normally dry land. For insurance purposes however, the word "rising" is the key to distinguishing flood damage from water damage. Generally, damage caused by natural flowing water that comes from the sky OR water that has been on the ground at some point before damaging your home is considered to be flood damage. A handful of examples of flood damage include:
  1. A nearby river overflows its banks and washes into your home
  2. A heavy rain seeps into your basement because the soil can't absorb the water quickly enough
  3. A heavy rain or flash flood causes the hill behind your house to collapse into a mud slide that oozes into your home
  4. Your home is located at the bottom of a hill or in an area that water runs through, filling your window wells and damaging your basement
Photo examples of what insurance considers to be a flood include:

The above pictures are from a recent storm here in Colorado Springs and any damage caused by the running water and heavy rain would NOT be covered under your home insurance policy. The last photo was from the same storm, but left a few feet of hail instead of running water. However, for insurance purposes it could still be considered flooding if the hail filled up your window wells and then melted and seeped into your basement, causing damage. In order to be covered for these types of events, you must carry flood insurance.
Flood insurance can be obtained through your local agent, but it is a separate policy from your home insurance and, very important to note, has a 30 day waiting period for coverage to begin UNLESS the policy is required for a loan closing.
The good news about flood insurance is that it is relatively inexpensive if you are not in a flood zone, ranging from $129 - $458 per year for a home owner, depending on the amount of coverage you need and whether or not you have a basement.
If you live near a burn area, there is an increased likelihood of water runoff and water damage because the ground is not able to absorb the rainfall and you may need to consider a flood insurance policy as an extra layer of protection for your home. If your home is located in an area that has a lot of runoff passing through your yard or if you are near a gully or stream, you too may want to purchase a small flood insurance policy for the peace of mind of knowing you would have some assistance if the waters get high again.
To talk about your particular home and situation and find out if you need this additional coverage, contact your local, professional insurance advisor who understands the unique risks that Colorado Springs, Manitou Springs and surrounding areas are facing right now. Hopefully you'll never be impacted by flood waters, but if you are, it's important to know that you have the right kind of coverage to protect your home and personal property.

Monday, July 8, 2013

What the bottom of the Grand Canyon taught me about investing for retirement. Part 1

My dad and I have been talking about rafting through the Grand Canyon for years. In June, we finally
had the opportunity to spend seven days (along with my son, Christian) traveling 188 miles down the Colorado River through the heart of the canyon. WOW, what an adventure! Rapids, waterfalls, slot canyons, hikes, was 7 full days of pure amazement. On top of all of the fun we had (including two opportunities to do some cliff jumping - check out the photos on I was also reminded of quite a few lessons that relate back to the world outside of the canyon. Specifically, some do's and dont's for retirement planning.

The Grand Canyon is a world of extremes. The air temperature was 105º but the water temperature
was only 47º. One minute you’d be hot as could be begging for a rapid while the next minute you were freezing your butt off and begging for the sun. However, if you averaged the temperatures out and sat in the sun while you were soaking wet, it felt pretty darn good because you were in “the sweet spot”. Not too hot and not too cold, but right in the middle. You should look for that “sweet spot” in your retirement accounts too. You may be tempted to swing for the fences with your retirement investments in order to catch a big return, but more often than not you catch not only a part of a big upswing, but also part of a big downswing as well. Over time, investment portfolios with real big swings up and down always perform worse than those with a nice, consistent average in the sweet spot. Try to find the middle ground and build a portfolio that avoids the extremes. Not only do you typically get better results, you’re usually a lot more comfortable too!

Another big lesson learned was the art of “sucking rubber.” As we would approach a mega rapid (the
biggest one we faced had us going straight up a 15 foot wall of water) our guide would yell out for us to “suck rubber”, which was our cue to get low (low enough to suck rubber), hold on tight and brace for impact against the impending wall of water. The lower you got (the more rubber you sucked) the better the chances of the wave going over your head instead of hitting you in the chest and knocking you off of the raft. There are certain events in in your journey towards retirement that require a little bit of “sucking rubber” in order to make it through relatively unscathed. Sometimes you can see them coming from a mile away and prepare for them. Other times, having a guide that can tell you when to suck rubber can save your retirement account and keep it safely on the raft and heading in the right direction. Make sure you are paying enough attention to the economy and the financial indicators to know when a big rapid is coming. Or, make sure you have a financial guide who can see the rapids that you do not and give you your cue for when it's time to suck rubber.

The amount of beauty in the canyon was unbelievable. There were hidden waterfalls and oasis
around every corner - if you knew where to look. There were plenty of times our guide would pull up to a rock in the middle of a rapid, tie off ...and then head off towards what usually looked like nothing. But then we would duck around a rock wall or up a little canyon and find hidden swimming holes and lush gardens. I was amazed that, in the middle of the dessert, there was an amazing amount of water, flowers and trees IF you knew where to look. We would have passed them by, never having known they were there without our guide, who knew every nook and cranny of the river and exactly where to stop.

When it comes to investing for your retirement and making sure you have enough money at the end of the trip, getting there is kind of like traveling the 188 miles down the canyon. There will be some big rapids that you need to “suck rubber” through (like the crash of 2007) and there will be plenty of hidden waterfalls and oasis (great investment strategies) that you may not see if you’re traveling down a river you've never been on. People who use a guide are more prepared for their retirement, typically have more money in their retirement accounts and know how much they need to save in order to reach their retirement goals. There are a lot of reasons people try to handle their own retirement plans, but the bottom line is you’ll do much better if you have a little help. It’s never too late (or too early) to make sure you’re doing the right things for your retirement account, and it's always the right time to ask for a little help.

Stay tuned for part 2 - "The right equipment"