Monday, December 21, 2009

Which New Christmas Gifts Need Special Insurance?

Which Christmas Presents Need Their Own Insurance?

T’was the day after Christmas, and Santa was good to you this year. He filled your stockings to the top and left you everything you wanted underneath the tree. But now that you’ve got it, how do you make sure it is repaired or replaced if something happens to it? Not everything Santa brings you is automatically covered by your home insurance. Make sure you know which Christmas presents need their own insurance to be protected!

1. Jewelry, Watches and Furs: Most insurance companies put a limit on high-priced jewelry and watches. Even with the best coverage, most jewelry items are only covered for up to $2,500 per item. If you find a $5,000 ring under the tree, it will only be 50% replaced unless you bump up the coverage. Make sure you turn in a receipt or appraisal to your insurance agent and have your new Rolex scheduled on the property. (Scheduled means it is specifically listed and insured). In addition to a per item limit, most home insurance also limits a payout for all jewelry – typically around $5,000 total. Again, make sure you list your more expensive pieces separately so they will not be included in the $5,000 limit.

2. Antiques, Collectibles and Art: Similar to jewelry, artwork and antiques are only covered up to a pre-set limit on your home insurance policy, usually between $1,000 and $2,500. That rookie baseball card you found in your stocking must be appraised and listed specifically on your policy in order for the normal limits not to apply.

3. Dirt bikes, ATVs, and snowmobiles: In general, anything that CAN have its own insurance policy MUST have its own insurance policy in order to be covered from a loss. Even though your new dirt bike is considered personal property, it is considered a motorized vehicle by your insurance company. If yours is stolen and you want a new one, make sure you splurge for the insurance policy to keep it covered.

4. Fire Arms: Most insurance policies will replace your guns if they are damaged, destroyed or stolen up to a maximum limit of around $1,000 - $2,500 depending on the policy. If you have a lot of guns, and your new Christmas toy put you over the policy limit, make sure you discuss the options with your local, professional agent. You can usually increase the policy limit for a very reasonable price (around $10 - $20 per year).

5. TVs, Video Game Systems and Blu Ray Players: Almost all electronics are automatically covered under your home insurance with no need to add extra coverage. Some companies impose limits on electronics, but it is pretty rare. One exception to this rule is computers. Although computers do have coverage provided under all home insurance policies, most WILL have a limit. The limit can vary widely from company to company, so make sure you check your specific limits

Home insurance is just like having one of Santa’s elves standing by to make you some new toys if yours get damaged or stolen. However, you must put insurance on those special new items in order for that elf to be on the job. If you don’t you’ll find yourself with a limit on what gets replaced, and only getting back ½ makes it pretty tough to have a happy new year.

(All policies have their own limits. Please check your personal policies for the exact limits on your policies or consult with your agent.)

By My Insurance Guys


Sunday, December 13, 2009

Renter's Insurance Is The Best Thing You Can Buy For Your New Apartment

If you do not own a home, do you still need to buy a property insurance policy? Your apartment complex does not require it…so is the extra cost really worth it, or necessary? There are 3 reasons it is absolutely necessary to have a renter’s insurance policy for your apartment, condo or rental unit.

Reason 1: Protect your personal property. You may not own the building you call home, but replacing everything you own INSIDE that building can be very expensive. Even if you are just starting out on your own and don’t have much, buying everything from your silverware to your underwear would cost you a considerable amount more than your annual renter’s insurance policy. Even 10 years of renters insurance would cost you less that trying to refurnish a one bedroom apartment. Perhaps everything inside your new place was a hand-me-down or a gift and cost you nothing, what are the chances you could replace everything the same way?

Reason 2: Protect yourself from lawsuits. Just as important as replacing your personal property if there is a fire, is protecting yourself from being sued if YOU start the fire. An accidental fire in an apartment building can lead to hundreds of thousands of dollars in building damage and property loss to the other tenants in the building. If you’ve ever wondered who is responsible for paying for the damages, the answer is YOU ARE! The person that causes the damage is the person ultimately responsible to pay for those damages. The building owner will have an insurance policy to rebuild the home, but the insurance company is likely to pursue the individual responsible in order to recover the money they had to spend. If you don’t have a couple hundred thousand dollars in your savings account and don’t enjoy the idea of having your paycheck garnished for the rest of your life, then a renter’s policy is your best solution. Your renter’s insurance policy provides coverage to pay for damages you are liable for, protecting your assets, and your wages.

Reason 3: Protect yourself from being homeless. Most people will never start an apartment fire or cause damages that leave their home uninhabitable. However, with 10 or more other people living in one building, you need protection from what everyone else may do. If the neighbor above you has a minor kitchen fire, and the fire department fills your place with water while putting out the fire, where will you stay? There are countless news stories of families being forced to stay at a Red Cross shelters because they lost everything and have no money for a new apartment. Your renter’s insurance policy provides coverage to pay for a hotel or other temporary living needs.

There is no easier or less expensive way to replace your clothes and furniture, protect yourself from lawsuits and provide a place to stay in time of need than through a renter’s insurance policy. For as little as $10 per month you can eliminate the possibility of thousands – or hundreds of thousands – of dollars in unnecessary expenses from your own pocket. It is one of the smartest things you can do if you rent.

By Robert Edgin

Tell us what you think, do you carry renter's insuance for your apartmnet?

Friday, December 11, 2009

No One Cares What Kind Of Life Insurance You Have

No One Cares About What Kind Of Life Insurance You Buy

You’ve reached a point in your life where you have responsibilities. A spouse, a couple of kids and a mortgage, some loans and a couple of credit cards – the list goes on and on. Then you stop and realize that if you HAVE responsibilities you should probably BE responsible and get some life insurance. After all, you made an oath to your spouse to take care of them, and you’d probably want your family to keep the home even if you were not there to help pay the mortgage. So what kind of life insurance should you buy? WHO CARES! As long as you have SOME type of protection for your family, the KIND you buy really doesn’t matter much. In fact, it’s the last thing to think about when it’s time to make that important purchase.

Priority Number One: The right amount. Life insurance is really just money – future money. It’s money to replace the money that would come from you over your lifetime. Money to make the mortgage and car payments, money to send little Johnny and Susie to college, money for retirement and all of the other things you and your family have planned together. Choosing the right amount of money is the first step to take when purchasing life insurance because it is THE reason you are buying life insurance. You need to know what your life insurance purchase – your future money purchase – is supposed to do if you don’t make it home from work. There are a lot of methods to help determine the right amount of life insurance. A couple of simple ones are as follows:

1. 10 times your annual income: This has been a recommendation of financial planners and insurance agents forever, and there’s a good reason. It’s all about the math, and the math usually works out to 10 x your income if you want to pay off your bills and leave a little extra for college and monthly income needs.

2. D.I.M.E.: DIME stands for Death, Income, Mortgage and Expenses – the first four things you should consider when deciding how much future money you need to buy for your family. How much will it cost for your funeral – probably $10,000. How much income will you need to replace for your spouse – assuming you’ve paid off the mortgage. How much do you owe on your mortgage, and how much of your children’s education do you want to pay for? These things should be taken care of at a minimum, and would allow for your family to continue on in the lifestyle they are accustomed to without fear of losing a home or putting food on the table.

Priority Number Two: The family budget. It does you no good to overspend and buy more than you can afford for an expensive policy, because you’ll probably end up cancelling it down the road and end up with nothing; and then nothing is what your family will end up with! Statistically, life insurance policies are cancelled after 7 years. You need your future money – your life insurance – to be there when you die. Unless you know when that is going to be, you need to plan on paying for your life insurance for a long time (until your dead, or you no longer need money for the family). You can always change the type of policy you own to fit the budget, but if you wait to buy life insurance until you can afford the best then you may never end up getting it all. Conversely, if you over spend for the best of the best now, but can’t really afford it then you’ll just get rid of it eventually anyway. Either scenario leads to problems for those you leave behind, so before you focus on what KIND of life insurance you are going to buy, start by figuring out your budget.

Priority Number Three: The type of life insurance. There are a lot of bells and whistles that can be added to life insurance, and a lot of excellent tax strategies that policies can be used for as well. However, if you can’t afford the payments – WHO CARES! You should have a long-term policy to last you until you die, but if you can’t afford that now then don’t worry about it. Get what you NEED now, and switch it to what you WANT later as your budget allows. I came across a young couple about 10 years ago who had 3 small children, a big mortgage, 2 working parents and NO life insurance. They had been discussing life insurance for years since their first child was born, but had never purchased any because they wanted a long-term policy that they could not afford. When we met they put me off as well, stating they would wait until next year when they could afford the policy they wanted. Unfortunately, the husband did not make it to next year. At 33 he died and left his wife with a mortgage, 3 kids and NO money. She stopped at my office on the way to the funeral to ask if maybe the husband had met with me without her knowledge to get some type of protection, but he had not. She purchased life insurance right then and there, dressed in black on the way to her husband’s funeral. It was one of the saddest days of my career, and one I will never forget.

The loss of a spouse or parent is emotionally devastating. Make sure it is not financially devastating as well. Life insurance is just future money – money your family will need to continue with the life you were building together. Make sure you have the right amount of protection if something were to happen to you, and that it fits in the family budget. After all, a widow never asks what KIND of life insurance her spouse had.

By Robert Edgin

Saturday, December 5, 2009

What Are The Right Limits To Carry On Your Car Insurance?

Brad Hagar posed a great question to us the other day that is worth sharing with everyone. "Why do I need to carry higher limits then what the state requires me to carry? Isn't 25/50/15 good enough"? We get this question about liability coverage quite often. Colorado's laws have a lot to do with the answer, and it's definitely an aswer that everyone should know.

A few years back, Colorado became a “tort” state, meaning whoever causes the damages in a car accident is responsible for paying ALL the bills that result from the crash. All medical, rehabilitation, work loss, pain and suffering, as well as fixing any cars or other property you damage. The state requires that you carry liability coverage in the amounts of $25,000 for an injured person, $50,000 for total accident injuries (in case you injure more than one person), and $15,000 to repair or replace any property you damage.

Obviously, $25,000 won’t go very far if someone is seriously injured in an accident. That amount can be spent before a crash victim even gets out of the emergency room. Factor in a stay in the hospital, missed work and rehabilitation and you could easily be faced with a bill of $100,000 or more. As far as fixing cars and other property you may damage, how far is $15,000 really going to go? How much did you pay for your last car? If it was less than $15,000, you are the exception, not the norm. The average car cost in the United States is $28,400 – a full $13,000 above the state required minimum on your car insurance.

If you are carrying the state required minimums and you cause a serious car crash, what will happen? Once injuries or damages exceed your policy limits, your insurance company is no longer responsible for the rest – but you still are! If someone has $100,000 worth of medical bills, and your insurance company has paid the first $25,000 (your state required minimums), YOU will have to pay the other $75,000 still owed. In Colorado, if you do not have the $75,000 than the state will garnish your wages, put liens on your property, and do whatever else they need to in order for you to pay the full amount. The same holds true for damages you cause to property; if the amount of damage is over your $15,000 limit, the rest will come out of your pocket.

So, why should you carry limits higher than the state required minimums? Because paying a few extra dollars per month for higher limits can save you thousands (or hundreds of thousands) of dollars if you are the cause of a serious car accident. Even if you are younger, or don’t have many assets yet, higher insurance limits will help protect your earnings by making sure your paycheck does not get garnished to pay any outstanding judgments against you.

Talk to your local, professional insurance agent to see which insurance limits are right for you. No one means to cause an accident, that’s why they’re called accidents and not on-purposes, but if you are the cause of an accident, make sure you have enough insurance to pay ALL the damages. After all, that’s what insurance is for.

By Robert Edgin

Other RelatedPosts:
Do You Need Medical Payments On Yor Car Insurance?

Thursday, December 3, 2009

Top insurance & financial news for the week of 11/30 - 12/5

The week after Thanksgiving is usually pretty slow around the office and in the insurance and financial industries, but not this week! Here are some good insurance and financial stories we came across this week:

  1. Wierdest Things Ever Insured
  2. Don't Let Your Home Become A Victim This Winter
  3. Reason #42 to have renters insurance
  4. Tips on how to be prepared at the car rental counter
  5. Colorado Springs in top list of recovering cities
  6. Colorado's new driving while texting laws
Do you have a good article or story you've come across that you think should be shared? Post a comment and add the link.

Tuesday, December 1, 2009

Who Needs Medical Coverage On Your Car Insurance Anyway?

If you've paid much attention to your car insurance this year, you probably noticed your monthly price went up about $5 per month for each car you have insured. If you were wondering why, it was probably the addition of $5,000 medical payments to each one of your cars. The question is, do you really need it? Although new legislation made it mandatory for insurance companies to add medical payments to all Colorado auto insurance policies, it is NOT mandatory for individuals to keep it. So here is the info you need to decide whether medical payments should be on your car insurance policy.

How it works: $5,000 medical coverage for you or your passengers if you are hurt in, on, or around your car (i.e. falling out of a truck bed, car crash, slamming your finger in the door). The first $5,000 of medical and rehab needs is paid on your behalf regardless of fault or other health insurance you may have. It can be used for a checkup, chiropractor visits, ambulance rides, etc.

The good: No more wondering whether or not it is o.k. to go get checked out after a car accident if you feel you need it. If you are in a minor accident and you feel you need a visit to your doctor or chiropractor, medical payments will pay for the visits (up to your policy limits) no matter whose fault the accident was - no co-pays, no deductibles, and no out of pocket expense. Without the medical payments coverage you would be forced to either use your personal health insurance and deal with pre-authorizations, office co-pays, etc, OR deal with the other driver's car insurance company IF the other driver happened to be at fault. "The medical payments coverage is making it much easier for people who are hurt to get the treatment they need, and that's what the coverage is all about", says Dr. David Lauritzen of Chirocare Recovery Center in Colorado Springs. The medical payments provide coverage for ALL passengers in your car.

The bad: The medical payments coverage brings a new cost to Colorado drivers, and perhaps is just a preview of things to come in the future. When personal injury protection was removed from Colorado auto insurance a few years back, most drivers in Colorado saw large reductions in their monthly payments. If medical payments become a mandatory coverage or lead to the return of a no-fault system, higher insurance prices will most likely follow. Medical payments may also duplicate some of your personal health insurance coverage - especially if your health insurance has low, or no deductibles for chiropractic and major medical needs. It is important to find out how your health insurance handles payments for ambulance rides, emergency room visits, rehabilitation, etc.

Overall: For now, medical payments coverage will cost you an average of $5 per month per car - a relatively small cost. Even if you have health insurance, one of the best reasons to keep the medical payments coverage is that it provides protection for any passengers you may have in your car with you. It is far easier to pay a few extra dollars per month now than find yourself at the receiving end of someone else's medical bills. If you slide on the ice and your passenger is injured you may be responsible to get them fixed up.

Although you can choose to remove the medical payments coverage from your auto insurance and save a few dollars per month, make sure you weigh the pros and cons first. Check your health insurance policy, and keep your passengers in mind as well. Make sure you talk to your local, professional agent and get a recommendation for your individual needs, and for even more detailed information visit Rocky Mountain Insurance Information Association web site on Colorado Medical Payments.

By Robert Edgin

Tell us what you think! Will you be keeping the medical payments?