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!