Monday, April 28, 2014

Do you trust your Bookkeeper?

Does your business insurance have enough coverage for employee dishonesty?

Most policies cover a trivial amount automatically of $20,000 or less. Its extremely inexpensive to add $200,000 or more. Stories like this are commonplace locally. The crooks are almost always caught after years of stealing and all the moneys gone. Think of Frys electronics millions stolen recently. A local nursery was put out of business by an embezzler. Countless other examples of victims bilked by people they trusted.

If you are on the board of directors of a homeowners association or a commercial condo association you better make sure you have enough coverage to cover the total reserves in the associations bank account. We have just reviewed 2 clients recently that have 0-$50,000 when they should have $250,000. As a board member you can be held liable for this oversite.

Call Carlos or Mimi at Insurance by Allied Brokers (650-328-1000) for a free insurance review.

Reform of the Flood Insurance Reform

We have the cure for the government run flood program: New half price private flood insurance with no elevation Certificate required. Call us for eligibility and options.

Reform of the flood insurance reform is coming. The bill allows for eighteen months for the implementation of the new plan. The 7/12 plan just got started 10/13, so expect the same results.
Possible highlights of the new plan:
  • Rebates for flood insurance customers who got big rate increases.
  • $1,000 elevation certificate requirement waived or delayed for some people.
  • Grandfathering allowed.
  • Buyer can assume seller’s cheaper policy.
  • A CAP on annual increases of fifteen to eighteen percent instead of twenty to twenty-five percent.
  • Delays or slowing of rate increases.
The rules are still written in pencil, but we will continue to keep up with the developments to help our clients.

From the gang that couldn’t shoot straight, in Washington, more confusion for our clients in a flood zone. The new 3/14 deal will reduce and/or delay the severe rate increases imposed by the 7/12 Biggert Waters Flood Reform Act for some flood insurance clients. The old deal took eighteen months to take effect and the new deal may take eighteen months as well. Some changes are promised by 5/1/2014, but the rules are like Obamacare, still written in pencil. I say the heck with the government flood policy!

GOOD NEWS!! We have a private flood insurance option that can save you up to fifty percent with better coverage and no $1,000 elevation certificate is required. Call Steve, Scott, or Carlos for a free review today. See our ad in the Daily Post!

Please call us 650-328-1000 for help with this or any other insurance matters, we are always here to help.

Sunday, April 27, 2014

Insurance for your Domestic Employees

Homeowners are at risk of being sued or made responsible for workers compensation and withholding payroll taxes anytime they hire a Nanny, cook, gardener, cleaning lady, handyman, caregivers, artisans, contractors and their subcontractors and employees;

Do you have insurance if they get injured on the job or sue you?

There are 3 main insurance risks, they are ;
  • workers compensation, a work related injury
  • general liability, your dog bites them
  • personal injury, wrongful termination or discrimination
Workers compensation: Your homeowners policy covers part-time household employees workers compensation protection if the work less than twenty hours a month. If you have a domestic employee working more hours, we can add coverage to protect you for $350 a year per employee. This covers the state mandated lost wages, medical, rehabilitation, and death benefits for work related injuries.

General liability: Your homeowners covers this usually up to $500,000 plus legal defense. This can be extended with an umbrella liability policy in increments of $1 million.

Personal Injury: We add this coverage to all of our policies, does your policy have it? This covers slander, libel, sexual harassment, discrimination and wrongful termination.

Hiring a general contractor or artisan to work on your home is also a risk, exposing you to liability. This risk can be reduced by demanding that your general contractor provide proof of liability, workers compensation coverage, AND name you as an additional insured ON HIS policy. Now he is first in line to pay the damages and his policy will also protect you. In addition, make sure that the general contractor pays all payrolls through his books. Then his employees and sub-contractors are not your problem. You can than avoid most workers compensation, liability, and tax pit falls.

Finally watch out for payroll tax problems. They are not insurable but can be costly. As the employer you are required to submit a 1099 or W-2 to the IRS for anyone paid more than $600. If they are deemed your W-2 employee, you are required to withhold and pay the state payroll taxes. Most domestic’s are considered W-2 employees . IF you fail to withhold the taxes and the employee doesn't pay them then you have to pay all of them plus fines. Several recent political runs for office have been damaged by accusations about not reporting and paying payroll taxes and hiring illegal aliens. Avoid this unwanted attention.

Please call us 650-328-1000 for help with this or any other insurance matters, we are always here to help.

Thursday, April 17, 2014

Common Business Property Insurance Gaps

To lecture business owners about the need for business insurance is like preaching to the already converted. They know the risks that they face, and do their best to take the insurance coverage they need within the insurance budget available to them, especially when it comes to business property insurance. In a perfect world, a business would be insured against every possible calamity. But we do not live in a perfect world and insurance costs money and with competing demands for every dollar, business owners opt for optimal, not total, coverage. It makes sense – why should a business located in a place that has never seen an earthquake take out earthquake insurance?

Business property insurance offers protection against loss or damage to the place of business and the contents of the premises. The first thing to do to ensure that a business is properly insured is for the owner to ask himself a question – “ If the premises and contents are lost, will the coverage enable me to go back to where I was before the loss?” This can be done by totaling the cost of recovery from catastrophe and seeing if the coverage is for the same amount. But it’s not that simple. There are usually exclusions that limit the coverage and it is in these gaps in the protection that danger lurks.

Plugging the Gaps

The first thing to look at is the total cost of recovery. This is not the same as a valuation for property tax or real estate marketing – these will never cover the cost of getting back on your feet. The cost of recovery is a top down valuation of what it will cost, at the current prices, to recreate everything. This can be done by getting estimates from builders and suppliers and basing the coverage on that. It could result in overestimation, but after a disaster, you will not be in a position to spend time shopping around for the best deals. Overestimation is better than getting caught short. This is an exercise that must be done once a year.

Most commercial property insurance plans do not include floods or windstorm damage or loss. These are not frequent occurrences in many parts of the country if there has been no severe weather for a couple years, people tend to forget about the dangers. And the premiums are not cheap. But after Katrina, Sandy, Ike and other storm and flooding disasters, it is obvious that these things can occur without warning after a long period of quiet. If your business is in a floodplain or a region where windstorms can occur, even if they have not for many years, you should check the exclusions on your insurance and plug any gaps in your coverage.

Another often overlooked gap is Ordinance Compliance Coverage (also known as Ordinance or Law Coverage). This will cover the costs of upgrading a structure to conform with existing building codes. But what does this have to do with a disaster? An existing structure may not have to comply with modern codes as long as the structure is not rebuilt or renovated. But after a disaster, if substantial repair or rebuilding is required, then modern codes must be complied with. And these cost money. For example federal regulations require that if a structure on a flood plain is damaged in excess of 50% of its market value, it must be rebuilt in conformity with current codes. In most cases, business property insurance does not cover this additional cost. If you do not have this, getting this extra coverage is a very worthwhile expense.

The right thing for a business owner to do is to consult an insurance professional to look at all the coverage options (and costs) available to him. Each potential coverage option should be reviewed in terms of historical risk, operational risk and complete repair and / or replacement costs. Covering every base may not be possible, but knowing where you are unprotected will at least prevent any unpleasant surprises.


Insurance by Allied Brokers has been helping businesses in the Bay Area for over 50 years with their property insurance needs. If you have questions about the possible gaps in your business property insurance, call us at (650) 328-1000.

Wednesday, April 16, 2014

Flood Insurance – Postponement is not a Solution

The Biggert–Waters Act of 2012 was aimed at tackling the crippling $24 billion deficit that the National Flood Insurance Program (NFIP) found itself in. The massive subsidies that the Program had to bear created a situation where the continuation of the system was unviable. The reform of 2012 was aimed at rationalizing the premiums so that the Program could become financially viable and stop being a massive burden on the taxpayers. This makes sound economic sense but the problem is that the sharp increase in insurance rates could cost millions of people across the country to lose their homes or face. How bad is the situation? An example would be a Long Island homeowner who still has a hole in her house from Superstorm Sandy. Her flood insurance premiums have gone up from a pre-Sandy amount of $850 to $2,200 now. Or take the case of a Penn. homeowner put his home up for sale but was as surprised as the prospective buyer to find that the new annual flood insurance premiums would be over $7,000 higher than the mortgage payments for the same period. Not only did the sale not go through, the seller knows no one will buy the house with that kind of financial burden attached to it. There are millions of cases like this across the country.

Postponement is Good, But…….

The effect in human terms of these homeowners would be catastrophic. And financial impact on an economy that is still not through with its recovery would massive. That is why lawmakers have no passed another reform that will delay the proposed increases, at least partly. For businesses and owners of second homes, the increase will be mandatory 25% per year. For other the increase is now capped to 18% a year, but FEMA had the option to reduce the amount of the increase. This is good news, but all that it really does is to postpone the day of reckoning. FEMA now has 18 months to submit an already overdue report on flood insurance affordability. It has 36 months to find a way to help policy holders who cannot afford the increased rates. A target of limiting annual premiums to $2,500 for $25,000 in coverage exists, but how is this to be reached without bankrupting a program that is already charging more than that in many cases?

Over 1 million policy holders will see their premiums rise significantly over the next few years. There are hundreds of coastal communities, port towns and river cities where the increase in rates will make it very difficult for people to keep their homes. But if the premiums stay low as they are now, any serious flooding could cost the taxpayer billions of dollars.

Using the Respite Wisely

Homeowners cannot afford to have the situation continue to drift in the way it has over the last few years. At the same time, the Program cannot be allowed to remain a burden on the taxpayer. Many proposals are emerging that could help to achieve a balance between protecting the homeowner and enabling the Program to stand on its own feet. Among them are giving vouchers that can be used to offset the rate increases to those who elevate their home on pilings, high foundations etc. Raising homes is expensive but the cost, in terms of loan repayment, could be less than the proposed increase. Some form of relief from the rate increases for those who are unable to raise their home but can move electrical and heating equipment to less vulnerable areas and are able to install water tight doors and windows is another possibility. There is also a private flood insurance program that costs only half of what NFIP does and also does not need an elevation certificate which cost $1000 and is required by the NFIP.

The latest reform has given homeowners and lawmakers a little time. It must be used wisely. It will be a shame if, a couple of years done the road, we continue to be faced with the problems of an unviable flood insurance program and rate increases that will cause people to lose their homes.

Have questions about your flood insurance and home insurance? Insurance by Allied Brokers can help you. The expertise we have gained over the 50+ years of our experience in the Bay Area will make it easy for you to find the best coverage at the best price. Call us at (650) 328-1000.

Wednesday, April 2, 2014

The "New Normal" in Health Insurance

High prices, no providers and lousy service

I want to apologize first and foremost to all of our health insurance clients for the deterioration of the level of service which we have been providing. The implementation of Obama Care (ACA) has been a complete disaster and it has thrown all of the insurance companies into chaos. The government failed to advise the companies as to what to do because they themselves had not yet written the rules. Because of this, the companies unfortunately could not advise us as to what to tell you, our customers.

Obamacare is driving up rates for everyone unless you make less than $45,000 a year and are getting a government handout sponsored by the taxpayers or have insurance but are being surcharged for a serious pre-existing condition. We do not participate in the Covered California exchange, as that is the only way you can get the socialist taxpayer subsidy and there is already enough wealth distribution going on in California without our help. If you are willing to pay for you and your own family’s health care costs, we are ready and willing to help you navigate through the morass that is Obamacare. We have the expertise to make the process as painless as possible.

The companies are in a state of chaos. They have fired most of their intelligent, quality people to cut the costs and are then replacing them with low paid novices that can barely spell insurance. The old Palo Alto landmark “Rudy’s Pub’s” motto was, ‘Lousy service, warm beer and cheap food.’ It was a kind of a cute takeoff on English pub humor.  The “new normal” for health insurance of ‘lousy service, poor provider lists, long waits, higher premiums, fouled up billing, and no one that knows or wants to fix it’ is simply NOT CUTE.

          Now that open enrollment is almost over, the rules and rates are pretty clear, although the companies’ service is still lousy. If you attempt to call an insurance company, you will experience a hold of one to three hours followed by your call becoming disconnected, transferred, or you may even be given wrong or conflicting information. You can avoid all of this by just calling Ron at Insurance by Allied Brokers today to guide you through the chaos for no additional cost!

“Not touched by human hands” has become our new method. If we cannot do it online or via mail, then it cannot be done. We have been able to learn all the new rules and how to get things done for our clients without having to talk to the companies. Please take my advice, and do not try to do it on your own. Without us to navigate for you, it is hopeless. We will use our expertise and genuine care for your best outcome to help you through this difficult process and get the job done!

Services we provide under the “New Normal”:
  • Signing Up
  1. Signing up for a new or replacement policy
  2. Explaining rates, coverage, and options
  3. Choosing provider networks
  4. Comparing companies
  • Billing and Payments
  1. We can check all of the companies online
  2. Change of bank or payment plan
  • Coverage and your share of the Bill
  1. Answers to your general questions
  2. Write letter to the companies contesting billing issues (Two month minimum wait)
  3. The best method is to skip the insurance company and contact your doctor directly on miscoded items
  4. Collection Agencies and your doctor and/or hospital are not getting paid on time so they are sending you to collections. Do not pay them; just send them your letter contesting the bill that we will have already sent to the insurance company
Let us help you get exactly what you want and need instead of headaches and wasted time that you will not get back. Insurance by Allied Brokers is the solution, YOUR solution!