Friday, April 28, 2017

Floods - California’s Uncertain Future

According to a state report, California is at increasing danger of severe flooding in the future. What happened in San Jose recently could be just a taste of things to come. A report from the nonpartisan Legislative Analyst’s Office (LAO) says that 1 in 5 Californians live in a flood plain. The structures at risk of flood damage are estimated to be $575 billion. The current expenditure on flood reduction is far less than the tens of billions of dollars that will be required to increase the level of protection. In San Jose, 14,000 people had to be evacuated and the damage is estimated to be about $100 million.

Inadequate Funding – A Huge Challenge

According to the LAO, the funding for flood control is both limited and inconsistent. The Public Policy Institute of California estimates that between 2008 and 20011 the state spent $2.2 billion a year on flood control measures. Most of the dams and weirs in the state are a minimum of 60 years old and many of the levees were built 100 or more years ago. These are not to modern design and structural standards. The Department of Water Resources and the U.S. Army Corps of Engineers, in a study released in 2013, says that there are 836 flood management projects in the state that will require $52 billion and an additional $100 billion is required to address the problem of future flood risk.

Climate Change and New Developments Add To the Problem

The effects of climate change are well known and even if the trend is reversed in the foreseeable future, undoing the damage already caused will take decades. Expecting the scope of the problem to increase is not scaremongering – it is scientific fact. Added to this is the population growth that is pushing development into new and often unsafe areas and compounding the problem. One example is the approval given for the construction of apartments in Nordale Avenue in San Jose. This is an area that was inundated by the recent flood.

Flood Insurance Is No Longer Optional
The dangers to homes and property are obvious and there is no immediate solution in sight. Flood insurance is no longer an issue that Californians can afford to just think about. It is essential and needed now. Many homeowners think that their homeowner's insurance will cover such calamities and that state and federal flood assistance programs will offer them the additional protection they need. Standard homeowner’s insurance policies do not cover damage and loss caused by floods. State and federal programs are intended to offer immediate relief from the havoc that floods cause, not to help in recovery and rebuilding lives. If you do not have flood insurance, you should contact an insurance broker without delay to get the coverage you need to protect your family’s future. If you do have coverage, are you sure it is enough? Why not talk to an insurance professional to see what kind of protection you really have and if you should increase it?

Sunday, April 16, 2017

Life Insurance - Do Your Children Have The Right Coverage?

According to some estimates, about 30 million Generation X and Y people in the country do not have adequate life insurance coverage. In their younger years the thoughts of family, responsibilities and death are not serious concerns. However, time passes quickly and responsibilities grow faster than they think are possible. With so many competing financial obligations and life insurance options available, finding the right coverage is not easy.If you are the parent of a young person starting an independent life, talking to them about life insurance is not interference, it is parental guidance. Here are the 3 basics of life insurance that you should discuss with them.

Do You Need Life Insurance?

If you are single and have no dependents, you may not need life insurance. If you are working, you may qualify for a small policy through your employer which will cover the basic funeral expenses if you die. However, if you are married, or have taken on guardianship of siblings or have people who are dependent on you, then life insurance is no longer an option. You need to ensure that those who depend on you are taken care of if you should die. The younger the age at which a policy is taken out, the less expensive it is. Beneficiaries can always be changed as circumstances alter.

How Much Do You Need?

This is difficult to decide. Millennials will not be able to appreciate the financial liabilities that are placed on them as they progress through life. As a parent, you can use your own example of where you were 20 years ago and where you are now. That will provide a framework for what they have to plan for. They need to look at where they will be 10, 20, 30 and 40 years from now and what their responsibilities will be. In general, the coverage should be enough so that their dependents can live off the interest. This will include paying off any debts and paying for children’s education. These may be difficult to determine so much in advance, but by planning for the future in 5 or 10 year blocks, getting the right coverage will be easier.

What Type Of Life Insurance Is Right For You?

Term life insurance, as the name implies, is a coverage that is taken for a fixed period of time. If the policyholder dies during the validity of the policy, the beneficiaries will be paid the policy value. A whole life policy provides for lifelong coverage and contains a tax deferred investment component called the “cash value.” Money can be borrowed against the policy or it can be surrendered for cash. Both options have their pros and cons.

Professional Guidance Is the Best Option

Once the need for life insurance has been understood and accepted, an insurance broker should be consulted. An insurance professional will be able to explain the intricacies of life insurance, the various options and how the coverage can be changed to meet the demands of different stages of life. Insurance is a constantly evolving business and the coverage you, as a parent have had over the years, may not be the best for your children.