Tuesday, July 23, 2019

How much Life Insurance do you need?

Awareness of the necessity of life insurance is one thing. Having a clear idea of how much of it you need is another. Different people have different opinions on this subject. One may have the minimum that will cover just the funeral costs; another may plan giving the dependents at least a small cushion to help them recover from your bereavement and pick up the threads.

The reality is that there is no single right answer to the question of how much life insurance you should have. The best way to find an appropriate answer is to contact a life insurance professional, who will be able to analyze liabilities, the short- and long-term needs of your dependents and other relevant factors.

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However, if you want to do some research on your own, so that you have issues to discuss with the expert, you could use these two formulas:

L.I.F.E.

L.I.F.E. stands for Liabilities/debts, Income to be replaced, Final expenses and Education and/or other expected costs. You can calculate your life insurance needs based on these factors.

A. Total up everything covered by the L.I.F.E. needs. Ensure you leave nothing out. That is the total coverage you need.


B. Subtract all the assets and savings that will be available to your family on your passing. It is tempting to inflate the amount by taking into account expectations from your stock market investments etc. Do not commit this mistake; they are volatile investments.

C. Also, subtract any life insurance you currently have and any coverage provided by your employer etc.


The gap between A and B+C = the amount of additional life insurance you need.

D.I.M.E.F.

This stands for Debts, Income, Mortgages, Education and Final expenses.

  • Debts: These would be every liability you have and everything you owe, including credit card debts, car payments and so on.
  • Income: What is the income that will be lost to the family? This is your current income and what you expect it to be when you stop working; this expectation is normally part of a family’s financial planning.
  • Mortgages: How much is required to pay off your mortgages? Do not think that the amount will be less the following year. No one knows when a claim may have to be filed. If the amount to be repaid is lower in the future, that is an extra cushion for the family and will help cover the unexpected.
  • Education: What do your dependent children want to do with their lives? How much will it cost to educate/train them for the careers they want to pursue? Include any reasonable financial cushion you would like to give them when they start out.
  • Final Expenses: The cost of death is far greater than most people imagine it is. You may desire a small budget funeral. Nevertheless, your family might have an elaborate one in order to ease their pain. Life insurance is to care for those you leave behind and this is a part of that caring. Budget for the final expenses might not be what you desire, but what your family will.
These tests will give you an idea of the coverage you need. To be sure about the protection you require, it would be better to consult an insurance agent.

Evaluating Insurance Policies

Insurance is a competitive industry and insurance companies market their products by making them appear to be as much attractive and user-friendly as possible. That makes choosing the right product difficult. People spend a lot of time comparing breakfast cereals to find the one that best suits them. It is surprising that they do not take the same trouble over their insurance.

It’s not that insurance companies are out to rip you off or mislead you – they are just promoting the sale of their policies. If the policy was not properly evaluated, and if you made the wrong coverage choices, you would live with a false sense of security. However, that would be shattered when a claim is filed, and you find that the coverage is not what you thought it to be.

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Policy comparison

In order to compare and evaluate the benefits of different policies for the same type of coverage, you need to be cautious about the following six key factors, known as the 6 C’s:

1. Cost: Though important, cost should not be the deciding factor. No one wants to pay for insurance more than what is needed. However, if a few extra dollars can fetch you many times the amount of coverage, it might be wrong to brush aside the option.

2.Convenience: Insurance companies make it as easy as possible for people to buy their policies. However, there are industry and legal mandates that need to be followed. At times, these could make one policy easier to obtain than another could. What you need to ensure is that the policy that is easy to get gives you the coverage you need.

3. Coverage: Is the protection available under the policy complete? Do the basic policy terms and available riders meet all your requirements?

4. Customer service: Is there a helpline, chat option on the website or other ways to contact easily the company? If you have to file a claim and need some guidance on how to do it, you should not be made to run from pillar to post. The insurance company should help you all along the way.

5. Claim Settlement: What is the company’s record and reputation for settling claims? When a claim is filed, the payment should in no way be delayed. A company with a record of prompt settlement of claims and payments is the right option.

6. Credentials: You need to be certain of the credentials of the insurance company in general, and settlement of claims in particular. You opted for the policy hoping that the insurance company would protect you when the eventuality against which you are insured occurs. If the company fails, you are going to be left without the resources to recover.

Do it the right way

Doing your own research on the insurance you need is a good idea – the more you know, the better for you and your family. However, with a subject as complex and specialized as insurance is, it is easy for a layman to make a mistake like overlooking a key factor or misunderstanding the extent of coverage.

An insurance agent has the experience and expertise in all aspects of a policy. If the agent is with an insurance broker that deals with multiple insurance companies, he will be able to give you a clear, unbiased and accurate picture of all the favorable and unfavorable aspects of each policy. That will lead you to opt for the right coverage at the right cost.

Sunday, June 23, 2019

Is your Car Fully Insured?

Cars are expensive and subject to damage or loss because of factors beyond your control. Ideally, you should have full coverage car insurance to ensure that you have the protection you need in case of vehicle damage, theft, or destruction. However, there is no single definition of what ‘full coverage’ is.

Every insurance company interprets it differently; when you buy car insurance, you will not find a ‘full coverage’ box you can tick. To ensure that your car is covered against any eventuality, these are the major forms of protection you need, typically treated as being part of ‘full coverage’:

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State requirements
Each state has specific minimum coverage requirements that must be met before a vehicle can be taken on public roads. They usually include bodily liability and property damage.
Comprehensive coverage
A collision is not the only way a car can be damaged. Storm damage, vandalism, hitting an animal and theft are just a few other things that could happen. Comprehensive coverage will cover all physical damage to the car caused by anything other than a collision.
Collision coverage
This covers any damage due to accident or collision, regardless of what caused the damage. This can be purchased only if comprehensive coverage is part of the policy.
Injury protection
Most policies have a set dollar amount for medical coverage and personal injury protection; it is normally set at the state-mandated minimum. Check to see if these amounts are enough – an insurance professional will be able to help you, if you need guidance. If required, the coverage limits can be increased.
You should consider purchasing as well the following as additional coverages to keep your car as fully insured as possible:
Underinsured/Uninsured motorist
This provides coverage if damage was caused by a motorist who does not have insurance.
Gap insurance
This is coverage for the difference between the actual cash value of the car and the amount still due on the financing used to buy it.
Towing
This may not seem like a major cost and is often overlooked. However, towing expenses can be very high and since the cost of the additional coverage is not great, it should be part of the full coverage car insurance.
OEM endorsement
Many car owners do not know that parts from the original equipment manufacturer may not be used for repairs. Aftermarket and used parts may be fitted to the car. Some insurance companies offer additional coverage to cover the cost of OEM parts used for repairs.
Car rental
You will need to use a rental while your car is in the shop. Check to see if your policy covers the cost of car rental.
Other options
There are more coverage options available like vanishing deductible and full glass coverage. An insurance expert will be able to tell you about them and help you pick the kinds of coverage you need.
Get the protection you need
Now that you know what full coverage car insurance is, and more importantly, what it is not, you should consult a reputed insurance agent to fully comprehend the terms of your current policy and get the additional protection you need.

How much Homeowner’s Insurance do you need?

The loss of a home can be devastating for the family and can seriously affect every member’s life and future. Homeowners depend on insurance to help them recover from damage or loss of a home. However, according to Consumer Reports, three out of every five Americans have underinsured their homes, often by up to 20%.

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That leaves them in dire straits when they file their insurance claims and find that they do not have the coverage they need to rebuild their homes and their lives. There are four main factors to keep in mind when calculating your home insurance coverage:

v  The cost of rebuilding your home
v  The cost of replacing personal property
v  Liability coverage
v  Coverage to take care of your living costs till you can return home

Rebuilding your home

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The cost of rebuilding your home will not be the same as the original amount you paid. Increases in material and labor costs, changes in building codes and the value of improvements and renovations you have made over time are a few of the factors that impact on the cost of rebuilding.

Replacing personal property

Assessing the true value of all the belongings you have collected over the years is rather difficult. Some items you think have little value may be worth far more than you may imagine, and vice versa. The only way to know how much coverage you need is to take a complete inventory of everything in your home, and check on the current prices of each.

Then remove those items that you need no longer. What remain would be what you will have to replace; their cost would be the amount of personal property coverage you need, which has limits; expensive items like jewelry, high-end electronics, etc. may require you to take out additional coverage.

Liability coverage

You could be liable for any injury that occurs on your property. Even your best friend could sue you if he faces huge medical bills because of a fall in your home. Most homeowner’s insurance policies cover liability, but often the amount is not enough. In general, you should have at least $300,000 coverage; one of $500,000 would be better.

Living costs

How long will you be away from your home – from the day you move out to the day you return? What would be the additional expenses you will incur during that period – temporary accommodation, food, transport and so on? That is the amount of coverage you need for living costs; if your policy does not cover this aspect, ask the insurance company how you can get this coverage.

Expert advice is essential

Each of the factors listed above does affect the amount of coverage you should have. It is indeed complex and getting right the amounts is never easy; leaving something out or underestimating costs can have serious consequences. At the same time, you do not want to pay for your insurance more than what you really need to.

The points listed above give you an idea of the issues involved. It would be better to contact an experienced insurance professional who will be able to guide you on the right coverage, by providing options you may not be aware of.

Thursday, May 23, 2019

How much Life Insurance do you need?

The only certainty in everybody’s life is death, which will occur eventually, and simply you have no control over it.  However, one thing over which you can surely have some control is to make provisions for your family today, taking into account the reality of the future inevitable.

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It is in this context that life insurance becomes very important. However, having life insurance is not enough; you must have enough of it to fulfill the responsibilities you leave behind.

So how much life insurance should you have? There is no set minimum amount or formula to calculate it. Circumstances are different from person to person and from family to family. However, your insurance plan should cover a few basic liabilities:

Mortgage

Probably for most people, a mortgage is the largest single ongoing financial burden. You must ensure that your family will not bear an extra monetary burden in case of your sudden demise. Mortgage lenders will normally demand that you take a life insurance policy that will cover the repayment. If you do not have coverage for your mortgage, the repayment must be factored into your policy.

Loans

In addition to mortgage, you may have other loans and debts you need to repay. In some cases, the lenders may have required you to take an insurance cover for such repayments as in the case of a mortgage. If you have no such coverage, you should add that liability to your life coverage.

Childcare and education

Every parent knows how expensive it is to raise children. If your children are old enough to identify what they want to do in life, you can calculate how long they will need your financial support and how much. Adding that to your coverage is easy.

If it’s too early for them to know what they want to do, calculate the cost of their remaining years in school, the college years and perhaps one or two years of specialization, research, etc. You will have to cover that amount in your policy.

Income replacement

The cost of living is not static – it rises with time. Your life insurance must ensure that your spouse and other dependents are able to enjoy the same quality of life even after your demise. In order to provide for them to continue to live in the same comfort zone, you can think of an Income Replacement Life Insurance policy.

Other liabilities/responsibilities

No two financial situations are identical. Add up all other financial outflows that will continue after your time, and ensure that your coverage is enough to take care of those costs. In addition, there may be factors like a spouse having a regular income that could reduce the amount of the coverage you require.

These are just general guidelines. Calculating the amount of life insurance you need is not as simple as it may appear. This is one area where you must be sure that you have taken all the right steps. It would be better to consult with a reputed insurance broker who will be able to help you find the right coverage at the right cost.

Impact of 2018 Wildfires on Home Insurance Rates

The steady increase in the incidence of wildfires in California over the years has seriously impacted on home insurance rates in the state. In 2018, there were over no less than 8,000 wildfires across California. The total loss caused by these fires is estimated to be in excess of $18 billion.
                                        
That kind of payout is something the insurance industry cannot afford. The only way to remain viable for them is to raise insurance premiums. This will surely impact on both businesses and homeowners.

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Premium rates expected to rise

The quantum of rise in insurance rates is not yet clear, but it may be huge. In a report issued last year, before the occurrence of the worst wildfires, the California Department of Insurance (CDI) made a prediction: homeowners who pay currently $800 a year for coverage might be charged up to $5,000.

One reason for this increase, besides the actual insurance payouts of last year, is the increasing number of homes in the Wildlife Urban Interface; these are areas, where forests and brush lands touch housing tracts. As they are both the most desired and the most vulnerable locations, the large rebuilding costs must be factored into the insurance rates.

Furthermore, builders say that labor shortages and the rise in material prices keep pushing up steadily construction costs.

Difficult to control the rise

Many residents are hopeful that the state government will be able to do something to control the rise in the rate, using the authority of the CDI. The CDI has the power to slow down the implementation of the increases, reduce them or even reject any proposed increase.

However, this is very unlikely to happen. If it were to occur, insurance companies could refuse to insure property in wildfire-prone areas or even stop selling policies in the state. Wildfires can destroy a community in a few hours. In contrast, the problem of insurance rate increases is a long drawn out one. Approval for increases can take months, and this timeframe could be extended, if citizens’ groups challenge them.

What you should do

The cost of insurance will inevitably go up. It is important that homeowners prepare themselves for this reality. The right way is to have a current valuation done of the home along with the valuables in it. The cost of major repair or even complete rebuilding must be taken into account. That is what you will have to insure your home for if you desire full protection.

There are other issues too you need to consider, for example, the cost of temporary accommodation and incidentals like food etc. if your home is not fit for occupation. Do you want your policy to cover these aspects as well? With the frequency, variety and severity of natural disasters on the increase, you do need full protection.

Contact an experienced insurance broker who has the expertise to help you though the maze of the rate increases. You need to find at the earliest the most cost-effective coverage to keep you and your family totally protected.

Tuesday, April 23, 2019

What to do if your Life Insurance Policy has Lapsed

All insurance policies, including life insurance ones, are contracts between an insurance company and the person buying the policy. Being a contract, there are actions that both parties are obligated to take. The insurance company will pay the money due under the policy, if a claim meets the requirements of the policy.

The policyholder is obligated to make regular payments, as defined in the policy. If payments are not made, the policyholder has not met his obligations and that in turn releases the insurance company from its commitment to pay if a claim is filed. This is known as a ‘lapse in coverage’. If this happens, the policy will have to be revived to enable again the protection the policy provides.

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The grace period

All States in the country require insurance companies to provide for what is called a ‘grace period’, if the premium is not paid on time. This is to help prevent lifeinsurance policies from lapsing every time there is a few days’ delay in paying the premiums.

This period is normally 30 days and the delayed payment will be accepted without the need for further underwriting. If the policyholder dies during this time, the coverage remains intact. When the grace period is over without payment of premiums, things get complicated.

Reviving a policy

Once the grace period is over, reviving a policy is not easy. Underwriting is usually required. If the period of the lapse is between one to six months, limited underwriting is usually enough. This is normally restricted to answering a few basic health questions and attesting that there have been no significant changes in the policyholder’s health from the time the policy was first underwritten.

If the lapse is beyond six months, things are much more complicated; complete underwriting procedure has to be carried out as when the policy was first taken. An important point to be noted is that the claim is very likely to be rejected, if the company discovers any false information in the claim during the limited or full underwriting process.

Why not take a new policy?

A frequently asked question is why not take a new policy if the old one has lapsed for so long that complete underwriting is required to revive it.  The answer is simple: even if the policyholder’s health is the same as it was when the lapsed policy was taken, the premium on the new one will be higher. This is because it will be based on the age at which the policy is issued. This will obviously be more for a new policy.

Get professional help

The specifics of reviving a lapsed life insurance policy will vary from one insurance company to another. The best course of action, in the case of a lapsed policy, is to contact your insurance broker for guidance. They will be able to help you revive the policy in the quickest, simplest and most cost-effective manner you can ask for.

How to File a Life Insurance Claim?

If you are the beneficiary of a life insurance policy, it means that the policyholder cared enough about you; you are now left with financial resources to help you overcome the obstacles that life will present. The policyholder wanted you to have this money, and there is no reason to feel guilty about claiming it. There is also no reason to feel stressed about filing the claim. It is typically a simple process and can be easily completed.

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Filing a life insurance claim

This involves a four-step process:

1. Contact your insurance agent. Even if this is not the person who sold the life insurance policy, he does know the procedure. He can give you competent guidance, and answer any questions you may have.

2. Get a copy of the death certificate of the policyholder. This can be obtained from the policyholder’s doctor, the doctor present at the time of death, or the funeral director.

3. Contact the insurance company that issued the policy. Such information is usually available on the policy document. There will be a clearly defined procedure for informing the company of the death of the policyholder. If you have any doubts over it, or if anything is unclear, contact the company for clarifications, or ask your insurance broker for guidance.

4. Submit the death certificate to the insurance company, without which the processing of the claim cannot begin.

Procedures for processing claims may vary from company to company. However, this is all that is usually required in general.  The next stage is deciding on the mode of receiving the money.

Receiving the payment

When a claim is filed under a life insurance policy, the beneficiary usually has a few options available on receiving payment. Again, the options will vary in degrees from one insurance company to another, but in general, they are as follow:
  • Lump sum payment: All the money due to a beneficiary will be given in one single payment, after which nothing further is due from the insurance company
  • Scheduled payout: A specified part of the money due under the policy is paid at a future scheduled time as defined by the beneficiary.
  •  Life income: The beneficiary receives a monthly payment for the rest of his/her life. The quantum of the payment is based on the value of the insurance policy and the life expectancy of the beneficiary.
  • Specified period income: The beneficiary receives a regular monthly payment for a predefined period of time.
  • Joint and last survivor income: If the policy is a joint one, the surviving insured person will receive a fixed monthly payment for the rest of his/her life. In some cases, there is the option to give part of the money available to a third party.
Filing a life insurance claim is designed to be simple and easy. However, this needs to be done by a beneficiary who is greatly affected by the bereavement of the benefactor, a dearly loved one. That is why seeking the help of an experienced insurance professional is the right course of action. They will give all the relevant information, and guide properly in claiming the insurance benefits due.

Saturday, March 23, 2019

Do You Have The Personal Liability Insurance You Need?

There is a widespread assumption that only those who are wealthy and have business interests need to worry about personal liability issues. The reality is very different. Society has become increasingly litigious, and you could suddenly be faced with a liability claim that could bankrupt you.

From a visitor’s suffering an injury in your home to serious but unintentional damages you could have caused – the areas of what a person may be held liable for keep expanding rapidly. Your homeowners insurance and auto insurance may provide you with some degree of liability protection; however, this must be clearly mentioned in the policy.

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The eligibility should not be taken for granted. It is advisable to contact an insurance professional to check on the amount of liability coverage you currently have.

A common mistake

A common mistake people often make is to presume that their current assets are not enough to warrant paying for liability insurance. The problem is that if a liability claim against you is upheld, you may lose part or all of your savings, investments, home, other property and so on.

Moreover, your future earnings may be garnished and assets may be impacted. Personal liability insurance protects you when you are at fault. Furthermore, your coverage will pay for your legal defense, in case you are falsely accused of an injury or loss.

How big is the risk?

The risk is greater than you may presume. It is an old truism that “most accidents occur at home.” To put that into perspective, the National Safety Council says that in 2013, one in sixteen persons suffered an injury at home that required specialist medical treatment.
If that one person happens to be a visitor in your home, you would be liable to pay for the accident.  Looking at it from a different angle, one in fifteen homes has an injury-related insurance claim each year.

Customer attitude is a major reason why the issue of personal liability coverage is ignored more often than not, or the coverage that may exist is too low to safeguard against a crisis. For instance, when buying a car or home, your focus is primarily on damage or loss; the liability aspect is rarely given the thought it deserves.

Liability could arise anytime from anywhere. For example, suppose that your child hits a ball in a game that flies through an open car window; the driver ducks the ball, loses control and suffers an accident; the liability could be massive, although it was inadvertently caused.

Protect what you have

A liability claim upheld against you could wreak havoc on your life. A reliable protection is in the form of personal liability insurance.  Liability is a complex legal matter and that is the reason why you hear about a very large number of court cases.

Personal liability insurance too is a complex matter. It is important to have the right amount of personal liability coverage; it is equally so to know what your coverage includes and excludes. The best person who can help you get the right coverage is an experienced insurance agent.

Saturday, March 9, 2019

Insurance Agents and Brokers: What makes them Different?

The terms ’insurance agent’ and ’insurance broker’ are often used interchangeably. To most people, they mean the same – people who sell insurance to customers.  It is generally true of course; however, there are a few important differences you need to be aware of. That information will help you decide on who to contact for your insurance needs. There are a few commonalities between the two:
  • Agents and brokers both require a license from the regulatory agency of the state in which they sell insurance.
  • Both receive their compensation from the companies whose insurance policies they sell.
  • They both need to acquire necessarily a few from many accreditations; a customer has the right to know which ones the agent needs to acquire, and which others the broker needs to. The customer has the right to be familiar with what those accreditations entail.
           



Insurance agents

An insurance agent is a representative of an insurance company: he works on behalf of that company to sell their insurance policies to customers. Agents are bound by contracts with the companies they work for. The contracts define what they can sell, say or do; they specify clearly the compensation an agent receives for policies sold.

There are two types of agents: a ‘captive agent’, who works for only one company, and an ’independent agent’, who works with multiple companies.  It may appear that independent agents are better off, but this is not always the case. Captive agents often have access to policies and terms reserved only for them. Independent agents, of course, have a wide range of policies they can offer from different insurance companies.

Insurance brokers

Insurance brokers do not represent insurance companies; they represent insurance buyers. They are not contractually bound to any insurance company, and so they are completely independent. They do receive compensation from insurance companies for the policies they sell, but their success and business growth come from the services they provide the buyers.

Which one is right for you?

Insurance is a highly competitive business. You do find many variations between all types of policies with reference to the terms, conditions and exclusions, and deductibles and premium amounts. A policy that costs more may not provide the type of coverage your specific circumstances demand. A policy that costs less than others may have the coverage you need, but the limits may be too low.

It is difficult for you decide whether higher deductibles and lower premiums are right for you, or the contrary is more suitable for your needs. An accurate comparison of policies, their benefits and their reliability requires a great deal of expertise and experience in matters of insurance.

Insurance brokers are in a better position to offer you a wider range of policy choices, and guide you to the options that suit your needs the most. Remember that insurance agents work for the benefit of insurance companies, and insurance brokers work for the benefit of insurance customers. The success of the brokers, both professionally and financially depends on the quality of their services to customers and customer satisfaction.

Friday, February 22, 2019

Homeowner's Insurance in California: Legal Rights (Part-2)

You find in this post a continuation of an overview of a few more California laws that protect the interests of policyholders.


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Living expenses

In cases where a claim is filed in a situation that the state has declared to be a ‘disaster’, an insurer must provide at least 24 months of Additional Living Expenses (ALE) benefits; this is subject to the limits provided for in the insurance policy. If you come to know what your ALE entitlements are, the insurer is bound to give you a list of items and expenses covered, whenever you ask for it.


In most cases, an advance ALE payment is released immediately after the calamity to help policyholders to recover, and find some strength to reestablish themselves. Further payments are released as and when expenses are incurred.


Fair claim settlement


An insurer cannot force a policyholder to accept a settlement that is unreasonably low or in violation of the terms and conditions of the insurance policy. Subject to policy limits, the settlement must provide for the restoration of the property to the condition it was in before the loss. Workmanship and materials should be of the same quality as before.


For example, if the home had had previously marble counters, the insurer cannot replace them by laminates. Furthermore, the insurer cannot demand that any specified contractor, company or individual do the repairs to the property. All that the insurer may do is to provide referrals, if the policyholder requires them.


Depreciation


The insurer cannot reduce payments/settlements you are entitled to under the terms of the insurance policy; they cannot unilaterally depreciate things that normally would not be replaced during the life of the structure, such as the foundation or the framing, etc.


Should any dispute arise about any depreciation calculation, you have the right to ask the insurer to spell out clearly how the depreciation was calculated; this must be given to you as you can study how it has affected the settlement offer.


Examination under oath

The insurer may ask you to be examined under oath about a claim you have filed. If that happens, the questions asked should be relevant to the processing of your claim; you are entitled to receive a transcript or recording of the examination.


You can then provide clarifications or rectifications of any answers you had given under oath. You can also ask the insurance company to give you a copy of the questions before the examination, but they are not bound to supply this.


Complaints against the insurer


Should you desire to file a complaint with the California Department of Insurance, the insurance company cannot retaliate against you in anyway, withhold your payments, intimidate, or threaten you in a bid to prevent you from filing the complaint. Moreover, the company cannot advise you against consulting an attorney or obtaining legal advice in relation to your claim.


To access a copy of these laws and regulations, visit the California Department of Insurance website using this link: http://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/2007NewLawsNoticeCAWildfires-2.pdf



With the right insurance broker at your side, the problems you may face in filing a claim will be minimized largely; the broker will ensure that all matters are resolved quickly and fairly to your satisfaction.

Homeowner’s Insurance in California: Legal Rights (Part-1)

California has enacted more laws to protect the rights of insurance policyholders than any other state in the country. While this is undoubtedly a good thing, the downside is the complex and voluminous documentation that covers these laws. Most people cannot but shy away from going through the entire volume. In fact, many people in the insurance industry, including claim adjusters, do not have complete knowledge of them. 
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Consequently, through no fault of their own, and with no attempt on the part of the insurance companies to help out, claimants in California face many problems. Often they do not receive the full payment due to them, or the payment is inexplicably delayed. Good knowledge of your rights can help you receive fair treatment from insurance companies. A few of your crucial legal rights are listed below for your benefit.

Good faith settlements

The insurer must act in good faith and must attempt to “effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.” Moreover, the insurer cannot settle a claim “for less than the amount to which a reasonable person would have believed he or she was entitled by reference to written or printed advertising material accompanying or made part of the application.” In addition, depreciation/actual cash value holdbacks must be reasonable and not excessive.

Clear prompt communications

Your insurer must respond to all your questions and other communications within “15 calendar days”, and there must be “a complete response based on the facts then known.” The insurer is also duty bound to inform you about all deadlines that may apply to a claim you file, including any deadline that may exist for filing a lawsuit against it.

To ensure that you receive the service you are entitled to, it is best to communicate with the insurer, on important matters, by letter or email so that there is a record of who said what and when.

Fair claims process

The processing of a claim must be transparent and fair. You have the right to see all documents the insurer may have or create relating to a claim you have filed, including any that affect the valuation process. In other words, you have the right to see all valuations, reports, photographs, material estimates, content and construction depreciation schedules and so on.

On request, the insurer must supply you with copies of all these documents for your perusal and review. What you are not entitled to are attorney-client communications and work products, which are privileged.

Fair investigation

An insurer is bound to gather whatever information is reasonably required to process a claim and it is your responsibility to cooperate in the investigations. In case you are uncomfortable with questions asked of you via a telephone interview, you can ask for a written list of questions, which you may respond to in writing.

Tuesday, January 22, 2019

10 Key Insurance Policies - Part 1

The aim of insurance is to protect you against the unexpected. We know that we will all die eventually, but we do not know when, so we have life insurance to provide for our dependents after we are gone. We are not aware of when we will fall sick, be injured in an accident, have our homes damaged by natural disasters and so on. Life is full of uncertainties and it is natural to try to have as much protection as possible against what could happen. The problem is that resources are limited and trying to have insurance against every possibility may not be financially viable.Every individual and family’s insurance needs are different. That being said, there are some types of coverage that are essential for just about everyone. These are the key policies that should always be in place. The specifics may differ from person to person, but an insurance broker will be able to give you focused guidance that will ensure you get the coverages you really need.

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     ·  Disability insurance: Studies show that about one-third of Americans will suffer, from some form of disability during their lifetime that will prevent them from working and earning an income. The effect this can have on a family is often not fully appreciated. The fact is that, almost half of all home foreclosures are caused by people being disabled and unable to work and pay off their mortgages. Disability insurance is the only protection you have if your earning ability is affected by sickness or injury.

     ·  Long term care insurance: Americans may be healthier than ever before and may live longer, but it is important to keep in mind that over half of the population will require some type of long-term care, such as an extended stay in a nursing home or having an in-house nurse after the age of 65. At the minimum, a 12 month stay in a nursing home will cost $60,000. It will probably be much more, depending on the amount of care required. Not having this coverage could wipe out your savings and retirement portfolio. What happens to you, and your spouse, then?

     ·  Health insurance: A major illness or a serious accident could leave you, or a family member, with medical bills running into hundreds of thousands of dollars. This could not only wipe out your savings, but also bankrupt you. Health insurance is the only protection you have against the ever-rising cost of medical care.

     ·  Umbrella insurance: It is not only the rich who are sued for damages. The world we live in is becoming increasingly litigious and even the smallest of issues can result in claims for damages. Many people make the grave mistake of presuming that because their assets are limited, it is not worthwhile for anyone to sue them. They forget that their future income may be included in any damages awarded. Umbrella Insurance is the best form of protection at a lower cost.

     ·  Term life insurance: Death could strike anyone at any time. Term life insurance is a cost effective way to ensure that your dependents do not suffer financially after your death and that their futures will remain secure.

The next part of this blog will look at the other essential insurance coverages.

Wednesday, January 16, 2019

Health Insurance Options for Small Businesses - Part 2

Two options were covered in the first part of this blog. Here are three more popular and viable health insurance options designed for small businesses.

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Group integrated health reimbursement arrangements

High Deductible Health Plans (HDHPs) are among the most widely used group health coverage options. One reason for this popularity is the low cost of coverage. The problem with them is that the low cost is due to the high deductibles and the limited coverage they provide. HDHPs may meet the requirement of providing employees with healthcare, but they typically do not meet all healthcare needs or cover all the costs. One cost-effective way of making up for the shortfall is to offer a Group Integrated Health Reimbursement Arrangement (GIHRA). With a GIHRA the employer allocates a monthly tax-free allowance to the employee that is in addition to the group policy. The employees can use this to pay health care costs and the employer will then reimburse them to the extent of the amount allowed to them. Businesses can set up their own employment eligibility requirements and allowance limits.

Association health plans

Associated Health Plans (AHPs) allow small businesses within the same industry segment or in the same geographical location to jointly purchase large group coverage. Because of the larger size of the employee pool, the cost per employee, can be substantially lower than other coverage options. However, in some cases, standard coverage items and essential health benefits may not be covered. Businesses joining together for an AHP must ensure that they all have the same employee health care objectives. Without this, the conflicts that will arise on the amount and types of coverage, can render the plan inoperable.

Self-insurance

Self-funded health insurance is an option that some companies go in for. In this case, there is no health coverage from an insurance company and so there are no premiums to pay. Instead, the employer takes up the financial burden of providing health care to the employees. The eligibility, types, amount of coverage and deductibles etc. are all provided in a formal coverage plan that is made known to all employees. The positive here is that since there are no fixed payments to an insurance provider, the financial outflow will be limited to only actual costs covered by the plan. The risk, of course, is that the payments towards healthcare costs will exceed what the insurance costs would have been. In the worst case scenario, the financial outlay could cause irreparable financial damage to the business.

Lots of options – lots of ways to make mistakes

The aim of all these health coverage options is to reduce the financial burden on small and medium enterprises. Each one has its own pros and cons and navigating through the complexities of the coverage options can not only be time consuming, but also very confusing. Making the right decisions will result in a happier and more motivated workforce that will have a positive impact on business performance, while the wrong choice could result in a demoralized workforce and lower productivity. Contacting an insurance broker is the best way to be sure of making the right choices. He will evaluate the coverage needs of the employees and suggest the health plan that will be best for them and the company itself.