Thursday, November 21, 2019

Rental Unit Owners Risk It All

For most people, their home is their biggest asset. It is cherished, protected and maintained to the best of their ability.  Obviously, this costs money and when a way to monetize this asset appears so that apart if not all the upkeep costs can be defrayed, it is an opportunity that many homeowners jump at. Even otherwise, the additional source of income is something homeowners don’t want to let go of. This is one of the reasons why Airbnb has seen such phenomenal growth over the last few years. A second or vacation home may be lying empty for a good part of the year. Why not turn it into a rental with Airbnb and earn some money when the owners are not using it? If the owners are empty nesters with more space than they need, why not turn part of the home into a rental and make some extra money? There are many reasons to sign up with Airbnb and the process is a simple one. Only a few people think of the risks involved. After all, the rental space is not being used, the valuables have been removed and if anything should be damaged, there is always insurance to cover the cost of repairs is how people reason. Unfortunately, that is not the case.



The Risk

The people who will live in your home are strangers. Sure, they have come through Airbnb so they have been checked out, at least to some extent. But that is no guarantee that they are really who they appear to be. It could be that they are the sort who simply don’t care about other people and their property and will treat the home they are staying in with contempt, leaving the owner with a mess to clean up after they have gone. Or they could be the nicest of people who have unfortunately had an off day which results in accidental damage to the home and what is in it. In the worst-case scenario, the actions of the short term renters could lead to the home being badly damaged or even destroyed.

The Protection (Or Lack of It)

All homeowners have these thoughts in mind when giving control of their home to strangers. However, they also believe that the one-off possibility of bad things happening is no reason to lose out on the easy additional income as even in the worst case, Airbnb insurance and/or the homeowner’s policy will cover the damage or the loss. However, this is not the case. In a recent incident, Airbnb insurance refused to pay when the renter of a $1 million home burnt it to the ground. The home insurance policy declined to pay because the home was being used for business purposes which is excluded from the coverage.

The Solution

What homeowners do not realize is that they need extra coverage if their properties are being used as Airbnb rentals. There are special vacation rental property policies that offer the owners the protection they need. Few insurance agents are aware of or understand this coverage. If you are renting out on Airbnb, contact an insurance broker who is aware of the protection that is available to you and will help you find the right coverage to keep you and your home protected.

Everyone can get insured now!

Allied brokers are the best when it comes to auto insurance, home insurance, business insurance, life insurance or health insurance. They are indeed unparalleled!

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Thursday, November 7, 2019

Wildfires Are Back

Wildfires – just when you thought they were over, rear up again. The second coming of the wildfire season this year has been worse than the first. Californians accept that the dangers of earthquakes and wildfires are the price they have to pay to live in the Golden State. Earthquakes are still a force of nature that have not been fully understood and when and where they happen is of course beyond human control. Wildfires too are usually, though not always, acts of nature. The difference is that the frequency and intensity of these fires are steadily increasing. So too is the area that is affected, which is constantly expanding.



It’s Been a Bad Year

Strong Santa Ana and Diablo winds, extremely low moisture levels, drought conditions and an abundance of tinder are among the many reasons why the state is so prone to wildfires. Long term changes to the climate and the environment mean that the situation will only get worse in the future. This year, as of the end of October:
  • The Kincade fire has burned over 66,000 acres.
  • 96 structures, including 40 homes have been destroyed.
  • 80,000 people remained threatened.
  • The Getty fire has burned500 acres.
  • A large number of homes in high-value areas like Brentwood have been damaged or destroyed.
  • Millions of homes have been left without power after electricity was cut off for safety reasons.
  • The damage and loss caused by other fires are still being calculated.
As bad as this year has been, expect both the extent of the risk and the areas where wildfires occur to increase in the future.

Are You Properly Protected?

Statistics show that most of the homes in California are underinsured. The desire to save money by limiting coverage is understandable. However, when the perils that homes face are increasing, the desire to cut back on insurance is becoming an unacceptable risk and one that is rapidly increasing. Over the last few years, there have been a huge number of cases where the insurance coverage for homes damaged or destroyed by wildfires has not been enough to cover the full repair or rebuilding cost and the other expenses that arise while the home is uninhabitable. These homeowners have faced immense financial hardships in trying to rebuild their lives.

Insurance companies are watching this year’s developments closely and it is likely that insurance premiums will go up again as they did in 2017 and 2018 when the wildfire damage resulted in huge payouts and a resulting rise in insurance rates. Expect rates to go up in the next few months when the full extent of this year’s losses have been evaluated. Hence, this is the time to contact a trusted insurance professional who will be able to help you balance the increasing risks your home faces, the rising cost of insurance and the need to have the kind of coverage that will give you and your family the protection you need.

Wednesday, October 23, 2019

Don’t Let Your Kids Become Uber Delivery Drivers

It's becoming an increasingly common situation – parents with children who have been driving for a year or two, are good drivers and who have their own cars think that being an Uber driver is a good way for the kids to earn some money. The hours are flexible so the driving can be done around school hours and other busy times. The money looks good too. The simple calculation done is to take the driver’s per mile income and reduce the gas cost. What is left is the profit that will make the children more independent and reduce the financial burden for the parents. Unfortunately, that is not the whole story.

Image Courtesy: Pexels
What It Really Costs the Driver
There are other costs that need to be entered into the equation – depreciation, vehicle wear, service costs, higher insurance rates, etc. An example of how misleading this simple equation of income minus gas equals profit can be was recently reported in the news. A car owner wanted to make some extra money in his spare time. His car was worth about $20,000. He drove for Uber for a couple of months and made $5,000. During that time the value of his car dropped to about $15,000. About 80% of the driving he had done during that time was for Uber, so about $4,000 of the value drop was due to that. Then there were the extra service costs and new tyres, both of which were needed much sooner than normal because of the Uber mileage. 

The insurance rates also went up because of the endorsement required to cover ridesharing. All in all, these totaled up to more than $3,000. The bottom line is that in the months that he drove for Uber, the driver earned $5,000 but the depreciation and service, insurance and parts costs were in excess of $7,000. In other words, driving for Uber was a big loss. The danger here is that in many cases people drive for Uber for months enjoying the extra cash in hand. It is only after quite a few months that the actual costs involved begin to dawn on them and by then, they have incurred significant losses.Some of those who drive for ridesharing apps think that driving more miles will offset some of their losses. The problem here is that Uber only reports mileage done with riders in the vehicle, which is usually far less than the total miles driven.  Uber drivers lose in every way. When it comes to letting kids drive for Uber or delivery, it is the parents who end up footing the bill.

The Risk Factor

The more a person drives, no matter how good a driver he or she is, the greater the possibility of being involved in an accident. Insurance will, in most cases, not accept a claim filed because of an accident while the vehicle is being used for ridesharing. Endorsements may be available, but that coverage is only for when the driver is between rides and stops when a rider enters the vehicle.

If you want to go ahead with the ridesharing, talk to an insurance agent to understand what the risks are and what the additional coverage will cost.

Tesla Launches Auto Insurance in California

Tesla, along with its high-profile CEO, are frequently in the news. The coverage is both positive and negative, as is to be expected when the CEO is worth over $19 billion and the car seems to be where the future of the automobile industry lies. Recently Mr. Musk’s name was a hot topic in the insurance industry because of the launch of a Tesla insurance product. This is being done via a partnership with an established and well-known insurance company. An emerging auto company entering the field of insurance may seem odd, but Mr. Musk feels that it is the high cost of Tesla insurance that is a major factor in limiting the growth of Tesla sales.

Image Courtesy: Pixabay
The High CostofInsuring Tesla Vehicles

On the face of it, the high cost of Tesla insurance may not appear to make sense. No insurance company disagrees with the claim that vehicles with driver assistance systems are among the safest on the road. In other words, the number of insurance claims for these vehicles will be less than those for traditional autos. However, the problem is that the size of the average claim may be significantly higher for a Tesla than for other cars because of the high cost of the autonomous driving technology. When an accident does occur, the cost of repairs or replacement could be very high.

In California, the cost of insurance through the Tesla insurance product may be up to 20% lower and in some cases, as much as 30%. Tesla says it is able to offer these prices because the company knows its vehicles better than anyone else and is able to leverage that knowledge to offer lower insurance costs. The counter-argument is that while Tesla may know its vehicles best, how does that translate into a detailed knowledge of their drivers? Even the safest of vehicles can be dangerous in the hands of the wrong driver. Has the huge auto insurance industry, with so many years of experience behind it, got it wrong when it comes to Tesla insurance pricing? The jury is still out on this but that does not mean that Tesla owners need to blindly accept that their car insurance will be very costly.

The fact that insuring a Tesla is expensive cannot be argued. That does not mean that a Tesla owner, or the owner of any car for that matter, should blindly accept that insuring his vehicle is going to empty his wallet. Auto insurance is a highly competitive business with every insurance company offering a variety of coverage plans and options, all designed to maximize policy sales. Add that to the fact that insurance needs can differ widely from car owner to car owner. Only an insurance broker, a company that represents a number of insurance companies, will have auto insurance policy choices and options to offer its clients that will enable them to choose the policy that is right for their needs. Automobile technology is rapidly evolving and new vehicle offerings will keep appearing. Before making the decision to buy, contact an insurance professional to know what the insurance will cost you.

Monday, September 23, 2019

Who Needs Long-Term Care Insurance?

The short answer to this question is everyone. As the years pass, the probability that you will need help in caring for yourself increases. No matter how fit and active you are right now, injury and sickness are conditions that you can never predict. According to a study done by the U.S. Department of Health & Human Services, about 50% of those over 65 years of age will develop a medical condition that will require some form of long-term care. In many cases, the duration of care will be under 2 years, but in some instances, it could be in excess of 5 years. Whatever be the duration, the cost of the medical care needs to be handled. The high cost of medical care is a concern for everyone and this cost is bound to rise with time.

Image Courtesy: Pexels

Health Insurance Is Not Enough

Regular health insurance policies do not cover long term care costs. Medicare is also of no help as it is only for short term nursing care and for when limited duration home health care is required. Neither will it cover the cost of what is known as “custodial care” which is when a person needs supervision and support for daily activities. This includes Alzheimer’s disease, dementia, progressive physical degeneration and other such chronic conditions. Medicaid, federal and state health insurance will provide some help to those defined as having low income, but this will kick in only after the individual’s financial resources have been exhausted.

What Long Term Care Coverage Provides for

Long term care costs can deplete your savings in a very short time. According to a 2018 study, the average cost of long-term nursing home care in a semi-private room is almost $90,000 per year. This could easily go up, depending on the amount of care, medication, rehabilitation, etc. that may be required. Even in cases where nursing home care is not required, care in the form of a home health aide will, on an average, exceed $50,000 a year.

Besides protecting your savings, the other factor to consider is the quality of care that you will receive. The more coverage you have, the more you can spend on care and this gives you increased choices in where you are cared for, by whom and to what extent and the quality of care as well.  If you have only Medicaid or state or federal assistance to fall back on, you will be limited to facilities that accept payment from government programs.

Thinking of a time when you will need medical care for an extended period is not pleasant, but it is a subject that cannot be ignored. As the study mentioned above predicts, there is a 50% chance that you will need long term care in the future. Planning now for the coverage will enable you to budget the costs more conveniently and will give you the peace of mind that comes from knowing that even if you need long term care, you will not be a financial burden on others. Talk to an insurance broker to learn more about the coverage options, costs, how it works and any tax advantages that may be available so that you can find the coverage that works best for you.

Sunday, September 22, 2019

Is Renter’s Insurance a Must?

There is no legal requirement in California for a tenant to have renter’s insurance. However, there are a number of reasons why it makes a great deal of sense to have this coverage. The property you live in may belong to someone else, but all the possessions in it are yours. In California, it is necessary for landlords and building owners to have insurance on the property they rent out. This insurance will cover damage or loss in relation to the structure, but not the tenant’s belongings inside it. Some property owners may require the renter to buy a renter’s insurance policy before issuing a lease, but many do not. Having a renter’s insurance policy protects you from a range of risks and financial losses. These include:

Image Courtesy: Pexels
• Loss of Property: Renters insurance will cover you against the loss of your personal possessions due to an unexpected occurrence or disaster. There is generally a minimum amount that is set by the insurance company.

Personal Liability: Claims against renters for damage to property caused by their negligence is on the rise. Cases of lawsuits being filed against renters alleging that personal injury was caused by their acts of omission or commission are also increasing. Court costs and damages (if awarded) could be huge and could ruin a person financially. The claims could be filed by the landlord or other tenants.

Loss of Use: If the place you live in is damaged or becomes uninhabitable for any cause covered by the renter’s insurance policy, you will be covered against any additional living expenses. These include hotel accommodation and meals until such time as you are able to find new accommodation. The amount of the coverage and the duration you are covered for will depend on the terms of the policy.

• Medical Payments to Others: If a person should be injured in your rented home, you could be held liable for that person’s medical costs and other claims. Renters insurance will protect you from any potential financial loss if this should happen.

You may be a renter, but the place you are renting is your home and not being able to live there or facing huge liability claims because of your occupancy of the premises can be devastating. People generally think of the structure when the topic of property loss comes up. The possessions inside the home that may be damaged or lost are usually given less importance. It is easy to underestimate the value of your possessions. It is only when they are lost and need to be replaced do you realize their worth. The problem is that when realization dawns, you may not have the financial resources needed to make the replacements. Even if your landlord does not require you to have renter’s insurance, it is a coverage you must have. Contact an insurance agent who will be able to give you the coverage options and help you find the policy that is right for you.

Thursday, September 5, 2019

Fun to Drive But A Nightmare to Insure

One of the major advantages that electric vehicles have over gas cars is the sum of moving parts. Electric motors use fewer parts and hence require less day-to-day maintenance. The downside? There aren’t enough traditional mechanics to service them; the technology is new and the battery, which is the primary component under the hood, is complex to repair. More reason for you to be fully aware of how to insure your Tesla.



There is no fixed market rate and hence you would have to approach a third-party insurance company to get a competitive quote. Irrespective of the Tesla model, you can insure it with the same company. Bear in mind that you will be spending roughly USD 3000, depending on the model, which is around 50% more than you would spend insuring a gas car; ore popular the car, more the insurance costs. Tesla models currently fall into the luxury car segment in most countries. The annual premiums are astronomically high and truth be told, companies are trying several tricks to avoid a Tesla customer due to the risk uncertainty.

Getting a quote isn’t easy either. Sometimes they just turn you down or ask for hard documentation. Even then, companies delay quoting by several days, citing risks & difficulties. As a result, when you do get that quote, you’re usually paying twice or thrice what you’d expected.

Currently, repair and replacement costs are very high and there’s a waiting time of few months. Something as simple as repairing the sensor for the windshield wiper can set you back over a 1000 USD. Sure, you may be thinking, “Hey, why don’t I just go to a regular repair guy and let him have a crack at it, it’ll be way cheaper.” It’s too early in the Tesla life cycle for the average mechanic, they’ll just end up re-routing you to the factory. repairs after an accident can sometimes take months. Most policies have a 30-day limit for their rental car. It is important to make sure you get a policy that gives you an unlimited time frame.

Without the right information, the process of insuring a Tesla proves to be a difficult and frustrating experience for a customer who was until then all excited about owning one. Knowing what you are up against, makes the battle easier. Give us a call before you make that purchase, allow us a little time and we will sort you out with all the right information.

Friday, August 23, 2019

Is Your Commercial Property Protected Against Natural Disasters?

California has been reeling under the effects of global warming. Over the last few years, we have seen an increase in natural disasters like floods, earthquakes and forest fires. It has cost the state billions of dollars and people have lost their lives, homes, and livelihood. It has taken a toll on small businesses as well. It isn’t easy to recover from the after-effects of a natural disaster without insurance.

Most people check a variety of boxes when it comes to personal insurance. They ensure their homes, cars, jewelry, and even their antiques. But, when it comes to their small business, they favor commercial business insurance. This may offer protection against general liability claims but does it cover physical losses that occur due to the effects of a natural disaster? No, it doesn’t.

Why Does a Small Business Need Commercial Property Insurance?

Most small business owners prefer taking minimal insurance for their property, especially if it is leased and if their lease contract specifically demands it. But, consider this! If you don’t get adequate cover for your commercial property, you may get next to nothing if disaster strikes. The money won’t be enough to help you rebuild your business.

After Effects of a Natural Disaster on a Small Business

  You will have no space to conduct your business


•  All the orders that you have taken will remain unfulfilled

•  If you have a warehouse, you could lose millions if the goods get damaged

• You could lose all the data related to your business including client communications, contracts, orders, etc. leading to irreparable loss.

How Do You Recoup?

It will be difficult to get back on your feet after a blow like this without financial help. You will need to renovate your space and refurnish it. You may have to refund clients if you can’t deliver the goods that they ordered. You may not be able to get your office space and your business functional for months. If you had been covered for such an eventuality, the insurance could have eased the financial burden to a great extent.

What Should You Look for in Commercial Property Insurance?

When you go through the commercial property insurance policy, you need to ask the right questions! Does it cover all of your property? What kind of cover does it provide if your small business is affected by a natural disaster? Does the commercial property insurance cover damages done to interiors and electronic equipment? Would it cover loss of goods?

You need to find a good insurance company or an insurance agent who is knowledgeable and will answer your questions patiently. They should be able to explain what the policy offers and make sure that whatever you need is covered. Visit http://www.alliedbrokers.com/ or call 650-328-1000 to speak to one of our experienced insurance agents to find out what kind of cover would work best for you.

Why Do You Need Supplemental Insurance?

When you are young unless you have some kind of chronic illness or need specialized medical treatment or expensive medication on a regular basis, a basic medical cover would suffice. But as you grow older, it is important that you take a long, hard look at your health insurance and see what you are covered for.

Healthcare is very expensive. If you fall ill, you need money for consultation fees, specialist fees, medications, tests, hospitalization fees, ambulance fees and so on. Indeed, the list is endless. Finding out that your medical insurance isn’t enough for your treatment can be traumatic. This is where supplemental insurance can help.

Image Courtesy: Pixabay

What Is Supplemental Insurance?

It is additional insurance that you can take, over and above your medical cover. It can help take care of a lot of things that your regular medical cover may not. Supplemental insurance can take care of deductibles (amount of money that you would pay at the hospital before the coverage kicks in) and copayments (amount which is in addition to the sum that your health insurance has given you assured coverage for) when you fall sick.

Common Types of Supplemental Insurance

Critical illness insurance is usually specific to a disease. Some illnesses that are chronic or long-lasting may need long term care. Your medical insurance may run out long before you get better. Supplemental insurance can ease the financial burden of a serious illness.

Accidental death policies include Accidental Death and Dismemberment Insurance (AD&D) and accident health insurance. They are usually combined and sold together. It will not only include medical insurance in case of accidents but can also include other related problems that may arise through accidents like wage loss, expenses that arise due to loss of mobility, etc. In case of accidental death, the benefit of the accidental death insurance will go to your loved ones and can be substantial.

Supplemental insurance also includes dental insurance for adults as well as vision insurance plans. Regular health policies may not cover these two expensive health issues and it would be a wise idea to get these policies.

Long term care insurance is supplemental insurance that covers hospitalization and home care or assisted living care for people who have been diagnosed with long term illnesses. There are also supplemental insurance plans that offer cashback benefit if unclaimed. It will be given to you over a period of time or as a whole sum.

There are many kinds of supplemental insurances available. Medigap is common supplemental insurance. This is taken by people who are enrolled in Original Medicare. It covers many things that your original medicare won't.

Visit http://www.alliedbrokers.com to take a look at our supplemental insurance policies or call 650-328-1000 to talk to one of our insurance agents and they will work out the best one for you.

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.

Image Courtesy: Pixabay
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.

Image Courtesy: Pexels

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’:

Image Courtesy: Pexels
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%.

Image Courtesy: Pexels
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.