How high of a deductible should I carry? What makes sense?
We are asked many times, "What makes sense on carrying my deductible?" Generally, the savings on a deductible will be equal to the premium paid over a 2 1/2 to 3 year period. Most people won't have claims that often and should take the savings.
Another point to consider is that most people have a threshold that they would not turn in a claim under a certain amount to not have it on their record. You might as well carry that amount of deductible and take the premium savings if you wouldn't turn in any claim below that amount anyway. Our recommendation would be to carry the highest deductible you can afford, and take the savings and apply it to purchase an Umbrella policy, or increase your limits where you are vulnerable to a high claim settlement.
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Does Your Credit History Affect Your Insurance Premium?
It is very likely that your credit history can and will affect your personal insurance premiums. Many companies are reviewing past credit history using Transunion, Equifax, or other popular credit reporting companies. Your credit history can be influenced by late payments on credit cards, mortgages, car payments, etc.
Soft hits vs. Hard hits: When you get a quote for car insurance, one of the first parts of the process involves the company in question checking your credit history. Unlike some other credit inquiries, this will not negatively affect your credit score in any way, because it’s considered a “soft hit.” A soft hit does not appear on your credit score and does not affect your history negatively. An example of a “hard hit” would be if you were to apply for a credit card and get turned down, that information would stay on your credit report and have negative results.
Ask your agent if your company used your credit history to rate your policy. Find out which company supplied the credit background, and contact the company to receive a copy our credit report. Bottom line - Keep your credit clean!
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Do I Need a Personal Umbrella Policy?
No one can tell you whether or not to purchase an umbrella policy; it is a matter of personal preference. We would recommend that you purchase an umbrella, as the cost is very reasonable, generally as low as $120 for $1,000,000 for a typical homeowner with two cars. The umbrella provides coverage in increments of $1,000,000 over and above your home and auto coverages and can even extend coverage for you as a director or officer of a non-profit organization.
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Uninsured Motorist Coverage and Underinsured Motorist Coverage
Your liability coverage protects you from having to pay damages to someone if you cause an accident. Your liability policy will not pay for your expenses resulting from an accident with an uninsured or underinsured motorist. Even if the other driver has liability insurance, it may be only the minimum amount, and this coverage can quickly be exhausted. Medical care is expensive. The replacement cost of even a single vehicle easily can be $30,000 or more. Your underinsured coverage kicks in to pick up all or part of the difference once the other person's liability limits are exhausted. If possible, have as much uninsured and underinsured coverage as you have liability coverage.
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Loan-Lease Gap Insurance-How it can help.
Loan-Lease Gap Insurance is provided by insurance companies to offset the difference in the actual value of a car involved in a total loss and the amount of the loan or lease payments remaining. By adding Loan-Lease Gap Insurance to your policy, the insurance carrier will make up the difference to the bank to pay off your existing loan.
Be careful; many banks have already included this coverage in your loan or lease, so be sure to ask to avoid paying for the coverage a second time. Most companies require that the car be within 2 model years of the current year. The Loan-Lease Gap coverage will exclude late payments, upside down purchases from the previous car, or any other negative impact directly related to your loan or lease.
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Does My Homeowners Insurance Policy cover Mold?
As a general rule, most insurers attempt to exclude coverage for mold contamination associated with long-term leakage, moisture or water intrusion from a construction defect, wear and tear, deferred maintenance or poor repairs. Most insurers will acknowledge coverage for mold contamination associated with accidental discharge of a closed plumbing system–as long as you take reasonable steps to protect and repair the property after you discover the damage.
Mold remediation may be covered with the purchase of a separate rider. Once you determine that you have a covered loss, be sure to go down the list of all the coverages in your declarations page, including additional living expense (if you have to move out during repairs), and make sure that you explore all the benefits you are entitled to.
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Am I Covered by my Homeowners Policy if I have a Business in the Home?
If you're an Avon salesperson, a bookkeeper, or you're selling MaryKay or Longerberger Baskets out of your home, more than likely your homeowners policy specifically excludes any liability arising out of a business venture. This is for property and liability coverage. Some homeowners policies do provide a limited amount of property coverage. Be sure to tell your agent about your "Home" business, so they can be sure you're properly protected.
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If your house burned down today...
Other than contacting your insurance agent right away, you would begin to think about all the things that you could never replace.
The first thing that comes to mind is your photographs. Give all your negatives to a neighbor, relative, or anyone who could safekeep your precious memories. Buy a fireproof safe to store your home videos, wedding pictures, deeds, tax returns, etc. Next would be the family heirlooms, artifacts, pictures and crafts. You should videotape all these collectibles to have a permanent record. You already have smoke detectors in the house, but what about the garage?
Place a heat/smoke detector in the garage. Many fires start in this area and are undetected until it's too late. Ask Collaborative Insurance Services for other things to think about before you have a claim.
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Renter’s Insurance
A renter’s policy should be considered even if you don’t own your home. Your landlord’s insurance will cover the building itself, but will not cover damage to your personal property or liability against you. Think about how much it will cost to replace the contents of your apartment, all of your personal belongings, furniture, clothing, computers, etc., if there were an accident that caused a serious fire. Or, if a visitor to your apartment were to have an accident, they may be able to sue you for damages. You can protect yourself against these potential problems with renter’s insurance.
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How Much Life Insurance Do I Need?
The Age Old Question! Most experts say you need between 7 to 10 times your combined annual income, less any liquid assets.
Basically it boils down like this:
- For Funeral Expenses, Medical and Hospitals, and Estate Administration, count on between $12,000 and $15,000.
- Add to it debt repayment - car loans, home improvement loans, credit card balances, and miscellaneous loans.
- Add to that mortgage balance, college costs times your number of children (figure $20,000 in state-$40,000 private annually).
- Then add 50-75% of your annual income times the number of years needed and total that all together.
- Now subtract savings, stocks, employer provided insurance and any other life insurance you may have, and there you have it!
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