If your rental property becomes vacant, will you still have coverage?

Monday, August 30th, 2010 | Home ins | No Comments

Your rental property has just been vacated and you want to take some time to screen new tenants or make upgrades to your property.  Does your coverage change now that the home is vacant?  To avoid surprises at the time of a claim, it’s crucial to know exactly what your policy covers. 

Review your policy today for restrictions.  Here are some points to check regarding coverage on vacant property:

• Will your policy immediately terminate when the home is vacated? 
• If not, how long will coverage continue for named perils like fire, explosion, lightning, vandalism, windstorm and hail damage? 
• What happens if you decide to renovate?
• Does your carrier offer a separate policy for vacant property?  

 Not everyone loves insuring vacant homes.  But Foremost does.  That’s why they also offer a specific program for vacant homes that provides a full 12-month policy with pro-rata cancellation and the choice to stay insured for up to 24 months.  The home can be for sale, in the name of an estate or under renovation.  Coverage includes common perils, plus options for liability, personal property, vandalism and malicious mischief. 

 Not sure what your policy provides?  Call me at 205 640 5892  to discuss your coverage and find out more about the Foremost Vacant program.

*Coverage may not be available in all areas.

Life insurance: Do you need it?

Saturday, August 21st, 2010 | Life Ins | No Comments

The most frequently asked question about life insurance is: Do I need it? The answer depends greatly on your situation. So, let’s determine if you need it. Review these statements and check all that apply:

□   I am married.

□   I have children.

□   Our family recently welcomed a new baby.

□   I am single, but I have dependents (a child or an elderly relative) who I support.

□   I am the sole breadwinner in my household.

□   I recently changed jobs.

□   My income has changed.

□   I recently bought a house.

□   I will pay for my children’s college education.

□   I own a business.

□   I am in debt.

□   My family has a history of illness, such as diabetes or heart disease.

□   I have trouble saving/investing money.

If you checked any of these statements, you need life insurance to protect the loved ones who rely on you for their financial support.

Imagine if you died unexpectedly. What would happen to your spouse, your children and other dependents? Would their standard of living or care slip significantly? Who would pay your children’s college tuition? Who would pay your mortgage and other debts? Would your business survive?

With life insurance, these concerns go away. If for no other reason, get life insurance for those most important to you—your family.

Life insurance tips

Now that you’ve determined that you need life protection, here are 10 suggestions to help you look for the best life policy for your family’s needs:

1. Get the right amount. Remember that the amount of life insurance you need is directly related to the dependency of your family. An eight-year-old child is more dependent than a 20-year-old already is in college. Plus, knowing how much coverage you need prevents you from paying for unnecessary insurance.
2. Start young. Get your life insurance while you’re young. Generally, premiums are cheaper for younger people because they are healthier than the rest of the population. Also, buying young will enable a cash-value policy to grow in value.
3. Live healthy. Don’t smoke. Tobacco users pay more than twice the premium as non-smokers. Also, don’t cheat because benefits can be denied if someone who claims to be a non-smoker dies of a smoking-related illness. Also, you can improve your insurability and get a better rate by routinely visiting your doctor and improving medical conditions, like high blood pressure.
4. Know what life policy you need. Learn the difference between term life and whole life policies, as well as that of a cash-value policy versus an annuity. There are products that serve several purposes and those that serve a single purpose. Know what your needs are first. Then you’ll know which coverage you should purchase.
5. Dual incomes? If you and your spouse are breadwinners, get life insurance for both of you. That way, if either of you passes away, the family’s standard of living will not suffer.
6. Prepay the premium. Ask the insurance company if you can pay your premium in advance, instead of monthly. This approach will save money on administrative or handling fees. Not all companies do this, but it never hurts to check.
7. Want to save money, too? Some life insurance products—known as “cash-value policies”—are both a savings tool and a death benefit. These polices are ideal if you cannot save money. The cash value accumulates and can be borrowed or used for other purposes.
8. Buy ‘bulk.’ Some insurance companies charge less for buying more. For example, it may be cheaper to purchase a $250,000 policy rather than the $230,000 you need.
9. Don’t rely on employer-provided coverage. Many group plans limit the amount of coverage offered, which may not be enough for your needs. Additionally, you likely cannot take the life insurance with you if leave your job.
10. Keep your coverage current. Major life events will impact the amount of coverage you need. Many events—such as having a child, getting married or buying a big house—will increase the amount of coverage you need. Others—such as children leaving the roost—may decrease the coverage you need.

Losing you would be painful enough for your family. The right life insurance can at least alleviate concerns about the financial implications of your death.

 Shon Messer… Shubert Insurance is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs. You can visit Shubert Insurance online at www.shubertinsurance.com or call it at 205 640 5892

Does Volunteering Your Time Mean Volunteering Your Insurance?

Thursday, August 12th, 2010 | Home ins | No Comments

Millions of Americans donate time—their most valuable asset—to serve as a volunteer board member on non-profits, booster clubs, churches, PTAs and civic organizations, just to name a few. The decisions these folks make can have a dramatic impact on their respective organization—and not always for the better. If a volunteer endeavor goes bad, would a volunteer board member have coverage against a lawsuit under his or her homeowner’s policy?

Homeowners’ Insurance

The last thing volunteers want to consider is what would happen if their favored organization file suit against them as a result of their efforts. But it happens, and not infrequently. This does happen, especially when volunteers make decisions that directly influence the finances of an organization. Often, the only insurance these volunteers have to back their efforts is a homeowner’s policy. Unfortunately, this policy may be of little assistance.

The reason homeowners’ policies do not usually cover liability stemming from actions as a volunteer is the nature of the claim. The policy is designed to cover claims of “bodily injury,” such as someone slipping on cracked pavement in your driveway; and/or “property damage,” such as accidentally setting your neighbor’s house ablaze when burning some brush on a windy day.

Claims against board members do not usually involve bodily injury or property damage. Rather, they involve bad decision making that results in financial loss to the organization, such as the decision to invest in an IT system that turns out to be a debacle, costing the organization tremendous time and money.

There is another problem. Homeowners policies do not cover “professional services.” This is important to note, because board members are often asked to serve in a capacity consistent with their profession. For example, a church member who is a CPA may be asked to serve on the church’s board as finance chairman. Even though he is not paid for his services, the “professional services” exclusion under his homeowner’s policy would still apply.

In addition to the above, homeowners policies do not cover claims of personal injury unless this coverage is specifically added. Personal injury insurance is added to the homeowner’s policy to cover claims such as libel, slander, wrongful eviction, and false advertising.

What to Do

Events causing claims are unpredictable. While the reasons shown above prove it’s unlikely, not all claims against volunteer board members are excluded by a homeowners policy. Decisions to purchase personal injury coverage and a personal umbrella policy will increase your ability to find coverage for a suit against you. 

The best method for insuring the actions of board members is for the organization to purchase a directors and officers (D&O) liability policy. These policies are relatively inexpensive for most non-profits. Before volunteering, request information on the organization’s D&O policy. The absence of this insurance leaves you at risk of having no personal insurance to defend a suit brought against you by the organization and should influence your decision to serve.    

Shubert Insurance is a local Trusted Choice^® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs. You can visit Shubert Insurance  online at www.shubertinsurance.com  or call it at 205 640 5892

How to save the most money on your car insurance

Wednesday, July 28th, 2010 | auto Insurance | No Comments

So you’re shopping around for auto insurance. What do you need to know? Well, there are lots of ways – at least 11 – that you can save money. Many of these money-saving ideas may apply to you.

1. One Insurer, Multiple Policies – Do you have a homeowners or renters insurance policy? If so, is it with the same insurance company that provides your auto insurance? If the answer is no, you’re paying too much – for both policies. Almost every insurance company that sells auto insurance wants its policyholders to also buy homeowners or renters insurance from that company.

   These insurers offer so-called multi-policy discounts. Usually, these discounts are at least 10% and some insurers apply the discounts to both the auto and the homeowners/renters policy.

   Tip.  Talk to your agent about multi-policy discounts.

2. Good Driver, Good Price – It’s no secret that the better your driving record, the less you will pay for auto insurance. But did you know that most people qualify as “good drivers” and are eligible for discounted premiums? Some good drivers pay a lot more than others, however.

   Many auto insurers are actually a collection of several insurance companies in which each caters to a certain type of driver. The worst drivers go in one company, the best in another, and a lot of people wind up in one of the middle companies.

   These middle people pay less than the worst drivers, but more than the best. The thing is, many of these middle people have driving records that are just as good as those who are insured by the companies that offer the lowest rates. Yet these middle people are paying more. Why?

   The usual reason is that they don’t know any better. No one told them which insurance company in the group had the best prices. And, odds are, no one even told them there was a group of insurance companies. If you have a spotless driving record, there’s no reason you shouldn’t be paying the lowest price a group of insurance companies has to offer.

   * Tip.  Make sure you’re getting the best discount for your driving record.  Talk to your agent.  And remember, be a safe driver.  It will save you money.

3. The Beauty of the Bus (or Other Mass Transit) – Do you drive to and from work? If you do, you are literally paying a premium to do so. Insurance companies charge you significantly higher premiums if you drive to work. And, the longer your commute (in miles, not minutes), the higher the premium.

   * Tip.   Some drivers should consider mass transit. Yes, there’s a price there, too. But you will reap the savings of gas and lower insurance costs.

4. Low Mileage, Low Price – On average, people drive 1,000 to 1,250 miles a month. That is what insurance companies consider average use.
   
   * Tip.   If you drive less than the average, you could be eligible for low-mileage discounts, which some insurers offer.
5. High-Profile, High-Cost – The type of car you drive is a major factor in what you pay for insurance. Is your vehicle a magnet for thieves? Is it more expensive to repair than most cars? If the answer to either of the last two questions is yes, you’re paying more than the average car owner for insurance.

   * Note.  To get detailed information on your vehicle(s) – or a vehicle you’re thinking of buying – write to the Insurance Institute for Highway Safety at 1005 North Glebe Rd., Arlington, VA 22201 and ask for the “Highway Loss Data Chart.”

6. Raise Your Deductible – The deductible is the amount you pay before insurance kicks in if you have a claim. For example, if you have a $250 deductible and you have an accident in which your car sustains $1,000 in damage, you pay the first $250 and your insurer pays the balance, $750. The lower the deductible you choose, the more you pay in premiums. If you have assets, you can probably afford to absorb at least $250 – $500 if you have a claim.

   * Tip.  If it’s been years since you’ve had an accident, you may be better off raising your deductible and paying less each year for insurance.

7. Drop Unnecessary Coverages – Let’s say you have an older car, one not worth very much. There’s really little point in having collision and comprehensive coverages. You don’t have much to protect. Remember, too, that you have to subtract your deductible from any potential payout you might get.
   
   * Tip.  As a general rule, any car worth less than $1,000 shouldn’t have collision and comprehensive coverage. Between the deductible and the extra expense of these coverages, the cost is probably greater than the benefit. How much is your car worth? An auto dealer can tell you, or there are plenty of books that have values of vehicles going back many, many years.
8. Discounts, Discounts, Discounts – Auto insurance companies offer several discounts for a variety of reasons. The car has automatic seat beats, air bags, anti-lock brakes, anti-theft devices, etc. The driver is a good student, which is especially valuable if you have teenage children who will be on your policy.
   * Tip.  Make sure you are taking advantage of all the discounts available to you!
9. Taking the Defensive – Many insurance companies also offer discounts to those who have recently taken defensive driving courses.
10. Low-Cost and High-Cost Areas – Are you planning to move? If you are, you should take into account the cost of insurance. Generally, the more urban the area, the higher the premium. The costs can vary even within a community.
    
    * Fact.  Rates can vary greatly from state to state. If you’re living in New Jersey, Massachusetts or Hawaii, you’re paying several times more, on average, than you might in North Dakota, South Dakota or Idaho.
11. Credit Where Credit Is (Or Is Not) Due – Is your credit record better than your driving record? If you have a good credit record, you could be eligible for discounted premiums from several auto insurance companies.

* Fact. Many insurers now use your credit history as a major factor in determining what to charge you for auto insurance. In some cases, with some companies, you could save money by shifting your business to an insurer that uses credit as a rating factor – even if you have a so-so or poor driving record. There is another side to this coin. If you have a poor credit history, you could save money by moving your auto insurance to a company that does not use credit as a rating factor. Many insurers do not use credit as a factor.

* Tip.  Regardless of your credit status, you should talk to your agent to make sure you have the best situation given your credit record, good or bad.

Call 205 640 5892 or Visit www.shubertinsurance.com

Undervaluation: Not to Be Overlooked

Friday, July 23rd, 2010 | Home ins | No Comments

You pay for home insurance to avoid incurring large out-of-pocket expenses after a something damages your house and personal property. The last thing you need is an insurance company explaining “adequate limits of insurance” after the fact; especially if that explanation means more cost to you.

According to Marshall & Swift/Boeckh, an organization specializing in building cost research, 59% of homes were underinsured by an average of 22% in 2005. Some reasons for the high number of underinsured homes include inaccurate valuation methods, complacency with current home value and failure to report value-changing improvements and betterments.

The penalty for underinsurance is costly. Your home insurance company requires that you pay for enough insurance to cover the value of the home at the time it is damaged, not when the policy is issued. Most home insurance policies contain a provision requiring the limit of insurance to be equal to or greater than a specified amount for the insurance policy to pay for the full cost of the damage.

For example, say your house catches fire and one-fourth of it is damaged. While adjusting the claim, the insurance company determines that due to increased construction costs, your home’s current replacement value is $100,000. If just a portion of your home is damaged, most home insurance policies require that your limit be at least 80 percent of this amount, in this case $80,000. If your limit is less than $80,000, you will only receive a portion of the $25,000 and will have to pay the difference out-of-pocket…yuck! Despite the above example, you should never carry a limit of insurance lower than 100 percent of your home’s current replacement value. Here’s why: Consider the previous example, only this time the fire damage is so severe that your entire home must be torn down and rebuilt. If your policy limit is anything lower than $100,000 you will have to pay the difference yourself.

To make matters more difficult is the constant flux of property values. According to the National Association of Home Builders, the cost of common construction materials such as cement, drywall, lumber and nails have soared over the past two years, two to five times faster than gasoline prices! According to Marshall & Swift/Boeckh, some homes that were built just two years ago for $125 a square foot may now cost over $200 per square foot to rebuild.

People also forget to count improvements. According to the Harvard University Joint Center for Housing Studies, homeowners spent $149 billion on owner-occupied home improvements in 2005. And this amount doesn’t include home repair costs or the amount spent by landlords on rental homes—two factors that would exponentially increase this dollar figure. Have you added a burglar alarm system, closed in the garage, put in new floors or redone the kitchen? Improvements like these are fair game in determining the current value of your home. In addition, many homeowners do not understand that factors like market price, property tax appraised value and mortgage amount are not the same as the cost to repair or rebuild your home after a loss.

Preventing underinsurance is tricky but not impossible. Most home insurance policies can be modified to increase insurance limits automatically. Regular communication (at least annually) with your Trusted Choice^® agent will help you understand limits and trends. And reporting improvements will help keep your limits up-to-date. These steps will help ensure that your home insurance policy will do what you expect it to come claim time.  Ask  Shubert Insurance your Trusted Choice^® independent agent for guidance    205 640 5892

Before Installing a Swimming Pool, Consider the Insurance and Safety Implications

Thursday, July 15th, 2010 | Home ins | No Comments

Swimming Pool Safety

Making Sure Your Home Is Properly Covered for a Disaster

Thursday, July 15th, 2010 | Home ins | 2 Comments

What impact would the death or disability of an owner or key employee have on the continued success of your business?

Friday, June 25th, 2010 | Commerical Insurance | No Comments

“Business Interruption Insurance”

Tuesday, June 15th, 2010 | Commerical Insurance | 2 Comments

“Business Interruption Insurance”

It is estimated that between one-third and one-half of all businesses have no business interruption insurance. Almost half of businesses that experience a serious loss never reopen…over one-fourth of those that do, close within 3 years. A major reason that many businesses don’t survive a serious loss is the lack of business interruption insurance or inadequate limits of that coverage.

 Most businesses carry “fire insurance,” as it is commonly called (though fire is just one of many perils covered by business insurance policies. Such insurance is usually required in order to get a mortgage on a building or to secure a loan using property as collateral. However, it is estimated that between one-third and one-half of all businesses have no business interruption insurance.

 A major reason that many businesses don’t survive a serious loss is the lack of business interruption insurance. What is business interruption insurance and why is it needed? As an analogy, most individuals need at least three types of personal insurance. First, they need life insurance in case they meet an untimely demise. Second, they need medical insurance in case they have an extended illness or injury. Third, they need disability income insurance to offset their lost income while ill or recuperating from injury.

A business also needs these same three types of insurance coverages. The first two are provided by commercial property insurance which, like life insurance, pays for direct damage to property if it is totally destroyed by a covered peril. Like medical insurance, commercial property insurance also pays for the cost to repair the property if it is only damaged and not completely destroyed.

 The insurance coverage that is often overlooked is business interruption insurance which is comparable to disability insurance in that it pays for the business’s loss of profit and expenses that continue while the business is not fully operational during repair or relocation following a loss. Almost half of all businesses that experience a serious loss never reopen their doors and over one-fourth of those that do, close within 3 years. Again, a major factor in such business failures is the lack of adequate business interruption insurance.

Business income insurance covers three types of losses or expenses that occur while the business’s operations are interrupted or curtailed: (1) loss of profits, (2) continuing expenses, and (3) extra expenses. In addition to its loss of profits, a business must continue to pay some bills whether its doors are open or not. Some businesses will incur extra expenses in order to remain open at a temporary location. Business interruption insurance pays for these losses and costs.

Business interruption insurance is offered within two major types of business insurance packages. First, half or more of all businesses are eligible for “Businessowners” policies. These are package policies that incorporate many of the most commonly needed insurance coverages. Most “BOP” policies, as they are often called, include business interruption insurance without any specific dollar limit, but rather a time limit which is typically 12 months. Following major disasters, a year’s worth of virtually unlimited coverage can mean the difference between survival and business failure. Unfortunately, not all businesses are eligible for a BOP policy, not is it appropriate for all businesses.

BOP policies are typically limited to smaller, low-hazard retail or service businesses. Other businesses are usually insured under a Commercial Package Policy, or “CPP.” These packages are much more flexible than BOPs because they include many optional coverages not available under a BOP policy. A downside, though, is that the coverages built into a BOP policy must be added separately in a CPP.

Business interruption insurance is a good example of such a coverage. Unlike a BOP policy where there is a time limit rather than a dollar limit, under a CPP, there is a dollar limit but no time limit for business interruption insurance. The biggest problem with this approach is that many business owners grossly underestimate the amount of coverage they need during the coming year.

To determine the proper limit, the business owner must determine, in the event of a total loss, how long it would take to rebuild or relocate and restore operations to their pre-loss level. Next, he or she must determine what would be the worst time of year for such a loss to occur, how much profit would be lost, and what expenses would continue or increase during that specific time period.

If the business is new or rapidly growing, the business owner can easily underestimate the amount of insurance needed and, as a result, incur penalties for underinsurance built into the policy. For situations like this, business interruption insurance often includes options that eliminate to some extent, and for a price, the underinsurance penalties in the policy, though the limit itself may still be inadequate.

Also, keep in mind that, after the business reopens its doors after several months, the level of business will almost certainly not be the same. However, business income insurance normally stops as soon as the business is fully operational again, regardless of the income stream at that time. Therefore, the business owner may need to purchase what is called an “extended period of indemnity” coverage. This pays the difference between what the business would have earned if it had never had a loss and its actual depressed income stream while it rebuilds its customer base.

One of the reasons some business owners don’t purchase this coverage is because, as you can see, it can get rather complicated. That’s why it is important to seek the counsel of a good independent insurance agent who is experienced in placing commercial insurance.

Business Continuation

Sunday, June 13th, 2010 | Your Money | 1 Comment

Eventually every business owner will leave the business that he or she created…either by selling the business or as a result of death, disability or retirement.  As a result, business continuation planning is about taking control of something that is inevitable.

The first step in business continuation planning is to clearly define your goals.  For example:  

• What do I want for my future?  Do I want to work indefinitely, or do I want a clearly defined exit strategy?  

• What do I want for my family?  Do I want my business to remain in the family?  What steps have I taken to secure my family’s financial well-being in the event something happens to me?  

• What do I want for my business?  What would happen to my business if I died or became disabled?  Do I want my business to survive my death, disability or retirement?  In answering these questions, you have three options to evaluate:  retain the business in your family, sell the business to co-owners, employees or to outsiders or, as a last alternative, liquidate the business. 

Without advance planning, others may control the process.  With advance planning, a business owner has the opportunity to realize the maximum value of the business, develop an appropriate tax strategy, leave the business in the hands of chosen successors and avoid the family and business turmoil that can result from a lack of planning.  

Our free Business Continuation Life Guide is designed to provide a framework through which you work to arrive at the answers that are best for you, your family and your business.