Archive for the ‘General Info’ Category

Life Insurance 101   Leave a comment

The scenario: You’re a human.  You fall somewhere between the ages of a day old and 85 years old.  You (or your parents) realize that no one exits the human experience by skirting around the inevitable mortality event.  It is part and parcel of being human; a shared story common to the race.

The problem: In your experience, you recognize that the purchasing power of money is quite a useful tool.  Actually, it’s quite likely you would be pleased in having more of this kind of tool.  It leverages.  It elevates.  It persuades.  Perhaps more than anything, it turns dreams into potential… the wild machinations of the mind into hard, cold realities.

The truth is, for most Americans – at least within a certain age demographic – we are wealthier than we realize, though not as wealthy as we’d like to be.  Few of us are really good at long-term planning.  Fewer yet at long-term saving.

The oh, aren’t you glad there’s a solution:  You won’t need a light bulb to turn on this solution.  You already know it, although you might not like to talk about it.  It’s life insurance.  Yep.  Risk pooling, in all its glory.  “But there’s nothing’s worse than life insurance,” you say, “is there?  Other than taxes.”  Au contraire…

Now that you know the solution, let’s explore the options.  Some are wiser than others.  Some just pragmatic and rational.  As you read this, you may wish you could go back in time and do it over again, only this time in a wiser frame of mind.

You’re probably familiar with the detail that the ‘www’ has more opinions about every subject known to man than you can possibly live long enough to sort through.  Don’t feel bad: you haven’t been singled out.  Do you have an ache?  Maybe a stabbing pain?  Go self-diagnose it on the Internet.  Ha!  Good luck!  It’ll tell you to pluck out your eyeballs and saw off your arms.  “Oh,” but you say, “the pain is in my foot.”  Well, sometimes you’ll get referred pain like that.

The kinds: Term, universal life, whole life.

Term.  Term insurance is known in the insurance industry as “pure insurance.”  It is most often sold without bells and whistles, much like a new car without a radio.  Term insurance is designed to cover a period of time (a term), beginning on the date of x, concluding on the date of y.  During that period of time, the insured’s life is covered against the risk of death.

Example:  Sam buys $1,000,000 coverage for a 20-year term.  Sam is 44 years old.  His premiums will be (somewhat) low, because at the end of 20 years, he will no longer be covered by this policy, and, actuarially speaking, because the likelihood of his death during these years is low.  However, by purchasing this policy, Sam clearly demonstrates that a.) he loves his wife and children, and is concerned about their welfare in the aftermath of his passing, b.) he recognizes there is mystery regarding the unknown date of his death, and c.) buying insurance is an excellent gauge of human responsibility.

His attained age will be 64 years when the policy completes its contractual obligations.  He smokes cigarettes, but like he says, “It’s only 1 pack a day.”  He drinks a little rum and coke when he gets home from work because, “Hey, if you had my job, you’d drink twice what I do!  Believe me.”  Sometimes he drives and drinks.  (Just a short word or encouragement for you, Sam: this is not clever.)  He had a DUI, on his 50th birthday.  Sent a family of 3 to the hospital.

During the period of his coverage, his life has seen more twists and turns than he could have possibly anticipated.  He and his wife had another baby.  Whoa!  Surprise, Sam!  He lost his job – twice.  He’s beginning to wish he didn’t like French fries near as much as he does.  He’s gained 140 pounds and already had a heart attack, 5 years and 3 days on the back side of the DUI.  He has diabetes.

In our example, Sam has lacked an important and vital component of a thorough game plan: namely long-term strategy.  Many people applaud him for having shown the horse-sense in buying insurance.  We salute you, Sam.  Although we believe you could have planned better for you and your family, you did what needed being done.

“Sam?” asks the insurance agent.

“Yeah.”

“Sam, do you mind if I ask you a question?  I mean, I know it’s kind of retrospective and everything, but… well, now that you’ve seen how much your new term policy is going to cost you, do you think you would have done anything differently?”

“Uhh, yeah.”

“What?” asks the Inquisitive Producer.

“Do you mind if I get back with you on that?  I’m kind of focused on sticker shock at the moment.  Say, isn’t there a Wendy’s close to here?”

“Sure, sure, Sam.  I understand.”

Term insurance recap: 

  • It covers a term period.
  • It pays on one condition only: if the insured dies during the term.
  • The premiums are low and level (the same throughout the term of the policy)
  • It generally does not guarantee re-insurability.
  • It has no cash value. There are no policy loan or withdrawal allowances.  When the policy dies, and you’re still alive (assuming you are), your premium money is gone.
  • It offers one, singular guarantee: to pay a death benefit in the event of death during the term.
  • Its owner lacks the ability for the policyholder to skip the premium payment if he or she so desires.
  • It lacks adjustability of duration (unless the policyholder stop paying the premiums, then it lapses).
  • It doesn’t take into account that as each year passes, the replacement policy at the end of the term will be more expensive. And, the insured may no longer be insurable.

Universal life:  Often called a hybrid, universal life is the ‘compartmentalized’ look-alike of its twin sister, whole life.  Universal life and whole life are known as “permanent insurance.”  The essential difference between them is that universal life is flexible in many ways that whole life isn’t.  Sometime this is good, sometimes it isn’t.

Example: Todd buys a $1,000,000 Universal Life policy.  As the name implies, its duration is for life.  Todd is 26 years old.  “Ah, you’re a smart lad, Todd,” his insurance agent beams as he hands him the policy.  “I wish I’d had your smarts when I was 26!  Alas, I didn’t.  Lots of water under my bridge, Todd.  Anyway… good move.”

Todd’s UL policy will last for the rest of his life.  His agent reminded him to pay the premium every month as long as he was able.  “Do your absolute best, Todd.”  This is where universal life takes a fork in the road from whole life.  If Todd doesn’t pay his premiums – because of whatever – the policy will pay them for him, but not without deteriorating ramifications.  We would all do well to remember: there’s no free lunch in the real world.  Furthermore, this is not something Todd can or should do often, or repeatedly without the policy withering away to nothing, at last lapsing (dying).  He’s borrowing from the cash reserves of the policy.  The very same cash which has been building a private wealth machine in his own name and for his benefit.

As long as he watches the P and Q’s of his ‘unbundled’ policy components, like, for example, the monthly mortality charge, he’ll do all right.

Universal life recap:

  • Flexible, transparent, backed by conservative investments.
  • Unbundled.
  • Flexible lifetime, extending to death.
  • Adjustable duration.
  • Adjustable death benefit.
  • Cash value if properly funded.
  • Policy loans, withdrawals available.
  • Crediting rates disclosed to policyholder.
  • Mortality charges disclosed to policyholder

 

Whole Life:  Not many years ago, General Motors’ Cadillac was a prized brand.  Anything that was the best in its class was simply called a Cadillac.  The finest house was a Cadillac.  The best restaurant, a Cadillac.  The nicest TV was a Cadillac.  Whole Life – now there’s a Cadillac for you.  The Cadillac of life insurance.  People bought Cadillac because of its reputation, because of its inherent quality.

Whole life, again, like universal life, is a lifelong contract between insurer and insured.  One element keeps its clock ticking: the premium.  The level, unchanging premium (monthly, semi-annually, or annually), is the same throughout the life of the contract (although some contracts may be paid within a defined time period: single pay, 10-pay, to 65, etc.).  These policies build a cash bank of reserves available to policyholders.  A large portion of the reserves are at the disposal of the policyholder, who may willingly leave them untouched, all the while building more and more value, as well as adding to the value of the death benefit.  They may also be used, as simply as filling out a form.  Imagine wanting a new car, asking the insurance company to send you the money, and voila! it’s yours.  Imagine using it to fund your children’s college, and paying it back on your timetable, where there’s never a late payment.  Imagine every time you make a payment, you are increasing your tax free death benefit to the ever thankful advantage of your beneficiaries.

Example: Charlene is 30.  She buys a $1,000,000 whole life policy.  It’s like having her own private bank.  Ten years later, her dear Grandma passes away.  She inherits $100,000 and adds the money to her dividend earning, compound-interest earning, legacy-creating whole life policy.  She bought the policy for its death benefit for her three children, but as she ponders the many benefits of her super fine financial vehicle, she realizes it’s one of the smartest financial decisions she’s ever made.  A year after Grandma dies, her first child, Jules, is headed off to college.  She’ll fund it for him, by loaning him $30,000 a year.  Her loans will not be taxable.  He’ll pay her back when he graduates, and has a job in his field.  She’s okay with that, there’s no rush.  No late fees, no credit bureau reports.  If she wanted to, she could use her insurance policy to collateralize the loan at the bank.  But as it is, she’s pleased with her plan, and continues paying her premiums.  She could also let her policy self-fund for a while, but remembers the adage that fat pigs get fatter the more you feed them.  Nine years later, Jules has lived up to his word, and the loan is fully re-paid.

She’s done the math.  If she wants to, as she nears retirement, she can rollover her $700,000 cash value into an annuity without a tax hit, using a 1035 Exchange, but she doesn’t have to do that to use it.  Life’s good.  She’s loaned each of the children enough money to finish their degrees.  They’ve all paid her back.  The kids are taken care of.  Sure, they all have their own insurance now, but she’s covered, and so are they in her tax free distribution plan.  Her death benefit has swollen to a million and a half dollars.

An unexpected medical turn of events takes Charlene by surprise.  At least the insurance is okay: the Inquisitive Producer added a disability rider back when she bought the policy.  From now on, her policy won’t require premiums.  She’s 64.  She’ll retire a little early.  She’ll withdraw $30,000/yr. until she hits full retirement age (about $15,000 more than Social Security would have paid her).  Now, at 66, instead of having her Social Security deposit into her local checking account, she’ll have it deposited into her insurance policy and take tax free loans on it to fund her retirement – all the while, feeding the fat little porker.

Whole Life recap:

  • Straight, level premiums
  • Ability of policy owner to borrow or withdraw… for ANY purpose, without loan officer approval.
  • No issue with insurability – it’s guaranteed for life, no matter how sick, unhealthy, or uninsurable you become.
  • Policy loans are not taxable and guaranteed. It’s the policyholder’s decision if loans will, or will not be repaid.
  • Tax free distributions to beneficiaries.
  • Many crediting rates/insurers include non-guaranteed dividend income.
  • Some policies create high early cash values.
  • Outstanding “living” benefits for policyholders AND their beneficiaries.

Well, there’s the breakdown, friends.  Perhaps we haven’t met.  Hi.  My name is Scott Olive.  I’m the Inquisitive Producer, the new one on the block over at Lee County Insurance Agency.  Maybe you can carve out a little time for us to sit down and discuss your future.  No pressure, I promise.  I won’t bring a firehose with me – because you’ve got things going on in your life, and I don’t need to bowl you over by selling you something that doesn’t fit your outlook.  Then again, if you’ve got five minutes for my story, you might re-think how to plan your own.  There’s no one size fits all for me.  Probably not for you, either, huh?  You may not want or need a Cadillac (u-hum, I mean, a Mercedes).  That’s fine… Fiat’s more your style.  Great!  We’ve got them, too (figuratively speaking).

I’d like to leave you with this: if you don’t already have life insurance, or you think it’s time to review where you stand financially with what you have, don’t you owe it to yourself to investigate your options?  Don’t you want to break out of the mold, and find out what freedom is all about?  Life insurance can be an evil necessity.  But it can also be a joyful foundation for a bright future.  You don’t really believe that Social Security, with both of her broken legs, a bad heart, and her very serious concussion, will survive for long, do you?  Isn’t it time to take matters into your own hands?

One other final thought.  Just in case you think I’m in this only for the commissions, that proves how well you don’t know me.  Hey… you’ve got the Internet… see for yourself that life insurance and annuities are the backbone of the wealthy (more on annuities later).  They know!  Believe me; they’ve studied it.  The sooner you start, the better.  The longer your view, the more better (u-hum).  I don’t believe in tricking folks, and I don’t believe in lying, either.  No matter how hard the truth may be.  I’m old enough to know a few things, young enough to hold my own.  Oh, yeah… and your story’s much more important than mine.  Because it’s not about me.  It’s about you.

”Our blogs are for general education and information only and may not represent your unique needs. Coverage will vary. Please contact your agent to verify your specific policy terms and conditions.”

Posted June 3, 2016 by leecountyinsurance in General Info, Life

Pumpkin Safety   Leave a comment

Pumpkin

Safety is key when you’re pumpkin carving with the kids for Halloween. These tips from Pumpkin Masters will help!
When you’re carving pumpkins, having fun is key — but the most important thing to remember is safety, especially with kids. After all, you want to carve the pumpkin, not yourself!
Here are five safety tips to ensure a safe — and fun — pumpkin-carving session with the little ones.

1. Create a safe workspace.
Set out your carving materials on a well-lit, dry surface. Make sure everyone has the tools they need right in front them, and that kids can reach the space easily.

2. Choose the right tools.
Using household kitchen knives can be dangerous, especially for children, so we recommend carving tools specifically designed for kids, which has a larger handle that makes it easier for little hands to grip and maintain control.

3. Point the blade away.
No matter which carving tool you’re using, point the blade away from you as you carve. If your hand slips, you’re less likely to get hurt.

4. Saw, don’t slice.
Instead of using a sweeping movement, like slicing, try gently sawing through the pumpkin as you carve. Go as slowly as you need to avoid slipping.

5. Watch your hands — and others’!
Be mindful of where everyone’s free hands are when carving. Whether you’re carving yourself or you’re holding a pumpkin for someone else, keep one hand on top of the pumpkin instead of on the side. That way it’s within sight, which will decrease the risk of poking or slicing through the pumpkin — and into someone’s hand.

6. Illumination:
Small battery powered LED lights are much safer than traditional candles. They won’t burn you or your pumpkin.

“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”

Posted October 17, 2013 by leecountyinsurance in General Info

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Preparing an Effective Evacuation Plan   Leave a comment

Image

In the event of a sudden emergency such as a hurricane, you may have just minutes to gather your family and important papers, and get out of your house, possibly for good. Are you prepared? Where would you go? What would you take with you?

With preparation and practice, you stand the best chance of getting out with what you and your family need, and ending up in the right place.

Planning ahead is crucial; this five-step plan can help get you and your family on the road to safety. 

1. Arrange Your Evacuation Ahead of Time 

  • Identify where you can go in the event of an evacuation. Try to have more than one option: the home of a friend or family member in another town, a hotel or a shelter. Keep the phone numbers and addresses of these locations handy.
  • Map out your primary route and a backup route in case roads are blocked or impassable. Make sure you have a map of the area available.
  • In case your family members are separated before or during the evacuation, identify a specific place to meet and ask an out-of-town friend or family member to act as a contact person.
  • Listen to NOAA Weather Radio or local radio or TV stations for evacuation instructions. If advised to evacuate, do so immediately. 

2. Create a Home Inventory 

A home inventory will help ensure that you have purchased enough insurance to replace your personal possessions. It can also speed the claims process and substantiate losses for income tax purposes. A detailed home inventory is also helpful should you need to apply for disaster aid.

To make creating a home inventory easier, the I.I.I. provides free Web-based software at KnowYourStuff.org. Know Your Stuff allows you to organize easily and list your possessions, as well as add digital photographs of your valuables and upload scanned receipts. The program provides free, secure storage of your inventory on Amazon Web Services. Storing your inventory online gives you the ability to access it from any computer in the event your own computer is damaged or destroyed. 

3. Plan What to Take 

  • Medicines, prescriptions and first aid kit
  • Bottled water
  • Clothing and bedding (sleeping bags, pillows)
  • Flashlight, battery-powered radio and extra batteries
  • Special items for infants or elderly or disabled family members
  • Computer hard drive or laptop
  • Photographs
  • Pet food and other items for pets (litter boxes, leashes) 

4. Gather Important Documents 

Keep important documents in a safe place that you can access easily. In the event of an evacuation take the following documents with you: 

  • Insurance policies
  • Prescriptions
  • Birth and marriage certificates
  • Passports
  • Drivers license or personal identification
  • Social Security cards
  • Recent tax returns
  • Employment information
  • Wills, deeds and recent tax returns
  • Stocks, bonds and other negotiable certificates
  • Bank, savings and retirement account numbers
  • Home inventory 

5. Take the Ten-Minute Challenge 

To find out if you are ready, do a real-time test. Give yourself just 10 minutes to get your family and belongings into the car and on the road to safety. By planning ahead and practicing, you should be able to gather your family members and pets, along with the most important items they will need, calmly and efficiently, with a minimum of stress and confusion.

“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”

Will My Policy Cover Trees and the Damage They Cause if They Fall? It Depends….   Leave a comment

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Does my insurance cover damage from falling trees?

A homeowners insurance policy covers two types of damage associated with trees: damage to your insured property (casualty damage) and damage for which you are responsible (liability).
 
For example, if a tree in your yard fell onto the roof of your home, your homeowners insurance policy would pay to repair the damage and remove the tree.
 

What if my neighbor’s tree falls on my house? 

It doesn’t matter who owns the tree. If there is damage to your property, your insurance policy would cover the loss. However, if the tree that toppled over was diseased or tilting severely and should have been removed or trimmed before the damage occurred, the neighbor could be held liable. Your insurance company will generally pay for your damage and then try to recover the money they paid from the neighbor who owned the tree.

What happens if a tree falls in my yard but does not hit anything?

Homeowners insurance policies cover real property. If nothing that was insured was damaged, there is no coverage. That means removing the tree would be done at your expense. This is why homeowners are encouraged to inspect the trees surrounding their homes to be sure they are properly maintained and are healthy enough to stand up to high winds. If a hurricane strikes and many trees are damaged, it may take a while before a crew could reach you – and when the demand is high and resources are limited, the costs of services such as tree removal are often higher.
 
If the tree hits my shed or fence, is it covered by insurance? 
 
Yes, and you should review the Other Structures section of your homeowners insurance policy to learn what the policy limits are for this coverage.  Repairs to a shed or fence are covered up to the policy limit, but if the repairs and cost of getting the tree off the damaged structure exceed the limits, there is typically additional coverage available for removing the debris, usually with a 5 percent cap. For example, if you have $10,000 in coverage for Other Structures, your insurer will pay a maximum of $10,500 for repairs and tree removal.
 
Why won’t my insurance pay to remove a damaged tree that is leaning toward my home? 
 
There is no coverage if the tree has not damaged insured property. An insurance policy covers damage, not the threat of damage. A homeowner insurance policy is not a home maintenance policy. Learning to recognize tree hazards will prevent damage from worsening and could protect your landscaping.
 
Is there another way to cover my expenses from tree removal if my insurance doesn’t cover it?

Typically, losses not covered by insurance or other means can be deducted as a casualty loss on an individual’s federal income taxes. Talk to your tax professional or review IRS publications on calculating casualty losses. The IRS defines a casualty loss as an “identifiable event that is sudden, unexpected, or unusual.”
 
“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”

Posted August 20, 2013 by leecountyinsurance in General Info, Homeowners

Top 10 most common homeowners insurance claims and simple ways you can avoid costly problems   Leave a comment

hose bursting1

What can you do?

Insurance adjusters have ranked the most common, yet preventable, homeowners claims. Five of them – that’s half the list – are plumbing related. This is a busy time for everyone and the last thing you need is an unexpected plumbing breakdown. Unless you enjoy the excitement of a flooded laundry room or having a toilet take a one-way trip through the floor, the answer lies in smart preventative maintenance.

Top ten homeowners claims to avoid
————————————————————————————————————————————————–
1. Burst washing machine hose – Plastic or rubber washing machine hoses eventually leak and even burst. Three bad combinations here: The machine jars and jumps; the lines get hot and cold repeatedly; laundry rooms are typically located in low-traffic areas, meaning it may go unnoticed a while. Damage is often extensive and expensive, which is why it’s ranked #1.
Precaution: Plastic hoses should be replaced at least every three years, and frequently inspected for leaks. Stainless hoses look substantially stronger and in many cases are but there are alos some that are not much better than the “cheapie” model.

2. Slow leaks around tub/shower grout and edges – Grout and caulking decay over time, and cracks can develop. Water seeps into walls and floors little by little, causing tub and shower pans to corrode or to actually sink due to softening wood supports. The problem greatly accelerates as more water intrudes, leading to major repairs in plumbing, carpentry, tile work and more. Insurance rarely covers these expenses.
Precaution: Make sure that all water from the shower or bath stays there. This means securing shower doors and tightly closing curtains. Also, frequently inspect and repair seals. A little time now can save thousands of dollars later. On a preventive maintenance trip.

3. Toilet seal leaks – If your toilet wobbles it could mean that the seal is worn, or that it was improperly installed. Since the seal prevents sewage gases and other wastes from leaking into your home, this is not just a costly repair—it’s a health issue. We’re not talking “maybe” here; sewer gases are a health risk and not to be taken lightly. Get this fixed.
Precaution: Periodically check the base of the toilet for water. If a leak is present, have it repaired immediately.

4. Refrigerator water-supply line leaks – The small water line that goes from your refrigerator—called a capillary line—can easily become kinked. Plastic lines also become brittle from use, which leads to leaks. These leaks are rarely noticed but can cause extensive damage to the walls, floor, and cabinets around the refrigerator.
Precaution: If lines become brittle, replace them as soon as possible. Be sure to check metal lines for crimps or kinks that can cause the line to form a leak.

5. Roof leaks – Weather, age, wear and tear — these conditions adversely affect your roof’s condition. Signs of a leaking roof include spots or stains that appear on the ceiling, or curled, upturned shingles around the edges of your home.
Precaution: Don’t try to stretch the life of your roof past its time. But to ensure a longer life, make sure that gutters are cleaned regularly. Also check for loose or missing shingles, especially after storms with high winds. Home owners insurance does not cover wear and tear. If your roof is leaking because it is old it is your responsibility to maintain and replace the roof as necessary. Most insurance companies in Florida allow up to 15 years on a shingle roof. Tile roofs are generally acceptable up to 20. Many companies now are settling roof claims on a depreciated basis based on the age of the roof.

6. Chimney/fireplace fires – It’s easy to think that starting a fire in the fireplace is as simple as throwing a few longs and matches together and watching it burn. Before your next family weenie roast, you should know that dirty or plugged chimneys regularly cause home fires.
Precaution: Practice fire safety: keep flammable items clear of the fireplace; be sure that children are supervised at all times; keep matches and flame accelerants in a safe, secured place. Before you start a fire, clean any excessive amounts of soot and ashes from the chimney. Also, maintain a regular chimney-cleaning schedule.

7. Hot water tank leaks – When was the last time you thought about your hot water tank? Probably not any time in the recent past unless you had a problem or repair. Since hot water tanks develop leaks and rust as they age, this “out of sight, out of mind” mentality can lead to major home damage. Sometimes, you begin to notice that you run out of hot water more quickly, indicating poor performance or maybe sediment in the tank. Both indicate a service or replacement need.
Precaution: Periodically check for water damage in the flooring around your hot water heater. If your water heater was installed more than five years ago, a qualified technician should check it at least annually. It may only need cleaning and servicing.

8. Electrical cord fires – Do you have a lot of “gadgets” and appliances plugged in throughout your home? Hiding those unseemly cords with throw rugs? Bad idea. Electrical cord fires result primarily from overloaded circuits, cords under throw rugs, and baseboard heaters.
Precaution: Minimize the number of appliances in use or plugged in at the same time. This will keep your circuits operating within their safe capacity. Also, route cords around throw rugs to reduce the likelihood of fire. Make sure all furniture is a safe distance from heaters, and that they are properly ventilated.

9. Unattended cooking or candle fires – Candlelight flickering shadows on the wall is relaxing, beautiful, soothing. Standing on the curb watching the flames flicker throughout your home is, um, something less than calming. Contained fires can become ‘uncontained’ quickly and violently. It’s from one thing: Lack of attention.
Precaution: Be aware of your candles or cooking fires at all times. Is a candle burning too closely to a flammable object? Is it in a non-flammable holder? Periodically monitor all candle and cooking fires and always practice fire safety.

10. Garage door opener theft – You want your home to comfortable, safe, and secure. You may lock your doors, but sly criminals often snatch garage door openers, gaining access to garages and homes.
Precaution: If you’re not parking your car in the garage, take the garage door opener out of the car. This one, simple measure substantially increases your home security. Thieves cannot gain access to your home easily, making break-ins more difficult and therefore less likely.

“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”

Lightning Safety Week – Surge Protection for Your Home   Leave a comment

lightning

At the first clap of thunder, seeking shelter indoors to avoid being struck by lightning is a priority. But it’s also important that what’s inside the structure is protected as well. According to the Lightning Protection Institute (LPI), a single bolt of lightning can carry over 30 million volts of electricity. A strike from a powerful charge like that could trigger a power surge that could damage expensive electronic equipment inside your home – or worse – spark a devastating fire.

As part of Lightning Safety Week (June 23-29), the Insurance Institute for Business & Home Safety (IBHS) advises homeowners to take precautions to reduce the chances of lightning-related loss and disruption from power surges.

To reduce the risk of damage from a lightning strike, homeowners should consider investing in a whole-house surge protector, which offers protection against electrical surges or spikes. Many utility companies provide and install whole-building surge protection systems. If this is unavailable in your area, consider hiring a licensed electrician to install the protector.

There also are relatively inexpensive ways to prevent significant damage from a power surge. Below, learn how to keep expensive electronics from being damaged or destroyed by a sudden spike in voltage. Find additional lightning protection guidance for both businesses and homes at disastersafety.org/lightning.

PREVENTING POWER SURGE DAMAGE TO YOUR HOME

1. Unplugging electronic equipment when there is lightning in the area is the most reliable means of protecting that equipment from a power
surge.

2. Know the important difference between a surge suppressor and a power strip. A power strip plugs into your wall outlet and allows you to
plug in multiple electronic devices. However, a power strip does not protect equipment from being damaged by a spike in electrical power.
Like a power strip, a surge protector also gives the user the ability to plug in multiple electronic devices, but it also protects your
electronic devices from sudden power spikes.

3. Connect telephone, cable/satellite TV and network lines to a surge suppressor.

4. Make sure the surge suppressor has an indicator light so you know it is working properly.

5. Ensure the surge suppressor has been tested to UL 1449, which should be indicated on the packaging.

6. Purchase a surge suppressor with a Joule rating of over 1,000. The Joule rating typically ranges from 200 up to several thousand the
higher the number the better.

7. Look for a surge suppressor with a clamping voltage rating (voltage at which the protector will conduct the electricity to ground)
between 330 v, which is typical, to 400 v.

8. Purchase a surge suppressor with a response time of less than 1 nanosecond.

9. Avoid cutting corners. You don’t want to protect a $1,000 television or computer system with a $10 surge protector. For $25 and up, you
can provide much better protection.

10. Consider hiring a licensed electrician or home/building inspector to review the power, telephone, electrical and cable/satellite TV
connections in your home. Have them check that you have adequate grounding of the power line connection and your power distribution
panel. All of the utilities should enter the structure within 10 feet of the electrical service entrance ground wire and be bonded to
that grounding point.

Make Sure You’re Covered for Sewer Backups   Leave a comment

sewer backup
A Little Insurance and Preventive Action Offer a Lot of Protection Against Sewer Related Damage

If you’re a homeowner, here’s one of the worst nightmares you can experience. Torrential downpours deluge your property and neighborhood with rainwater, overwhelming your home’s sewer system or your sump pump’s ability to handle the water runoff. The next thing you know, you have raw sewage backing up into your home’s drains, overflowing toilets and tubs or flooding your basement. A backed up sewer can do a real number on your home, causing thousands of dollars in damage to floors, walls, furniture carpeting and electrical systems, as well as pose a major health hazard.

No problem. You’ve got insurance, right? Not so fast. According to the Insurance Information Institute, most sewer system backups are not covered under a typical homeowners insurance policy, nor are they covered by flood insurance.

Uh-oh.

For homes that have been severely damaged by sewer backups and are uninhabitable, your basic homeowners policy may include Loss of Use coverage, which provides reimbursement for lodging, food and other living expenses you may incur if you have to vacate your home. Loss of Use coverage also reimburses you for the lost rental income if you rent out part of the house. but that’s about all you’re going to get with your average homeowner’s policy.

For most consumers, coverage for sewer-related problems must be purchased either as a separate product or as an addition to a homeowners policy. Fortunately, sewer backup coverage is available from most insurance companies for a nominal cost. We recommend that consumers in our rain-prone region of Florida err on the side of caution and purchase this additional insurance. You can typically purchase sewer backup insurance for an additional premium of $50-$75 per year; a small price to pay for significant piece of mind and protection.

What Causes Sewer Backups

Most homeowners probably don’t realize that they are responsible for the maintenance and repair of their main sewer line — the pipeline that runs between their house and the municipality’s sewer main, usually located underneath the street. The main sewer line is owned and maintained by the property owner, including any part of the line that extends into the street or public right of way.

Over time, these main sewer lines can easily deteriorate, crack, collapse or become obstructed. You may not have a clue that this kind of damage is occurring. But one severe rainstorm may be all it takes to bring the problem to a head.

Some of the more common causes of damaged sewer lines and sewer line backups are:

Aging Sewer Systems: More than half of nation’s sewer lines are 30+ years old or connected to aging municipal sewage systems. After decades of wear, tear and obstruction, the sewer line and system no longer have the capability to withstand heavy demands and so they back up and overflow.

Combined Pipelines: Some newer sewage and drainage systems combine storm water and raw sewage into the same pipeline. During intense rain storms, these combined systems are exposed to more volume and debris than they can handle. With nowhere else to go, the outgoing water and sewer backs up into basements and other low lying drains.

Tree Root Infiltration: Shrubs and trees seeking moisture can make their way into cracks or through joints in your sewer line, causing extensive blockage and damage. Tree roots can travel a long way; the damage may occur from a tree on your property, a neighbor’s tree or a tree on public property. Samples of the tree roots can be obtained to identify which party is responsible for cleanup and repair.

Blocked Municipal Lines: Many times the problem has nothing to do with your property, but with a blockage in a your municipality’s sanitary main running under your street. If the blockage is not detected in time, sewage from the main can back up not only into your home but your neighbors, as well.

Usually this kind of backup happens slowly, giving you plenty of time to call a licensed plumbing company or your agent to find out who they suggest. If water and sewage back into your basement at a rapid rate, don’t delay; call your municipality’s public works office or sewer department and report the problem immediately.

How You Can Prevent Sewer Line Backups

There are several preventive measures homeowners can take to minimize the occurrence sewer line backups.

Proper Disposal of Grease and Food: Grease, fats, gravies, sauces and cooking oils should never go down your kitchen drain but should be poured into a heat-resistant container and disposed of in the garbage. Once in your drain, these substances will cool off and solidify either in the drain or in the main sewer, eventually building up to a massive clog. Food particles should never go down the drain unless run through a garbage disposal first.

Proper Disposal of Paper Products Properly: Toilet paper and human waste is the only thing that should go down your toilet. Diapers, paper towels, feminine products and food should never be flushed; these products do not deteriorate and can easily clog your main sewer line. Even facial tissue should be avoided; it does not dissolve as easily as bathroom tissue does.

Replace Your Pipes: One way to prevent collapsed sewer lines or tree root infiltration is to replace your old clay or metal sewer lines with today’s newer plastic or PVC pipe. If you have continuing problems with tree roots in your sewer line, you may have to have the roots cut or your line cleared periodically.

Install a Backwater Prevention Valve: These fixtures are installed into a sewer line in the basement of your home to prevent sewer backups. They allow sewage to go out, but not to come back in.

What to Do If You Experience a Sewer Backup

Sewer backups can produce a host of nightmares for homeowners, including disease, mold formation, destruction of valuables, foundation damage and electrical malfunctions. Prompt cleanup is necessary to restore sanitary conditions and prevent further damage. If you experience a sewer backup situation, at a minimum, your cleanup should include:

Wet-vacuuming of all floodwater
Mopping floors and wiping walls with soap, water and disinfectant
Flushing and disinfecting plumbing fixtures
Steam cleaning or removing wet carpets or drapes
Repairing/removing damaged wall and floor covering
Cleanup of ductwork

How to File a Sewer Backup Claim

Contact your insurance agent as soon as possible after your sewer backup has occurred. For insurance purposes, it’s a good idea to take before and after photos of the affected areas of your home or basement and itemize any property losses. Save all receipts related to repair, cleaning or damages related to your sewer backup. Do not dispose of any damaged items until an adjuster has seen them. You cannot recover money once the items are gone or repaired unless the adjuster has seen them first.

“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”

Happy National Insurance Awareness Day!   Leave a comment

Insurance

June 28 is National Insurance Awareness Day- our favorite holiday, of course! We want to remind you of some of the many reasons why insurance is so great and you just can’t afford to be caught without it.

Insurance provides safety and security. It’s a good feeling to know in the situation that if something were to happen, you are taken care of. Peace of mind is a great feeling to have. Life is unpredictable but we can protect ourselves and the ones we love from the unthinkable with a great insurance plan in effect.

Having insurance also helps you financially. The cost to repair damage can be significantly high, higher than you would be able to afford. Having insurance will allow you to prepare the deductible.

Take a look at some numbers.

In recent years, the average home claim has totaled $7,368.

Average flood claim is $24,166.

Average fire claim is $24,153.

National severe weather claim is $7,163.

National liability claim average is $11,153.

If you get stuck in one of these situations, would you have the money to pay out of pocket? Protect yourself and the ones you love. Celebrate National Insurance Awareness Day by making sure your polices are up to date.

“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”

The Art of Coverage: Collectibles Insurance vs. Traditional Homeowners Policy   Leave a comment

stamp vase 1918 coin

The chances are good that you are a collector of something. So what makes something a collectible or when do you need to “Schedule” your personal belongings. The simple answer is: it depends.

Some of the most commonly collected items include fine art, sports memorabilia, wine, rare books, stamps and coins, antique rugs and tapestries, musical instruments, action figures, dolls, toys, auto and movie memorabilia, and guns.

Large private collections generally have proper risk management in place including fine-art insurance that covers the full value of the items. But many smaller collections (those valued below $1 million) tend to be insured under a traditional homeowners policy or have no insurance at all. If these collectors face a devastating event resulting in damage, they may discover too late that their coverage is not sufficient to address their financial losses.

In simple terms, the process of insuring collections of fine art and collectibles under a traditional homeowners policy tends to be time-consuming and difficult while possibly yielding lower limits and less expansive coverage when compared to obtaining coverage with a fine art and collectible insurance policy. The comparisons below address specific differences between the two types of policies.

Appraisals – Homeowners policies generally require appraisals for collections or individual items valued over $2000 as part of the underwriting process. Many collectibles insurance policies do not require appraisals at the time of application.

Deductibles – Zero-dollar deductibles are the standard for collectibles insurance policies with some offering additional deductible options. Homeowners policies may offer zero-deductible policies, but it is not as common.

Limits – The limit on fine art and collectibles coverage generally ranges from $500 to $2000 for a homeowners policy without the addition of a floater or rider. Even with an added floater or rider, homeowners policies tend to limit the level of exposure. A collectibles policy may offer coverage up to $1 million or more.

Coverage – One of the most important coverage differences between a homeowners policy and collectibles policy is the valuation of covered items. Homeowners policies tend to insure for actual cash value while collectibles policies insure the full collectible value of items in the collection. This distinction alone can reflect a startling difference in potential claims payments in the event of a loss. Homeowners policies generally cover named perils only, exclude coverage for items during transit, limit coverage on items stored away from the home to as little as 10 to 15 percent, and extend coverage to newly acquired items for only 30 days. By contrast, collectibles policies typically include all risk coverage and provide coverage for items in transit, items stored away from the home (such as in an office or storage facility), and newly acquired items for up to 90 days. Some collectibles policies may offer additional coverage benefits such as discounts for monitored fire and burglar alarms or items kept in a UL-rated safe.

Claims – In today’s insurance market, filing a claim against a homeowners policy may leave an insured vulnerable to premium increases at renewal or the possibility of non-renewal. With a separate collectibles policy, claims do not affect homeowner premiums or loss history. In addition, companies that offer collectibles insurance may have claims adjusters with a high level of expertise in this area. Adjusters with this specialized knowledge are better able to determine the value of unique or rare items, which should expedite the claims process and lead to a better outcome for the insured.

A detailed comparison of the benefits and limitations of standard homeowners insurance versus collectibles insurance demonstrates that specialty coverage can be very advantageous for even a small collector.

Standard homeowners policies have limitations for most common items such as Firearms, Jewelry, Furs, Silverware, Precious and Semi-precious stones, Money, Gold, Silver, Coin or Stamp collections etc. Anything that has a special value such as an oriental rug (worth more than an area rug you may purchase as a home improvement store), anything that is “one of a kind” that can’t be replaced by going to a local department store, a collection of things such a porcelain figurines, fine art, breakable art such as a vase or statue. These are things that may need to be insured by a personal articles policy. Sometimes referred to as “scheduling”, this is a policy that insures specific items at a specific value determined by an appraisal or other means of valuation.

If your $10,000 Persian rug is damaged but not insured for $10,000, it is a rug and can be replaced for about $150 at Home Depot. A 1938- 3 legged Buffalo nickel may appraise for several thousand dollars depending on the grade, but if it is not insured for that value, you guessed it, it’s just a nickel worth 5 cents. Sentimental value is dear to us and nothing can replace sentimental value but Grandma’s old wedding ring could be worth a few hundred dollars or a million bucks. Every insurance policy has limitations, exclusions and provisions that you may need to comply with before you are properly insured. Please contact Lee County Insurance Agency for additional information about insuring your valuables.

“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”

Man’s Best Friend… but not always.   Leave a comment

animal liability

Your pets are likely more of a liability to you than you realize. In fact, many dog breeds are specifically excluded from traditional homeowners’ policies. That means that anything from digging and playful nips to injurious bites or even provoked attacks could easily leave you vulnerable to a devastating lawsuit. Did you know that 4.7 million dog bites happen every year––making dog-related damage the biggest cause of homeowner’s insurance claims? As a result, many insurance companies are limiting dog bite insurance coverage or excluding animal liability coverage all together. With increasingly strict state and local regulations being enforced across the country, animal liability and dog bite insurance coverage are things that every dog owner should consider. There are costs associated with dog bite claims that include medical treatment, surgical procedures and counseling not to mention the legal bills.

Dog Breeds Most Commonly Excluded from Homeowners Coverage:
• Bully Breeds
• Pit Bulls
• Chows
• Rottweilers
• Doberman Pinschers
• German Shepherds
• Akitas

Just because your dogs breed isn’t listed doesn’t mean you are covered, many companies have an extensive list of prohibited breeds, some of which, you may have never even heard of. A stand-alone animal liability policy should be able to give you more protection against a possible large out of pocket claim. This is purchased in addition to a homeowners or renters policy that provides other coverages you still need.

It is not just dogs that are a problem for insurance exclusions, In Florida most companies exclude ANIMAL liability. This could include your parrot that takes a chunk out of someone’s finger or even a cat that your neighbor trips over. Let’s not forget those exotic animals like large iguanas, tigers, snakes, monkeys or even alligators that are kept as pets.

“Our blogs are for general education and information only and may not represent your unique needs. Coverages will vary. Please contact your insurance agent to verify your specific policy terms and conditions.”

Posted June 13, 2013 by leecountyinsurance in General Info

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