Archive for July, 2013

New Cars and Gap Insurance

Posted on: July 29th, 2013 by Personal Insurance No Comments

Now that we have survived the second heat wave of the summer, the people at our house start to think about cooler summer weather and then the move out!

These “new” grown ups that are moving out are also realizing that they will need a car to get to their new jobs and now they have 45 days to figure out their car thing.

Their questions go like this……….. New or used? Do I really need a car or could I just take the train? Can I really afford a car and insurance? and my favorite………… How much would you (the parent) like to contribute to my car?

As they review all of these questions I throw out a few other thoughts about new cars and insurance.

If they buy a brand new car when that new car leaves the lot it loses 9%-11% of its value on day one.

If they then have an unfortunate accident with this car, they will still owe the full amount of their car loan. Since the car will be insured for the actual cash value and not the “purchase price or loan amount”, many new car buyers who do have an accident still owe money on their car even after they have received their total loss insurance check.

One solution to this scenario is to add GAP Insurance coverage to their car insurance policy. This is not an expensive coverage and it can be invaluable for the first few years of a new car loan. This Gap Insurance will pay the difference between the amount you owe on your car loan and the actual cash of your car. In the event of a total loss Gap Insurance leaves you free to look for a new car!

Back to all of the car questions at our house! They will most probably buy used cars. I am hoping that they may even decide that the train pass will work best and if not I hope they drive very safely.

Basic Estate Plan; Yes, You Should Have One!

Posted on: July 26th, 2013 by Commercial Insurance No Comments

It will continue to surprise and baffle us, although after many years of first hand accounts, guess it shouldn’t. We continue to witness the dedicated mother/father or successful business owner that have worked so hard on their “successes” they have completely ignored any type of basic estate plan for their family.

Just the other day, a married professional couple, lawyer and doctor, mid-thirties, three children under the age of twelve and no will. At a minimum, a Will, Durable Power of Attorney, and Health Care Proxy are basic documents every family should have to avoid costly decisions made without your direction. We would include a Trust as well in your plan, but if we can get everyone to act on the first three, we will consider that a success. A closer look at each;

Wills

Your Will, will name an executor for your estate that will be responsible for providing the IRS and home state with a final accounting of your assets. In addition, and more importantly, the document will name a guardian for any minor children, recognize any specific gifts to individuals and direct assets into trusts. Most people assume all assets automatically flow to a surviving spouse, but that is not always the case. The absence of a Will may require your assets to go through probate. Few things we know of probate, it will take longer to get your assets to the people you would like, the state will charge a considerable amount of money that you would avoid with a will and your wishes may or may not be followed.

Durable Power of Attorney

This document allows you to name a person to represent you in financial or legal matters in the event you are unable to represent yourself due to illness or other reasons.

Health Care Proxy / Living Wills

This document declares a person you choose to make health care decisions on your behalf if you are unable to do so. It is common this document will express your wishes relating to end of life care and whether certain medical care should be continued or withheld. Most people file a copy of this document with their primary care doctor.

Revocable & Irrevocable Trusts

Trusts are legal documents in which you designate a person or persons to oversee assets deposited into the trust for the benefit of others, the named beneficiaries. In Massachusetts, an estate value over $1,000,000 would be subject to estate taxes. That’s not a lot when you consider the value of your house, life insurance and savings/retirement accounts. There are many different types of trusts and an experienced estate planning attorney can draft documents to meet your specific goals.

In the absence of these documents, someone other than you will be making you and your family’s important life decisions when you cannot. Take the time to legally assign these rights to the person you want.

Questions or more information on Wills & Trusts, Call us, we have the Answers.

5 Things to Know about Disability Insurance

Posted on: July 19th, 2013 by Commercial Insurance No Comments

While everyone is probably up to speed with Life insurance by all the attention and advertising dollars spent to keep Life insurance front and center. Your biggest exposure to financial unrest for you and your family could be found if you are disabled due to injury or illness. Disability insurance will provide you an income to pay bills when you can not perform your job.

When considering Disability insurance and the benefits it can provide, it’s important to understand these Five things;

  1. If you can not work due to injury or illness, disability insurance can help pay your monthly bills like; mortgage/rent, utilities, car payment, insurance, food, education, credit card bills, health-care.
  2. Social Security benefits are not available to you if you are out of work less than one year. If you are the sole provider or bread winner in a family you will drain all savings to keep your family a float.
  3. Most long-term disabilities are due to illness not injury. Take extra care exercising, driving or playing sports may not matter. Illnesses you see other people get every day will account for over 90% of disability claims.
  4. Easier and less expensive to get disability insurance while your young and healthy. Today 25% of people under the age of thirty will suffer some form of disability before the age of 65.
  5. Your disability benefits through work are taxable income. You will receive far less than you think will with disability insurance benefits provided by your employer. Disability insurance you purchase on your own is non-taxable. Combine the two incomes to get you the monthly benefit you will need.

While most of us are in agreement the importance and value Disability insurance can provide. Facts are most people will not take action.

For more information on Disability insurance and how it will help you and your family, Call us, We have the Answers.

Vacation Season – Rental Car Time May be Here!

Posted on: July 15th, 2013 by Personal Insurance No Comments

Summer is a season in which many of our clients fly off to new locations to see new sites. In our agency it is also the time of year that we get that call…………………. “I will be renting a car on vacation. Do I need to buy the insurance?”

Each year our response is the same. Your liability coverage will go with you so you are all set with that part of your insurance, but please consider buying the additional “collision damage waiver” insurance when renting a car.

I know this seems ridiculous! If you have a Massachusetts Car Insurance policy on your car some of your coverage will extend to your rental car. The issue arises when the rental car company (and we have seen a few of these) adds additional costs to your rental car “damage bill”.

To keep it simple, if you have collision on your car and it is insured on a Massachusetts personal car insurance policy, your collision coverage will extend to your rental car. So, if you had a $500 deductible on your collision coverage for your car, the damage to the rental car would be covered subject to this same deductible. Please keep in mind here that you may also get a surcharge for your rental car accident!

However, we have seen a number of costs and fees that rental car companies have submitted to car renters that may NOT be covered. FEES for Loss of Rental Income, Fees for Administrative Expenses and FEES for Diminished value of the damaged rental car are just a few of the additional FEES that are being assessed by some rental car companies.

Because of these additional costs, we recommend that our clients purchase the “collision damage waiver” insurance that is offered when they rent a car.

If you have more specific questions about how your car insurance coverage will work when you are renting a car, just let us know. And do enjoy that vacation!

Knowledge or Experience, Your Choice

Posted on: July 12th, 2013 by Commercial Insurance No Comments

There’s no doubt that “Knowledge is Power”, and in order to make sound business decisions on your business insurance you need either the experience or knowledge to guide you. Experience can be very costly. Talk with an owner that suffered through an uncovered loss at their business and they will tell you they wish they had the knowledge and did not have to learn by experience.

Are you confident you have identified and have answers to common gaps in insurance coverage we uncover every day? These common gaps may surprise you;

Employment Practices Liability:
Employee suits against business owner for employment related claims, to include; Gender/Age discrimination, Sexual harassment, Wrongful Termination, Emotional distress, Negligent promotion/hiring

Fiduciary Liability:
As owner, officer, trustee of company retirement plan, YOUR personal assets are at risk. You can be held personally liable as a result of alleged errors, omissions or breach of duty for losses on a group benefit plan

Cyber Liability:
A breach of your secure network or point-of-sale system, a stolen lap top, missing thumb drive, or employee error, all pose real world problems for businesses

Business Overhead Expense:
You, a partner, or key employee is disabled due to injury or sickness, how will the business fill the role and lost income? What are the financial obligations owed to the disabled employee? Provide cash to the business to bridge the gap for up to two years until decisions and plans can be made

Long Term Care:
Not if but when you will need this important insurance. Determine how and where your medical care is delivered. Secure coverage today when health is good, benefits are greater, costs are lower, and premiums deductible as an employer benefit

If you have questions, Call us, We have the answers!