Wednesday, October 25, 2017

What Does Small Business Insurance Cover?



As a small business owner, you know the importance of insurance coverage for your business. It helps protect you from financial losses and against specific risks covered by the policy which typically includes fire, wind damage, lightning, falling objects, theft etc.  A normal policy will offer 3 basic types of coverage.

Clothing Store Owner.
https://www.allstate.com/tools-and-resources/business-insurance/small-business-insurance-need.aspx


General Liability Coverage

General liability will cover the medical costs if anyone is injured at your business place due to negligence. Depending on the policy terms, it may also pay for legal costs if you should besued over an accident that occurred at your place of business. General liability coverage is subject to limits. If the medical expenses are in excess to your coverage limit, you may have to pay from your pocket to cover the balance.

Business Property Coverage

Property coverage will protect the business premises (if you own it) from risks that are listed in the policy. For example, if the premises are damaged or destroyed by fire, the policy will help to pay for the repairs or rebuilding. If the furniture or equipment is damaged, destroyed or stolen, the policy will cover the cost of replacement or repair. When buying a small business policy it is important to choose the right deductibles and limits. This means that you can select the amount you will pay yourself before the policy kicks in, and the maximum amount that the policy will pay. As a general rule, higher the deductible, lower the premium.  Because of cash flow limitations, many small businesses make the mistake of keeping deductibles and limits low to reduce the premium outflow. However, saving a few dollars a month could result in paying thousands of dollars from your pocket if damage or loss occurs that is not covered. An insurance agent will be able to help you find the optimal coverage for your business.

Business Interruption Coverage

This will help you to continue operations after a covered peril occurs. It is meant to help in replacing lost income and the higher expenses that arise after your business operationsare affected. For example, if your premises are not usable after a fire, the coverage will help in paying rent for a temporary workplace. This coverage is subject to limits both in terms of the overall dollar amount payable as well as the time period for when it is applicable. Your insurance agent will be able to give you a clear picture of what the limits are to help you to find additional coverage, if you should need it.


Additional Coverage

In addition to these 3 basic coverage, it is often possible to buy additional coverage which can include:

 ·         Data compromise coverage

 ·         Employment practices liability coverage

 ·         Business auto insurance

 ·         Outdoor property coverage

 ·         Equipment breakdown coverage

 ·         Product liability coverage

 ·         Professional liability coverage


Ensure You Are Protected

The loss of your business could have a severe impact on you, your family, and your employees. Small business insurance is a protection to your business and by extension, to the ones who depend on you. The variable coverage limits and options available mean that the best way to get the protection you need, at a cost you can afford, is to consult a professional insurance broker.


Disaster Insurance – What You May Not Know

Hurricane, earthquakes and other natural disasters have been around since the beginning of time. The spurt in the volume and intensity of these disasters appear to be increasing over the years. While part of this may be due to climate change, the expanding population of cities, exponential growth of infrastructure and increasing value of homes are among the major reasons for these massive financial losses. These disasters and the publicity surrounding them have caused homeowners to re-look at their insurance coverage. While the overall policy may appear to offer adequate protection, there are factors that could limit the resources available to repair or rebuild your home.





Issues to Consider

         ·         Your standard disaster policy may not be enough. A typical homeowners’ policy will not normally cover damage from floods or rising water. Some policies pay for damage caused by wind or wind-driven rain but others do not. Some policies issued in areas that are prone to hurricanes include a specific “hurricane deductible” where the policyholder has to pay a large amount from his pocket before the coverage kicks in. For example, if a home valued at $200,000 is destroyed by a fire, the standard deductible is typically from $500 to $1,000. However, under the same policy, if the destruction it is caused by a hurricane, the deductible could be 5% or around $10,000. This is a huge difference. 

          ·         Because of this, you may have to dip into your savings. In the case of earthquake damage, you may need to pay as muchas 15% from your pocket. Without enough cash available, you could be forced to sell off assets to cover the cost of repairs. Ideally, you should have savings set aside for such a contingency or a Home Equity Line of Credit (HELOC) set up to cover you. The HELOC should be set up in advance because no lender will extend credit on a house that has already been damaged.


       ·         Since the standard homeowners insurance does not cover flood damage or loss, taking out flood insurance may be a good idea, depending on the flood risk in your zone. A qualified insurance agent will be able to help you evaluate the risk and find the right coverage. Note that there is awaiting period for this coverage to kick in – it is usually 30 days. This is to discourage people taking out a policy only when a flood threat is imminent. Another factor to keep in mind is that coverage offered by the federal government’s National Flood Insurance Program is limited to $250,000 for property and $100,000 for contents. Additional coverage can be bought from private insurers.


Check Your Coverage

The complexities of insurance coverage mean that it is easy to make mistakes when taking out a policy or misunderstanding the coverage that exists. Talk to a reputed insurance broker about your existing disaster coverage to know if there is a gap that needs to be covered. He will be able to help you stay completely protected.

Sunday, September 24, 2017

Filing a Claim after a Natural Disaster

Natural disasters like hurricanes and floods have been a major topic of conversation of late. The silver lining in the massive loss and damage that has occurred in Texas is that it has caused many homeowners to reevaluate the need for flood and earthquake damage coverage that is not typically covered by a homeowners’ insurance policy. Those who have the coverage will be protected if a disaster occurs. However, ensuring that you get the insurance pay out as quickly as possible is often not easy. It is estimated that the damage caused by hurricane Harvey in Texas could be around $10 billion. It means that insurance companies will have to process tens of thousands of claims. That volume will often lead to delays in the payouts. According to the National Association of Realtors, after a major natural disaster it could take anywhere from a week to a few months for an insurance adjuster to get in touch with a policy holder. It is worthwhile knowing what you can do to speed up the process if you should ever need to make a claim.

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Expediting an Insurance Claim

  • Contact your insurance company as soon as possible. Even a day’s delay could mean weeks or months longer before the payout is made. It is not that the companies intentionally delay payments – they are flooded with claims and so the sooner the claim is filed, the sooner it can be processed.
  • Ask the insurance company when you can expect the adjuster to contact you. This will enable you to be ready when he comes.
  • Take pictures and videos of the damage, including personal items. Include the date of purchase and keep receipts of high-value items in a place where they will not be lost.
  • Keep a record and receipts of everything you spend to make any immediate repairs that maybe possible and are essential. Also, record everything you spend on accommodation and food in case your home is unlivable.
  •  Keep a detailed record of all the actions you take in filing your claim. This includes the people from the insurance company you speak to or correspond with. Note down the dates, times and include details of what was discussed.
  •  Be careful of what you discard. The adjuster may want to see these items. In case you have to discard them because of municipal hazard regulations or for your own safety, take pictures of all that is discarded to show to the adjuster.
  •  If the insurance company offers you the options of signing up for text alerts, do so. This is the quickest way to know the status of your claim, when the estimate is ready and when the payment will be made.

If you have the insurance policies or if you are planning to get additional coverage, talk to your insurance broker about other area or insurance company specific actions you can take to expedite the process, if you should ever have to make a claim.



Most Hurricane Harvey Victims Do Not Have Flood Insurance

Hurricanes are a part of life in many parts of US and people typically take some basic protections against them. It’s good enough at time, but not when something like hurricane Harvey hits. The flooding has been massive as we’ve seen on TV. The billions of dollars of damage that has been caused is a figure that many people may not be able to comprehend; but everyone can relate themselves to pictures of people being taken out of their homes by boats.


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Rescue Is Where Problems Begins

Rescuing people from the flooded areas was, of course, the priority. But for the families, who left flooded basements, water damaged walls and ruined furniture, appliances and valuable behind, the next stage is often a huge question mark. Some may have the resources to rebuild their lives, but the burden will be crushing. For most, the pockets are not deep enough. Many of them will be forced to sell and leave their communities. A major reason is that many of them do not have the insurance coverage they need to rebuild their lives.According to the Consumer Federation of America, only about 2 out of 10 homeowners in Houston have flood insurance.

Homeowners insurance generally covers only damage and loss caused by winds - flooding is not part of the policy.Separate policy is required to protect from flood damage. There are three wrong assumptions that caused so many Houston homeowners to not have the coverage they actually needed:
  •  The premiums flood insurance is thought by many to be too high. Actually, the cost would be even higher if the premiums were not subsidized by the federal government under the National Flood Insurance Program. Unfortunately, people did not realize that the cost of this insurance is reasonable considering the potential loss a flood could cause.
  •  Flood insurance is mandatory for those with federally backed mortgages in high flood risk areas called Special Flood Hazard Zones. Since Houston does not fall into this zone, homeowners thought that the risk was non-existent and so flood insurance was not required. Being outside a flood zone does not guarantee that flooding will not occur, as the residents of Houston found out.
  • A large number of people were under the assumption that state and federal aid that is made available when an emergency is declared will help them to recover. This aid is only meant to help people survive in the aftermath of natural disasters, not to enable them to rebuild their lives and homes.

California Is No Stranger to Flooding

California is no stranger to storms and weather-related property damage. Flooding could happen anywhere, whether or not the area is a flood zone. The fact that fierce storms and wind-related damage has occurred in the past with no flooding does not mean that it will not happen. In Corpus Christi and Rock port the damage was wind-related. In Houston, the same hurricane caused flooding.

California homeowners who do not have flood insurance are at a much greater risk than they realize. To understand the risks and potential loss and get the coverage that is needed, an insurance broker should be consulted. Being rescued from home by boat can be bearable if you know that you have the insurance coverage to rebuild and get back to normal life.


Monday, August 28, 2017

Car Insurance for New Drivers

If you have just gotten your driving license, you probably feel that the world is your oyster – you are now free to travel and go wherever you want. It is important to remember that passing your driving test does not automatically make you a good driver. That comes with experience on the road and an appreciation of the dangers that exist on the road. It is these dangers that you need to protect yourself against. Even if you do not make a mistake, the mistakes of others could put you and your vehicle in danger. That is why it is illegal to drive without insurance.



The Coverage You Must Have

There are varying levels of auto insurance available. In California, the minimum requirement is liability coverage. This is twofold:

 Bodily injury coverage which covers injuries suffered by others in an accident you are involved in.
 Property damage coverage which covers damage to another person’s property caused by an accident you were involved in.

The idea behind this minimum coverage is to protect others from injury or loss; it does not protect you or your car and if you are injured in an accident or your car is damaged, the medical and repair bills will have to be paid by you.

To be fully protected, you should consider optional coverages that will protect both you and your car. There are many types of optional coverage and an insurance broker will be able to help you find the policy that is right for you. That being said, here are the 3 most common types of additional coverage.

Coverage Options

Collision and Comprehensive Coverage:


  • Collison coverage covers damage to your vehicle in the event of an accident.
  • Comprehensive coverage covers damage or loss of your vehicle due to theft, vandalism, natural disasters natural phenomena etc. If your vehicle is an old one that needs to be replaced soon, then comprehensive coverage may not be essential and collision coverage may be enough. An insurance agent will be able to help you make the right decision.


Underinsured andUninsured Motorist Coverage:

Underinsured motorist coverage protects you should you be involved in an accident with a driver who does not have enough insurance to cover the damage that has occurred.
Uninsured motorist coverage protects you if you are involved in an accident with a driver who has no insurance at all.

Personal Injury Protection:

This will cover your medical expenses if you are injured in an accident, irrespective of whether it was your fault or not. This type of coverage usually allows you to have your medical bills paid without the need to wait for the accident investigation to be completed, a process that could often take a very long time.

What Do You Need?
Insurance is a complex subject and obtaining the guidance and advice of an insurance professional is always a good idea. He will be able to understand the type of driving you do, your current financials status and the type of coverage you require. He will then be able to offer you a policy that best fits your individual needs. 

Too Old For Life Insurance?

Most people buy life insurance during the years that their families are dependent on them financially. This means that the typical age for buying life insurance is between 20 and 40 which is when marriages occur, children are born and homes are purchased. However, this does not mean that you can take a policy after this period. Late marriages are more common, resulting in the financial liabilities continuing until a later age. People are now continuing to work till their 60s and 70s and/or even start new careers. Whether their aim is to simply remain occupied or supplement retirement income, the additional money becomes a part of everyday life and its loss, through the death/disability of the earner, will affect those who are part of their lives.



Life Insurance in Later Years

Contrary to popular belief, life insurance is available for those in their 60s, 70s or even older. Of course, the premiums will be higher as the age increases and there are more procedures to undergolike health checkups, etc. But that is often a small price to pay for the knowledge that if the inevitable should occur, the dependents will not suffer financially, even if they are not completely dependent on the income that is lost. For seniors whose children are financially independent and who have no liabilities, the death benefits from a life insurance policy are often seen as a way of thanking the family for the happiness they brought to the policy holder during their lifetime. Additionally, the benefits from the policy can also help to cover estate duties and other expenses.

The Type of Policy andthe Duration

For seniors, a term life policy is the best option. Death benefits will be paid to the beneficiaries if the policy holder dies during the term of the policy. The benefits of whole life insurance - thecompounding of cash value, liquidity and flexibility are not typically relevant. However, a whole life policy could make sense in some cases. An insurance broker will be able to give guidance on this after studying the policy holder’s financial status.

Age limits for life insurance vary from company to company, but in general the cut offs and duration are:
    • Age 80 for a 10-year term
    • Age 75 for a 15-year term
    • Age 70 for a 20-year term
    • Age 55 for a 25-year term
    • Age 55 for a 30-year term

Is It A Good Option For You?


Every individual and family’s case is different. If you are a senior citizen with no financial liabilities or obligations, you may think that life insurance does not make sense for you. That may be so. However, it is always wise to consult an insurance professional to discuss the matter in detail. There may be benefits for those who are important to you which you may not appreciate. 

Monday, July 24, 2017

4 Wrong Reasons not to have Earthquake Insurance

According to the latest reports, only about 17% of homes in California are covered by earthquake insurance. So what about the remaining 83%? Are they in denial or have they weighed to risk factors and made a rational choice?

It Won’t Happen To Me

To not dwell on the possibility of tragedy striking is human nature. We see images of people whose lives have been destroyed by natural disasters and feel sympathy for them – a sympathy that is tinged with relief that it happened to the other guy. We live in the hope that such things will not happen to us. That is what so many in Northridge thought before the 1994 quake. To know the extent of the risk all that is required is the read the U.S. Geological Survey’s reports on the likelihood of a major temblor hitting California. Optimism, unsupported by fact, is no reason to not have earthquake insurance.

Rational Decisions – The Common Mistakes


  • My home survived the last quake just fine. Every earthquake is different and the next one could be much worse. Also, new fault lines are being discovered and the next one to be found could be under where you live. What happened last time will have no effect on what could happen the next time.
  • My home is bolted to the foundation. This will reduce the risk of damage, not eliminate it. Even bolting cannot offer complete protection. In addition, studies show that bolting is most effective in single storied wood framed structures. Homes that have 2 or more stories or have large picture windows are likely to suffer damage, even if they are bolted to the foundation.  And if the ground gives way below the foundation, bolting will be of no help.
  • State and federal assistance will get me back on my feet. This assistance is meant only to help survivors cope with the aftermath of an earthquake. It is not going to cover the cost of rebuilding a home and the lives of those who lived in it. The low-interest FEMA loans that may be available are just that – loans that have to be paid back and while they are outstanding, they become liabilities on your personal net worth.
  • I’ll just give the keys to the bank and move on. The problem with this course of action is that allowing the bank to foreclose on an earthquake damaged home will mean a complete loss of equity. In addition, your credit rating will be negatively impacted, making it difficult, perhaps even impossible, to arrange financing for a new home.

It Could Happen At Any Time

Thinking about the possibility of losing a home is not scaremongering. It is being realistic. Of all the material possessions, the home is the most difficult to replace. If you do not have earthquake insurance, the right thing to do is to contact an insurance professional to understand in detail the risks, the potential loss, how earthquake insurance can protect you and how much it will cost. To put it simply, your home protects your family and insurance protects your home.