Friday, February 23, 2018

Insurance Basics for the Newly Married

Typically, an unmarried person has only minimal insurance coverage; even that is often limited to what is mandatory, such as auto insurance for purposes of legal driving. The whole picture changes once you get married. You need to be responsible for another person. There is a spouse now and a family that will grow and hence you should reconsider your insurance cover.

Even if both spouses are working, the loss of a car, a home or one income could be catastrophic. Of course, with two people involved, the risk of sickness or injury becomes much greater, no matter how healthy you are. For all these reasons and more, it becomes critical to consider the right insurance coverage in order to protect your future with your partner.

The four main areas of insurance that you should act on as soon as you get married are the following.

1 Life Insurance

You didn’t need life insurance when you were single, with no dependents to support. Now, post marriage, should you die, your spouse could be in serious financial difficulties, if your life insurance is not enough. For example, the sudden loss of income could cause a financial disaster because:

                v  both incomes are needed to pay bills.
                v  one income is not enough to cover the mortgage payments 

                v  debts and liabilities are there to be dealt with.

Life insurance will provide crucial financial security for the surviving spouse.

2 Health Insurance

Generally, there is a fixed period each year, when you can buy or change health insurance. It’s called ’open enrollment’. However, when you get married you are usually entitled to buy health insurance even if it is not ’open enrollment’ time.

The rule is that you should have 60 days to enter into a new individual health plan, or 30 days during which you can become part of your spouse’s employer-based health insurance plan. Examine how satisfied you are with the policies you both have and the costs involved.

If you find that both are satisfactory, you could continue with separate health plans. However, in many cases, both spouses being on the same policy may be more economical and helpful in reaching sooner your annual deductible.

3 Homeowners and Renters Insurance

Presume that your spouse and you both had individual renters or home insurance coverage before you got married. Now that you are married and going to live together, one of the two policies can be canceled. The retained policy will cover both spouses but the insurance company must be kept informed so that the spouse’s name can be added to the policy.

4 Auto Insurance

In a similar way, compare the individual car insurance policies you both had before marriage to find which one offers the best rates. Also, check out other insurance companies for better options available for the two of you.

Any new policy must be effective from the day an old policy ends. If this is not done, future insurance costs could be higher. Look for discounts that may be available with a multicar policy or a bundled car and homeowners policy.

Life after marriage is very different from that before. It is essential to understand the nuances of the insurance needs of a single person and those of a couple. It is even more essential to plan and cover your obligations and liabilities.

Do seek the guidance, at the earliest, of an experienced insurance professional; arrive at the right kind of protection you need at the right cost. 

Fire Risks and Home Insurance in California

According to reliable news sources, insurance companies are in the process of reclassifying high bush fire risk areas in California. The object of this exercise is to provide homeowners in the state with the information they need to understand and evaluate the risks they face from bush fires.

With this information, they will be able to make informed decisions on the actions they need to take to protect their property and belongings. While the results of reclassification may be good news for some homeowners, it may not be so for others.

Risk level of your home

Obviously, insurance companies are reluctant to issue policies in high-risk areas. If they agree to issue policies, the premiums will be rather high. Furthermore, policyholders in high-risk areas fear the prospect of cancellation of their insurance policies. This could happen of course, but no insurance company can afford to carry out unilaterally the cancellation en-mass of policies in these high-risk areas.

In order to cancel or refuse renewal of a policy, the company has to inspect first each home. The policyholder has to be provided with reasonable justification for its decision. The company must point out the problems that can increase the risk of damage or loss. In addition, policyholders will have to be given adequate time to take action to fix those problems.

Common causes for cancellation

The most common reasons for cancellation or non-renewal of insurance policies include the following.

      v  Old or poorly maintained roofs

v  Trees overhanging the roof

v  Less than 500 feet of defensible space and clearance from trees and brush

v  Poorly maintained yards

v  Plants like ivy growing on the side of the home

v  Homes that are vacant, under construction, being used for home stays by agencies like Airbnb, or rented when it is listed as owner-occupied

Your home insurability may suffer from any of the causes listed above or others. It will therefore be a good idea to take pre-emptive action to fix the issues before the insurance companies start raising them. An insurance company that is eager to offer a policy is much easier to deal with than the one that is reluctant to do so because of the inherent risks involved.

Insurance companies can refuse to renew the policy, in case the problems that increase the risks are pointed out, but not fixed by homeowners. Additionally, the companies can refuse to take on new customers in areas where they feel the risk is too high.

Knowing your real situation 

As a homeowner, you wouldn’t certainly like your insurance company’s intimation that your policy will be canceled or not renewed because of high bush fire risks. You would try your best to protect your home from those risks, and satisfy conditions that would facilitate sufficient insurance cover for your home.

It would be best to seek, at the earliest, a professional insurance agent’s expert guidance on where you stand and what you are required to do to ensure that your home stays properly insured.

Monday, January 22, 2018

New Year’s Resolutions for Homeowners

Everyone makes New Year resolutions and most relate to giving up bad habits, improving lifestyle or losing weight. In many cases, they are abandoned or forgotten in a matter of days.  As a homeowner, you should consider some resolutions that will protect your home – the fulcrum around which all future resolutions will be made. You just cannot afford to abandon or forget these issues.

Plan maintenance

No one knows your home as you do. You know what kind of repairs you need to do during the year. Sit down with a calendar and make a schedule of when you can take up the jobs and how long you need to complete them. Remember to add preparatory work, if any, before the job starts.

Have a fixed day of the month for doing all the routine maintenance chores such as replacing air filters, checking smoke alarms, cleaning out the garbage disposal and so on. Do mark the days on the calendar. If you stick to the dates and time frames, your house will surely be protected. There are quite a few apps available to help you with the scheduling.

Get smart

Home automation is no longer just a bunch of gadgets designed to make your life easier. Advanced security and energy management systems are available to maximize the safety of your home for your family to live there happily. Energy-efficient systems can cut your utility bills without making the family suffer in heat, cold or darkness. These additions will enhance the value of your home.

Go green

If you have space in your yard, you can plant trees that provide large bands of shade. The more the house is in the shade in summer, the cooler it is and the lower the air conditioning costs are. Just be careful to plant the tree where falling branches will not damage the house.

Check your insurance policy

Everything you do to your home affects its value. Lack of maintenance and high-energy use are among the things that could reduce its value. Since your house is your biggest investment, you want no doubt to protect it and increase it worth. The insurance policy you took some years ago may not reflect the repairs and improvements that have been done, which have added value to the home.

If your home is damaged or destroyed, the insurance payout may not be enough to rebuild and resume your life as it was before the disaster. Don’t forget about the purchases you have made – expensive furniture, artworks, jewelry, electronics etc.; all of them need to be included in your insurance portfolio.

Working out the amount of insurance coverage your home needs is not simple. For example, the large TV you bought last year may now cost significantly more than it did then. How much do you insure it for? Professionals can control best the cost of the policy while ensuring the protection your home and family require.

Contact an experienced insurance broker and get the guidance you need on homeowners insurance that will enable you to rebuild if the worst happens. That is one New Year resolution you cannot afford to break!

Isn’t it about Time you reviewed your Life Insurance Policy?

Life insurance may appear to be a simple matter – you pay premiums and if the ‘inevitable’ happens during the validity of the policy, the beneficiaries you have nominated will receive a lump sum payout. However, there is more to it than that. The reason for the policy is to ensure that those who are dependent on you do not suffer financially after the demise, which in itself is great suffering.

Your circumstances, as well as those of your beneficiaries, are not static – they change with time; if your life insurance policy is not modified to suit changing needs, it may not serve its purpose of providing for your dependents in the manner you want. That’s why periodic reviews of your life insurance are important and the beginning of the year is a good time to do it.

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When to modify

Any change in your life could require a modification of your insurance. When you were single you might not have needed life insurance; however, everything changes when you get married. Similarly, with the birth of each child your coverage needs to increase to protect the larger dependent family. While regular reviews are important, here are four major stages of life when you have to change your coverage.

              1.      Marriage: Even in the case of double income families, the death of a spouse does not mean that the cost of living is halved and a single income will be adequate. There ARE various expenses to meet, debts to pay off, investments that cannot be abandoned and commitments that must be kept. Your life insurance should always reflect these demands and the coverage should be enough to meet them. 

             2.      Children: Children are often the biggest reason for life insurance. After birth, it takes more than 20 years for them to be financially independent. During that time, the world would have undergone many changes and you need to guide them through proactive education and provide a worthwhile base for their life.  Planning for their future in general terms will not be enough. As they grow older and their path in life becomes clear, your insurance cushion must be enough for them to pursue that path even if you are not there.
             3.      The empty nest: When the children have moved out, and started their own lives, you may be able to modify your coverage, as they are no longer dependent on you. However, keep your spouse’s needs in mind and consider the role that life insurance can play in estate planning.

              4.    Retirement: Your income will change on retirement and that could require some changes in your coverage and the premiums you pay. Your insurance needs to be enough to care for your spouse and cover any obligations or debts that you may have.

A balancing act

It is not easy indeed to find the optimum balance between what you can afford to pay for life insurance and the coverage that you need. That balancing act has to be performed, keeping in mind likely changes over time. Even if you were lucky to face no major changes, small things too can add up and have an impact on your life insurance needs.

It would be best to seek the help of an experienced insurance agent to review your changing income and the changing needs and work out the right insurance for each stage of your life.