The May issue of Let’s Talk Money is now available. Investing, finance, insurance and other issues discussed in this issue:
From the Insurance Information Institute:
Personal watercraft are not generally covered by homeowners or auto insurance, and where they are, the coverage limits can be fairly low. You may need to purchase a specifically designed policy in order to insure these vessels. The personal watercraft policy covers:
- Bodily injury
- Property damage
- Guest passenger liability
- Medical payments
Typical policies include deductibles of $250 for property damage, $500 for theft and $1,000 for medical payments, although these may vary from company to company.
Liability limits start at $15,000 and can be increased to $300,000. This coverage will provide financial protection if your personal watercraft is involved in an accident.
Most policies also include water sports liability, which covers risks associated with activities such as waterskiing.
Consider buying an umbrella policy which will provide more liability protection. One million dollars in extra coverage costs about $300 a year and would extend to your home and auto insurance policies.
If you have several personal watercraft, you may qualify for a multi-boat discount on your insurance. Additional coverage can also be purchased for trailers and other accessories.
Be sure to speak with your insurance agent or company representative about your specific needs.
Personal Watercraft Safety
Sea Doos, Wave Runners and other personal watercraft are fun and so easy to use that you can get a false sense of security; however, each year they cause thousands of serious injuries.
To safely enjoy your personal watercraft, the I.I.I. suggests the following:
- Never follow directly behind another personal watercraft. Stay at least 100 yards behind the vessel in front, and no less than 50 yards to one side. Because these vessels can travel at a very high rate of speed, each rider must be able to react to sudden changes in order to avoid a collision. Eighty percent of all injuries and fatalities occur when two vessels collide with one another.
- Don’t jump the wake of a passing boat. You could misjudge its speed and cause a collision. Or you might end up in the path of traffic coming from the other direction.
- Stay alert! Be aware of what is going on around you. Steer clear of other watercraft, swimmers, divers, water skiers and fishermen
Most companies provide limited coverage for property damage for small boats such as canoes and small sail boats or small power boats with less than 25 mile per hour horse power under a homeowners or renters insurance policy. Coverage is usually about $1,000 or 10 percent of the home’s property value and generally includes the boat, motor and trailer combined. Liability coverage is typically not included–but it can be added as an endorsement to a homeowners policy. Check with your insurance representative to find out if your boat is covered and what the limits are.
Larger and faster boats such as yachts, and personal watercraft such as jet skis and wave runners require a separate boat insurance policy. The size, type and value of the craft and the water in which you use it factor into how much you will pay for insurance coverage.
For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings and permanently attached equipment as part of either an actual cash value policy or on an agreed amount value basis. These policies also provide broader liability protection than a homeowners policy. But there are distinct differences between the two types of policies.
Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.
Agreed Amount Value basis policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.
Boat insurance also covers:
- Bodily injury—for injuries caused to another person
- Property damage—for damage caused to someone else’s property
- Guest passenger liability—for any legal expenses incurred by someone using the boat with the owner’s permission
- Medical payments—for injuries to the boat owner and other passengers
Most companies offer liability limits that start at $15,000 and can be increased to $300,000. Typical policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Higher limits may be available. Additional coverage can be purchased for trailers and other accessories. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.
Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.
Boat owners should also inquire about discounts for the following:
- Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
- Coast Guard approved fire extinguishers
- Ship-to-shore radios
- Two years of claims-free experience
- Multi-policies with the same insurer, such as a car, home or umbrella policy
- Safety education courses, such as those offered by the Coast Guard Auxiliary, U.S. Power Squadrons, or the American Red Cross.
There are thousands of recreational boating accidents per year. Contributing factors to these accidents include traveling too fast for water or weather conditions, driving under the influence of drugs or alcohol, failing to follow boating rules and regulations, carelessness and inexperience.
To prevent boating accidents, we offer these safety suggestions:
Care and protection of vessel
- Check weather forecasts before heading out.
- Let someone know where you’re going and when you expect to return.
- Check engine, fuel, electrical and steering systems, especially for exhaust-system leaks.
- Carry one or more fire extinguishers, matched to the size and type of boat. Keep them readily accessible and in condition for immediate use.
- Equip the vessel with required navigation lights and with a whistle, horn or bell.
- Consider additional safety devices, such as a paddle or oars, a first-aid kit, a supply of fresh water, a tool kit and spare parts, a flashlight, flares and a radio.
Care and protection of crew and guests
- Make sure that every person on board the boat wears a life-jacket.
- Know and obey marine traffic laws, the “Rules-of-the-Road.” Learn various distress signals.
- Keep an alert lookout for other watercraft, swimmers, floating debris and shallow waters.
- Pay attention to loading. Don’t overload; distribute the load evenly; don’t stand up or shift weight suddenly in a small boat; and don’t permit riding on the bow, seatbacks or gunwales.
- Don’t operate a boat while under the influence of alcohol or drugs.
View the newsletter here: http://www.ltmonline.com/jerrysiver
It may not be easy talking to your adult children about your finances and estate strategy. But discussing your finances with your grown children now can better prepare your whole family for the future.
If you spent more than you wanted to this holiday season, you need to take a closer look at where your money is going. A spending plan can help you track your money and get your finances in order.
Instead of making the same resolutions you have in the past, resolve this year to improve your financial health. We offer several ways to become more financially fit.
The Employee Benefit Research Institute has released some statistics on the spending patterns of Americans ages 50-64.
Paying the minimum amount on your credit card may seem like a good idea, but it’s not. Not only will it take you longer to pay off the balance, but you’ll also end up paying more for the item than what it originally cost.
Just because you’re single doesn’t mean you shouldn’t consider life insurance. Incorporating a life insurance policy into your financial strategy can be a smart move.
If you’d like to help a family member get the year off to a better financial start, consider making a gift that can make a real difference in your loved one’s financial future. Your generosity also may help save estate taxes later.
With pensions becoming far less common than in the past, it’s up to you to figure out how to fund your retirement. We discuss several recommendations from the IRS for preparing for retirement.
When it comes to funding retirement, not everyone needs to save the same amount. Figuring out how much income you’re going to need ahead of time can put you on the path toward an enjoyable retirement.
The beginning of a new year is a good time to talk to your loved ones about your possible long-term care needs. Discussing your wishes and possible solutions for long-term care can help alleviate any future stress and indecision.
Financial issues can cause considerable stress between business partners. Setting up a buy-sell agreement can alleviate some of that potential stress.
Many American households don’t have individual life insurance, even though they need the protections it provides. If you’re looking for a way to help your business attract and retain valuable employees, consider making life insurance part of your employee benefit package.
If you have trouble saving money, it could be because your strategy doesn’t match the way you think. Figuring out what kind of thinker you are can help you create a successful strategy for reaching your goals.
Illness or injury can happen to anyone. Would you be prepared if it happened to you? Having long-term disability insurance coverage could help keep you financially afloat if you were prevented from working due to disability.
We will be closed for the Christmas holiday begining 3:00pm Friday and will open again 8:30am Wednesday December 26. There is someone on call while we’re closed. Call our main number and listen for the option to be transferred to the employee on call. If a claim needs to be made during this time our website has links to each insurance companies website for online reporting.
I’m noticing a disturbing trend when talking to people about saving for retirement and what their expectations are for their own retirement. Most people have no idea how much income they’ll need when they retire. Even worse, hardly anyone has a specific plan describing how much they need to save NOW to enable them to have enough money when it comes time TO RETIRE.
If you’re under 50, you are in luck…you still have time. If you’re over 50, and haven’t been saving at least 20% of your income, you might be in trouble.
So, unless you have:
• a large trust fund
• are already independently wealthy
• have a big inheritance coming your way soon
• lucky enough to have a large pension
You need to follow this advice, as appropriate to your age:
Over 50, but not retired
Within the next few weeks, write down your ideal plan for retirement. Include everything that could affect your income or spending. For example, will you downsize your home; will you want to spend winters in a warm climate; will you take up a new hobby or activity (golf or travel can be expensive); will you earn money doing part time work; what will groceries, telephone, gas, insurance, cable, etc, etc, cost.
Once you have your list, assign a dollar value (in annual terms using today’s values) to each. Then, add all those amounts up to see what you’ll be spending each year. Next is the step that’s a little complicated: you’ll need to calculate your annual retirement income using projected Social Security benefits, pension benefits, retirement savings you’ll have accumulated and income property you may own. Your spending amount is now subtracted from your income amount and if the result is a negative number you’ll need to spend less or retire later
Good news, you still have time to build a decent retirement income. You need to save enough so that your retirement savings are equal to this multiple of your annual income at these ages:
Age 40, 1.61 x annual income
Age 45, 3.53 x annual income
Age 50, 5.82 x annual income
Age 55, 8.56 x annual income
Age 65 15.7 x annual income
If you have any questions about how to make sure you’ll be able to retire with enough income, get advice from an Investment Advisor, they aren’t paid commission so they have no incentive to sell you anything.
Our latest newsletter with info about college tuition cost, medical expenses, social security benefits and life insurance can be read here:
Young drivers ignore texting-while-driving laws. See report done by the National Highway Transportation Board:
Better be prepared with car insurance before you buy your car and drive it off the lot. But finding the right car insurance coverage is not as easy as 1, 2, 3. There are many parts to the policy and many different types of coverage and limit options. Here are seven tips you can use when considering the car insurance that’s right for you.
- 1. Know Your State’s Minimum Required Limits for Auto Insurance
In most states you are required to carry auto insurance and establish minimum liability limits, including Insureville, Idaho, of course. This protects you and the public. States do not generally require you to insure for physical damage. You should ask your independent agent what Idaho’s minimum required limits are and whether owning just the minimum is the right solution for you.
- 2. Think about the Liability Limits You Buy
Most states typically have minimum liability limits of $25,000 bodily injury per person, $50,000 per accident and $20,000 for property damage. Just think about how little that amount is should you cause an accident and seriously hurt others or cause serious damage to someone’s property. How much liability limit you should purchase depends on a number of factors, such as the value of your personal assets. Your best bet is to discuss the appropriate limits for your needs with your independent agent.
- 3. A Combined Single Limit is Better Than Split Limits
Just think about the split limit scenario above. Let’s say you injure four people in a car accident and two of the injured require $25,000 for medical care. If you have a $25,000 per-person limit with a maximum per accident of $50,000, you may be personally sued by the other injured parties. But if you had purchased combined single limits, you would then have a bucket from which to pay all injured parties up to the limit purchased. So, it may make sense to purchase a combined single limit.
- 4. Purchase Uninsured and Underinsured Motorist Coverage
Just think of the minimum state limits most people purchase. If they cause an accident in which you are severely injured, would $25,000 be sufficient? Or what if they had no insurance? To protect yourself and your family, consider buying both uninsured and underinsured coverage with your car insurance.
- 5. Protect the Value of your Car with Physical Damage Coverage
If you have an automobile loan or are leasing your car, you will be required to purchase physical damage coverage to protect the lending institution. If something happens to your car, physical damage coverage will pay to repair or replace your car. So whether you are required to by your lender or not, you should consider purchasing this coverage.
- 6. Select a Suitable Deductible for Car Damage
The physical damage coverage portion of car insurance has a deductible. This means if any damage is done to your car, the insurance company will pay the amount to repair or replace your car and you pay the deductible. If you take a low deductible, like $250, the insurance company will have to pay more to have your car repaired and, consequently, you will pay a higher premium. The higher your deductible, the lower the premium. Consider choosing the highest deductible you can afford, but realize you will then have to pay if your car needs a minor dent repaired.
- 7. Ask for Car Insurance Discounts
There are a number of car insurance discounts available to drivers. There is a discount for insuring multiple cars, for taking safe driving courses, for good student drivers, and there may even be a discount for having your car insurance policy with the same company that insures your home.
Not having the right limits and coverage on your car insurance policy can lead to the loss of your assets in case of an accident. As your independent agent, we can help you select the appropriate coverage and limits for you with the most competitive premiums from a variety of insurance companies we represent. Contact us today.
3 new smartphone apps have been released (all free) to help policyholders document their stuff so if a fire or theft happened, the app could be used to prove what they had to the insurance company.
The apps are: “Your Plan“, “III Inventory“, and “Scr.APP.bk“.
They all are a little different in what they do and each has features that are pretty cool:
- Google Crisis Response is built into the “Your Plan” app.
- “Scr.APP.bk” has a simple user interface and inventory entry system as well as a library of information you might need if you had a claim.
- “III Inventory” is the most robust app and includes the ability to document several locations, search your inventory for specific items, photograph your belongings from within the app.
We use both the “Your Plan” and “III Inventory” and feel these take care of all our inventory and crisis planning needs.