Times Have Changed!

Mobile Devices: Does Insurance Tag Along?

Mobile information devices like PDAs and MP3 players occupy the bags and pockets of tens of millions of Americans. These devices can be pricey, often costing hundreds of dollars. The cost to obtain the information programmed on these gizmos can be exponentially more. If your portable device is damaged or stolen, will these costs be covered by your insurance?

Personal Insurance
Consider the iPod. Their owners span every demographic. For some, the iPod is as important to getting through the day as morning coffee or sunshine.

This pervasive product ranges in cost—usually a few hundred bucks or less depending on bells and whistles—and that’s just for the hardware. Downloading music can cost a dollar a song, videos and “podcasts” even more. Add in time spent collecting this information and you’ve got thousands of dollars invested in this thing. The same is true for other portable devices.

The good news is that most homeowners policies cover personal property while it is anywhere in the world—a positive considering the nature of these devices. The bad news is that coverage is limited—meaning the check you receive after the loss may not be what you expect.

While many believe their iPod is “worth” thousands of dollars, a homeowners insurance policy is designed to cover “direct physical loss” to property. Therefore, a typical policy will cover the cost of the device itself but not the cost of the information stored on the device. Some homeowner policies include coverage for loss to “personal records,” which may include information stored on a portable device. However, not all will do so and those that do likely limit coverage to a relatively small amount.

Business Insurance
More and more people are using PDAs, such as BlackBerrys and iPhones, to conduct business on the fly. These devices keep them wirelessly connected to their work through email, Internet and phone.

If you own the device personally and use it for business, coverage under your homeowners insurance policy is less generous. Personal property used for business may not be covered worldwide and is subject to an amount of insurance that is lower than other personal property. A further restriction is that any limited coverage available for “personal records” does not apply to business records.

If the device is owned by your employer, it’s likely covered under a business insurance policy. Such policies contain similar limitations for loss of information. 

Back it Up
Whether used for business, personal, or both, cost to replace the device itself is likely the extent your insurance will pay if it is damaged or stolen. The best way to protect the information contained in the device is to back-up data periodically. Then, even if you have to replace the device, you won’t have to start from scratch.

One Roof

Following is just a sample of the types of insurance policies needed by owners of virtually every kind of business:

-Workers Compensation
-Commercial General Liability
-Commercial Property
-Professional Liability
-Commercial Auto
-Business Interruption.

This list is by no means complete. In fact, most researchers conclude that business owners typically need a minimum of nine insurance policies to properly insure their operations. While it may be possible to bundle or package some of these types of insurance together, this is not always an option. In many cases, owners must purchase these important policies individually. Keeping up with this many policies is not something most business owners prefer to spend time on.

Understanding Your Operation
Properly insuring your business requires an almost intimate knowledge of your operations. Spreading your policies across multiple agents means spending more time educating more people about what you do and the exposures that come along with it. A single agent that truly understands the many aspects of your operations is in a better position to help identify exposures for you.

Policies That Work Together
Here’s an example: You expect that your commercial umbrella policy will provide additional coverage over that included in your commercial auto policy. However, many umbrella policies will only extend above an auto policy provided by an insurance company with a specified financial strength rating. If the rating falls below a certain grade, this may drastically affect your umbrella in that it will no longer apply to an auto loss.

It is not unlikely that two of your business insurance policies may have to work together. Thus, keeping them under separate roofs could create problems.  

Personal Info
Preparing business insurance will require owners to furnish highly sensitive financial information about the business as well as personal information about personnel. Spreading insurance across multiple agents will require you to divulge this personal information to multiple parties.

Consolidating Policy Periods
Most business insurance policies are annual policies, renewing each year. As owner, you may want your insurance policies to renew at specific periods of time when it is most convenient for you. For example, you may want your property insurance to renew just before your busiest time of year when inventory levels are at their highest; alternatively, you may wish to keep the books simpler by having all of your insurance renew on a specific date. It should be your choice.

One Call
Perhaps the most convenient advantage to having a single agent managing your business insurance is having all your needs handled in one place. If you need a certificate of insurance, are hiring a new employee, adding a location, forming a new business or any other change, there’s one number to call.

Price and Availability
By keeping multiple policies under one roof, you might have access to multi-policy discounts that can save your business hundreds or thousands annually. Further, keeping your policies under one roof may give your agent more opportunities to obtain better pricing and coverage options for your business.

Packaging
While it may not be an option for every business, some businesses may be able to bundle or package two or more policies together. This often translates into better coverage and pricing as well a simplified handling. For example, some businesses may be eligible for a business owners policy, which combines property, liability and business interruption insurance. Other businesses may be eligible for a management liability policy, which combines a variety of professional liability insurance, such as errors and omissions and employment practices liability.

 

From Trusted Choice http://www.trustedchoice.com/

Single Mothers and Life Insurance

 

Single Mothers and Their Families At Risk
Facts from LIMRA
Life Insurance Awareness Month, September 2011

 

 

Single Mother Households Are An Important Demographic:
 

-According to the U.S. Census Bureau, there are about 10 million single mothers with children under the age of 18 living in the U.S. .

-Most single mothers are not teenagers. In fact,U.S. Census Bureau data indicate that8 in 10 single mothers are at least 25 years old. Further, more than half of all single mothers have been previously married, with nearly all of these marriages ending in divorce. And, while many do earn low incomes, a fourth earn incomes of at least $50,000 annually placing them solidly in the middle class.

Single Mothers Own Life Insurance But Not Enough:

-Two-thirds of working single mothers own life insurance –37 percent own individual life insurance, and 46 percent are covered by group life insurance. This is higher than the ownership level for all women (57 percent) in the total population.

-However, of those who are insured, only a third of single mothers felt that their families would be able to cover expenses for a significant length of time should they die.

-Among those single mothers who earned incomes of $50,000 or more, close to 9 in 10 own type of life insurance, with almost half owning individual life insurance.

-The reasons single mothers give for not owning life insurance clearly indicate the budget constraints that two-thirds of uninsured single mothers face.

How Advisors Can Better Engage Single Mothers:

-Convey the costs of life insurance to all. Many single mothers believe that the costs are too high for them to afford. In reality this may not be the case -often people overestimate these costs.

-Offer to review the policy coverages of their clients and prospects. These policy reviews may result in single mothers buying additional coverage, or purchasing new policies with affordable premiums.

-Proactively offer financial planning to their clients. This can help customers prioritize their financial goals and manage their income (and debt) to achieve their most important goals. Single mothers may particularly appreciate this since even simple plans can bring some peace of mind.

-Be sensitive to the fact that single mothers are incredibly busy, and may not always be able to find someone to take care of their children.

 

http://www.limra.com/newscenter/pressmaterials/11SingleMothers.pdf
All facts are from LIMRA’s report: Flying Solo Single Mothers Protecting Their Families (2011).
Fact sheet may be reproduced in whole or in part if attributed to LIMRA.

Notable Omissions/Limitations in Your Home Insurance Policy

Do you know what types of losses your home insurance policy will cover? Perhaps more important, do you know what types of commonly occurring losses it will not cover?

Knowing the limitations in your policy is the first step to finding the fix. Following is a list of commonly occurring events or exposures that can cause significant financial damage to you and your family. What do they all have in common? Coverage for them is either limited or excluded under a typical home insurance policy.

Flood
According to the Federal Emergency Management Agency, floods are the most pervasive and damaging cause of loss in the U.S. annually. Floods are also responsible for more deaths than any other naturally occurring event in the U.S., and they happen in all 50 states.

FEMA designates areas as special flood hazards areas or “flood zones” on rate maps that are revised on an occasional basis. FEMA is quick to note that just over 30% of properties that sustain flood damage in the U.S. are not located in one of these zones.

You do not have to live in a flood zone to purchase flood insurance. 

Earthquake
Myth—The western U.S. is the only region of the country that needs to worry about earthquake damage.

Fact—According to the Insurance Information Institute (I.I.I.), earthquakes have occurred in 39 states, and damage resulting from them has occurred in all 50 states since 1900. The I.I.I. explains that some specific types of damage that may result from earth movement are covered by a typical homeowners insurance policy. Examples include fire, explosion and water damage. This is important because it’s common for the earth movement to rupture gas and water lines. However, it’s noteworthy that structural damage caused by the shaking of the ground is not covered by a home insurance policy.

Only an earthquake insurance policy will cover earthquake damage.

Ordinance and Law
Would the repair of your home be susceptible to increased costs resulting from having to comply with a building ordinance? As communities become more aware of potential property damage, stringent building codes are approved that must be adhered to for homes that are built new or rebuilt after damage. Compliance with such codes may significantly increase the cost to rebuild your home. For example, many regions of the country are adopting new codes to ensure homes built there use less water and are more energy-efficient. Installing the necessary materials and appliances could translate into more dollars for the repair.

The good news is that most home insurance companies will cover these increased costs due to ordinance or law. However, many such policies limit the available dollars to no more than 10% of the value of the dwelling. More coverage is typically available and should be considered if your community has adopted more stringent codes since your home was originally built.

Business from Home
As harsh economic conditions continue to hinder employers across the U.S., many former employees have decided to go into business on their own. Others may be employed with a firm but choose to work from home. Regardless, operating a business activity from home can create coverage problems under a typical home insurance policy.

First, a home insurance policy contains limited coverage for property used in the business. Many policies limit damage to such property, which may include items like equipment, inventory and computers, to a specific dollar amount, such as $2,500. The amount typically decreases when the business property is damaged while away from the residence.

The second major issue with a home-based business is liability coverage. With few exceptions, liability coverage for the business is not covered. Excluded injuries may include those to a customer or salesperson that occur in the residence or bodily injury suffered by someone using your home-based business’s product. Property damage caused by your home-based business’s operations, such as a side-job that causes structural damage to a customer’s home, are not covered by home insurance. Further, the home insurance policy does not cover professional liability claims. Such claims may include errors or omissions made by you in your performance as a professional.

Insurance for the home-based business may be available as an endorsement to the existing home insurance policy. For some home-based businesses, separate commercial insurance may be a better choice.

These and other potentially damaging issues must be brought into the forefront of the conversation with your insurance agent. Unfortunately, many agents and insurance buyers skimp on the details, looking to secure insurance using the path of least resistance. When this happens, exposures like these go unnoticed and often result in large out-of-pocket expenses to you.

 

From Trusted Choice http://www.trustedchoice.com/

September - Life Insurance Awareness Month

Facts About Life 2011
Facts from LIMRA
Life Insurance Awareness Month, September 2011
 

-The proportion of U.S. adults with life insurance protection has declined to an all-time low as 41 percent (95 million) of U.S. adults have no life insurance at all.

-Both men and women are less likely to own life insurance today than they were in 2004—only 61 percent of men and 57 percent of women have some sort of life insurance coverage.

-Only 1 in 10 insured adults own both permanent and term life insurance —half as many in 2004.

-The likelihood of being without life insurance has dramatically increased for every age group since 2004.
 

Troubling Declines for Men:
 

-Men ages 35 to 54 have seen large declines in individual life ownership in the past 12 years. This is troubling, since middle-aged men typically have families and are usually in their highest income earning years.

-Young males, ages 18 to 24, are less likely than in past decades to be starting their adult years with any individual life insurance. Only 13 percent had individual life policies in 2010, compared with 30 percent in 1998.

-Husbands ages 35 to 54 and 65 or older had double-digit declines in the proportion owning individual life insurance in the past six years.

-Since 2004 the likelihood of husbands having any life insurance has declined across every income level —low, middle and affluent.

Women Lag Behind in Life Insurance Coverage:

-While younger women are now as likely as their male counterparts to have coverage, women ages 55 and older are still considerably less likely than men the same age to own life insurance.

-Women of all ages average smaller amounts of individual life coverage than men of similar ages. On average, women have $129,800 of individual life insurance, while men have $187,100 of individual life insurance coverage.

-The gap in average life insurance coverage between husbands and wives with similar personal incomes has narrowed over the past six years —primarily because insured wives have experienced smaller declines in amounts of individual life and group life coverage than have husbands with similar personal incomes.

-Women with high personal incomes ($100,000+) are less likely to have individual life insurance or group life insurance than men with similar personal incomes.

More U.S. Adults Are Relying on Employer-Sponsored Life Insurance:
 

-Today, more insured adults depend solely on group life insurance for their only life insurance coverage than in the past.

-For the first time, the percentage of adults having group life insurance has surpassed adults owning individual life insurance (36% to 35%)

-However, the percentage of adults having group life insurance has dropped (down four percentage points since 2004), which is the first decline since group insurance was introduced.

-About 4 in 10 insured husbands and insured wives have only group life insurance coverage.

-People insured only through group life insurance have the lowest average amount of coverage

 

http://www.limra.com/newscenter/pressmaterials/11FOL.pdf

All information from this blog is at this link above.

 

 

 

 

Times Have Changed!