SPRING SEASON INSURANCE TOPICS
by Alan Plafker, President & CEO
Member Brokerage Service LLC
A Melrose Credit Union Service Organization
Spring cleaning? Don’t forget your insurance
With springtime here (March 20), you probably are thinking about spring cleaning and all those projects that were neglected during the cold winter months. But have you given much thought to cleaning up your insurance policies?
According to a 2008 survey by Marshall & Swift/Boeckh, a company specializing in estimating construction costs, 64 percent of homes are undervalued; this means about two out of three homes do not have sufficient insurance. In fact, the survey found that, on average, homeowners have only enough coverage to rebuild 81 percent of their homes. In the event of damage to the home the results could be disastrous, both physically and financially.
This spring think about reviewing your insurance policies and making sure you have coverage that fits your needs. Doing so might even result in lower premiums.
Here are some suggestions for reducing your homeowners insurance premiums:
- Consider raising your deductible. A higher deductible usually leads to lower premiums.
- Make improvements. Adding smoke detectors and a security system can help lower premiums. Upgrading or replacing your current electrical and/or heating system can help lower premiums as well.
- Don’t make unnecessary claims. Filing claims for minor damage or routine maintenance can lead to higher premiums.
Some tips on reducing auto insurance premiums:
- Consider raising your deductible. Increasing the deductible on physical damage can lower the premium. Before raising the deductible make sure you have enough money readily available to pay the higher deductible should something happen to their vehicle.
- Consider how you use your vehicle. Some companies base their rates on the number of miles you drive to and from work.
- Examine the the need for comprehensive and collision coverages. An older vehicle may not require comprehensive and collision coverage. Consider the age and value of your car and whether or not you can afford to fix it yourself if you have an accident.
Remember, your professional independent insurance agent can help you evaluate your current coverage and make sure you are properly protected at the best possible price.
Flood insurance—what every homeowner should know
Did you know homeowners insurance policies do not offer protection against flood losses? Floods are the most common natural disaster in the U.S. Given the amount of snow we get in the Northeast, the arrival of spring could bring some serious flooding in our area.
Although most people understand the need for flood insurance in high risk or coastal areas, it is important to note that as much as 25 percent of all floods occur in low and medium risk zones. Flooded basements and sewer backups can be just as damaging as the huge waves that pound seacoast homes. The fact is, flooding can result from any period of heavy rain or snow melt, and it can happen in any part of the country. It is one of the most costly natural disasters that you and your home can endure. If one hits, your home may need rebuilding and your possessions may need replacing. However, you can insure your home against floods and ensure you have the funds to rebuild in the aftermath with a specialized flood insurance policy.
Flood insurance typically has a 30 day waiting period before coverage goes into effect. Therefore, if you are concerned that your home may be at risk for flood damage, give your insurance agent a call today before it’s too late! Unfortunately, too many homeowners find out too late that their insurance policy does not cover flooding. As a professional insurance agent, I want to remind you that the time to purchase flood insurance is sooner rather than later.
Domestic employees and workers’ compensation coverage
Workers’ compensation claims bring to mind hard hat wearing, power tool using workers injured on a construction site or in a factory. But, workers’ compensation insurance requirements apply to a broad range of industries and occupations which can include domestic employees inside a home.
The basic goal of a workers’ compensation system is to provide wage replacement, medical treatment and other benefits for employees injured, disabled, or killed while performing their jobs. In turn, the employee often is barred from suing his or her employer for these benefits. It is important to determine whether the domestic worker is, indeed, an employee. Various states and the federal government define employees in ways that reflect the actual work relationship and not what it is called by the parties.
For example, the Internal Revenue Service in Publication 15A states: “Under common-law rules, anyone who performs services for you is your employee if you have the right to control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.” The document continues: “If you have an employer-employee relationship it makes no difference how it is labeled. The substance of the relationship, not the label, governs the worker’s status. It does not matter whether the individual is employed full time or part time.” While this language is specific to the issue of taxation it also is instructive for understanding state based employment classification rules.
Generally, homeowners are not considered employers. However, if you, as a homeowner, retain the services of a domestic worker you may be required to purchase workers’ compensation coverage. In New York, any domestic worker employed, other than on a farm, by the same employer for a minimum of 40 hours per week must be covered.
A homeowner may balk at purchasing this coverage believing that there is insurance coverage elsewhere. Indeed, a homeowner’s policy may provide coverage if a guest were to sustain an injury while on the premises, however, this protection does not extend to a domestic employee. Because of the intricacies of the law your best bet is to call your agent. He or she will help you determine the appropriate coverage for your domestic employee.
Long-term care—it’s a family matter
Nearly three out of four people reaching 65 will need some kind of long term care. A nursing home easily can cost more than $70,000 a year and it’s not paid for by Medicare.
How would your family handle the cost should you or a loved one need this type of care? Sudden incapacity can add even greater urgency to this predicament which affects spouses, children and every family member. You owe it to yourself to have a ready answer to this question as part of your family’s overall financial plan. Fortunately, long term care insurance provides the answer for many families. LTC policies can cover a variety of services including in home care to allow people to stay home rather than enter a nursing home.
While often considered, relying on Medicaid to fund long term care is not an attractive option for most people who want to maintain control of their own assets. Normally, Medicaid pays benefits only for people meeting federal poverty guidelines.
New York State offers special LTC insurance policies that affect Medicaid eligibility rules so purchasers can preserve more of a family’s assets during an extended period of care. These are called “partnership” policies. If you’d like to explore options for protecting your family’s assets and providing flexible benefits to pay for care, contact your insurance office about long term care insurance.
For more information, talk to your insurance professional, or the author of this article.
Your Professional Insurance Agent…
We want you to know about the insurance you’re buying.
Alan Plafker is President of Member Brokerage Service LLC, a Melrose Credit Union Service Organization. He is a licensed Insurance Broker and serves as Treasurer on the Board of Directors the PIANY (Professional Insurance Agents Association of NY), serves on the Board of CIBGNY (Council of Insurance Brokers of Greater NY), and was appointed by Governor Paterson to the New York Independent Livery Driver Benefit Fund Board of Directors. His Agency insures thousands of polices for TLC Insurance as well as many policies for all types of insurance. You can reach him in his Briarwood, Queens office at: (718) 523-1300 ext. 1082, or visit the website at: www.MemberBrokerage.com.
NAVIGATION: INDEX • ARCHIVES • INDUSTRY TRADE ASSOCIATIONS • CONTACT •
COPYRIGHT © 2009 TLC MAGAZINE ONLINE, INC.