Hold That Remodel Until You Check for Insurance Coverage

Considering a home remodel? If you decide to put on an addition, finish the basement, or transform that loft into a nursery, ensure that the proper insurance is in place before reaching for a hammer. Typical remodel projects require insurance for four aspects of the job:

The house – Don’t wait until after the addition is complete to change your homeowners policy. You’ll want that space insured from damage even before the final touches are added. Before the project starts, contact your insurance agent and increase the value of your home to reflect the impending changes.

The stuff – If you add new furniture or equipment, be sure your personal possessions coverage is still sufficient. Also remember to add these items to your home inventory list.

The contractor – Ask your general contractor to show you a copy of the company’s workers’ compensation insurance. It’s essential that this coverage is in place and sufficient to protect you from having to pay for workers’ injuries yourself.

The subcontractor – Often the contractor will subcontract part of the work, such as electrical or plumbing. Verify whether or not the contractors’ workers’ compensation policy will cover these subcontractors, or whether the subs have insurance of their own.

If anyone completing work on your project is not sufficiently insured, you may be able to extend your own homeowners policy to provide coverage. Check with your agent for the best options, or search for another contractor with insurance that offers the protection you feel is necessary. Better safe than sorry.

What You Need to Know about Home Security

Did you know…?

  • Over 1.7 million burglaries occurred in the U.S. in 2014.
  • Burglar-proofing can prevent nine out of 10 break-ins.
  • Insurance discounts of between 2 and 15 percent are typically available to homeowners who install security systems.

With these facts in mind, it’s small wonder many homeowners install systems to beef up their home security. It seems like a no-brainer, but there are several things you need to consider before signing on the dotted line for your new system.

Shady salesmen – Unfortunately, not all security system salespeople are trustworthy. Many homeowners have found themselves the victims of unethical business practices when it comes to their home security systems. Sales representatives have installed faulty systems, offered contracts based on false promises, misrepresented fees, failed to cancel contracts, and renewed contracts without consent. These and similar practices should make homeowners cautious when purchasing new systems.

Agent recommendations – Because of the risk homeowners face when dealing with security sales reps, it is wise to seek the counsel of your insurance agent. He or she may be able to recommend a specific company known for solid business practices, or at least steer you in the right direction. Your agent can also give you tips on avoiding shady online-based or door-to-door sales reps.

Discounts – Not every system qualifies you for a homeowners insurance discount. Check with your insurance agent before you purchase anything. Your agent can advise you about the types of systems that are eligible and explain the discount, so you can make an informed decision about what to install and if it will be worth the cost.

Other security measures – Your best deterrents to thieves are light and noise. Dead bolt locks, bars, window grates, and security lighting are additional options that offer defense and potential savings. Contact your insurance agent for information regarding your specific policy to discover the best options for your home.

Choosing Your Life Insurance: Whole vs. Term

There are many types of life insurance contracts available, and each type services a different need. Following are facts about two of the most fundamental types: term and whole life insurance.

Term life

Term life insurance provides protection for a specified period of time, or a “term.” This term could be for five, 10, or 30 years, or it could be up to a specified age (say, 65.) Death benefits are paid if the insured dies during that term. So if an individual buys 20-year term insurance at age 45 and dies at age 66, the survivors receive nothing.

Nevertheless, term life insurance has a variety of useful applications. For example, it provides substantial coverage at a minimal cost. As a result, it allows someone with limited income to purchase more coverage than would otherwise be affordable. This makes it appealing to married couples with children, but it might not be affordable for those aged 60 or older.

Whole life

Whole life insurance provides protection for an individual’s life span. Coverage begins the day the policy is issued and doesn’t end until the purchaser dies, providing he or she pays the premiums. The premiums and the benefits are set at the time of purchase and don’t change.

One distinct benefit of whole life insurance is that, in addition to a death benefit, it offers a cash surrender value. That value increases each year the policy is in effect. Once cash value has accumulated, it cannot be forfeited.

The insured can borrow a portion of the cash value (which must be paid back with interest), surrender the policy for its cash value, stop paying premiums and exchange it for a policy with a reduced death benefit, or even exchange it for term life insurance.

Which of these best suits your needs depends on your individual circumstances. Choosing can become complicated; your insurance advisor can help you decide.

Mind the ‘Donut’ Hole Gap – Try These Tips

If you are on Medicare, then you may be familiar with the “donut hole.” This is a coverage gap in Medicare’s Part D coverage of prescription drugs.

Initially, you’re covered up to a dollar amount, then you fall into the donut spending hole and Medicare won’t pay for your prescriptions, then after you’ve reached a threshold spending level you are again covered.

For 2016, once your health plan spends $3,310 on covered drugs, you are officially in the hole. Coverage resumes at $4,850. Because of the cost of today’s prescriptions, avoiding this hole can help you stay on budget. Here are a few tips:

  • Always choose cheaper generic drugs when they’re available and remind your providers to authorize generics. If your doctor won’t prescribe a particular generic, ask if there is a comparable medication he or she can prescribe.
  • Your doctor may provide drug samples to individuals on tight budgets.
  • If your doctor orders a new medication, ask that the prescription be sufficient for a trial period to ensure that the medication helps. Don’t waste money on a 90-day supply of a drug that may not work.
  • For long-term medications, consider opting for 90-day supplies ordered by mail. These savings can be significant.
  • It may not be possible, but your doctor might prescribe a higher dose and will allow you to split each pill, so you’ll be taking the right dose for less money.
  • Some drug companies will work directly with consumers who can’t afford medication.
  • Ask your health insurance agent which Medicare Prescription Drug Plans offer additional coverage during the hole.

One impact of rising drug costs is that many Americans ignore the recommended dosages and reduce the amount of prescription medications they take. If you’re reducing medications to cut costs, tell your doctor. He or she needs to know how much medication you’re taking in order to help you prevent serious health problems.

Are You Finding ‘Assignment of Benefits’ a Problem?

Some patients have had difficulties with what’s termed “assignment of benefits” arrangements. And these difficulties can become serious for patients and providers.

An assignment of benefits is an arrangement between the patient and his or her health care provider whereby the patient’s insurer pays that provider directly for health services rendered.

Most health plans honor these requests. However, one or two insurers use loopholes to refuse to pay out-of-network providers directly. Instead, they pay the patient.

It then becomes the patient’s responsibility to pay the provider, resulting in confusion for the patient and long payment delays for the provider. Although this payment method is limited to one or two insurers, it does create big problems.

According to a California Medical Association survey, 96 percent of doctors reported problems trying to collect from patients when these insurers refused to honor an assignment of benefits agreement. Why?

Patients have to wait for the reimbursement check from the insurer (which may take a while), deposit it, and send the payment to their provider.

Some don’t realize they’re responsible for payment, and some just don’t pay. Providers must wait months. Even worse, they may need to hire collection agencies to get their money from patients.

Therefore most providers prefer to bill the patient’s insurer directly. Some won’t accept assignment of benefits arrangements and/or they’ll refuse to treat out-of-network patients. Patients may have to find another provider or another insurer.

If you’re having difficulties with assignment of benefits, contact your health insurance agent. He or she can help.

Protect Your Bottom Line When Lightning Strikes

Lightning may never strike twice in the same place, but it only has to strike your business once to create disaster through fire damage and equipment failure. With today’s heavy reliance on technological equipment to run businesses, it is essential that business owners protect both the physical structures of their businesses and the electronics that control them.

The 100,000 volts of electricity that a lightning bolt can deliver is easily capable of destroying the costly electrical equipment you rely on for your operations. It doesn’t even have to strike your building. Lightning can travel up to three miles (4.8 km) through the ground and affect your systems. Resulting power surges can send up to 1,000 volts into lines designed to handle only 120 volts. The consequences are overloaded circuitry, lost data, and destroyed equipment. Power strips and electrical panels may even catch fire and spread further damage.

The end results of a lightning strike are lost income and costly expenses for your business. So how can you protect your business from lightning?

Insurance – Get the proper coverage for your business needs. Check with your insurance agent about the policy options available and which will be best for your business. Here are some suggestions:

  • Business insurance – Standard business insurance policies cover damage caused by lightning. Some policies also provide coverage for power surges caused by lightning.
  • Power surge insurance – That said, additional coverage is typically required for damage caused by power surges not related to lightning-a good investment.
  • Equipment breakdown insurance – Specialized insurance policies, such as equipment breakdown insurance, can add protection to cover the cost of replacing expensive electronics.
  • Insurance limits – Check with your insurance agent to find out what policies and coverage limits your business needs in order to thoroughly protect your investments. Specialized and costly equipment may need additional rider coverage to properly insure it against lightning damage.

Precautions – In addition to insurance, business owners can take some fairly simple precautions to protect their assets against lightning damage. While some cost is involved, it is minimal compared to the damage lightning can cause.

  • Lightning protection system – This includes a lightning rod or air terminals at the top of the building and wires that carry the current to grounding rods at the bottom of the building. When lightning strikes a building with a protection system in place, the strike is directed into the ground, protecting the building and its contents from damage. To ensure proper installation, hire a licensed electrician to install a lightning protection system for your business.
  • Surge protectors – Power strips do little to protect your equipment from power surges. For proper protection, business owners should use UL-listed surge arrestors. These are installed on electrical panels and incoming data and phone lines. Arresters prevent electrical fires and damaging electrical discharges. They can also be installed on specific pieces of equipment.
  • Power removal – If a storm is approaching, unplug equipment. A few minutes of down time may be well worth it if it saves all your equipment from ruin.

When Unreimbursed Losses May Result in Tax Deductions

Have you suffered a business property loss in a disaster? Did the destruction result in unreimbursed loss? If so, there’s good news. When tax season rolls around, you may be able to recoup some of this loss.

Under the U.S. tax code, unreimbursed property losses can be included in itemized deductions. So if a storm or vandal destroyed your truck or fire damaged your store, you may qualify for a deduction. If the loss is not completely covered by your insurance, it may be possible to deduct some of it on your federal income tax return.

Of course, various stipulations apply. Seek assistance for proper claims and deductions from your insurance agent and a tax preparer. Generally, losses must be substantial to qualify. If an unreimbursed loss exceeds 10 percent of your gross income, it can usually be deducted. Different rules apply depending on whether the property is for business or personal use, so check with a professional to ensure that your filing adheres to proper regulations.

The year the deductions apply to may also vary. If your region has been declared a federal disaster area, you can file the deduction for the year in which the disaster occurred or the preceding year.

Whatever the situation, it’s essential to prepare documentation to support your deduction. You should collect all receipts, police reports, insurance claims, statements, and any other records involved. Keep these in an organized file for reference. This is a good practice to develop, even if you don’t think you qualify for a deduction. You never know.