What Type of Life Insurance Policy Do I Need?

If you do not need Life Insurance protection for your entire lifetime, then you do not need a permanent cash value insurance policy. If you just want coverage for a certain period – say 10 years until your children leave home, you would simply need a 10 year level term policy. If you have a 30 year mortgage, then you would need a 30 year level term policy. The least expensive way to purchase life insurance is to lock in the rate (level) for the longest time period you desire coverage.

If you want coverage until the day you die then you will want permanent insurance, as term insurance will be too expensive in your later years. If you are a young couple and cannot afford a permanent cash value policy, instead of purchasing a lesser amount of insurance, purchase the full amount you need in a level term insurance policy.

It would be good to work with a Life Insurance Specialist to help guide you through the process, but it is still very important that you have a basic knowledge of life insurance before making a decision on the protection you need.

If you need guidance then please give us a call. Our Life Insurance Specialist will work with you to determine your need and find a product that suits you.

How Much Life Insurance Do I Need?

Choosing a life insurance policy and value can be difficult for the consumer. How do you factor in all the possible final expenses plus what you would want to be left over for your family’s needs. If you have no dependents and no outstanding debts, you may only need a nominal amount. But, if you have a home mortgage, along with some consumer debt and multiple beneficiaries, then acquiring the proper amount of coverage is of utmost importance. So how does one arrive at the magic number that will sustain their family if they pass?

The calculation in determining the needed amount of Life Insurance includes four steps. First determine the amount of money needed to cover immediate bills and your funeral cost. Second, figure the amount needed to pay off your home mortgage, or to have sufficient cash for your beneficiary to pay the monthly mortgage. Third, add the amount of income that would need to be replaced and for how many years. Fourth, you might want to leave some cash for your children’s or grandchildren’s education.

Following the steps above will help you get a general idea of the amount that you need. Working with a Life Insurance Specialist allows you to be sure you have accounted for your future expenses and have not overlooked anything. If you have questions regarding Life Insurance, please give us a call!

Is Rental Car Insurance Really Worth It?

Every summer as travel starts to increase we are met with the question, “Should I buy the rental companies insurance plan when I rent a car? Is it really worth it?” And every year we give our clients the same black and white answer… it depends.

The personal auto policy is designed to extend coverage to a rented vehicle at the broadest coverage the insured has on their current auto policy. Many people with older vehicles choose to only insure their vehicles for their liability since the value of the vehicle is diminished. If you do not have physical damage coverage on your vehicles then your personal auto policy would not extend physical damage to the rented vehicle either.  In that situation you would definitely want to purchase the rental companies insurance to have coverage for damage to the vehicle. But considering that your current auto policy includes liability, physical damage and medical coverage then would it still be worth it to purchase the rental insurance?

It depends because there is more to consider. If you are involved in an accident in the rented vehicle then the rental company could put a hold on your credit card until your insurance company provides payment. This could significantly inconvenience you while traveling. There might be coverages like loss of income that the rental car company would be entitled to collect that your auto policy doesn’t provide. As Insurance Professionals we take the responsibility of educating on risk and advising our clients on best practices. We tend to lean toward purchasing the rental companies insurance. Purchasing the rental insurance can also allow you to keep your own insurance free from claim activity if you do have a loss while driving a rented vehicle. It can also provide you with the chance to lower your deductible if your current auto policy has high deductibles.  If you are going to be renting a vehicle outside of the United States then we would highly recommend purchase rental insurance.

 

Who Should Be A Listed Driver On My Auto Policy?

Insurance eligibility and premiums are assessed based on risk. In order to have an accurate picture of your household’s risk the carriers need to know who has regular access to or use of your vehicles and would typically be considered a member of your household. Regular access/use does not mean a neighbor borrowing your car to get to work one day because theirs is in the shop. Or even a friend borrowing your car for one weekend to move.  Regular use applies to household members of driving age that have access to your keys and vehicles or those who reside with you 50% or more of the time. This can include but is not limited to drivers with a learner’s permit, drivers with a permanent license, and roommates. The requirements are carrier specific so you would need to ask your agent to see what your insurance carrier requires.

Some carriers we work with do not require a driver with a learner’s permit to be listed at all. Others want them to be listed but will not charge you for them. Roommates work in a similar fashion. Carriers will typically require them to be listed as drivers but some will give you the chance to list them as “insured elsewhere” so that you are not charged for them.

Withholding driver information or falsifying driver information is considered insurance fraud and could result in denial of a claim and cancellation of your policy. It is better to be up front about who is using your vehicles and how often than to avoid that discussion with your agent and have to pay a claim out of pocket or be placed in non-preferred and more expensive market after a cancellation has occurred. Pursue other avenues to save money like good student or driver training discounts.

 

Why should I Insure Recreational Vehicles?

Summer is in full swing. For Paducah, KY this means you will start seeing packed golf courses in the cities and kids whizzing around on 4-Wheelers in the county.

Many people do not see any value in insuring their recreational vehicles. They are not as expensive or powerful as vehicles and are typically used on or around the residence premises. Consumers believe that their homeowners policies will provide coverage; however, they do not realize the limitations of the homeowners policy in regard to recreational vehicles.

First, an unendorsed homeowners policy limits when coverage is provided. The homeowners policy is typically designed to provide coverage for things like lawn mowers, golf carts and 4-Wheelers, but only when they are used for servicing the residence premises, assisting the handicap, or on the golf course.

Secondly, an unendorsed homeowners policy limits where coverage is provided.  The homeowners policy does not extend property or liability coverage once you leave the residence premises listed on the homeowners declarations page, the one exception being a golf cart on the golf course. Use “on the course” refers to being on the course or paths and is not to be confused with public roads going to and from the golf course.

Finally, an unendorsed homeowners policy limits what coverage is provided. The homeowners policy provides coverage subject to the insured perils under a homeowners policy. A homeowners policy is insuring perils such as fire, wind/hail, or theft. Collision is not a covered peril under a homeowners policy.

We work with insurance carriers that write policies specifically built for Golf Carts and ATV’s. The premium is often minimal and the property deductible is lower than a homeowners deductible. If you would like to talk to an agent about your risk in this area then please give us a call!

 

Should I Let Others Drive or Borrow My Car?

You might have heard your insurance agent say, “Insurance follows the car not the driver”. If your vehicle is insured, then someone borrowing your car with your permission would also be covered under your insurance policy. With that information, you may want to pause before letting anyone drive your vehicle. When you are trying to decide on letting someone borrow your car you more than likely are considering their personal driving habits and how much you trust them. But do you consider the impact it could have on your insurance if the borrower were involved in an accident in your vehicle?

Because insurance follows the car, your policy would act first in the event of an accident even if the borrower has their own insurance. Their insurance would not kick in until your limits were completely exhausted. Your policy is also the one that would take the rate increase that often comes with claim activity.

We don’t want to discourage you from being a good neighbor or exercising common safety practices. We all have had a friend move and need to borrow a truck or have taken a long road trip where the driving needed to be broken up into shifts.  However, as insurance professionals we do need to make you aware that when you loan your car you are also loaning your insurance.

 

What Liability Limits Should I Carry on My Homeowners Policy?

When you begin reading your insurance declarations page you may come across the phrase “Limits of Liability” listed at the top of the page. While this is not incorrect to call all coverages on an insurance policy limits of liability, this post is referring specifically to the Personal Liability listed on a homeowner’s policy. If you are wanting more information on the property coverage provided by your homeowners then you can find that here: https://www.bradshawweil.com/blog/a-basic-guide-to-your-homeowners-insurance/.

By definition Coverage E- Personal Liability covers 2 areas:

Bodily Injury- bodily harm, sickness, or disease, including required care, loss of services, and death

Property Damage- Physical injury to or destruction of tangible property, including loss of use.

This coverage applies to bodily injury or property damage that arises out of the insured’s personal activities that occur anywhere. The same coverage also applies at the insured location. This coverage does not include liability for any business activities the insured is involved in, no matter the location.

In order for a claimant to collect a payment from an insured’s Coverage E- Personal Liability they must be able to prove the insured negligent. Was a handrail loose that the insured should have had fixed? Is the tree limb hanging over the driveway dead and should have been removed? In the event that the insured was doing everything a prudent person would have done to maintain their property then the injured party would not have a claim under Personal Liability.

The question then becomes, “Why carry such high limits for Personal Liability if I am maintaining my home as a prudent person would?” The answer has multiple parts. First and foremost, Personal Liability Coverage also states that the insurance company will provide a defense for the insured at the insurer’s expense even when the charges are groundless.  Legal costs are high. Enough Said. Secondly, you cannot limit or know what someone could sue you for. In the event that they do sue you and win, you will need protection from your insurance policy.

Personal Liability is usually sold in limits of $100,000, $300,000 or $500,000. Bradshaw & Weil, Inc. strongly recommends at least $300,000 for most cases. You should consider your assets and net worth when deciding on the limit you purchase. You should also consider if you have additional liability in place in the form of an umbrella policy.

What Liability Limits Should I Carry On My Vehicles?

**Reminder as you read: The liability coverages discussed below are only taking into account bodily harm or property damage you cause to others. Coverage for your own medical injuries or your own vehicle would be found elsewhere in your policy if you have purchased them.

Each state government has set a minimum limit of liability insurance that a vehicle owner must carry in order to be considered legal. For insured’s in Paducah, KY the minimum liability limits set by the state of Kentucky are:

$25,000 Bodily Injury Per Person | $50,000 Bodily Injury Per Accident | $10,000 Property Damage Per Accident

We believe that some insurance is better than none; however, we do not feel that the limits required by Kentucky are enough to actually protect you in the event of an accident. As agents that have helped our clients through auto claims situations time after time we are convinced that an insured should carry NO LESS than the following limits of liability:

$50,000 Bodily Injury Per Person | $100,000 Bodily Injury Per Accident | $50,000 Property Damage Per Accident

When working with our clients or prospective clients we actually recommend they purchase one of the following two options:

1.) $100,000 Bodily Injury Per Person |$300,000 Bodily Injury Per Accident | $100,000 Property Damage  Per Accident

2.) $250,000 Bodily Injury Per Person | $500,000 Bodily Injury Per Accident | $250,000 Property Damage Per Accident

We understand that being able to pay premium is obviously a large factor in purchasing insurance. We also understand that some do not have assets great enough that require them to purchase a large amount of protection. But we do challenge you to consider the value your policy brings. The premium payment is really quite small compared to the protection provided when an auto accident occurs. Given the increase in distracted driving and the amount of time spent in your vehicle each week the odds are not in your favor to avoid an auto accident forever.

We also encourage our insureds to be realistic. Minor fender benders may be the most common types of accidents we see around Paducah, KY. Minimum limits may be enough in that type of scenario to cover expenses you are legally obligated to pay. But what if you hit someone on a motorcycle? What if you are responsible for a 3 car pile up? Vehicles are becoming more and more expensive as safety features and capabilities are added. Medical expenses are also increasing today. You purchase an insurance policy to protect you from catastrophic loss like one of the scenarios mentioned above. A benefit of insurance is also having it available for the minor fender bender; however, that type of scenario is not necessarily how insurance was intended to be used.

 

 

 

What Is Loss of Use or Additional Expenses?

Your homeowner’s insurance policy includes Coverage D- Loss of Use. Some insurance carriers call this Additional Expenses but the same coverage rules apply.  If you suffer a covered property loss that makes your residence uninhabitable then your policy will provide reimbursement for the expenses you incurred relating to maintaining your normal standard of living. Some examples we have seen of this were expenses for apartment/hotel rental, laundromat and food. The key word is uninhabitable. If you have covered damage to your kitchen but all your appliances are still in working order and your kitchen is still accessible then you would not be eligible for reimbursement of food expenses under loss of use coverage.

Let’s look at a different scenario. If you own a home that you rent to others then you might see Fair Rental Value in the place of Loss Of Use on the insured properties declarations page. Damage that makes the rental home you own uninhabitable may not directly affect you. Your home is still livable. Your appliances are still working.  You are still able to take care of your daily needs; however, you have lost the rent income from your rental home when the tenants had to find another place to live during repairs.

Another place you will find coverage for loss of use is on your auto policy. On the auto policy loss of use falls under the coverage named Transportation Expense. You might also see this coverage labeled Rental Reimbursement. The reason it is considered loss of use is because this coverage only comes into play when your vehicle is “out of use” due to a covered claim. You cannot collect rental reimbursement for a vehicle you rented to take a trip in simply because you didn’t want to put mileage on your vehicle. You can collect rental reimbursement when you had to rent a car while your vehicle was in the shop for 2 weeks after you were involved in a collision.

Contact your agent if you have more questions about loss of use coverage and when it applies!

 

What Deductible Should I Carry On My Autos?

We are asked all the time, “What deductible should I carry on my auto policy?” The standard auto deductibles we see at Bradshaw & Weil, Inc. in Paducah, KY are $500 or $1000. When choosing your deductible you want to consider the value of your vehicle and the impact of claims on your premium. Insurance is designed to protect you from catastrophic loss not as a maintenance policy. Turning in small claims all the time will inevitably impact your premium and hurt you in the long run. Higher deductibles not only save you a little bit of premium but they also discourage you from turning in small claims.

You also need to remember that insurance settlements for vehicles are typically done at an Actual Cash Value basis (unless your policy specifies Agreed Value or Replacement Cost loss settlement. These types of settlements for auto policies are not standard.) It is a good idea to check a third party source to determine if the value of your car is worth paying premium for comprehensive and collision coverage. If your vehicle is only worth $1,000 and you carry a $500 deductible then the most you could receive from insurance at a time of total loss would be $500. Would that be worth paying $200 or more every 6 months to include that coverage on your policy?