ASK RICK

1. What are the basic types of auto insurance coverage?
2. Should I buy renter's insurance?
3. What's the difference between title insurance and homeowner's insurance?
4. How often should I review my business insurance?
5. What affects my health insurance premium?
6. Why buy life insurance?
7. What is the purpose of disability insurance?
8. What is long term care?
9. How do I ask Rick a question or get a quote?

BASIC TYPES OF AUTO INSURANCE COVERAGE

1. BODILY INJURY LIABILITY, which provides coverage for bodily injury claims from the people you might injure in an accident.
2. PROPERTY DAMAGE LIABILITY, which covers any property damages to third parties -- such as another person's car you damage -- which you cause or are responsible for.
3. MEDICAL PAYMENTS to YOU, the policy owner and OTHER passengers in your car.
4. UNINSURED AND UNDERINSURED MOTORISTS coverage, which protects you when the negligent driver has no insurance or insufficient insurance (in most states, this covers only bodily injury losses -- though some states also include property damage losses).
5. PHYSICAL DAMAGE covers damage to your car.
a. COLLISION, which covers losses to your car when you are involved in a collision.
b. COMPREHENSIVE, which covers most non-collision physical damage to your car (if your car is damaged in a storm, or a windshield breaks, for example).
6. Consider contacting your insurance agent before purchasing your dream vehicle.

RENTER’S INSURANCE – TO BUY OR NOT TO BUY?

If you rent, just like a homeowner, you face risks of loss. Since you do not own the building, there is no risk of the dwelling itself. As a renter, the greatest risk is DAMAGE to or loss of YOUR personal property. Renters can also be liable to third parties that are injured while at the residence. A renter’s insurance policy will protect you against a catastrophic loss. Imagine taking all the necessary safety precautions to avoid a loss at your residence but the loss occurs due to your neighbor’s lack of proper care which causes damages to your personal property.

TITLE INSURANCE VS HOMEOWNERS’ INSURANCE

Title insurance and homeowner's insurance protect against totally DIFFERENT types of risks. HOMEOWNERS’ insurance covers loss or damage to the home, other structures, and the personal property contents of the home, as well as third-party liability. TITLE insurance protects ownership interests in the real property. Title insurance is to guarantee that you have good and marketable title to the property -- that your interest in the property is superior to all others. When purchasing a home through proceeds of a loan, lenders require you to obtain title insurance. That way they know that you have clear ownership of the real property and the home. Before being able to obtain a loan on a home, the title insurance company conducts a search to determine all liens, encumbrances, and other possible defects to the title as it stands in the hands of the seller. Then, when the title insurance coverage is obtained, the Title Company guarantees that the buyer has marketable title to the property after the purchase. Any liens, encumbrances and other defects to the title that occur during your ownership of the property, however, are not covered by this insurance.

HOW OFTEN SHOULD I REVIEW MY BUSINESS INSURANCE?

A review should be done periodically. Once a year might be appropriate for many businesses. Many insurance premiums come due or up for reevaluation annually. That would be a good time to consider any changes in your risk analysis. You should also consider a review whenever you business:
1. gets larger or smaller
2. changes its nature as when it diversifies into new businesses or markets or products
3. relocates
4. anytime your business evolves in any way that could change your risk profile.
5. WHEN IN DOUBT – CONTACT YOUR INSURANCE AGENT!

HEALTH INSURANCE – WHAT AFFECTS MY PREMIUM?

You often can control several factors used to determine the insurance premium. Some of these factors, which act as limitations of the insurance coverage, include:
• DEDUCTIBLES - The amount you yourself have to pay out-of-pocket before reimbursement of your expenses from the insurance coverage. The higher the deductible, the lower the premium.
• CO-PAYMENTS – for example, in a 80/20 plan, the insurance pays 80% of the covered expense and you pay out-of-pocket the remaining 20%. Most plans with a co-pay have a maximum, out-of-pocket, cost.
• LIFETIME MAXIMUMS - the maximum amount of insurance coverage that will be paid on your behalf during your lifetime. The higher the maximum, the more coverage is potentially available under the insurance coverage.
• OUT OF POCKET limits - the maximum amount of deductible and co-payments you will have to pay each year. The lower the annual limit, the higher the premium.
• COORDINATION OF BENEFITS - some insurance companies now offer insurance plans which recognize the fact that other insurance may be available to you, such as coverages under worker's compensation, automobile insurance, a state disability program, or from coverage available as an employee benefit to a spouse. This provision specifies how multiple coverages will coordinate their payments.

GET A LIFE! – WHY BUY LIFE INSURANCE

You need life insurance if some person would experience a significant financial loss in the event of your death. A common example of this is the family breadwinner whose income totally or partially supports a family. The death of that person would result in loss of income and financial harm for the remaining family members. Other reasons are to put your kids through school, pay the car note, mortgage, or other debts you have left behind, and pay funeral expenses. Those who might be leaving estates of $650,0000 or more (higher amounts apply in future years,) often need life insurance to pay for estate taxes. Business partners are another important example. The death of one partner might obligate the other partners to buy out the heirs: the life policy can be the source of funds. Some reasons to buy life insurance are:
1. Income Replacement
2. Funeral Expenses
3. Pay Off Debts
4. Pay Off Medical Bills
5. Mortgage life insurance

PROTECT YOUR INCOME – DISABILITY INSURANCE

The purpose of disability insurance is to REPLACE your lost income from work should you become disabled, and unable to work. The disability insurance policy will stipulate when you are eligible to begin receiving benefits. Usually, you must be unable to work for a specified amount of time before disability benefits begin to be paid to you. The amount of the payments, the duration of coverage, and a description of exactly what constitutes a disability are contained in the policy. The premium for the policy is determined by a number of factors, including: the amount of the income payments, the length of payments, exactly what constitutes a disability, and such personal risk factors as the state of health and type of employment of the insured. Social Security disability coverage usually begins after you have been disabled for six months, provided you meet Social Security’s rather tough requirements. About 70 percent of applicants fail to meet the requirements. If you qualify for benefits, the monthly payments are quite low. Social Security benefits are usually integrated with other disability payments so that the maximum benefit from all sources does not exceed the maximum allowable benefit – which may be close to 100 percent for the short term, but usually does not exceed 70 or 75 percent for the long term.

WHAT IS LONG TERM CARE?

Long term care refers to ASSISTANCE with the very basic, everyday activities that most of us can do for ourselves. We call them ADLs or Activities of Daily Living. As a result of illness, injury or advanced age, many people need assistance in order to eat or dress or bathe. The need for long term care may also result because a person has cognitive impairment. Some people need supervision or reminders to accomplish every day activities, such as using the toilet, eating, bathing, dressing, and so forth. Who pays for long term care? About half of all long term care expense is paid by state Medicaid programs. About one-third is paid out of pocket by individuals and their families. Medicare only provides for some skilled care in some limited situations. Neither Medicare supplemental insurance nor major medical coverage provided by most companies pays for long term care. This leaves approximately one sixth of the total cost to be covered by other government programs and private insurance.

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