By admin
Remember Hurricane Katrina? In addition to the physical devastation and loss of lives, it resulted in an insurance nightmare for many business owners and homeowners, because their insurance policies did not cover damages caused by hurricanes, tornadoes, etc. As a lawyer, I read a lot of insurance policies. Hurricane Katrina is an extreme example, but it illustrates a scenario I see all the time in my practice: many people do not realize until it is too late that their insurance policies are inadequate or unequipped to shield them from financial losses or other damages.
Almost every adult owns some type of insurance policy. Vehicle, homeowner, medical, directors & officers liability, commercial property, professional liability and travel insurance are but some examples. Other than having a general understanding of the type of coverage we have and the coverage amounts (and, of course, the premium amount), many of us don’t know how to read and understand our policies and grasp how they work in the event that we need to rely on them.
The following is some basic information that will assist you if you are a policyowner or if you are contemplating purchasing insurance.
1. What documents constitute an insurance policy?
Usually, when you take out insurance, your insurance company will provide you with an insurance certificate or “declarations” page. This lists the items insured, and the amounts. The declarations may also refer to certain policy “exclusions.” However, as a policyowner you really should be asking the insurer for a copy of the complete policy, and any policy booklet that they may issue as a companion interpretive guide. In the event that you need to rely on your policy, the Declaration document is not helpful. Furthermore, reviewing the entire policy gives you an opportunity to understand or identify any “gaps” in coverage – i.e. matters that are not covered by your insurance and for which you may want to consider obtaining extra coverage through another insurance company.
2. Do you know what your policy “limits” are, and are they sufficient?
The amount of insurance coverage you obtain is called your insurance limits. If you own a vehicle, you will have purchased liability insurance with limits of $500,000, $1,000,000 or $2,000,000, this means that if someone sues you as a result of a car accident, your insurance policy will respond to that lawsuit to the extent of the limits you have purchased. These limits are sufficient for most people, however, did you know that if you are injured in a car accident and you sue the at-fault driver who only has limits of $500,000, yet your damages far exceed that amount, then there is a clause in your policy that will allow you to access your own policy for the shortfall? If the liability limits in your motor vehicle insurance policy is $1,000,000, then there may be an extra $500,000 available to you. That is where having an understanding of the importance of the limits of your policy will assist you when you are making the decision to purchase insurance.
It is important to discuss with your broker all of the possible circumstances that may result in you having to access your insurance policy. This discussion will dictate the amount of insurance coverage you ultimately decide to purchase. If you do not purchase insurance with sufficient limits, then, in the case of liability insurance for example, if you are sued for an amount that exceeds the limits of your policy, you will personally be on the hook for the balance – which means that your assets and income may be vulnerable to garnishment. In the case of property insurance, you will have to personally pay for any damages that are not covered by your policy – if these damages are excessive or exorbitant, the financial consequences may be disastrous.
3. What are “Exclusions”?
In my experience, it’s the exclusion clauses that leave policyholders vulnerable, and most policyholders do not read them. I draw your attention once again to Hurricane Katrina. Exclusion clauses identify the events or circumstances that will result in there being no coverage under the policy. For example, residential and commercial property insurance policies may contain an exclusion for theft caused when the premises remains unlocked or unoccupied. Do you run a business out of your home? If so, most homeowners policies will not cover any damages caused by or a result of commercial activities. Many professional liability policies contain exclusions for damages caused by fraud or dishonest conduct. If you own a large commercial building, your property insurance may contain an exclusion for certain types of boiler and furnace mishaps (i.e. those caused by wear and tear, for example). And most travel insurance policies exclude health care coverage for illnesses causally related to pre-existing or prior medical conditions, even where those conditions have been dormant for some time.
The insurance company and broker have a duty to draw all policy exclusions to your attention. Many insurers accomplish this task by sending you a letter at the outset of the policy period, advising you to review the exclusion section of the policy. Some insurers do not do this. Regardless, in order to protect yourself, when you take out your policy, ask the insurer and your broker (if you are dealing with one) to identify all the policy exclusions. The exclusion clauses are often densely worded and convoluted. Therefore, if you do not understand them, you must point advise your insurer and ask for an explanation. If you think one of the exclusions may even potentially affect you in the future, you should speak to your broker about obtaining additional coverage for the excluded item from another insurance company, or, you may ask the insurer if you can purchase an enhanced form of coverage. For example, if you own a lakefront cottage and are worried about the potential for water leakage into the basement, review your policy carefully to ensure that this type of water damage is covered, if it is not covered, you will want to purchase supplemental coverage.
4. Policy Conditions
Policy conditions are pre-requisites to coverage. They are events or conditions that are necessary to keep the insurance in place. Payment of the premium by a certain date is a simple example. Another is maintaining a security alarm as a pre-condition to insurance against losses caused by theft. Other conditions relate to the policyholder’s obligations once a claim arises – that is, the reporting requirements. The reporting requirements dictate when and how you should report a claim to your insurance company. Some policies require that you report the claim in writing and within a certain period of time. In some policies, coverage will be triggered by notifying the insurer by phone – as many of you who have been in car accidents know.
There is almost always a time limit within which you can report a claim. Some insurance policies spell this out explicitly in the policy, others simply say that notice to the insurers must be given after an incident “forthwith” or “immediately.” Regardless of the wording used, if you suspect that you have a claim that may be covered by your policy, you should report it.
Policy conditions should be regarded in the same manner as exclusions, since failure to abide by them will result in a lack of coverage. Therefore, it is important that you have a complete understanding of what they are when you purchase your policy.
5. Insurer’s Obligations When a Claim Arises
Insurers have a duty to deal with you in good faith. When you make a claim under your policy, your insurer has a duty to assist you in processing your claim, to act in your best interests and to not take an unreasonable position on coverage. If the insurer makes a coverage decision that has no basis in the policy, then it may be subject to a complaint to the Financial Services Commission of Ontario, or in a lawsuit it may be vulnerable to a claim for punitive or aggravated damages.
6. The Role of the Broker
I have previously written on this site about the role and obligations of your insurance broker. Having an understanding of how your policy works and your policy exclusions allows you to have a meaningful discussion with your broker about what your insurance needs really are. Some of the additional questions that may arise out of this discussion, and which may result in your decision to purchase additional or enhanced insurance, are listed below.
# Do you own property outside of Ontario or conduct any business activities outside of Ontario?
# Do you conduct any business activities in your own home?
# Are you a voluntary or paid officer or director of a corporation?
Are you aware that you may be sued in this capacity and that insurance may be available to protect you in this instance?
# Does your workplace medical-dental policy provide sufficient coverage for all possible health-care contingencies?
# Do you travel regularly outside of Ontario and/or internationally? Are you over the age of 65 and travel regularly?
By admin
As the economy crunches further into recession, it’s important to remember that you can still save money during the tight times. Here are a few ideas on how to save:
1. Make a budget! This is the best advice I can give you. Figure out how much money you spend on everything, from your mortgage/rent payment to your groceries. From your car insurance to your spending money. Everything you have. Then when you calculate how much money you’re making and how much money you’re spending, you will see how much you should save each month. From here on out, pay yourself first. Let’s say your budget shows $100 extra income over your budgeted expenses. Before you do anything, pay the $100 to your savings account. Then, if you’re short on money at the end of the month, take it out of your spending money that you’ve budgeted for.
2. Don’t overspend at the grocery store. A few tips here: Don’t grocery shop while you’re hungry. You’ll end up thinking everything looks good and buy more than you need. Always shop with a list. Without a list, the impulse buying increases and you spend more. Always buy sale items. Grocery store have so many sale items, I always try to do my entire shopping trip without buying anything that’s not on sale. Always buy based on price per ounce. Sometimes sale items are actually more expensive per ounce than another brand, or a store-brand. Buy the best VALUE. And buy bulk. Usually a bigger jar of peanut butter has a much lower price per ounce than the small jar. You’ll save money because each peanut butter sandwich will cost less.
3. Cut out the extras. A satellite dish is much cheaper than cable. Or you can cut the cable altogether and go with just your local channels. Do you have a home phone and a cell phone? Get rid of the home phone. Do you have dial up internet? Get high-speed. Instead of paying for the phone and the internet service (AOL, Netscape, etc), you can find a cheaper option with high-speed, and you’ll have a better internet experience.
4. Cut down on your utilities. During the winter, close the vents to the rooms you don’t use and close the door. It will be a more efficient way to heat your home. Turn the lights off when you leave a room. Don’t fall asleep with the TV on. Don’t leave your computer on when you leave. These things will cut your utility bills down.
5. Work online when you’re bored. Whether you’re writing blogs/articles or doing surveys, you can make a few extra bucks each month through online work. While the money won’t fly in, you can earn a steady stream of income each month if you find the right websites.
Good luck with the saving!
By admin
Mutual funds are popular because they allow all types of investors with similar investment objectives the opportunity to pool their money together to take advantage of a variety of different investment opportunities. There are four main advantages of mutual funds: low cost professional management, diversification, liquidity, and flexibility.
Low cost professional management is probably the biggest advantage of mutual funds. For investors who do not have the time or knowledge to monitor their own investments on a daily basis, mutual funds provide the best solution as the fund’s portfolio is managed by a fund manager that has met certain education and experience requirements. The fund manager also has access to better research and more sophisticated analysis tools than the average investor. Normally, this type of professional management involves high management fees and a large minimum investment, usually over $100,000, however, mutual funds provide this type of management for all investors.
The second advantage of mutual funds is diversification. Since mutual funds contain a larger pool of wealth, fund managers are able to invest the money in a wide variety of securities. A typical mutual fund portfolio usually includes over 50 different securities in over 15 different industries. Therefore, mutual funds provide a low cost way for any investor to obtain a diversified portfolio.
Liquidity is the third advantage of mutual funds. Investors have a continuing right to redeem their shares for cash at the share’s net asset value. Mutual funds can also be easily purchased and redeemed. They are also considered to be convenient as they can be purchased or redeemed at any financial institution. Investors should note that while liquidity is an advantage of mutual funds, mutual fund managers put an emphasis on long-term growth. If an investor wishes to purchase a short-term mutual fund, they should invest in a money market fund.
The final advantage of mutual funds is flexibility due to the variety of options associated with these funds. Mutual funds provide three different types of income choice: interest income, dividend income, and capital gains. Investors can choose which they wish to receive, and can change funds if their needs change. Mutual funds also offer a variety of purchase and redemption plans that meet the needs of almost all investors. Investors can also choose to move between funds as most fund families allow transfers between two or more different funds at no added fees.
If you are an investor with limited time and investment knowledge, who wants to invest in a variety of securities, that are easy to purchase and redeem, are professionally managed, and offer a variety of income choices, then mutual funds are definitely the investment choice for you.
By admin
you are like most ordinary people today, at some point in your life you will need money that you just don’t have, for car repairs, medical bills, school supplies for your children, etc. You can always rely on your credit cards, but who wants to pay those extremely high interest rates and fees? There is a better option, referred to as a personal loan. The money that you receive from a personal loan can be used to cover all kinds of expenses, anyway you like, just keep in mind, that you do have to pay the money you borrow back, plus interest. There are many places to obtain a personal loan from, local banks and loan companies, as well as internet lenders. Personal loans can bail you out of a fix, as long as you don’t borrow more than you can pay back, and you shop around for a good rate and repayment plan.
The average person, with a full-time job and decent credit, can borrow as much as $15,000 in the form of a personal loan. Don’t try to get the max you can, just get enough to see you through, because again, you will have to make those monthly payments, and the more you borrow, the higher those payments will be. Personal loans are different from lines of credit often available to you through your bank. The money you take out with a personal loan is given to you all at once, and you will not be able to get more until you have paid off a significant portion of your debt. With lines of credit, you are given a certain limit, and you can withdraw funds until you have reached that limit, pay the balance down, and get more funds as needed
Again, depending on your credit, the amount of money you need, and your income, your personal loan may be either unsecured or secured. If your loan is unsecured, there is no property listed as collateral, but you will likely have to pay a much higher interest rate, due to the risk the lender is taking by giving you an unsecured loan. If you fail to pay the money back, they have no property to take from you to go towards the remaining balance that you owe, meaning that they will have to go through the legal process to get their money. If you have a secured personal loan, some piece of property that you own, such as your vehicle, land, home, etc., is listed as collateral, and if you default on the loan, the lender has the legal right to claim that property as repayment.
Your repayment time varies from loan to loan, in some cases, you will be given up to five years to payoff your debt entirely, and in others, you may only have a year. It depends on the policies of your lender, and how much money they are lending to you. The longer you stretch your repayment period out, the more you will be paying towards interest, so keep that in mind. Don’t accept a loan with payments that you can’t afford to make just to get lower interest, but dont accept the longest term if you can afford otherwise. If you don’t fully understand the personal loan process, you should take the time to look into it, before you sign any paperwork, so you don’t end up in financial trouble.
Hopefully, you now understand personal loans, and a little bit more about how they work. Make certain that you check the interest rate, and make certain that you can afford the monthly payments, before you sign on the dotted line.
By admin
Millions of car accidents happen each year in the United States alone. With these accidents come thousands of fatalities and countless injuries.
When you sustained a personal injury or one of your family members died because of a car accident, you may be entitled to some compensation from your insurance company or the insurance company of the person who is at fault for the accident.
Car accidents are traumatic enough for the victims, the physical stress coupled with high emotions and the worry about the future can put one on edge especially if the victim is a breadwinner or someone who contributes a significant amount to the family’s finances.
The complications of claiming car accident insurance might add to the trauma if one does not go about it correctly.
Car insurance companies may look like the friend you really need during times of distress but these companies’ priorities are still themselves so they would look to pay you the least amount possible or nothing at all.
What you can do after a car accident is follow some basic steps if you want to ask compensation from your or the person at fault’s car insurance company.
Here are some steps you can follow when you want to file for a car accident insurance claim:
• File an accident report even if it is just a minor accident.
• Get a copy of the police report.
• Check what kind of protection your car accident insurance provides.
• Make sure that your medical record will be released and presented to the insurance company.
• File a claim for physical injuries through medical coverage.
• If another party was at fault for the accident, file the claim under uninsured motorist coverage.
• Prepare car repair estimates from at least two companies.
• Document all expenses including car towing and storage.
• If you have rental reimbursement coverage then you can ask the insurer to arrange a temporary car for your use.
• If other damages were discovered during repair, you should notify the insurer as well.
An attorney who has experience with negotiating with car accident insurance companies will be very helpful to your cause.
Here are some things that you can do to help speed up and ensure your claim’s success:
• Notify the insurance company about the accident immediately.
• Read your insurance policy so that you are aware of what type of coverage you have.
• Get details of the accident. Include location, road conditions and the weather. Get the car model, color and plate number of the vehicles involved as well.
• Take note of the insurance details of the other people involved.
• Document all expenses and receipts that you accumulated because of the car accident.
• Check if you have other insurance that covers the same accident.
• Consult with a car accident lawyer.
These are just some tips you can follow to ensure the success of your car accident insurance claim.
By admin
Financial planning for a single person may be easier than one thinks. One person managing an income has only his or herself to consider. A weekly budget,taking in to consideration,rent,food,car expenses,credit expenses,perhaps the cost of keeping a pet,is necessary for peace of mind.A person who is psychologically adapted to managing money is far ahead of one who is not. Impulsiveness whilst shopping, can be a disaster and that is why a list of essential items and only the money to purchase these with will assist the impulsive spender on the weekly shopping spree.Loneliness can also be responsible for unnecessary spending. It is always nice to chat with the favorite shop girl or boy and these outings, nightly in some cases, can empty the wallet or purse quite quickly. But this advice is all very well for one who has had experience in this area. Youth is extravagant and no thought for the future troubles the mind. As one reaches real maturity the mistakes of extravagance may be clearly seen. The ownership, or at least a mortgage, of a home should be of prime consideration when starting a career.
But for this to happen, the person needs to be guided, either by a friend or parent,or by self-motivation. A savings plan is essential. No matter what other expenses are necessary, a regular amount should be put away each week into a separate bank account and, when the amount is of substantial nature, put into a short term deposit account. This should then be offered as security for a housing loan. The sooner this is started, the sooner the single person will be settled in his or her mind and the resultant calmness will allow the person to take stock of the circumstances and see where improvements may be made in career and lifestyle. the single person may, at this stage, consider a domestic partnership.A person, whether a male or female, who owns a home or is at least paying one off, is not burdened with the uncertainness of a residential status and will be in most cases established in the area he or she lives.This means friends will be made and business acquaintances nurtured with career possibilities. We are all single at some stage and all need the same sound advice to help us with the life ahead.
By admin
Apparently, there are now more credit cards than people in Britain, which means that there must be a lot of people with more than one card. So how many cards should you have?
I’d say it depends on how well organised you are, what your attitude is towards credit and finally your overall financial position.
The more cards you have, the more organised you need to be. If you are juggling five or six cards, all with different statement dates, it is easy to overlook or be late paying one; then you find yourself lumbered with hefty penalty charges.
Some people seem to believe that because they are told they have a credit limit of £xxx on their card, that they must spend that amount. Forget about ability to pay, these people will max out on every card they have. If this is anything like you, you should certainly forget about having multiple cards - in fact maybe you should reconsider whether to have a card at all.
Unless you want to incur massive interest charges and still be paying off the balance in thirty or more years’ time, you should aim to pay off your credit card as early as possible. If you can’t pay the balance in one go, pay as much as you can each month. Obviously, the more cards you have, the less you will be able to spend on each of them.
There are occasions when it makes sound financial sense to have more than one credit card. If you have a large outstanding balance on your existing card, look around for one of the many introductory offers of 0% interest on balance transfers for up to 12 months. Transfer the balance but don’t be tempted to put any purchases you make on to the new card; unless of course there is also a similar introductory offer on purchases. The reason for this is that if the interest free offer applies only to the balance transfer, any payments you make will be taken off this, leaving any purchases to accumulate interest at standard rate. Instead, put any purchases on your old card.
If you haven’t cleared the balance at the end of the introductory period on the new card, repeat the procedure of searching out similar offers but this time transfer the balance from both cards. At this moment, you will be in possession of three cards. Determine which of the two earlier cards is the better deal this will be the one that you use to make purchases, the other you destroy. You can continue doing this until the credit card companies stop offering any special deals; if this happens, find the best card and have only the one.
