What happens when you have an insurance claim?

Not surprisingly, most people are neck-deep in running their own businesses and don’t really understand how their insurance works … and that can have catastrophic consequences.

You should have a basic understanding of what you’ll be paid if something happens to your business property. If you don’t get the money you need to replace it, how will you stay in business?

One way insurance companies pay for damaged or destroyed property is the Actual Cash Value (ACV) method. ACV is calculated as fair market value or cost less depreciation. Now think about that in this example …

What’s the value of … let’s say … a 5 year old refrigerator?

Whatever it’s worth, it’s most definitely a lot less than the cost of a new one, right? A new fridge might be $1,000 but the used one may be worth only $500.

With an ACV settlement, if that fridge is destroyed, you’ll get $500 from the insurance company. BUT, it will cost you $1,000 to buy a new one.

Now … that’s not necessarily a problem. It’s simply a choice. You have other options.

One of them is Replacement Cost … and under this method you essentially get “new for old”. When that $500 fridge is lost, the insurance company buys you a new one – they replace the lost property – as opposed to compensating you at actual cash value.

Of course, choosing Replacement Cost means higher premiums. After all, the insurance company has more at risk when insuring replacement cost. And more risk means more premium.

Neither option is right, and neither option is wrong. It depends on your individual circumstances and your capacity to keep some risk yourself in exchange for lower premiums. (By the way there are other options. I just want you to understand the basics.) And don’t forget, the value of your property changes from year to year.

In reality there are greater complexities, but if you understand the basic difference between Actual Cash Value and Replacement Cost, you’ll be well on your way to protecting your property to your desire and your budget.

Give me a call if you want to discuss this topic further, or to make sure your property is protected like you want it to be.

RICH KRASNOMOWITZ/ US INSURANCE AGENCY 866-588-1190

email – richk@usinsagency

Keeping The Tax Man At Bay!

Happy Valentine’s Day! (Don’t forget … it’s coming soon.)

Here’s another important tip from your friends at US Insurance Insurance. I hope you find it informative and useful. Please pass it on to those you love!

I thought I’d send you some tax tips now in case you’re the kind of person who gets them done early. Here are some of the most common errors on tax returns. If you avoid errors, you minimize the chance of an audit … and NOBODY wants to go through that!

* Mistakes on social security numbers tops the list of tax return errors.

Make sure all the SSNs on the return are correct. And it’s a good idea to put your SSN on each page of the return in case the pages get separated at the IRS.

* Math errors are another common mistake – especially when subtracting. If you’re not using a computer or tax-preparer carefully check the math. Do like Santa Claus and check it twice!

* Forgetting to sign and date the return. Yeah. Happens all the time. And remember for a married couple filing a joint return, both must sign.

* Failing to attach all the paperwork – like W-2s.

* Putting income in the wrong place. This is interesting. If you record dividend income as interest income – like for mutual funds – the IRS computers will probably see that as under-reporting dividend income, because they get that information from the mutual fund companies. Then the hassles begin.

* Failing to file because you can’t pay in full. BIG MISTAKE! File your return on time, even if you can’t pay the tax due. Willful failure to file is a federal crime. You’ll only pay interest on amounts past due.

* Failing to file when no tax is due. I guess it happens. You gotta file the return whether you owe any money or not.

There’s lots of information on the Internet to help you avoid problems.

Just do a search on “common tax errors”.

All of us here at US Insurance wish you a joyous tax season! OK … how about a reasonably fun tax season? OK … good luck, we hope you get through it. How’s that?

Seriously, though, I hope this information was helpful to you. Thanks for thinking of US Insuarnce Agency for your insurance business.

Thank you,

Rich Krasnomowitz – I can be reached at richk@usinsagency.com or view our webiste www.usinsagency.com

PS It’s sad, but there are people in this world who will take everything you have if given the chance. Of course, your insurance will foot the bill … but ONLY IF you have enough. If you don’t it could literally ruin your financial life. Good news …

A whopping million dollars of protection can be as little as $12 a month!

Erase your worries and your fears. Contact us today about a Personal Umbrella policy.

If you can’t stand the heat, maybe your kitchen’s on fire!

Yes – I’m already in the Holiday Mood – so I thought I would share some Thanksgiving Day Tips!!!

Did you know that more kitchen fires are reported on Thanksgiving Day than any other day of the year? Here’s a quick list for you to print out and keep handy during this busy holiday season.

*Supervision is the key. Never leave cooking food on the stovetop unattended and regularly check food cooking inside the oven.

*Get in the zone. Keep children and pets away from the cooking area by creating a 3-foot safety zone around the stove.

*Keep away from the heat. To reduce the chances of bumping pots and pans and spilling their contents, turn panhandles in, but away from hot elements and burners.

*Keep it clean. Keep the cooking area clean and clear of anything that can burn — towels, potholders, drapes, food packaging, etc.

*Roll ‘em up. Make it a point to wear short, close-fitting or tightly rolled sleeves when cooking. Loose clothing can dangle onto burners and catch fire.

*Is it too hot to handle? Use thick, dry, flame-resistant potholders when handling lids and pans.

*Keep a cool head. In the event of a range-top fire, put on an oven mitt and smother the flames by turning off the burner and carefully sliding a lid onto the pan. Leave the lid in place until well cooled. Never carry the pan outside.

*Water and grease don’t mix! Never use water or flour on a grease fire.

Doing so can shoot burning grease around the kitchen, actually spreading the fire.

*Use the right tools. If you’re familiar with using a multi-purpose fire extinguisher, keep one handy in the event of a grease fire.

*Prevent flame spread. If you have an oven fire, immediately turn off the heat and keep the door closed to prevent flame spread.

Print this list and share it with your friends and loved ones. Be safe and alert to any kitchen dangers and you’ll be sure to enjoy a wonderful holiday season.

As always, if you or anyone you know might find this message useful, please forward it to them. We want to help as many people as possible.

For more safety tips or to discuss your insurance needs – kindly contact Rich Krasnomowitz @ 973-838-8181 or rihck@usinsagency.com.

Rich Krasnomowitz is an independent insurance agent with offices located in Butler, NJ  and Newton, NJ.  Serving the insurance needs of all of Northern New Jersey. 

 

Will your insurance claim be paid in full?

One of the most dangerous concepts in insurance is “co-insurance”. I say dangerous because if you don’t understand it, you can get burned by your own uninformed decisions.

Long ago, when insurance came to be, an interesting “battle” took place …

Insurance companies determined that by taking a little bit of money

(premium) from lots of people, they could afford to pay for huge losses of only a few of those people. Based on expected losses they decided how much premium to charge. And an assumption they made was that everybody would insure their property fully.

Bad assumption! Policyholders quickly realized that most losses are small – rarely a total loss. So, instead of insuring their $100,000 building for $100,000, they insured it for less – risking that they wouldn’t suffer a total loss. This wrecked the insurance companies’ ability to pay losses and be profitable, too.

So, the insurance companies invented “co-insurance” – which basically means

- if you don’t insure the full value of your property, you’re going to share in the partial losses.

For example (simplified for illustration purposes), if you have a building worth $100,000 and insure it for $80,000, you’ve insured 80% of value. If there’s a total loss, you only get $80,000 because that’s the coverage limit you chose. That’s NOT co-insurance. That’s coverage limits.

Co-insurance comes into play on partial losses. In this example, if you have a partial loss, of say $10,000, the insurance company will only pay $8,000 … because you only insured 80% of the full value and 80% of $10,000 is $8,000. You pay the other $2,000. That’s co-insurance.

That’s a pretty compelling reason to insure to full value.

Now most policies require you to insure at least 90% of value to avoid a “co-insurance penalty” at the time of loss. (But, remember, your policy will never pay more than the limits of coverage. So, if you insure 90% of value and have a total loss, you’re only going to get 90% of the loss from the insurance company – your policy limits.)

Wait! There’s one last landmine here …

To determine if a co-insurance penalty will apply, the value of your property will be determined at the time of loss – NOT what it was worth when you bought it, NOT what it was worth when you bought your policy, and NOT what you say it’s worth.

The insurance company will determine the value of your property at the time the loss occurred. Why is this important?

Let’s say you paid $100,000 for your building 5 years ago, and insured it for $100,000 – fully insured, no chance for a co-insurance penalty. And let’s say the building is worth $120,000 today, but you didn’t increase your insurance.

Now there’s a partial loss, the insurance company values your building at $120,000 and says, “A co-insurance penalty applies, because your insured value of $100,000 is less than 90% of the building’s real value of $120,000.” What a nasty surprise.

There are a number of tools to help prevent this. “Inflation Guard”

protection and annual reviews are two good ones. The most important thing is for you to have a basic understanding of your exposure.

Ultimately, your insurance decisions are yours. Be an educated consumer and make sure you get what you want. Give me a call if you want to discuss any of your coverage limits.

For a complete review of your insurance needs – please contact Rich Krasnomowitz/US Insurance Agency 130 Main St., Butler, NJ  07405

Phone: 973-838-8181  Email richk@usinsagency.com

 

What type of insurance does your company need?

I hope that 2009 has been going well for you so far!

At some point during the next 12 months, you will need to renew your insurance policies. Before doing this, it is best to take the time to sit down and consider exactly what type of insurance your company needs.

Many businesses don’t have enough coverage for their property and their employees, while other businesses have insurance that isn’t necessary.

Either way, you may end up spending money that could easily be fixed by just knowing all the types of commercial insurance available and the reasons for obtaining them.

Property Insurance

Of course the most important type of insurance to have as a business owner is property insurance. Remember that your homeowners’ policy will most likely not cover your business, even if the business is run out of your home, although many do have options to add on to your homeowners policy with separate provisions for your business. You may need to seek out a business property insurance policy, though.

Liability and Medical Coverage

This is the same as it would be for a homeowners insurance policy, except that it would include any damages a customer sustained while at your company. Of course, if you work out of the home and no one ever visits you in the home, probably isn’t necessary. But this is essential insurance for anyone who has customers or clients that regularly walk into their establishment. Necessary liability coverage varies for different businesses.

Automobile Coverage

Again, if you are using your own car for transportation of goods, then your regular automobile insurance should cover the needed insurance for your automobile. But, if you have a series of vans or trucks for delivery or will be giving employees a company car, you must have automobile insurance.

Most likely you will need an extended policy through your auto insurance or a separate business auto insurance policy to cover these extra automobiles.

Health Insurance, Workman’s Compensation and Other Benefits

If you are self-employed, you can acquire health insurance and other benefits like life insurance through a spouse or can find a good deal on independent insurance for just you and your family. If you have any number or employees, though, it is a huge benefit to offer those employees health and life insurance. Many employees won’t even consider working for a company where they do not have the option to pick up a benefits package.

Of course, this isn’t all the information you need (there just isn’t enough time or space to list it all), but if you have any questions about business insurance policies, please call our office.

Don’t forget the importance of protecting yourself, your employees and your business!

For more information on your business insurance needs feel free to email me – Rich Krasnomowitz/US Insurance Agency @ richk@usinsagency.com

Hello world!

Welcome to WordPress.com. This is your first post. Edit or delete it and start blogging!