Health Reform Timeline

June 2010: Medicare beneficiaries pay less for preventive services, Tax credits for certain small employers begin

July 2010; Uninsured people with health problems eligible for state insurance program

Sept 2010; Insurers required to cover sick children, Lifetime limits on insurer payouts prohibited, Children allowed to remain on parents policy until age 26

January 2011; Seniors who exceed medicare drug coverage limit receive $250 rebate, Voluntary payroll deduction for long term care coverage starts

January 2013; Medicare taxes rise on incomes above $200,000 per year

January 2014; Medi-Cal eligibility expanded, Insurers barred from denying coverage, Individual requirement to obtain coverage begins, insurance exchange opens for business, Subsidies for buying coverage available

2016; Long term care benefit available

2018; Federal tax on high value benefit packages begins

*data from California Healthcare Foundation

Use your discounts!

When comparing your insurance premiums you need to make sure you are looking at the whole picture rather than looking at one mono-policy compared to another. Often the various discounts available through a multiline carrier will make your overall insurance cost less than if you just compared one mono-line policy to another.

For example, your auto/renters discount can save you so much on the auto premium that it can pay for the Renters policy. In other words, you can get two car insurance policies and a Renters, for the same total cost as two auto insurance policies.

Discounts you want to look for are the: Multi Line Discount, Good Driver Discount, Multi Car Discount, Persistency Discount, Safe Driving Discount, Business or Professional Group Discount, Anti-Theft Discount, Passive Restraint Discounts,AntiLock Brake Discount,Alternative Fuel Discount,Senior Defensive Driver Discount,Good Student Discount,Inexperienced Driver Training Discount,and the Electronic Stability Control Discount.

Be sure to compare the cost of the total household insurance premium cost rather than a mono line comparison. That way you can be sure you are getting the best value for your insurance cost!

If you would like a free, objective review, please call me at 650-355-5396!

Mortgage Protection Insurance

Buying a home brings many responsibilities in addition to providing the income to cover the mortgage, and maintain the residence. Along with your Homeowners insurance you also need to consider having Mortgage insurance.

Some Mortgage insurance is called PMI (Private Mortgage insurance) which the lender tacks on to the loan as an additional fee (if you put less than 20% down). This generally protects the lenders from the loan defaulting.

But Mortgage insurance can also be provided by purchasing a Life Insurance policy on one, or both, of the spouses in the household. This protects the families financial future should something happen to either of you.

If a working spouse were to pass away the financial hardship that would put on the household will only compound the emotional hardship. At the very least, Life insurance gives the family time. Time to readjust to the loss of a loved one, and reassess their financial situation.

Ideally it would provide sufficent income to maintain their lifestyle. But, while many families have morbidly joked about being worth more dead than alive, the ultimate factor in calculating sufficient Life Insurance is its affordability.

A non-working spouse’s economic contribution to the household has been calculated to be $30,000 a year. That is what a basic housecleaner, errand runner, baby sitter would cost conservatively. To replace that you need to have enough coverage to conservatively generate that amount of income. At a 5% return that would mean $600,000 in Life insurance.

This is easiest to obtain with a 20 Year Term policy which would cover this expense for the time the children are young and the mortgage is large. And a multi line carrier should provide discounts on your personal lines which will also help defray the cost!

Contact me today and we can discuss how we can be sure your family is sufficiently covered! 650-355-5396, or ctrowbridge@farmersagent.com.

A Smarter way to buy Group Health Insurance

Health Insurance premiums are a topic all over the news these days! Their annual increases have shocked the buying public into demanding some kind of action from the government. What kind of change that will take is somewhat in the air, as the government has put off the effective date several years into the future, and who knows what will end up actually being incorporated into the rules and regulations? But, there is a strategy that you can take advantage of right now, that can lower your premium by 30%!

This strategy takes into account the actuarial knowledge gleaned from years of experience and thousands of different types of customers. It is based on the reality that only 4-7% of your employees will max out their deductibles in a given year, and 50-70% of your employees will not use their health insurance, or will use it so little as to have little effect on its costs.

It entails using a high deductible plan, from any of the main carriers in the market today, and using the impressive savings they produce to pay for the actual deductibles used through a pooled company owned savings account (not an HSA which is individually owned). After deductibles, and a small fee to the TPA to administer and coordinate the plan, the net effect is a 30% savings off what the typical plan costs.

This strategy is currently being used by over three thousand companies, in all different types of businesses. I call it a “Smarter” way to buy your group health insurance as it is geared more towards paying for what you are actually using.

Your carrier is not motivated to tell you about this because the 50-70% of employees who are currently not using their health insurance are pure profit to them. And, your Broker may not have told you about this because 1) they are not aware of it, or 2) they don’t want to rock the boat and lower their commissions by 30% when they have a good thing going! I just did because I want to earn your business! All your business, including your Business Owners Policy. Workers Comp, Group Life, 401k, etc…

If you would like to see how this works I need to show you a side by side comparison to what you are currently paying. All I need is a census (DOB, Home Zip, Dependent Status and Carrier Plan) along with a copy of a recent bill from each carrier. This is probably your largest overhead expense, after salaries!

Contact me today! 650-355-5396, or ctrowbridge@farmersagent.com.

How Much Insurance is the Right Amount of Insurance to Have?

Homeowners may not realize it, but it is their responsibility to make certain they have sufficient coverage to replace their home (if it were to burn down)! Insurance carriers do not offer “Gauranteed Replacement” coverage anymore. They offer “Extended Replacement” coverage. This adds an amount over the rated Dwelling amount to take care of any discrepancies. Typically this is 25-50% over the rated amount.

But, the base amount needed is the responsibility of the Policy holder. Thats not to say a good agent will not be able to give you a good idea of what would be appropriate for the area. But, many people rely on their carriers to tell them, and there is no assurance the voice on the other end of the phone is anything more than an order taker.

The right amount of Dwelling insurance is easily calculated. Just take the square footage of the home, and multiply it by the local construction cost per square foot.

Also, don’t skimp when t comes to liability coverage as you can have a lot more to loose than the cost to rebuild your home if you become involved in hostile litigation. Remember, your Liability coverage protects you from people suing you for monetary damages.

Since the likelyhood of you having someone over who would sue you is not high this coverage is a real bargin, and should be enough to cover your “assets at risk”, (these equal your Equity in property, savings and investments, and 4Xyour annual income).

You face most of your Liability exposure in your car so make certain that your Bodily Injury, and Property damage coverages are sufficent to cover your “Assets at Risk”. Since most homeowners have considerable “Assets at Risk” they may want to consider an Umbrella Policy. That is, a seperate Liability policy, that goes on top of the underlying Liability coverages found in your home, auto and boat policies. They come in increments of $500,000 to $1,000,000 and are exremely cheap considering the peace of mind they provide.

Pay attention to this part of your Insurance policy or you may discover, painfully, that you didn’t have the right amount of insurance coverage. What a miserable way to learn that the cheap insurance you were paying for is insufficient to protect you when you really need it.

Contact your agent today to confirm you have the protection you are paying your hard earned money for? Or, call me, Corrin Trowbridge at 650-355-5396, for a FREE REVIEW!