Why Your Auto Policy Limits May Be Too Low

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Suppose you are traveling home on I-81 from Kingsport to Johnson City and you hit someone. Sadly, the driver is inured and the vehicle damaged. The vehicle, a brand-new Ford truck valued at over $50,000, is totaled, and the driver needs to be admitted to the hospital for head trauma. The driver is out of work for months and needs extensive testing and procedures to restore his health. You realize you are in for a massive lawsuit. In a tragic situation like this, would you be properly covered by your auto insurance policy or are your policy limits too low? As awful as it is to think about, auto accidents happen and you need to be prepared.

Sometimes, in the cases of extremely costly claims, your insurance provider (for example, Erie, Progressive, etc.) may just write you a check for the full amount of your limits and walk away, never providing you with an attorney for your defense. While this situation is rare, how would you protect yourself and your family if it were to happen to you? Do you have the proper limits on your auto insurance policy?

When Attorney Costs Aren't Covered by Your Auto Policy

In most standard auto policies, there is a phrase such as, “Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted by payment of judgements or settlements.” This means that after they have paid the full amounts of your limits, they are no longer required to provide you defense in the case of the lawsuit. If they decide just to pay you the entirety of your limits outright, they are never obliged to defend you.

So in the above example, what if your insurance company were to just give you the $40,000 they owe for the vehicle and the driver, and leave you to hire your own attorney for the entirety of the lawsuit? Insurance companies generally will not do this, but if you are in a million dollar lawsuit with very low limits on your policy, this option is usually in their best interest and in the best interest of their shareholders.

What Your Auto Insurance Limits Should Be

There are several things you should do to defend yourself against this type of situation. First, make sure you have proper limits on your auto insurance policy. At Veritas, we recommend a bare minimum of 100/300 bodily injury coverage, though we prefer to see our clients choose limits of 250/500. While some people have 50/100 limits, the average emergency visit if someone is admitted is $57,000. That means a 50/100 limit may not cover your costs. Second, make sure you are properly protected with a personal umbrella policy which provides additional coverage of $1-5 million. This policy would extend the limit of liability, providing you coverage well beyond your limits and defense by the insurance companies’ attorneys.

It’s important to sit down with your insurance agent and discuss whether you have proper coverage in the event of an accident. Nobody wants to think about these types of situations, but it’s better to be prepared than to lack coverage if something happened.

Auto Insurance Questions?

If you have any questions about your auto insurance policy or would like a free auto insurance quote, feel free to contact our Tennessee office at (423) 292-4142, or send an email to help@veritasrm.com. Veritas is an independent insurance agency, meaning we work with a number of different companies and will help you find the best and most affordable policy for your needs. Our personable and knowledgeable staff would be happy to help you with any of your questions.

Should You Get a Health Sharing Plan?

A number of people have asked about health sharing organizations, such as Medi-Share and others. These programs serve as health insurance alternatives, in which a group of individuals share one another’s healthcare costs. If you are interested in participating in a health sharing plan, here are some aspects of the system that you should be aware of.

Pros and Cons of Health Sharing Plans

There are several great things about sharing plans. Not only are you connected to a group of individuals that are praying for and with you, there are some economical benefits to sharing plans. They offer good discounts, and the premiums are generally very low.

That said, there are a few potential downsides of health sharing plans that you should know about when making your decision.

First, a sharing program is not an insurance product, so there are no guarantees. Though this is also true if you have a Blue Cross Blue Shield or United plan, for example, there are many more dollars behind those plans, which can help in situations like a large catastrophic event in the area.

Secondly, health sharing programs generally have comparatively few members, which can pose problems. A small group of members means there are limited resources to be shared amongst the group. While a Blue Cross plan, for example, has millions of members, a sharing plan will usually only have a few hundred to a thousand members. This could be an issue if you were to have a large claim that needed to be covered.

Health sharing plans also usually restrict coverage for sin-related issues. If you drink alcohol or use tobacco, you may be unable to get coverage. If there was a scenario where one of your children became pregnant out-of-wedlock, things could get complicated. Though some plans do assist in arranging for adoption or maternity services, many do not cover maternity expenses for a child conceived out of wedlock. While these may not be a concern for you, it is good to be aware of the restrictions sharing plans may come with.

What to Know Before Getting a Health Sharing Plan

If you decide to go with a health sharing plan, make sure you know what the laws are about switching to a traditional health insurance plan if you ever have the need or desire to do so. If something were to happen with the sharing group you are part of, for example, you need to be aware of what would happen next. Also be sure that you know what the sharing plan considers to be a pre-existing condition.

Ultimately, whether you participate in a sharing group or not is up to you. There are certainly benefits to doing so that may make it right for you! However, it’s important to be aware of all the surrounding issues to make sure you are making a wise decision to protect yourself and your family.

Further Questions?

Making these decisions can be difficult and have a number of accompanying factors. If you have any questions about health sharing plans or your health insurance policy, contact our Tri-Cities, Tennessee office at (423) 292-4142 or email us at help@veritasrm.com. Though we do not currently sell sharing plans, we are connected to local people who do, and we would be glad to help answer any questions you may have. Learn more at veritasrm.com.

What You Need to Know About Life Insurance

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Life insurance is one of those things you don’t like sitting and talking about, especially with your family. It means you are going to die someday. No one likes to talk about that. But if you are gone, who is going to provide the income to your family that you are providing right now? Statistics tell us that about 80% of Americans don’t have the life insurance they need to protect their families. This article explains what you need to know so that you are not one of those people.

Why Get Life Insurance?

Life insurance is not about you. It’s about protecting your family in the event that the unspeakable should happen. Your family is probably the most important aspect of your life. You would do anything for them. But what would happen to your family if you were no longer here? The last thing you would want is for your family to be thrown into financial chaos because the unexpected happened to you. If you are concerned about protecting your family in the case of your death, getting life insurance is a necessity, not an option. While it’s not easy to think or talk about, it’s your responsibility to ensure that your dependents have financial stability and peace of mind in the event of your passing. This is what life insurance is for.

How Much Do You Need?

Let’s say you are making $40,000 a year. Can your wife and family live the way they are living right now if there’s not another $40,000 coming in? That’s the question you need to ask yourself. Life insurance is cheap. If you’re in good health, you can get life insurance for next to nothing. At Veritas Insurance, we even have programs where you don’t have to give blood, step on a scale, fast, or pee in a cup. None of that! In twenty minutes you can get preferred rates.

So how much life insurance do you need? Generally, you need 10 to 15 times your current income. Why this much? If you make $10,000 a year, for example, and you have 15 times your income in life insurance, that’s $150,000 dollars in life insurance. Your wife can invest that money with a good financial advisor. They will tell her to take 4-6% of that per year and live on it for the rest of her life. If you have 6% of $150,000 per year, you are going to end up with right about $9,000 every year. If you were making $10,000 a year, this is going to give your wife $9,000 dollars a year. According to historical results, she should be able to take that $9,000 a year, keep up with inflation, and not have to use any of that principal. She can keep on doing what she is doing. Whether she is working or staying home with the kids, your income will be replaced. That’s what life insurance is about: replacing lost income if someone dies. The same is true for your wife. If she dies, you need 15 times her annual income in life insurance.

Do Stay-At-Home Moms Need Life Insurance?

If your wife is a stay-at-home mom, she is worth a lot of money. She cooks, she cleans, she drives the kids everywhere. If something were to happen to her, it’s going to cost you a lot of money to have someone do all those things for your family. You need to sit down to talk to your wife and find out exactly how much life insurance you need on her that would replace either her income or the work she does in the house.

Get Coverage!

Life insurance premiums are not expensive. For example, if you are 25 years old and in good health, you can have a $100,000 ten-year term for less than $10 a month. However, most people do not have nearly enough life insurance. Only about 20% of the people in America actually have the life insurance that they need to protect their family. Make sure that you’re not one of them by getting the life insurance you need.

Call our Johnson City office today and we can help! Megan Jackson in our office does a phenomenal job helping folks with life insurance. Call her today at (423) 292-4142 and let us help you get your family protected with the life insurance you need.

Your Experience Modification Factor

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Imagine having a valued employee get hurt at your workplace. Now imagine not having workers compensation insurance. Could you be sued? Could you lose your business? Workers compensation insurance is a necessity for your business. However, many businesses overpay on their workers compensation premiums.

How much you pay on your premium is determined by your experience modification factor. Though it is very easily controlled, approximately 40% of businesses have an incorrect experience modification factor. Here is a brief overview of what the experience modification factor is and how it works. This can be a complicated subject, so if you have additional questions, please contact our East Tennessee office. We would be happy to help answer any questions you might have.

The Basics

What is the experience modification factor? The experience modification factor determines the premium you pay for workers compensation insurance. It is based on the losses your insurance company has experienced from your business. The workers compensation experience modification factor is done by the National Council on Compensation Insurance (NCCI). They get data from all the states they work in, including Tennessee and Virginia, to create an experience modification factor (mod). A mod of 1 is the average of all the data collected. Thus, if your mod is above 1, you are worse than the average in your profession in terms of claims and safety. However, if your mod is below 1, you are better than average.

Your Mod and Your Premium

If your manual premium is $50,000 for your profession, but you have an experience modification factor of 1.5, you will multiply 1.5 times $50,000 to get your new premium. However, if you are better than average and have, for example, a mod of 0.80, you will multiply 0.80 by $50,000 to calculate your premium.

Class Codes

The experience modification factor takes into account the class codes that you have, and the payroll that you had in those class codes. The higher your risk and the higher your expected losses, the lower your mod can be if you don’t end up with any claims. The rates for roofers or loggers are quite high. If you have $100,000 in payroll, the insurance company is expecting you to have some claims. Therefore, if you end up not having any claims, you will have a low mod. However, if an office has $100,000 of payroll, the insurance company is not expecting you to have many claims at all. Thus, an office will have a low mod. However, the office’s mod probably won’t be as low as someone doing logging or roofing with $100,000 in payroll if they also do not end up with any claims.

Need Help?

Those are some of the basics of the experience modification factor for your workers compensation insurance. There are a number of details dealing with this topic, so we would be happy to sit down with you and give you a free report on your mod. Your experience modification factor is one of the few things in insurance that you can control and manage very easily. Contact our Tri-Cities office at (423) 292-4142, and we will answer any of your questions and help you make sure your mod is correct.

Debit Cards: A Threat to Your Small Business

With more men and women joining the workforce without checking accounts, many employers in the Johnson City, Tennessee area have found the need to start paying their employees with debit cards. However, this method of payment poses a couple of issues for employers.

The Problems

First, you cannot require your employees to have a checking account or to receive their paycheck in the form of a debit card. Second, you have to disclose the fees associated with the account, the account history, and their rights.

The most common issue of these two is the fees associated with using debit cards. If fees on their card cause their hourly wage to drop below minimum wage, you are in violation of the Fair Labor Standards Act (FSLA). This can also come into play when you withhold funds from their paycheck for failure to return company equipment, their uniform, their cell phone, etc. The FSLA requires that all employees be paid at least minimum wage, so be careful. Make sure you do not drop the total amount of their pay check divided by hours worked below the current minimum wage.

Contact Us

If you have any questions about this or any of your business insurance needs, contact our Tri-Cities office today at (423) 292-4142 or email us at help@veritasrm.com. We will be glad to help you make sure you have the coverage you need.

Insurance for Historical Buildings

There are a lot of beautiful historical homes and commercial buildings around the Tri-Cities, Tennessee area. Downtown Jonesborough (Tennessee’s oldest town), Johnson City, Kingsport, and Bristol are all marked by their historical buildings. Historic districts do so much to preserve local history. However, historical buildings can come with certain challenges. When insuring historical buildings and homes, there are certain things you must do in order to get the coverage you need.

More Expenses Need Coverage

Oftentimes, local historic districts have strict regulations on remodeling and authenticity. In the case of disaster, if your historical building or home is only insured with a standard policy, you may not have the coverage you need to meet all of the distinct requirements for older buildings in your town or city. For example, finding authentic or period appropriate building materials and parts can be difficult and costly. In addition, new codes may require certain things like sprinkler systems or elevators in the building. This creates extra expenses as well.

A Standard Policy is Not Enough

A standard insurance policy should pay you a substantial portion of the cost to rebuild. However, it won’t provide everything needed to comply with the additional building codes. This leaves you unable to rebuild without very large out-of-pocket expenses. It could also leave you needing to obtain a loan to finance the balance or repair bills due to city, county, or state laws. If you own a historical building, you should carefully look over your insurance policy and sit down with your insurance agent to figure out what your exposures are. It is important to be fully covered in the event of a claim.

Get Coverage

If you have any questions about insuring your home, historical building, or business, or have questions about high value home insurance, please contact our Johnson City office at (423) 292-4142, or send an email to help@veritasrm.com. We would be happy to give you more information and help you make sure you have the coverage you need.