Happy Black Friday!
Friday, November 28, 2014
Friday, November 21, 2014
Clean teeth, jewelry coverage and the Song of the Day
As you read this you're probably thinking..."Hey - aren't Mitch's teeth whiter?" In fact they are! Yesterday morning I went to my dentist in the Montclair neighborhood of Oakland, not too far from home. Afterward I was outside contemplating a donut (I like to get a head start on plaque build-up for my next appointment) when I bumped into my friend Sean Chernak. Sean is a huge ska fan, and has lent me a few ska collection CDs one of which features today's Song Of The Day by Millie Small (below).
After Sean left I resumed my donut quest, but stopped when I came upon Montclair Jewelers. One of my clients should have her jewelry appraised and I have been looking for a jeweler who I could recommend for appraisals. I have found that person, the shop's owner David Coll, one of the most knowledgeable gemologists in the Bay Area.
There are limits and restrictions to how jewelry is covered in a home policy. Your personal property may be covered up to $400,000. But outside of a total loss, your jewelry may be covered for a much lower amount, say $5,000 with no one item being covered for more than $1,000. Your $4,000 Rolex watch stolen? You get $1,000. Seven of those same watches (one for each day of the week) stolen? You get $5,000. You can protect your jewelry by specifically listing the pieces and having them appraised, submitting the appraisal to your insurance agent (hopefully that's me if you're in CA or IL) and purchasing a rider or endorsement to your home policy.
David shared some of his experiences working with insurance claims. "The purpose of an insurance policy is to make one whole, so if you read the policy language when you buy a jewelry rider it states that if something happens to the item, the company will replace the item with something of equal value." He pointed out that insurance companies are able to purchase jewelry at wholesale prices, so the premium you pay is not derived from the appraised value of the replaceable item, but from the lower wholesale cost the company pays to acquire that item on your behalf. So if my $4,000 Rolex gets stolen, with the correct rider, I get another Rolex of like quality. But if I wanted cash instead I WOULD NOT get $4,000. The premium I paid to get that $4,000 replacement coverage, is actually calculated on the wholesale cost for that item (let's say $3,000). If you have a one of a kind item which cannot be replaced, you will want to insure it for the actual agreed upon cash value of what it's worth - $4,000. Since a different dollar amount is being underwritten, that coverage will cost you more money.
Also, appraisals should be done frequently: Aim for every three years. When the price of gold has increased from $800 an ounce to $1,200 an ounce, that fly gold chain you used to wear at Studio 54 has also increased in value. An out-of-date appraisal is as useful as the coverage you get from your Members Only jacket. It will cover you, but you could probably find something that better reflects who your current situation.
For all your insurance needs, call us at 925-588-3888 or go to my website. And while you're at it, please like us on Facebook.
And now the Song of the Day:
After Sean left I resumed my donut quest, but stopped when I came upon Montclair Jewelers. One of my clients should have her jewelry appraised and I have been looking for a jeweler who I could recommend for appraisals. I have found that person, the shop's owner David Coll, one of the most knowledgeable gemologists in the Bay Area.
There are limits and restrictions to how jewelry is covered in a home policy. Your personal property may be covered up to $400,000. But outside of a total loss, your jewelry may be covered for a much lower amount, say $5,000 with no one item being covered for more than $1,000. Your $4,000 Rolex watch stolen? You get $1,000. Seven of those same watches (one for each day of the week) stolen? You get $5,000. You can protect your jewelry by specifically listing the pieces and having them appraised, submitting the appraisal to your insurance agent (hopefully that's me if you're in CA or IL) and purchasing a rider or endorsement to your home policy.
David shared some of his experiences working with insurance claims. "The purpose of an insurance policy is to make one whole, so if you read the policy language when you buy a jewelry rider it states that if something happens to the item, the company will replace the item with something of equal value." He pointed out that insurance companies are able to purchase jewelry at wholesale prices, so the premium you pay is not derived from the appraised value of the replaceable item, but from the lower wholesale cost the company pays to acquire that item on your behalf. So if my $4,000 Rolex gets stolen, with the correct rider, I get another Rolex of like quality. But if I wanted cash instead I WOULD NOT get $4,000. The premium I paid to get that $4,000 replacement coverage, is actually calculated on the wholesale cost for that item (let's say $3,000). If you have a one of a kind item which cannot be replaced, you will want to insure it for the actual agreed upon cash value of what it's worth - $4,000. Since a different dollar amount is being underwritten, that coverage will cost you more money.
Also, appraisals should be done frequently: Aim for every three years. When the price of gold has increased from $800 an ounce to $1,200 an ounce, that fly gold chain you used to wear at Studio 54 has also increased in value. An out-of-date appraisal is as useful as the coverage you get from your Members Only jacket. It will cover you, but you could probably find something that better reflects who your current situation.
For all your insurance needs, call us at 925-588-3888 or go to my website. And while you're at it, please like us on Facebook.
And now the Song of the Day:
Wednesday, November 19, 2014
A new feature for this blog...song of the day
Let's be honest - the only thing more difficult than trying to write an insurance blog daily is trying to read an insurance blog posting daily. But one thing I hope you'll like, and will share with others is this song of the day.
When of the benefits of bike-riding (in low-traffic areas) is I get some time to listen to my I-pod. I prefer to listen on the shuffle method as it's a good way to hear something I may have forgotten I had. To start this feature, here's one of my favorites, Charles Earland. You can read about him here, or better yet have a listen yourself.
When of the benefits of bike-riding (in low-traffic areas) is I get some time to listen to my I-pod. I prefer to listen on the shuffle method as it's a good way to hear something I may have forgotten I had. To start this feature, here's one of my favorites, Charles Earland. You can read about him here, or better yet have a listen yourself.
Tuesday, November 11, 2014
The future of Obamacare
For those of us wondering about the future of Obamacare, check out this article:
John & Rusty report
John & Rusty report
Friday, August 22, 2014
Tis the season....
...fire season that is. Recently I worked with a client who was buying a house in the Oakland hills. Before it closed escrow, he wanted to get an idea of how much his insurance would cost. The house is on a steep slope, and the area is woodsy, so he was expecting to pay no more than three grand. We ran some scenarios and he looked around at other solutions. The final price:
About $6,000!
And to top it off, many companies flat out refused to even offer him a quote. How can this be?
Now that we are in the fourth year of a drought, insurance companies have gotten skittish about writing homeowner's policies in perceived high-fire zones (which describes much of the state). Houses receive a fireline score, a number that runs from 1 - 30.
How is the score derived?
The score was developed by ISO - that's short for Insurance Services Office. They are an independent company that pulls together data, writes up standard insurance contracts, and files that information with state agencies. Not to get too geeky, but the score is based on three factors: (1) Slope - how steep is the property lot, (2) Fuel - how much combustible material surrounds the house, and (3) Access - how quickly can the fire department get there (how close is the station, what are the roads like etc). Each factor runs from 1 (good) to 5 (yikes!), and the overall formula looks like this:
(Slope x Fuel) + Access
I see this formula and try to imagine the possibilities: A house built into a hillside (5!) that is surrounded by Eucalyptus trees that explode in a fire (5!!) and is only accessible by driving up a 15-mile curvy one-lane dirt road (5!!!!), is probably a thirty. A cinder block house with no trees for miles built next to a fire station is probably a 0. Dismal perhaps, but plenty of parking.
At first glance this seems unfair, especially since a house can have a different score than it's neighbor depending on the slope. But as the summer progresses, it seems even more unusual that we have not had a major catastrophe. Each day for the last month, I receive notices for no less than four current fires, and maybe another four notices where the previous week's fires have been brought under control. Thankfully, these fires have been away from heavily populated areas. Take a look at this handy map of fires in the state:
California General Fire Map.
Or even of this map of fires in the LA region alone:
Fires in the LA region
My client ended up backing away from a house he really loved, but was too expensive to insure. Though the premium is high, he also understood that the risk is very real. Now's he's in negotiation for another house, still in the hills, but with a lower slope. So far the premiums are far more reasonable.
For all your insurance needs, call us at 925-588-3888 or go to my website. And while you're at it, please like us on Facebook.
About $6,000!
And to top it off, many companies flat out refused to even offer him a quote. How can this be?
Now that we are in the fourth year of a drought, insurance companies have gotten skittish about writing homeowner's policies in perceived high-fire zones (which describes much of the state). Houses receive a fireline score, a number that runs from 1 - 30.
How is the score derived?
The score was developed by ISO - that's short for Insurance Services Office. They are an independent company that pulls together data, writes up standard insurance contracts, and files that information with state agencies. Not to get too geeky, but the score is based on three factors: (1) Slope - how steep is the property lot, (2) Fuel - how much combustible material surrounds the house, and (3) Access - how quickly can the fire department get there (how close is the station, what are the roads like etc). Each factor runs from 1 (good) to 5 (yikes!), and the overall formula looks like this:
(Slope x Fuel) + Access
I see this formula and try to imagine the possibilities: A house built into a hillside (5!) that is surrounded by Eucalyptus trees that explode in a fire (5!!) and is only accessible by driving up a 15-mile curvy one-lane dirt road (5!!!!), is probably a thirty. A cinder block house with no trees for miles built next to a fire station is probably a 0. Dismal perhaps, but plenty of parking.
At first glance this seems unfair, especially since a house can have a different score than it's neighbor depending on the slope. But as the summer progresses, it seems even more unusual that we have not had a major catastrophe. Each day for the last month, I receive notices for no less than four current fires, and maybe another four notices where the previous week's fires have been brought under control. Thankfully, these fires have been away from heavily populated areas. Take a look at this handy map of fires in the state:
California General Fire Map.
Or even of this map of fires in the LA region alone:
Fires in the LA region
My client ended up backing away from a house he really loved, but was too expensive to insure. Though the premium is high, he also understood that the risk is very real. Now's he's in negotiation for another house, still in the hills, but with a lower slope. So far the premiums are far more reasonable.
For all your insurance needs, call us at 925-588-3888 or go to my website. And while you're at it, please like us on Facebook.
Wednesday, August 13, 2014
The latest from an insurance agent convention...
This is not insurance policy specific, but I recently heard this story and thought I should pass it along to you:
A lady goes to her doctor. The doctor says, "I'm sorry to tell you this, but you only have two weeks to live."
"Oh no!" she exclaims, "Is there anything I can do?"
The doctor says, "Well, you can marry an insurance agent:..."
"Will that make me live longer?"
"No, but those two weeks will feel a lot longer..." (insert rim shot here)
For all your insurance needs, call us at 925-588-3888 or go to my website:
www.farmersagent.com/mvarhula
Please like us on Facebook:
https://www.facebook.com/pages/Mitchell-Varhula-Agency-Farmers-Insurance/590644470999625
A lady goes to her doctor. The doctor says, "I'm sorry to tell you this, but you only have two weeks to live."
"Oh no!" she exclaims, "Is there anything I can do?"
The doctor says, "Well, you can marry an insurance agent:..."
"Will that make me live longer?"
"No, but those two weeks will feel a lot longer..." (insert rim shot here)
For all your insurance needs, call us at 925-588-3888 or go to my website:
www.farmersagent.com/mvarhula
Please like us on Facebook:
https://www.facebook.com/pages/Mitchell-Varhula-Agency-Farmers-Insurance/590644470999625
Monday, June 30, 2014
All Homeowners policies are not the same
Many homeowners assume that all homeowners insurance is the same. As long as the coverage limits match, a policy or quote comparison is "apples to apples." But homeowners policies differ substantially even though they may appear to be identical. One major difference between homeowners policies is whether coverage is provided on an HO3 or HO5 form.
The HO3 is the most widely available policy form and often meets a lender's minimum coverage requirements. It covers a broad range of property types, but offers a more limited coverage for your personal belongings:
| HO3 | HO5 | ||
| Dwelling Coverage | Open Perils | Open Perils | |
| Contents Coverage | Named Perils | Open Perils |
Open Perils - Insures against all causes of loss that are not specifically excluded
Named Perils - Insures against a list of specified causes of loss
Named Perils - Insures against a list of specified causes of loss
These are the named perils that limit the personal property coverage on a HO3:
- Theft
- Fire or Lightning
- Explosion
- Smoke
- Freezing
- Vehicles
- Falling Objects
- Volcanic Eruption
- Windstorm or Hail
- Riot or Civil Commotion
- Damage caused by Aircraft
- Vandalism or Malicious Mischief
- Damage due to weight of Ice, Snow, or Sleet
- Sudden & Accidental Tearing Apart, Cracking, Burning, or Bulging
- Sudden & Accidental Damage from Artificially Generated Electric Current
- Accidental Discharge or Overflow of Water from Plumbing, Air conditioning etc.
The HO5 Difference
Many coverages that are available only by endorsement on the HO3 are automatically included on the HO5. For example, the HO5 automatically includes replacement cost coverage on contents.
Another great benefit of the HO5 is that you no longer have to prove that the damage to your property was caused by one of the named perils. This can take a lot of the uncertainty and headache out of adjusting a loss. Say a family was away on vacation, and raccoons, after entering the crawl space from an open access door, somehow make their way into the house. While foraging for food and shelter, they proceed to destroy things in the living room and kitchen including cabinets, furniture, and some small appliances. This loss would be fully covered under the homeowners HO5. An HO3 would have had this homeowner paying out of pocket to repair and replace the damage. While this is an unlikely scenario, it illustrates that there are countless, unimaginable ways your personal belongings could be damaged by things other than the named perils.
Because the HO5 provides broader coverage, the underwriting guidelines can be more restrictive. Generally insurance providers limit HO5 coverage to new(er) and/or well cared for homes that are in an area protected by a fire department.
Which should you choose?
Assuming that you qualify for both forms, the HO5 is the form of choice. The HO5 not only provides broader coverage, but can also simplify the claims process. While the initial price tag of the HO5 may be higher than the HO3, the total long run costs of an HO5 are generally lower.
The HO3-HO5 difference is one of many differences you could find between seemingly identical quotes or policies. It's important that you know the differences between good, bad, and average policies. Don't wait until you have a claim to learn about your coverage.
Wednesday, February 5, 2014
Farmers Friendly Review
How do you know if you’re properly covered for homeowners insurance? How much Life insurance¹ should you have? Many consumers find Insurance confusing, but our job is not finished until you fully understand and are comfortable with the coverage you’re paying for. On our first meeting we’ll review your current insurance coverages to determine your level of risk, and from there we can provide you with a personalized quote/quotes to give you the level of service you deserve and need. If you’re not satisfied with the level of service provided, then frankly neither are we.
Located close to the intersection of Highway 24 and Interstate 680 in Walnut Creek, our agency can help you navigate the many options available when choosing Home Insurance, Flood Insurance, Auto Insurance, Classic Car Insurance, Business Insurance, Life Insurance¹ and more. Not only do we cover Walnut Creek, Lafayette, Pleasant Hill and Concord, we also work extensively in Oakland, Berkeley, Albany and Richmond. But we're not limited to those cities - if you're in California, we would like to compete for your insurance business.
Our mission is to help give you piece of mind knowing you’re backed up by a reputable insurance company like Farmers® and that you have an insurance agent to go to that you can trust.
Contact the Mitch Varhula Agency today at: 925-588-3888 or email us! You may also obtain an Auto Insurance or Renters Insurance quote right on my website.
Located close to the intersection of Highway 24 and Interstate 680 in Walnut Creek, our agency can help you navigate the many options available when choosing Home Insurance, Flood Insurance, Auto Insurance, Classic Car Insurance, Business Insurance, Life Insurance¹ and more. Not only do we cover Walnut Creek, Lafayette, Pleasant Hill and Concord, we also work extensively in Oakland, Berkeley, Albany and Richmond. But we're not limited to those cities - if you're in California, we would like to compete for your insurance business.
Our mission is to help give you piece of mind knowing you’re backed up by a reputable insurance company like Farmers® and that you have an insurance agent to go to that you can trust.
Contact the Mitch Varhula Agency today at: 925-588-3888 or email us! You may also obtain an Auto Insurance or Renters Insurance quote right on my website.
Sunday, January 5, 2014
Life Insurance - what's the right choice?
Like so many things in life, the answer to which life insurance is the right one for you...depends.
First - there are two types of life insurance - "Term" and "Perm" (for permanent life insurance).
Term is the easiest to understand. You purchase a set amount of coverage ($300K, $500K, etc) for a limited time period such as 10, 20 or 30 years. As long as you keep current with the payments, the coverage is in place, but at the end of the term that's it. Coverage is over and there is no cash value left.
Perm has a lot more moving parts. It gets it's name because the coverage period for your insurance is permanent; it's for your whole life (technically age 121). Also, the coverage has a cash value component. To explain this, visualize that each month, your premium goes into a bucket. From the bottom of the bucket, a portion of the premium goes to pay for the life insurance component. The rest stays in the bucket and grows tax-deferred. This is your cash-value. From here there are lots of options depending on your needs. You can get whole life which has set payments and a guaranteed rate of return. Or you can opt for a universal life policy which allows for monthly payment flexibility, and if you can tolerate more risk, you can choose a variable universal life policy, which let's you put your cash value money into select mutual funds of your choosing. As that money grows you can access it by making a near interest-free loan to yourself. Whether you repay that loan is up to you, but realize it affects your cash value's growth rate.
Perm is more expensive than term, but has greater flexibility. Many clients choose a combination of both perm and term policies.
This is just a high-level explanation - for more, please call me at (925) 588-3888.
First - there are two types of life insurance - "Term" and "Perm" (for permanent life insurance).
Term is the easiest to understand. You purchase a set amount of coverage ($300K, $500K, etc) for a limited time period such as 10, 20 or 30 years. As long as you keep current with the payments, the coverage is in place, but at the end of the term that's it. Coverage is over and there is no cash value left.
Perm has a lot more moving parts. It gets it's name because the coverage period for your insurance is permanent; it's for your whole life (technically age 121). Also, the coverage has a cash value component. To explain this, visualize that each month, your premium goes into a bucket. From the bottom of the bucket, a portion of the premium goes to pay for the life insurance component. The rest stays in the bucket and grows tax-deferred. This is your cash-value. From here there are lots of options depending on your needs. You can get whole life which has set payments and a guaranteed rate of return. Or you can opt for a universal life policy which allows for monthly payment flexibility, and if you can tolerate more risk, you can choose a variable universal life policy, which let's you put your cash value money into select mutual funds of your choosing. As that money grows you can access it by making a near interest-free loan to yourself. Whether you repay that loan is up to you, but realize it affects your cash value's growth rate.
Perm is more expensive than term, but has greater flexibility. Many clients choose a combination of both perm and term policies.
This is just a high-level explanation - for more, please call me at (925) 588-3888.
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