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Hurricane Season-Here’s What Your Insurance Won’t Cover for Hurricanes

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Homeowners Insurance Won't Cover for Hurricanes

 

Hurricane season is currently well underway. While most people don’t want to think about a hurricane hitting their home.  If you live in certain areas of the country, the possibility certainly exists. That’s why having the right kind of insurance coverage is so critical. Without it, you may not have the proper level of protection if your house ends up in the path of a hurricane. If you are wondering what your homeowners insurance won’t cover for hurricanes. Here’s a breakdown based on insurance type.

What Typical Homeowners Insurance Won’t Cover For Hurricanes

While homeowners insurance can be fairly comprehensive, it does have limits. Certain types of damage are often excluded if you have a traditional homeowners insurance policy.

In many cases, hurricanes aren’t explicitly listed as non-covered events. However, the kinds of damage hurricanes often cause normally are listed as excluded.

For example, water damage caused by storm surges and floods isn’t covered by the vast majority of traditional policies. If you live in a hurricane-prone area, some forms of wind damage might also be excluded. In both of those cases, you may need supplemental policies for flood and wind damage to secure the proper coverage.

Additionally, sewer backups related to a hurricane aren’t usually covered events. In fact, you may have to have both flood insurance and sewer backup coverage to ensure you have all of the protection you need.

Finally, if you incur expenses during an evacuation, such as costs associated with temporary lodging, that isn’t covered by most traditional homeowners insurance policies. However, if you come back to find that your house is now unlivable. You may have some coverage that can offset any temporary housing costs.

Dealing with Hurricane Deductibles

It’s important to note that if you do have a policy that covers hurricane-related damage.  You may be subject to a hurricane deductible. A hurricane deductible is similar to a typical one. Since it outlines the amount you are responsible for paying to address the resulting damage.

However, hurricane deductibles are higher than your typical deductible. Additionally, they only apply under specific circumstances. Usually, a triggering event has to occur. For example, if a hurricane warning is issued by the National Weather Service, that may enable insurers to require hurricane deductibles.

Whether you may be subject to a hurricane deductible depends on where you live. They are only a factor if you reside in one of the areas that allow them. Currently, those locations include:

  • Alabama
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Mississippi
  • New Jersey
  • New York
  • North Carolina
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Texas
  • Virginia
  • Washington, DC

Additionally, the amount of a hurricane deductible can vary. Typically, it’s based both on state law and the value of your covered property. It could be as little as 1 percent of your home’s value. On the other hand, it could be as high as 10 percent. This depends on applicable laws and what’s in your policy.

Addressing Supplemental Coverage

As mentioned above, certain kinds of hurricane-related damage aren’t usually covered by basic homeowners insurance policies. However, if you have the right supplemental policies or riders. You may have all of the coverage you need.

If you want reasonably comprehensive coverage for all kinds of damage a hurricane can cause. You may need the following extra policies:

  • Flood Insurance
  • Wind Insurance
  • Sewer Backup Insurance

Typically, by adding those three kinds of coverage, you can address most hurricane-related damage. However, as with all insurance policies. You’ll need to review the details to confirm what is and isn’t covered. Even those policies or riders can have exclusions. So you want to read through the policy carefully to make sure you have everything you need.

What Typical Renters Insurance Doesn’t Cover

Renters have a different kind of insurance coverage than homeowners. With a renters insurance policy, there’s never any coverage for the building’s physical structure. That’s because the renter doesn’t own the building.

However, like homeowners insurance policies, renters insurance coverage does have limitations. In most cases, damage caused by floods created by hurricanes isn’t a part of a typical renters insurance policy. Instead, the renter would need a separate flood insurance policy or a rider that addresses that type of water-related damage.

If you have a basic renters policy. Adding flood insurance or an appropriate rider may be enough. However, you’ll want to review the policy details to confirm.

Additionally, it’s important to note that renters aren’t typically subject to hurricane deductibles. As a result, if you owe a deductible. It’s typically the standard one in the policy.

What Vehicle Insurance Doesn’t Cover

Both homeowners and renters insurance policies don’t extend coverage to your vehicle. Regardless of whether the damage is related to a hurricane. As a result, you need a separate auto policy.

Unlike homeowners and renters insurance, comprehensive vehicle policies do provide hurricane-related coverage. With comprehensive coverage, damage that isn’t related to a collision is covered. Which includes damage caused by severe weather.

However, if you only have liability coverage on your vehicle. Damage related to a hurricane isn’t a part of it. In that case, you would have to handle any related expenses yourself.

Can you think of anything your homeowners insurance won’t cover for hurricanes? Share your thoughts in the comments below.

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Every Homeowner Should Have Flood Insurance-Here’s Why!

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every homeowner should have flood insurance

No homeowner imagines being the victim of a natural disaster. A serious flood can be devastating. Floods can damage your home and personal property with surprising speed. However, not having flood insurance can make the entire situation worse. Without the right coverage, your losses may not be covered. If you’re wondering why every homeowner should have flood insurance. Here’s what you need to know.

What Flood Insurance Is and What It Covers

Flood insurance is a type of coverage that is separate from a traditional homeowners insurance policy. Anyone who lives in an area with flood risk can potentially purchase this supplemental policy.

It specifically focuses on flood-related damage caused by natural disasters, as well as other causes. Usually, flood insurance covers damage in specific categories.

First, flood insurance will commonly handle structural damage to your home. This includes the actual building, as well as some related systems, like electrical, plumbing, and HVAC.

Second, flood insurance may cover your personal property. This includes damaged furniture that isn’t salvageable and similar household items, as well as clothing. However, this isn’t always part of the starting flood insurance policy, so you may need to request it be added if you want this protection.

Now, certain high-value items may not be fully covered by base flood insurance. This can include art, antiques, jewelry, firearms, or electronics above a certain value. In those cases, you may need flood insurance riders to add that coverage, just as you do with traditional homeowners policies.

Additionally, it’s important to note that every policy is different. Before you make assumptions about your coverage, review your flood insurance policy carefully. Ask questions about what is and isn’t protected, and request add-ons if needed to provide you with the level of protection you’re after.

Why Homeowners Need Flood Insurance

Typically, flood insurance fills a gap that many homeowners have in the primary policy. While homeowners insurance does cover some types of water damage under the hazard insurance segment of their policy, flooding events usually aren’t classified as the covered kind of hazard. As a result, damage caused by a flood may not be covered, leaving you without financial support to repair your home or replace your personal property.

Essentially, if you don’t have flood insurance, you’ll have to handle all related costs out of pocket. For most homeowners, this simply isn’t feasible. Flood repairs to a structure can be incredibly costly. Similarly, replacing all of your damaged personal belongings could take thousands and thousands of dollars.

It’s also important to note that homeowners with mortgages who live in higher-risk areas may be required by their lender to have flood insurance. This is especially true for anyone who uses government-backed financing sources, as there are federal laws requiring the coverage for properties they finance in high-risk zones. However, other lenders often follow suit, even if there isn’t a legal requirement.

The mandate for flood insurance is similar to them requiring homeowners insurance in general. It ensures the property is protected should a flood event occur and, since the lender is technically the owner until you pay off the mortgage, they have a vested interest in protecting its value.

How to Find Out if You’re in a High-Risk Flood Area

If you want to see if a property is in a high-risk flood area, the simplest way is to use the Federal Emergency Management Agency (FEMA) Flood Map Service Center. Simply enter your address into the search bar, and the site will display a map that identifies your home’s risk level.

You may be able to turn to other state and local resources as well. State emergency management agencies may have flood maps, for example, so they can be worth checking if you find the FEMA results lacking.

Should Low-Risk Property Owners Skip Flood Insurance?

No, homeowners in low-risk areas shouldn’t skip flood insurance. Even if you live in a low-risk area, going without flood insurance means you aren’t protected should the unexpected occur.

Low-risk doesn’t mean risk-free. Many natural events are unprecedented. But even if they weren’t deemed likely, your base homeowners policy won’t cover the related damage if it is excluded in your policy.

Additionally, risk levels can change over time. An area that wasn’t previously flood-prone can suddenly become so for a variety of reasons. Climate change, land development, and similar shifts can alter water flow through regions, turning areas that previously didn’t experience flooding into moderate or high-risk areas.

Where to Get Flood Insurance

If you need flood insurance, you can call your homeowners insurance company to see if they offer it. Some insurers have flood insurance riders, while others may require a separate policy for that specific kind of coverage.

However, not all insurance companies offer flood insurance. If that’s the case, you may not be able to secure flood insurance through your homeowners policy provider. Instead, you’ll turn to the National Flood Insurance Program, a system run by FEMA, that can help you find a provider that covers homeowners in your area.

Do you think every homeowner should have flood insurance?  Have you decided to risk it and go without flood insurance? Has flood insurance ever saved you from financial hardship? Share your thoughts in the comments below.

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How Much Cash Is Needed to Start a Pawnshop?

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How Much Cash Is Needed to Start a Pawnshop

So you want to start a pawnshop. Where do you start? What do you buy? How much is this all going to cost?

A pawn shop can be a very cash-positive business. While doing research for this post, I stumbled onto a Quora thread that showcased how much money can be made with such an operation. The profits ranged from $30,000 per year to $60,000 per month.

But, you have to get started. In today’s post, we’ll highlight what you need and what it’s going to cost.

What do pawn shops do?

First off, we have to talk about what a pawnshop actually does. Pawnshops buy, sell, and trade items. These items can come from the owner’s personal collection, something they acquired via purchase, or something they acquired via loan collateral.

When someone comes to a pawn shop to borrow money, they have to bring something of value for collateral. When the pawnshop lends money to this individual, they retain that valuable item until the principal (plus interest) is repaid. If they fail to repay, the pawnshop keeps the item.

Legal and location

There are many things you need to obtain when you start a pawn shop.

You need to take care of the legal requirements first. This includes licenses, articles of incorporation for your business entity, and permits.

Licenses include a pawnbroker’s license, precious metal dealer license, secondhand dealer license, and Federal Firearms License (if you plan on selling firearms) from the ATF.

The next thing you need is space. Where you set up shop is an important decision. The right location can bring in a lot of traffic and improve your earning potential. However, the right location comes at a cost.

Areas with high foot traffic cost more. Often, pawnshops will choose a space that’s close to a popular area, far enough away that it’s not too expensive, but close enough to make it convenient for the consumer.

Assets

There’s a minimum asset requirement needed to open. That number depends on the municipality, state, and country you plan on setting up shop in. For example, Texas has a $150,000 minimum requirement.

What do you need?

After you have all of the proper licenses and permits and pick where you’ll operate, you need to buy things to be operational.

These items include a computer (computer system/network), cash register, signs, equipment to display your products, record keeping, insurance, lockable cases, and a state-of-the-art security system.

What you’ll also need is an adequate amount of capital to purchase more inventory and lend money to consumers.

What’s going to cost

Depending on the size of your pawnshop and the anticipated foot traffic, your start-up costs will vary. If you’re a larger shop with a high probability of having a lot of visitors/customers, your starting capital could be between $50,000 and $75,000. A smaller shop with lower projected traffic can get by with $15,000.

Last bit of advice

When you start a pawnshop, you need to refine and learn some new skills. You have to educate yourself on how to assess the value of goods so you can acquire sellable items, but not at a cost that eats into your profit margin.

Also, you have to come up with a business plan. What interest rate will you charge on your loans? How much will you mark up the items you sell? How much are you willing to pay for inventory?

All of these questions need answers. Keep in mind, that this planning process should take place prior to buying the necessary licenses and other items to get the business started.

Related reading:

3 Ways to Get Financing for your Small Business

4 Ways to Use Business Loans

Some Often Overlooked Tax Deductions for Business Owners

Business Retirement Plan Guide

 

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Why Understanding Your Paycheck Stub Is Important

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Understanding your paycheck stub is essential. Your paycheck stub is included when you get paid. Whether you do direct deposit or get paper checks, the pay stub will show important information about your pay.

There are several key pieces to the paycheck stub – gross earnings, taxes, deductions, and net earnings. There are also other, seemingly, unimportant things on your paycheck. The information included on a paycheck stub include:

  • Hours works
  • Wages earned – gross and net
  • Overtime
  • Benefits – i.e. health insurance premium payment, retirement plan contributions
  • Taxes – federal, state, fica (social security 6.2, medicare 1.45, and .9 surtax if you earn over $200,000
  • Year to date info – hours, wages, taxes, benefits, etc.\
  • Personal information – name, address, social security number
  • Date of pay period
  • Pay rate
  • PTO, sick days, vacation days

Why is understanding your paycheck sub so important?

A pay stub is a way of keeping accurate records. It shows what employees worked, what they were paid, what taxes were taken out, retirement contributions, etc.

Because it’s your responsibility to report and address discrepancies. If you think you got paid less than you were supposed to or worked more than what’s reported, you need to bring that up. If your deductions (retirement plan contributions, taxes, health insurance premiums) appear to be less or more than you assumed, you need to bring that up.

Why are those things important?

  • What you earn is what allows you to afford to live. If you worked more or worked overtime, and it wasn’t reported correctly, your paycheck can suffer.
  • Taxes are incredibly important – if you expect to get money back on your tax return, but come to find out they weren’t withholding enough, you can end up owing instead. Your withholdings are very important to understand.
  • Health insurance premiums – if you’re not paying enough, your policy can cancel due to non-payment. What happens then? You go to the doctor and pay through the nose because you don’t have coverage?
  • Retirement plan contributions – If they “contribute” too much, you will have less on your check. If they “contribute” too little, your nest egg will suffer.

Paycheck stubs are incredibly important. They help you and your employer keep track of pertinent information, like taxes, health insurance premiums, retirement plan contributions, and your salary. Make sure you understand it and make sure you address any sort of discrepancy. That’s your responsibility.

Related reading:

Paycheck Stubs

Three Accounting Tools Every Small Business Needs

Does Health Insurance Affect Your Taxes

Is Long Term Disability Insurance a Good Buy?

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Is Long Term Disability Insurance a Good Buy?

Most professionals spend time planning for the future. The issue is, not everyone considers what they would do if they were suddenly unable to work. Having your income disappear due to a disability could be earth-shattering. As a result, many begin to explore their long-term disability (LTD) insurance options. But figuring out whether LTD insurance is a good buy can be challenging. If you want to see whether securing a policy is a smart move. Here’s what you need to know.

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Here’s What Kinds of Deaths Are Not Covered by Term Insurance

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Here's What Kinds of Death Are Not Covered by Term Insurance

Term life insurance can be a valuable tool for protecting your family’s financial well-being. Especially, in the case of the primary or secondary breadwinner’s death. However, term insurance doesn’t cover everything. The answer to the question, “What kind of deaths are not covered in term insurance?” is surprisingly long. If you want to know what the coverage excludes. Here’s a look at the types of deaths that don’t qualify for a term life insurance payout.

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How Can Disability Insurance Help? All You Need To Know

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You may have got insurance for your home, car or health because this is something that everyone does. But have you thought about insuring your ability to make a living? Probably not, even though you will now realize that it matters the most! Getting disability insurance is a smart move in this context because it pays up a portion of your income if you cannot work for a prolonged period due to an injury, illness or workplace accident. In fact, anyone who relies on a paycheck and has dependents to support should absolutely have this coverage. Here are some facts that you need to know about disability insurance.

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How To Claim Insurance For Wrongful Death

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Losing a loved one is traumatic in itself, but it can be excruciating in case of unexpected or wrongful death. While it can leave you scarred for life, you may also face financial setbacks when a family member dies in an accident or a situation that could be avoided. The bereaved family has a right to approach the insurance company and claim financial compensation for the wrongful death of their loved one in such an event. However, it is better to know the law well enough before you file a wrongful death claim because it keeps you one step ahead of the insurance company. Here are some facts that you need to be aware about.

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Do I Really Need Disability Insurance?

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For most Americans, saving money is a priority. Unless you bring in an exceedingly high income –– or you have your priorities greatly out of whack –– chances are you think about ways to cut down on expenses and save yourself some cash from time to time. Unfortunately, young people in particular are prone cutting or omitting vital services from their budget. Consider disability insurance: it’s likely few people in their 20s or early 30s contemplate the possibility of suffering a debilitating setback. As such, it’s also probable that a great deal don’t bother applying for disability insurance coverage, or if they do, they don’t prioritize it. This oversight could prove extremely costly, though. For evidence to that point, here are three reasons why you should rethink disability insurance today:

Time is a Factor

As with just about any insurance program, the sooner you enter into it, the lower you can expect your rates to be. True, every case is unique, but in general younger people will pay lower premiums than their older counterparts. This is why it’s essential for young professionals to look into disability insurance programs now and to demonstrate a modicum of foresight. If you plan on starting a family in the future, signing up for disability insurance now will guarantee you cover yourself in times of need and lock in the lowest rate possible. Sitting around and waiting will only end up costing you in the end –– one way or another.

“Disability” is a Fluid Term

You may be wondering: if I don’t work in a high-risk work environment, why do I need to invest in disability insurance? It’s a good question, to be fair. And the best answer is the fact that “disabled” means a great deal more than most people realize ––  since different jobs require different levels of physical involvement. So what qualifies as “disabled” for one profession, might not for another. Think about doctors who utilize intricate equipment to perform surgery. If they then develop severe arthritis in their hands, they become unable to perform their duties as a result of physical disability. That’s why physician disability insurance is distinct from disability insurance for teachers, for example.

The Worst-Case Scenario

Of course, the most obvious reason why everyone should set aside some capital for disability insurance is the fact that the worst-case scenario without it hardly bears consideration. Indeed, if a person becomes physically unable to perform their job, it can then be extremely difficult –– if not impossible –– to support themselves. And that doesn’t even take into account the possibility of shouldering family-based financial burdens. Regardless of how substantial your emergency fund may be, it’s unwise to overlook disability insurance. In reality, paying a regular rate for disability insurance is a paltry amount when compared with the benefits it could provide one day. It’s never fun to think about calamity, but it’s irresponsible not to plan for it.

How does Investment Strategy Change with Age?

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As we all know, as we age and our lives change. Our financial responsibilities and investment strategies change along with it.

In most cases, there are two truths to abide by. You have saved as much as you can and invest according to your risk tolerance, time horizon, and goals.

But what else is there? How do my financial life and my investment strategy change with time?

Starting career

Either you are just out of school or have been in the workforce for a few years. Regardless of which path you came from, there are two things on your list. Get rid of debt, or at least get it under control, and save for retirement.

There are several ways to plan for debt repayment.

  • Debt Snowball
  • Debt Avalanche
  • Balance transfers (credit cards)
  • Personal Loan (loan consolidation)
  • Refinance (student loans)

Check out this post on paying off your debt, here.

Step two is saving for retirement. If the company you work for offers a retirement plan, sign up for it. Max out your contributions if you can, but at the very least, contribute enough to get the employer match (if it’s offered).

Also, open a Roth IRA. If you have a little extra, contribute some to a Roth IRA in addition to your workplace plan.

Your investments. Time is your best friend at this point. Most of your investment allocation should be focused towards growth. Don’t put all of your eggs in one basket, diversify among stocks and bonds.

Again, the majority (at least 70%) of your portfolio should be in stocks, in some form or another.

Starting family

If you’re like the average American, your family starts to form around your 30th birthday. Hopefully, you’ve got a good head start on paying down your debt and saving for your retirement. Continue on that path.

With a family, comes saving for your kid’s college education, as well as other expenses (house, car, etc.). Contribute a little every month to a 529 College Savings Plan. The funds within this account can be invested aggressively, similar to your allocation in your twenties.

Your retirement savings is still in a good spot. Similar to your twenties, regarding the stock and bond allocation.

One last thing, get some disability and life insurance. If you have people that count on you, you need to protect them.

High earning years

More than likely, this will be your forties and fifties. At this point in your life, the average American is in their peak earning years, so take advantage of that and increase your retirement savings.

This will also be the time that your kids either go off to college or enter the workforce. Congratulations (kind of) you are empty nesters. You no longer have a college education to save for. More can go towards your retirement.

More than likely, though, you will have miscellaneous expenses from your kids that you will continue to pay for.

Your investment strategy will change slightly. You are getting closer to retirement so it’s time to start protecting what you’ve saved. A little less in stocks and a little more in bonds. Think 60/40 or 50/50.

Near retirement

You are in the home stretch! At this point, your debts (including your house, hopefully) should be paid off. All assets and your retirement savings should be looking healthy.

Your investment allocation will be similar to the last section. Definitely 50/50 if not 40/60, stocks to bonds.

Retirement

Congratulations, you’ve made it to your retirement. This can be liberating for some, but for others, this is an emotional challenge.

You’ve spent the last 40 or so years saving for retirement and now you are expected to start spending it. This is very tough for a lot of people.

From my experience and in my opinion, you should retain some sort of activity. Something that gets you out of the house, something that forces you to socialize, and something that makes you use your brain.

Staying social and sharp mentally could add some extra time to your life.

Your investments should be conservative. At least 40/60, but the more conservative the better. And it’s usually not a bad idea to keep some of your savings in cash, for emergencies such as health expenses (which will certainly go up at this point).

You don’t have many or any, more chances to earn more money, so it’s very important that you protect what you’ve saved.

Conclusion

The above information can be very useful to the average person. Paying off your debt and making your retirement savings a priority is very important.

Unfortunately, there is a retirement savings crisis in America. People aren’t saving nearly enough for retirement. They are counting on other sources, like Social Security or pensions to fund their retirement.

This isn’t enough. You won’t receive enough from Social Security to support yourself and pensions are few and far between, nowadays. We all need to do a better job of saving.

This article was created for informational purposes only. The above items are not to be taken for personal financial advice. Please consult with a professional about your personal situation.

To learn more about retirement savings and investing, and for our disclosures, visit our website: www.crgfinancialservices.com.

 

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