Top 10 Ways to Prepare for Retirement

Posted on June 26, 2012 by admin

Financial security in retirement doesn’t just happen. It takes planning and commitment and, yes, money.

Facts

Fewer than half of Americans have calculated how much they need to save for retirement.

In 2010, 30 percent of private industry workers with access to a defined contribution plan (such as a 401(k) plan) did not participate.

The average American spends 20 years in retirement.

Putting money away for retirement is a habit we can all live with. Remember…Saving Matters!

1. Start saving, keep saving, and stick to your goals

If you are already saving, whether for retirement or another goal, keep going! You know that saving is a rewarding habit. If you’re not saving, it’s time to get started. Start small if you have to and try to increase the amount you save each month. The sooner you start saving, the more time your money has to grow (see the chart below). Make saving for retirement a priority. Devise a plan, stick to it, and set goals. Remember, it’s never too early or too late to start saving.

2. Know your retirement needs

Retirement is expensive. Experts estimate that you will need about 70 percent of your preretirement income – lower earners, 90 percent or more – to maintain your standard of living when you stop working. Take charge of your financial future. The key to a secure retirement is to plan ahead. Start by requesting Savings Fitness: A Guide to Your Financial Future and, for those near retirement, Taking the Mystery Out of Retirement Planning. (See below to order a copy.)

3. Contribute to your employer’s retirement savings plan

If your employer offers a retirement savings plan, such as a 401(k) plan, sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate. Find out about your plan. For example, how much would you need to contribute to get the full employer contribution and how long would you need to stay in the plan to get that money.

4. Learn about your employer’s pension plan

If your employer has a traditional pension plan, check to see if you are covered by the plan and understand how it works. Ask for an individual benefit statement to see what your benefit is worth. Before you change jobs, find out what will happen to your pension benefit. Learn what benefits you may have from a previous employer. Find out if you will be entitled to benefits from your spouse’s plan. For more information, request What You Should Know about Your Retirement Plan. (See below for more information.)

5. Consider basic investment principles

How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in how much you’ll have saved at retirement. Know how your savings or pension plan is invested. Learn about your plan’s investment options and ask questions. Put your savings in different types of investments. By diversifying this way, you are more likely to reduce risk and improve return. Your investment mix may change over time depending on a number of factors such as your age, goals, and financial circumstances. Financial security and knowledge go hand in hand.

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6. Don’t touch your retirement savings

If you withdraw your retirement savings now, you’ll lose principal and interest and you may lose tax benefits or have to pay withdrawal penalties. If you change jobs, leave your savings invested in your current retirement plan, or roll them over to an IRA or your new employer’s plan.

7. Ask your employer to start a plan

If your employer doesn’t offer a retirement plan, suggest that it start one. There are a number of retirement saving plan options available. Your employer may be able to set up a simplified plan that can help both you and your employer. For more information, request a copy of Choosing a Retirement Solution for Your Small Business. (See below for more information.)

8. Put money into an Individual Retirement Account

You can put up to $5,000 a year into an Individual Retirement Account (IRA); you can contribute even more if you are 50 or older. You can also start with much less. IRAs also provide tax advantages.

When you open an IRA, you have two options – a traditional IRA or a Roth IRA. The tax treatment of your contributions and withdrawals will depend on which option you select. Also, the after-tax value of your withdrawal will depend on inflation and the type of IRA you choose. IRAs can provide an easy way to save. You can set it up so that an amount is automatically deducted from your checking or savings account and deposited in the IRA.

.9. Find out about your Social Security benefits

Social Security pays benefits that are on average equal to about 40 percent of what you earned before retirement. You may be able to estimate your benefit by using the retirement estimator on the Social Security Administration’s website. For more information, visit their website or call 1-800-772-1213.

10. Ask Questions

While these tips are meant to point you in the right direction, you’ll need more information. Read our publications listed below. Talk to your employer, your bank, your union, or a financial adviser. Ask questions and make sure you understand the answers. Get practical advice and act now.

Visit the Employee Benefits Security Administration’s website to view the following publications

Savings Fitness: A Guide to Your Money and Your Financial Future

Taking The Mystery Out Of Retirement Planning

What You Should Know About Your Retirement Plan

Filing a Claim for Your Retirement Benefits

Women and Retirement Savings

Choosing a Retirement Solution for Your Small Business

To order copies call toll free 1-866-444-3272

Copied from the US Government Dept. of Labor website: http://www.dol.gov/ebsa/publications/10_ways_to_prepare.html

For information contact us on our website: http://www.farmersagent.com/ctrowbridge

 

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Insurance and your car Rental?

Posted on June 19, 2012 by admin

I always have a certain discomfort when the agent behind the car rental counter asks me if I want the “Collision Deductible Waiver?”, which covers any damage done to the rental car and typically costs $20-$30 a day. On the one hand, I know my car insurance covers me, and it protects my Liability exposure, and, if you use the same credit card for the reservation as the payment, that can also cover the deductible also.

But, if I dropped collision, or comprehensive coverage from my own insurance then I am also missing that on the rental car, and if I do have an accident and I have the Collision Deductible Waiver then it most likely won’t be reported to my insurance carrier. Something that those with points already with their insurance carrier might want to protect against because of the extra expense additional points would add to my premiums. You also may want to buy supplemental Liability coverage for @$13 day.

I guess the added expense doesn’t make sense if you have a clean driving record and are renting in the US, but if you are driving in another part of the world, where your US insurance will not cover you, even in your own car, you really need to consider adding that protection as a cost of your trip. You should check your policy before any Canada/Mexico vacation where you will be driving to make sure just how far from the US borders your coverage applies.

There are arguments for and against this feature,  so it probably comes down to , “Do you feel lucky?  Well…, do ya?” Or, take the worry out of it, and consider it a cost of the trip. As I say, “Insurance is a cost, until you need it, then it’s a godsend!”

For information contact us on our website: http://www.farmersagent.com/ctrowbridge

 

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Dogs Bite!

Posted on May 17, 2012 by admin

About a year ago my wife broke down and agreed to get a dog for the family. I grew up with two Labrador Mutts and loved them dearly, but had forgotten how enriching it is to have a dog in the house. We  adopted a small Terrier Mutt from the local rescue shelter and with pretensions of graduer decided on “Maximus” as his name. Well, he went from being gated into the kitchen when we left, to the kitchen and the family room, to the run of the house, to building a doggy door from the kitchen to the garage and the garage to the back yard, and now he sleeps with us! He is the sweetest, most affectionate dog, who is so gentle and loving with our daughter, even when she drags him around the back yard jumping him over cross poles like a horse, or gently bopping him  for the most minor infraction. And, he takes every opportunity to cuddle up and lay on us when ever he gets the chance (he is truly a Lap Dog)! When we first got him he was very timid and even cowered from small female dogs, but lately he has grown more confident (despite being nuetered) even barking at the big neighborhood dogs when meeting them on a walk.

Despite all this, I find it a little uncomfortable, that even though I know him to be a gentle and loving animal, when people meet him they sometimes get down in his face and put theirs right up to him to give him a kiss? Then I received this article (below) and thought I would share it, as everyone should be aware of the frequency and cost of dog bites!

LOS ANGELES (AP) — Dog bites man does not get a lot of attention in the news, but it costs insurance companies hundreds of millions in claims every year.

State Farm Insurance, one of the nation’s largest home insurers, paid more than $109 million on about 3,800 dog bite claims nationwide last year, spokesman Eddie Martinez said Wednesday. In 2010, there were about 3,500 claims and $90 million in payouts.
The Insurance Information Institute estimated that nearly $479 million in dog bite claims were paid by all insurance companies in 2011, spokeswoman Loretta Worters said. In 2010, it was $413 million.
It’s no surprise that California — home to more dogs and people than any other state — led the way in 2011.
Martinez says 527 claims were filed in California and victims received $20.3 million, a jump of 31 percent over 2010.
About 4.7 million people are bitten by dogs each year and more than half of the victims are children, the Centers for Disease Control and Prevention said. About 800,000 people seek medical attention for the bites. Less than half of those people require treatment and about 16 die, the agency said.
After children ages 5 to 9 years old, the agency said that seniors represent the largest group at risk, followed by letter carriers.
Nationally, about 5,600 U.S. Postal Service letter carriers were attacked by dogs each of the last two years, said Los Angeles spokesman Richard Maher.
In California, a carrier was attacked in March and died of complications four days later after she suffered a stroke likely caused by trauma, Maher said.
Los Angeles carriers recorded the most bites with 83; San Diego was second with 68; followed by Houston at 47; and Cleveland at 44.
Medical expenses from dog attacks cost the Postal Service just over $1 million last year, officials said.
The third full week each May is National Dog Bite Prevention Week and State Farm, the U.S. Postal Service, the American Veterinary Medical Association and CDCP release dog bite statistics and launch campaigns to promote dog safety.
Despite the large number of attacks on letter carriers, the Postal Service decided to focus on children for their campaign because a child is 900 times more likely to be attacked than a letter carrier, Maher said.
Heredity, training, socialization, health, and the behavior of humans around it can all contribute to a dog’s tendency to bite, Martinez said.
The ASPCA predicts half of all children in the United States will be bitten by a dog before 12. The majority of bites will be from the family dog or the dog of a neighbor or friend.
People across the country own about 78.2 million dogs, according to the American Pet Products Association.
California was tops in the first two categories, then came Illinois, 309 claims, $10 million; Texas, 219 claims, $5.1 million; and Ohio, 215, $5.4 million.
At the bottom of the claims per state list were Maine, New Mexico, Montana, Hawaii and South Dakota, Martinez said.
The average cost per claim nationally in 2011 was $28,799, Martinez said.
California had a per-claim average of $38,500 but New York came in first because the company paid an average of $45,900 per claim there. Michigan was second with an average $38,700 per claim.
In 2010, California led the way with 369 claims and total payouts of $11.3 million. But the average cost per claim in the state is now $ $64,555 .For your reference and to verify the new statistic, please visit:https://worldanimalfoundation.org/advocate/dog-bite-statistics/.
There are ways to help a child avoid dog bites, the ASPCA says.
A youngster should never stare into a dog’s eyes, tease a dog, approach a chained dog, touch an off-leash dog, run or scream if approached by a loose dog, play with a dog while it is eating or touch a dog while it is sleeping. If a loose dog comes close, children should stand very still and be very quiet. Always ask a dog’s owner for permission to pet it and let the dog sniff your closed hand before you start touching it.
Please be aware that no matter how much you trust your dog with your family, they may react differently with strangers! Do not put your face down nears theirs until you are very familiar with that dog!
For information contact us on our website: http://www.farmersagent.com/ctrowbridge
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“Return of Premium” Term Life Insurance is not what it seems!

Posted on January 24, 2012 by admin

The latest hot product in Life insurance is the “Return of Premium” Term Life product. This is where the policy holder gets all their premium payments back if they live through the term of the policy. While this may seem an attractive feature, it does not come without an added cost. These policies are more expensive than a traditional term policy and when you compare the true costs of buying traditional term versus the “Return of Premium” term they don’t seem as attractive as they do at first.
Let’s use some actual numbers I obtained by calling one of those 1-800 CHEAP INSURANCE companies you always hear on the radio and TV. For a healthy 40 year old male, in the Bay Area, a traditional $200,000 30 Year Level Term Policy would run you about $30.63 per month, or $11,026.80 over the 30 years of the policy. For the same amount of coverage in a “Return of Premium” Policy it would run you $61.93 per month, or $22,294.80 over the 30 years. The traditional Term Policy leaves you with no residual value after the term is over, while the “Return of Premium policy would return the $22,294.80 back at the end of the 30 years, assuming you have lived up to the contract and haven’t given them any wiggle room in the contractual terms. Both purchasers in this example have enjoyed the security of knowing that if they had died their family would have had some protection to start over.
The “Return of Premium” would receive back their payments so they could argue that they actually enjoyed that protection for free. But, was it really free? They paid $11,268 more for the privilege of getting their money back after the 30 years, or roughly an additional 98% in cost. This can be called a “forced savings”, but it only equals about a 1.6% return if you were to consider the extra cost recovered was a return on the total cost. The real question is: Could you do better by buying a traditional term policy and investing the difference rather than buying the more expensive “Return of Premium” Policy.
Historically, large cap, blue chip stocks have averaged a little over 9% per year since the Great Depression, including the market performance since the recession that started in 2008. If you were to simply buy a traditional Term policy, and put the premium difference into an Index Fund of the S&P, you would do clearly do better than paying the extra premium incurred in the “Return of Premium” policy. Also, what if the additional cost of the “Return of Premium” policy makes only a smaller, insufficient policy affordable to you? Is that the point of this whole exercise? Sometimes names can be deceiving.

I have to give credit where credit is due! I got most of this information from in an article I read in the Franklin Prosperity Report (Jan. 2012), titled “Return of Premium Life Insurance: Worth the price?” by Joseph Dercole.

For information contact us on our website: http://www.farmersagent.com/ctrowbridge

 

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20 Reasons to own Permanent Life Insurance instead of Term

Posted on October 10, 2011 by admin

The following are 20 Reasons why Permanent Life Insurance is better than Term. From a publication by Crump Life Insurance Services, Inc. Copyright 2011.

1) To insure you have life insurance in place when you die- This means there definately will be resources available for your family. 98% of Term is not in force when its needed. People live through the term, cancel it when times are tough or let it lapse.

2) To insure your survivors can pay your final expenses- to give your family time to grieve, without having to sell assets or spend down bank accounts.

3) To insure your family can pay off a Mortgage-If your home has a mortgage, this relieves your family of that concern

4) To support Children with special needs- supporting children with special needs does not end with your lifetime, it lasts for theirs.

5) To equalize an estate, a business owner may want to leave the business to a child/employee and this will help equalize the inheritance amongst all the children

6) To maximize a Pension- having Life Insurnce in place allows a retiree to max out their Pension, and still have resources available for the surviving spouse.

7) To replace Social Securityat Death- these benefits do not pass onto the decendants surviving children, and Life Insurance can ease that potential loss.

8) To provide creditor protection- Some state statutes protect policy cash values from the claims of creditors.

9) To provide an assett that is not subject to the Alternative Minimum Tax (AMT)-Under current tax law policy Cash Values and Death Benefits are not subject to the AMT.

10) Own an asset that is not a factor in determining eligibility for Financial Aid- as a general rule policy cash values are not a factor in determining eligibility for financial aid for college

11) To provide continuing coverage for those unhealthy individuals, with soon to expire Convertable Term policies- If there policy allows it, converting their term policies to a Permanent one (before they expire) allows continuing coverage for those who have developed health issues since they initially took out the term policy.

12) To pay estate taxes- Clients with large estates may be subject to substantial estate taxes at death. Life Insurance, owned by an ILIT, can escape estate taxation and provide the liquidity needed.

13) To leverage a Gift- Gifts can be leveraged up many times (subject to the annual exclusion, life time gift credit and GST exemption) to purchase a Life Insurance policy outside of the gross estate.

14) To leverage a Charitable Gift- A charity can leverage annual gifts to purchase Life Insurance and obtain a larger donation through the use of Life Insurance.

15)To replace a Charitable Gift- you may wish to leave certain assets to charity, and this could replace these assets for your heirs.

16) To provide for Business continuation- Permanent Life Insurance is typically a better solution for Buy/Sell Agreements  between living partners and the deceased partners heirs, and its cash values can supplement retirement income for a business owner.

17) To provide Executive Benefits- If structured properly the cash values can be used to fund deferred compensation retirement benefits paid to executives, and the death benefits can be used as a cost recovery mechanism for the company.

18) To supplement Retirement – The cash value makes an excellent retirement supplement

19) To replace an estate- some consumers may want to spend down their assets during their lifetime while leaving an inheritance to their heirs. for instance this could replace the value of a house being used in a reverse mortgage to fund retirement.

20) Tax treatment benefits for the cash value- Under current tax law policy cash values grow tax deferred and can be withdrawn up to a cost basis, and above that the balance can be withdrawn without being taxed as a policy loan.

I hope these give you some ideas about the flexibility and usefulness of Permanent Life Insurnace.

For information contact us on our website: http://www.farmersagent.com/ctrowbridge

 

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Important things about Insurance & your Home Improvement Project

Posted on June 25, 2011 by admin

Proof of Insurance

Don’t be afraid to ask the prospective contractor to provide certificates of insurance. This is simply smart business, so the contractor should not be offended when you make such a request.  Having the certificate mailed or emailed directly from the contractor’s insurance agency is the best way to be sure that the insurance certificate is valid and the coverage listed is in force. I the contractor prospect can’t provide you with this information or seems unwilling to do so, move on to the next one.

Worker’s Compensation

As the property owner, you are financially responsible if a worker is injured on the your project and his employer does not have worker’s compensation coverage.  Be sure that any contractor you hire has worker’s compensation if he has employees. If the general contractor has coverage, his insurance will also protect subcontractors’ employees.  the safest policy is to ask the general contractor to furnish proof that his subcontractors have worker’s compensation. This information should be made readily available to you.

General Liability  Ask about the general liability limits the contractor has.  You should require that the limits be a minimum $1,000,000/$2,000,000 with at least a $1,000,000 umbrella or an excess liability policy.  Ask the contractor if he has any claims pending or situations that might develop into claims. Policies today are written with a “per occurrence” limit and a policy year limit. If there are other claims pending or likely to develop you might not have the protection you expect.  Ideally, you want the liability policy to be an “occurrence form”, not a “claims made” form.  The occurrence from gives you the best chance of recouping a future loss.

Also ask if the contractor’s liability policy covers “broad form”, property damage.  The standard liability policy excludes property in the care, custody and control of the insured.  The contractor has custody and control of any party of your home he is working on, so any damage that occurs may not be covered.
“Broad form” coverage takes care of this for you.
For information contact us on our website: http://www.farmersagent.com/ctrowbridge
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Coverdell’s and 529 Plans, Saving for your child’s education!

Posted on June 21, 2011 by admin

The possibility that our children will turn out to be as entrepreneurially brilliant as Bill Gates is over 6 Billion to 1. So, for the rest of us, we had better start planning on how we can help our child achieve success in whatever endeavor they choose to pursue. A good start is universally recognized as having them graduate from College. College graduates generally make more, and have more opportunities available to them than those who just finish high school. But, the cost of sending you child to college has been growing rapidly! If parents want to assist their children with this goal they must start planning for it today, or risk limiting the opportunities for their children.

Paying for a child’s education will be a considerable burden for most families.  Luckily, the government has recognized the importance of this goal, and has provided us with several tools to assist in that effort. You can now put up to $2000 away, every year, in a Coverdell Educational Savings Account. While not tax deductible, the earnings accumulate tax free when used for educational expenses, including grade school and high school, as well as College. Their eligibility is phased out for single taxpayers making between $95,000 to $110,000, and married taxpayers (filing jointly) from $190,000 to $220,000. Contributions must be made before April 15th of 2008, for the 2007 contribution.

In addition, an even more attractive savings vehicle is the 529 College Savings Plan (named after the IRS section in the code that establishes it). There are two types of 529 Plans available in many states, including California:

1) Prepaid tuition plans – allow an individual to prepay a student’s future tuition and fees at today’s rates, and

2) College savings plans – allow individuals to contribute to an account established to pay a student’s qualified higher education expenses at any eligible educational institution.  Mutual Funds are the most commonly used investment vehicle for these plans

529 Plans have several key features that you should be aware of:

First, while contributions to 529 plans are not tax deductible in California, some states do allow tax deductions.  However, in every state, the earnings from 529 plans accumulate, and can be used, tax-free at the federal level, to pay for qualified higher education expenses and programs of any eligible higher education institution.

Second, anyone can contribute to your child’s 529 Plan.  So, Grandparents or any well off family member can contribute. This can be very helpful as they have more disposable income! They can take advantage of up to $12,000 in annual gifting limits without any tax consequences to them.

Third, you can put away up to $320,000 per child here in California, which is good considering that some colleges/universities are charging close to that today for a four year ride, and those born today will face even higher costs for their College education.

And fourth, the Donor maintains control over how the funds are spent. If for some reason the child ends up not going to college, the funds can be spent on someone else’s education, or even withdrawn by the Donor themselves (subject to income tax and a 10% penalty fee on earnings)

Additional considerations in whether to take advantage of a 529 Plan include the possibility that they also may not be the best use of your resources at this moment in time. While everyone is eligible to invest in a 529 Plan, an argument can be made that you should save for retirement first. You do not want to support your children through college only to become a burden to them in your later years.  Your children may be able to get loans, grants or some other kind of student aid to assist them, whereas your retirement will not have that luxury when it comes time. If your child applies for financial aid, the 529 Plan can be used to calculate eligibility, but you can also use Roth, and Traditional IRA’s, to fund college education (income taxes may apply). And finally, there is a school of thought that some children will not appreciate the money spent on an education unless they are required to contribute to it also, by working their way through college.

But, all that being said, if your retirement plan is in place, this could be an important and efficient use of your investment capital in meeting this goal for your children.  And remember, generally, something is better than nothing.  Some plans can be started with as little as $50 a month.  Planning for this expense, will benefit your children, and subsequently your grandchildren

For more information contact us on our website: http://www.farmersagent.com/ctrowbridge, or call me at 650-FARMERS!

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Mortgage Protection Insurance

Posted on April 22, 2011 by admin

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!  For a free quote contact us on our website: http://www.farmersagent.com/ctrowbridge

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Benefits And Pitfalls of Renting your Home!

Posted on April 15, 2011 by admin

If you are moving from a home that you have lived in  you may want to consider the benefits of renting your property, rather than selling it.  Of course, that precludes your needing the profit to come up with your down payment for the new residence, but if you don’t need that, then renting may be a viable financial strategy!

First, renting your home will provide you with largely sheltered income due to the write offs of expenses and depreciation. And its been said, its not how much you make, but how much you keep that is important”. Don’t be swayed by the naysayers who point to some of the difficulties in being a landlord. While obviously not every wealthy person got there through Real Estate, most wealthy people I know have some investments in property!

You also get the advantage of it being a great rental market in the Bay Area right now. All the people who have lost their homes have to live somewhere and they are wiling to pay substantial rents for quality housing! By substantial I am talking about several thousands of dollars a month, enough to cover many 8-10 year old mortgages, and perhaps the taxes and insurance to boot!

And if you might foresee moving back to this area in a few years you would have housing available and not have to purchase a home at the new higher prices!

You also get to ride out this recession a little longer and if you do eventually want to sell you won’t have to accept the lower prices most homes are now commanding.

But, that being said there are also some serious pitfalls to renting your home. Your tenants may not take as good care of your property as your would. The wear and tear they put on the property will need to be repaired. Or, on the flip side, if you do not rent it it will be sitting idly while you have to continue to pay its mortgage, along with the cost of your new residence.

The tenants and/or their guests could come after you should they suffer a loss of personal property or bodily injury which could in some fashion be attributed to your ownership of the property.

There are no guarantees and your price could actually go lower if the economy gets worse. And if you do have substantial appreciation, and  you rent for longer than 3 years after you have moved out, you may loose the $500,000 tax break Homeowners enjoy. Make sure you consult an experienced accountant so you know what you are doing?

And finally, you would not have the equity available to invest in other property, which may be even more attractive than your home?

Both scenarios have their pros and cons. If you decide to rent be sure to use a qualified property manager to check out the prospective tenants ability to pay the rent on time, and check their references to minimize the possibility they would disrespect your property. Also, if a pipe breaks at 10:30 PM on a Saturday evening the tenants will be calling them, not you! And for 5-6% of the rent, that’s a price well worth paying!

Corrin Trowbridge is a Farmers insurance agent in San Bruno, CA  and he can be reached at 650-FARMERS, or www.trowbridgeins.com

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Earthquakes Happen!

Posted on March 14, 2011 by admin

This is an edited version of an article I wrote last year about Earthquakes….

Almost weekly Californians experience small Earthquakes that remind us of the reality of where we live.  Yet 88% of Californians do not carry Earthquake Insurance.  This is particularly ironic considering our Home, for most or us, is our largest asset.  Buying auto, homeowners and life insurance is considered a normal part of our insurance portfolio, yet most of us consider it an acceptable risk to leave our largest asset unprotected from this inevitable peril.  The USGS has predicted an 80% chance of a 6.0 or larger earthquake will hit northern California within the next 30 years, or for most of us, sometime in our lifetime. There is a 60% chance of that Earthquake happening in the Bay Area. It’s not IF, but WHEN the big one will happen! And lo and behold, on August 24th, 2014, we had a 6.0 in Napa! But… Is that the one? After that 9.0 in Japan last year, this seems mild in comparison.

Regardless, what would happen if a major Earthquake occurs and you do not have earthquake coverage? Many believe the government will assist those devastated by this eventuality. But Federal disaster relief has historically been to offer low interest SBA loans to eligible homeowner’s and businesses, to repair or replace damaged property. This is additional debt that you will be adding to your current mortgage which you are still be responsible for. The maximum SBA personal property loan is $40,000 and the maximum SBA real property loan for primary home repair is $200,000. FEMA disaster grants are available to those who do not qualify for a loan, but the average grant is less than $15,000, and the maximum is $26,200. Would that rebuild your home in the Bay Area? It can be argued that it is even more important for those with less resources to invest in Earthquake Insurance.

Along with your earthquake kit, (which should include camping gear, water, food and cash, all of which may be difficult to access if the big one hits); you should give strong consideration to adding an Earthquake policy to your Insurance portfolio. As recent events have served to remind us, we live in an area that has seen, and will see again, this type of calamity.  It’s a wise investment in your peace of mind.

From the California Eathquake Authority-03/14/2011

The tragic tsunamis and Magnitude 8.9 earthquake that have struck Japan – the fifth largest quake in the world since 1900 – are a stark reminder that earthquakes can happen any time and it’s essential to prepare, according to the California Earthquake Authority. The CEA said it’s also important to remember not just to prepare for the quake, but to also prepare for what happens after the shocks.

“Preparing for earthquakes is critical, not just in California but in all the other seismic regions throughout the United States,” CEA CEO Glenn Pomeroy said. “The simple truth is that our country is not adequately prepared for the destruction – and financial devastation – from the “Big One” that strikes closer to home.”
California houses two-thirds of the nation’s earthquake risk,with most residents living within 30 miles of a major fault. But just 12 percent of homes with fire insurance also have earthquake coverage. “The devastating earthquakes in Haiti, Chile, Mexico, New Zealand – and now Japan – remind us that earthquakes will strike California. It’s true what experts say, that it is not a matter of ‘if,’ it is a matter of ‘when,’” Pomeroy said.
“The bottom line is that it’s very hard to imagine how a community would recover from a massive quake, when nearly all the damaged homes are completely uninsured for the loss,” Pomeroy added. “We must do more to prepare for the day when a massive earthquake will strike the U.S., whether in California or some other part of the country.”
Pomeroy sees Christchurch, New Zealand, as a community better prepared for the two big earthquakes that recently rocked that region. Almost everyone in that country has earthquake insurance on their home, he said. “Because of this, Christchurch will recover despite thousands of houses being destroyed in recent months.”
In California, a homeowners policy covers fire loss but doesn’t cover earthquake damage — a separate policy is required. Without earthquake insurance , a California homeowner is out of pocket the full cost of fixing their home. And they’ll continue making mortgage payments while also paying the cost of living and eating elsewhere while their home is repaired.
Earthquake insurance can ease that burden and give Californians the strength to rebuild, Pomeroy said. With nearly $10 billion in claim-paying power, the CEA could cover all of its claims if the earthquakes in San Francisco (1906), Loma Prieta (1989) and Northridge (1994) all occurred today. The CEA is not affected by the state budget, and the state can’t take CEA funds to shore up other deficits, he added.
Source: CEA
As I was saying…. Its not a matter of IF, but a matter of WHEN it is going to hit us? What are you doing about it?  For a free quote contact us on our website: http://www.farmersagent.com/ctrowbridge

ARE YOU READY FOR THE BIG ONE! SF EXAMINER 4/3/11

If you can’t go home, you’ll need “go bags” with emergency supplies. Put one in your car, and leave one at work.  Here are some supplies the SF Dept of Emergency Management suggest you have in these bags:

Food & Water (as much as you can practically carry)

First Aid Kit

Portable radio (extra batteries0

Dust mask

Five Day supply of medications you take regularly

Cash – in small denominations

Toilet Paper

Change of Clothing

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