Estate Liquidation – Pros and Cons of Tag Sales and Auctions

Executors faced with liquidating an estate’s personal property will quickly find that it is their most time-consuming administrative task. Executors who don’t perform their duties could be removed from office by the Probate Judge, so it is important that they single-mindedly pursue disposing of the estate’s property so that the bills can be paid and the estate settled.

What you’ll get from this article

Executors have three main liquidation options, and I will discuss the pros and cons of each in this article. Any company chosen to liquidate an estate should be vetted; I will tell you how to do this conscientiously, and I will also propose the best liquidation method. I assume that the twin liquidation goals of the Executor are to achieve the greatest cash benefit to the estate and to leave the house broom-clean so that it can be sold. Of course, there are ways to maximize the cash return for each type of sale, and I’ll tell you what they are.

Investing ten minutes into reading this article could save an Executor many hours of work.

Option 1: Have An Auction On-Site

Benefits of an On-Site Auction:

Auctioneers are very competitive lot. It should be an easy job for an executor to find an auction company willing to take the estate liquidation job, and commissions will be competitive. A strong argument for an on-site estate auction is that when the auction is over, there will be very little clean-up. If you like, the real estate can be auctioned as well, since auctioneers are licensed to auction the real estate and other titled property. In one day, the house, car, boat, RV, and all the household goods could be sold.

Negatives for an On-Site Auction:

Auctions are driven by competitive bidding. Consequently, it is necessary to have a lot of people at your auction. Big crowds require nice weather, plenty of parking, bathrooms, food, and refreshments to keep the people from leaving. Online bidding can be included to boost attendance, but it is the local crowd that builds excitement and drives the prices up. To attract a crowd, the estate must have collectibles and other quality goods. Run-of-the-mill goods that can be purchased at the local thrift store are insufficient to attract a good auction crowd.

Suggestions for an On-Site Auction:

If your estate has many large collectibles, like antique furniture or a piano, an on-site auction may be your best choice. Summer weekends, when the weather is warm and dry, are the best times to hold an on-site estate auction. The auction company you hire should be equipped with sound equipment, canopy tents, display tables, and plenty of help for fast checkout.

Option 2: Auction Gallery Consignment

Pros for Auction Gallery Consignment

If weather is a concern, you may want to consider consigning your items to an Auction Gallery. Consignments at an Auction Gallery are grouped according to the type of item in order to maximize turnout and get the best prices from their collectors. For example, there may be an auction dedicated to art and home decor, or musical instruments, or ceramics.

Cons for Auction Gallery Consignment

There are quite a few reasons for not consigning to an Auction Gallery. For starters, many Auction Galleries will take only the best items from the estate. Ninety percent of an estate is made up of items that are of little interest to the auctioneer, which leaves the Executor to deal with the remaining ninety percent of the estate property. Lastly, when an Auction Gallery spreads the merchandise out over several auctions, it can take months for all the items to sell, delaying the closing of the estate.

Tips for Auction Gallery Consignment

Before you consign to an Auction Gallery, ask the auctioneer how your merchandise will be distributed between auctions; get a guaranteed settlement date. You will also need a plan for disposing of all the remaining estate merchandise.

Option 3: Tag Sale On-Site

Pros for Tag Sale On-Site

Tag sales have several advantages over an on-site auction. For those that are not familiar with tag sales, the sale is held on the premises and in the house. Companies that specialize in tag sales are less common than auction companies. At a tag sale, everything in the house is priced, much like at a yard sale. Shoppers will browse through the house, and choose the items they wish to buy. When buyers arrive at the house, they take a number, and are admitted into the house when their number is called. Tag sales usually start on Friday evening and end Sunday evening, so there is no need to provide food or bathroom facilities. Tag sales can be held rain or shine and in any season

Cons for Tag Sale On-Site

The biggest disadvantage in hiring a tag sale company is that tag sale companies are not held to the same legal standards to which auction companies are held. Auctioneers and Realtors are bound by law to the estate by a fiduciary bond. A fiduciary relationship binds the agent by law to act at all times in the best interest of the estate. Fiduciaries are licensed by the state, must pass tests, be bonded, must hold all funds in an escrow account until distributed, and has to settle the account with the estate within a specific time frame.

Fiduciaries must also keep accurate records and follow certain protocols. Failure of a fiduciary to follow procedures can result in fines or loss of license. Tag sale companies are not held to the same legal standards, although they certainly have a moral obligation to the estate. Tag sale companies can handle the details of the sale and the distribution of the money any way they see fit.

Another problem with tag sales is that typically there is merchandise left over after the sale. Often, there is a LOT of merchandise left over. When a lot of items are left over, the executor then has a clean-out problem, because the house must be left “broom-clean” before a realtor will list the house for sale. Unlike an auction, where prices go up with each bid, tag sale shoppers want to negotiate a lower price for everything, which is not only time consuming but costs the estate money.

Tips for Tag Sale On-Site

When working with a tag sale company, read the contract thoroughly, make sure settlement dealines are included. the operator should have a solid pricing plan, adequate staff, and a solid track record.

What about Internet Sales and Retail consignment?

Internet sales work well for items that can be shipped easily, like small collectibles, books, and artwork. Before you decide to sell these items online, remember that having a nice assortment of collectibles at your auction or tag sale is what will attract the buyers to your event. If you sell all the good collectibles online, you won’t get very good attendance at your sale. Dont even consider a retail consignment; they will take too long to sell your items.

How do I know if I am dealing with a reputable company?

Unfortunately, asking for references doesn’t always work; no one gives a bad reference. The Better Business Bureau lists ratings for some, but not all, companies. With an auction company, most states have an occupational licensing board which can give you the status of an auctioneers license and tell you if they have any complaints on file. Checking up on a tag sale company is a lot harder, because there is no agency keeping track of complaints. One website that is helpful is http://www.ripoffreport.com. When at the site search the name of the company you wish to investigate; also type in the owners name to see what that brings up.

Hire a company with a solid internet presence

These days, it is imperative for a company to have an online network. A company that is well-connected in the online world is likely to be a company that is well-networked in the local area. It’s unlikely that a company with a poor or no website will be able to use the internet to generate sales for your event. Doing a Google search of the company’s name or web address is the best way to to see how well connected they are. Go to Googles search bar (not the address bar at the top of the page, but the search bar in the center of the page) and type in the companys web address starting with www. How many search results are returned that pertain directly to the company you are investigating?. If the company is a national franchise, disregard the results for the general franchise and only count the results where the local company is mentioned. Ranking well with the search engines doesn’t necessarily mean the company will be the best one for your needs, but it is a good indicator of the professionalism of the company. Typically, companies that have lots of returned results do so because other organizations want to associate with experts in their field, so they link to the experts website. A large number of linking companies is like a “vote” for the company being linked to. A company that displays lots of Google results is usually one that is recognized as being expert in their field.

So, what’s the best way to liquidate an estate?

The best type of sale for estate liquidation is to hire a licensed fiduciary to sell the estate property in one day, to the bare walls, any time of year. To achieve this would require an event that is part tag sale and part auction, run by an auctioneer. Since Tag Sale operators are generally not licensed auctioneers and auctioneers usually hate to do tag sales, that’s a tough solution to implement. There are auctioneers that combine these services, however. Finding such a company will give an executor the flexibility of having a sale any time of year, the ability to sell down to the bare walls with nothing left over, and the assurance of dealing with a state licensed and bonded fiduciary.

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How to Travel With Books – Advantage and Disadvantage of Travel Books

Is it necessary to purchase a travel book or is it realistic that we can get similar information from other resources? Usually, most individuals have a major question on buying a travel book. So here are the pros and cons of purchasing one such book.

Advantages of a Travel Book

A travel book, which may be a paperback or e-book, comes in handy while traveling. Glancing through a travel book enables you to understand the custom and culture of a particular place in the world. So you can adapt yourself to that particular environment and stay there comfortably for longer periods.

  1. They Come In Handy — The travel guide comes in various forms such as, e-books, paperbacks and the file formats. You can have easy access to these books, which would assist you with all details compatible to the region you are traveling to.
  2. They Provide Enormous Information — Electronic or traditional travel guides provide you with answers to all types of questions such as how to learn some sayings that can be used in the place where you are traveling to? How to get data on where to reside, what to see and where to eat? How to get a clear knowledge about the history of a specific region or the atmosphere that it has?
  3. They Suit To Your Requirements — To access full information about a specific country or a region, both types of general and specific travel books are made available. The e-book may easily fit into your e-book reader whereas the paperback can fit into your backpack.

Disadvantages of Travel Book

  1. The Price — The e-book and paperback travel guides are very expensive compared to the information obtained from travel websites or from those who have moved or traveled to that region.
  2. Qualitative Images In Travel Books — Most travel books are in black and white. Only a few e-books consist of colored photos. Hence make a thorough revision before purchasing a travel guide or an e-book.
  3. Travel Books Make The Trip Less Natural — Traveling can be made more spontaneous by acquiring suggestions from locals than from travel books.

Conclusion

Considering travel books is essential while you are scheduling to travel. At the same time, never fail to revise the pros and cons in order to make the trip, the most memorable one.

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Advantages of Bus Travel

Bus is the most popular transport nowadays. Many people choose bus as the best transport for them because of the many advantages they find in it. Others never get on a bus, thinking only of the disadvantages, which are truly a lot. Here I will tell you the reasons why it is better to choose travelling by bus rather than travelling with your car for example.

The good standpoints for travelling by bus

Many people choose bus transport because it is cheap. This is the main reason why when you get on a bus you will see mainly students and old people. The tickets for long destinations are much cheaper than the flight tickets. You can also by a card for every month and travel at reduced fare. This is also a good advantage to choose bus transport, because it saves you money that you can spend on your next vacation.

Another good advantage of bus transport when going on short travels is that bad weather won’t be a problem for the bus driver. If you are planning to go to the nearest village with your bicycle and it starts raining or snowing, you will get wet for sure. If you choose the bus, you can save yourself this uncomfortable situation and it also can save you money because it won’t get you sick. Also if you choose to take a flight and the weather surprises you and a storm comes out, you may be waiting for hours because of delayed flights.

However, this won’t happen if you choose bus travel. In modern buses, you will have an air conditioner, toilet, the bus-hostess will offer you drinks and snacks to make your trip more enjoyable, and there are also at least two TV sets in new travel buses. So you can enjoy your trip watching a movie and having a snack without worrying when will be the next stop for the toilet. Also if you are travelling on a bus for more hours or even days, you can always make new friends there. So, the new social contacts are the other advantage of the bus. And if you have to choose between a plane or bus, remember that you will see much more if you are travelling with a bus. The bus also stops at many places during the travel and in that time, you can have a coffee or a cigarette if you are a smoker. In the plane this could not be done.

Another good advantage of buses is that they reduce the traffic jams in the rush hour in big cities. Imagine that everyone uses cars. The traffic jams will be a lot bigger than they are now. In some countries like India, a bus can gather more than 150 passengers. Imagine that all these people were using their cars instead of bus transport the cities will be crowded.

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What Are the Factors to Consider When Buying Life Insurance?

As you are shopping around for insurance quotes and insurance companies, these are a few basic factors you need to consider before you make any decision.

1. HOW MUCH LIFE INSURANCE COVER DO YOU NEED?

Here is a quick guide if you are not doing this with a financial planning professional yet. For ease of calculation and explanation, we are not taking time value of money and inflation into consideration.

Financial Obligations

Take into account any financial obligation that needs to be paid off if premature death or unfortunate event such as total & permanent disability or critical illness should occur. Examples could be business or personal loans or debts to be repaid or mortgage loan repayments.

Financial Support

Is there anybody who is dependent on you for financial support? Maybe aged parents, spouse or children? If there is, you may want to plan for the financial support to continue should any unfortunate event happen. For example, you may be planning to provide for your aged parents or a young kid for the next 20 years with an annual sum of $20,000. You would need a sum assured of $400,000 should that sum of money be needed right now.

Financial Gift

Is there a lump sum of money you would like to provide if an unfortunate event should happen? Is there someone you would like to leave a financial gift for when you are not around anymore? Or maybe a charitable cause you would like to contribute to? If there is, be sure to take this into consideration in your calculation of how much insurance cover to buy.

Replacement of Income

This is the tricky one where you will read of many differing opinions. The reason why this question is not so straightforward to answer is that guesswork of your income growth rate is involved.

There are general (very general) rules of thumb for this though.

You need to know how many years you would like your income to be replaced for. For example, if you would like your income replacement to be for 10 years. You will need a $500,000 sum assured if you are earning $50,000 currently. That will enable you to withdraw $50,000 per year for 10 years.

Alternatively, some may suggest for you to have insurance cover of 20 times your annual income. If you have a cover of 20 times your annual income, an investment return of 5% from your insurance proceeds will be able to replace your current income perpetually.

2. HOW LONG DO YOU NEED THE INSURANCE COVER FOR?

Knowing how long you need the protection of insurance for will play a part in knowing what types of life insurance products may be suitable. Do you need the insurance cover for a specific number of years only such as for a specific loan payment period or do you prefer the insurance protection for the whole of your life?

3. WHAT IS YOUR BUDGET FOR INSURANCE PREMIUMS?

Knowing how much sum assured and how long you need the coverage for is one thing but your ability to pay the insurance premiums also need to be considered. For example, if you require a specific sum assured but your budget is limited, you may need to buy a term life insurance policy to get the required insurance cover even if you may prefer an insurance policy that can accumulate cash values.

4. WHAT TYPES OF INSURANCE POLICIES SHOULD YOU BUY?

There are different life insurance products to suit different financial needs and wants. Find one that is suitable for yours. There are mainly four types of life insurance products.

Term Insurance

For protection needs with no accumulation of cash value

Whole-Life Insurance

Mainly for protection needs with accumulation of cash value

Endowment Insurance

Mainly for savings needs with accumulation of cash value

Investment-Linked Insurance

Accumulation of cash value through investments. Whether it is for protection or investment needs depends on the specific policy.

The pointers listed above is catered to the Singapore market. They are meant for general information and discussion. It is not intended to provide any insurance or financial advice and you should always seek advice from a qualified adviser if in doubt.

Benjamin Ang has a Bachelor of Business Administration and holds the designation of Associate Financial Consultant (AFC) and Associate Estate Planning Practitioner (AEPP). He writes about wealth matters to share financial knowledge with the public and also writes regularly on living and experiencing all the wonderful things that life has to offer.

Find out more about him at http://www.benjamin-ang.com/

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Cliches Associated With Insurance

Isn’t it funny how many cliches can be associated with insurance? I think when a couple of sayings and anecdotes were invented; the inventors had the term insurance in mind!

Have a look at a couple of the following sayings and tell me if you agree…

Nothing is certain, but death and taxes. This can be changed to – nothing is certain, but death and insurance. No matter who we are, what we do, how much money we have or which car we drive… we need insurance!

All is fair in love and war. Once again, this can be changed to “all is fair in love and insurance.” Don’t you agree that we are at the mercy of insurance companies? What they say is law and we have to just sign on the dotted line and accept the fact that we are paying tons of money each month on something that we do not really want. Do not accept the first quote that you are offered. Shop around until you find a policy that you are completely satisfied with. Do not allow any broker, agent or insurance company to force you into taking a policy that you are not happy with.

He has been taken for a ride – he has been taken for an insurance ride! It’s unfortunate to hear how many insurance companies take their clients and customers for a ride. This is usually by means of not wanting to pay out a claim, increasing premiums drastically, or other matters that we have no control over. Always read the fine print before signing any insurance document. By having a good understanding of what your insurance policy entails, a lot of this can be prevented.

A chain is only as strong as its weakest link – An insurance company is only as strong as its weakest link. When wanting to obtain insurance, make sure that you talk to an agent or a broker who knows what they are doing! The worst thing in the world is dealing with an insurance reseller who has only one thing on the mind and that is to meet their monthly sales targets. Insurance is a very important investment; therefore it is crucial that a qualified professional takes care of your needs and requirements.

A good beginning makes a good ending. Change this to “a good insurance company makes a good ending” and you will be one of the many individuals who are satisfied with the service received from their insurance companies. If a company offers outstanding service and handles queries and claims effortlessly, even a burglary or an accident can have a good ending.

After a storm comes a calm. If you can change this saying to “after an insurance claim, comes a calm” – congratulations! That means that you have recently put in a claim and that it was handled successfully, enabling you to relax after everything has been taken care of.

I hope you have enjoyed this tongue in the cheek look at insurance sayings – it might be a bit of useless information, but hopefully it managed to put a smile on your dial!

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Difference Between Employers’ Liability Insurance (ELI) and Workers Compensation Insurance (WCI)

Employers’ Liability Insurance (ELI) and Workers Compensation Insurance (WCI) are two important insurance covers to protect the interests of employees, as well as employers. There are, however, certain differences between the two. Due to these differences, it may result in wrongful litigation and consequently anxiety to parties involved. The differences between ELI and WCI are relating to where they apply and what they cover. We will discuss about them here briefly.

Where they apply

Employers’ liability insurance

As an employer, it is mandatory for you in UK to purchase employers’ liability insurance. Not purchasing attracts penalty under law. In certain situations your employees may feel that you are liable for job related illness/injury which they may sustain and they sue for this. If it is really a case, it may bring in expenses such as hospitalization, financial compensation and the like. ELI helps you under such circumstances.

While it is mandatory for you as an employer to have ELI, your employees need to prove that the job related injury/illness is because of your negligence. Imagine yours is a lumber business. While working, your employees should have the necessary equipment, training and skills to operate them. If you employ them without teaching the safety norms, imparting the training and checking the fitness, and they sustain injuries, it will amount to your negligence as per rules framed under Employers’ Liability Insurance Act and employees are likely to feel appropriate to sue you, because you are liable.

Workers compensation insurance

On the other hand, workers compensation insurance is a cover for the welfare of the employees. It depends on the circumstances that are the tone of relation between employer and employees. Thus, if you are more concerned about employees’ health and safety, you need to purchase this insurance. It does not matter whether it was your fault or your employees’ fault that resulted illness, accident or death, this insurance comes to your help.

Coverage

Employers’ liability insurance

As an employer, you have to go to court of law if the affected employee sues you. You need to pay financial compensation and bear the hospitalization and medication. ELI covers all these expenses.

Likewise, for employees ELI covers the permanent and temporary disability, injury and wrongful death at workplace. It covers the cost of litigation as well.

Workers compensation insurance

For employers, WCI is a Good Samaritan. In most cases, it ensures that your employees do not resort to litigation. However, in such unfortunate event, WCI covers the expenses because of litigation. It covers the financial expenses to be given to the affected employee for work-related injury, illness or even death.

Employees when inured at workplace, under WCI, are guaranteed to get compensation from the employer to cover medical and hospitalization expenses and certain portion of wages. In most cases, it is two-thirds or more. WCI covers the expenses on litigation, by the employee. In general, WCI takes care of the situation and makes sure that litigation on the part of employees is avoided.

WCI covers compensation (wages) in case of a temporary disability for the period of absence. If the individual got permanent disability, and not fit for employment in current occupation, WCI covers the expenses of vocational training and rehabilitation and cost of searching a job, if he wants.

Despite both ELI and WCI are meant to protect the interests of employees and employers, there are differences in the way they apply. You need to understand them and purchase a cover according to the need of your business.

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Life Insurance Fraud

Life insurance fraud is a black eye on both life insurance companies and life insurance customers. Both parties have been guilty of life insurance fraud and will be again–especially since, sadly, fraud seems to be on the rise according to most statistical measures.

Research by the non-profit The Coalition Against Insurance Fraud concludes that life insurance fraud committed by all parties costs an average household $1650 per year and increases life insurance premiums by 25%.

Life insurers are most often guilty of insurance fraud in the form of their agents doing “churning”. This is where the agent seeks to cancel your existing life insurance policy and replace it with a new policy that is paid for by the “juice”, or cash value, in your existing policy. Agents do this to earn more commissions for themselves without having to seek new prospects for business. Churning can result in increased premiums for a customer and clearly costs them out of their cash value.

Another insurance fraud practiced by agents, however, is called “windowing”. This is where, being unable to attain a client’s or applicant’s signature on a necessary document but already having that signature elsewhere, the agent holds up a signed document behind the unsigned document, presses it against a window to make the light shine through, and traces over the signature with a pen in order to forge the signature of the client or applicant.

When big name insurance companies have their agents do bad things it makes big headlines, but the fact is that the public is far more guilty of insurance fraud than companies are. And of course making false claims is the thing they do the most, which is why all claims on life insurance death benefit payouts are subject to investigation.

But falsely stating background or financial income information is another form of insurance fraud often engaged in by consumers. They might be embarrassed by their medical history or income, or they may realize that if they tell the truth they will have their coverage diminished or their premiums will be very high. If a life insurance company finds out someone lied on their application they have the right not to pay the claim or not pay the full death benefit depending on the circumstances and the policy.

But there are things that buyers of life insurance can do to protect themselves against insurance fraud, since they don’t have the great investigative resources that life insurance companies do.

Remember, when it comes to life insurance, if it sounds too good to be true, it probably is. There’s no free lunch.

Save all of your life insurance paperwork, including getting receipts for every penny you give your agent, and never ignore any notifications from your life insurance company.

Life insurance is never free and it’s not a pension plan, although certain policies can indeed become self-funding–but they never start off that way.

Never buy any coverage that you feel strongly is unnecessary, never let yourself be pressured, and never borrow to finance life insurance.

Although it can be part of an investment portfolio, life insurance’s number one role is protection against the unforeseen–and most people don’t need life insurance in their later years. It is intended to be temporary.

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What Makes London a Lively and Appealing City for Travelers?

It is petrifying to move to a new town especially when you do not know anyone. However, there is a different story to London because it is always busting with travelers and this makes it easy for those visiting to feel at home quickly.

London has a traveller's community that enterprises of individuals from New Zealand, Australia and South Africa. There is also special consideration for Europeans, Canadians and Australians citizens who wish to travel to London.

Most people come to London for fun or work. It is easy to get to London. You can apply through the British Embassy through several Visas. Most individuals who travel to London on a two year working holiday visa end up staying for the full two years. That way, they get a chance to know people, create relationships and have lasting memories.

Although London is busy, it is rich with all the remarkable sceneries that you could hope for. There are amazing places to visit. Any activity you want is available and you can enjoy art, education and sports, just to mention a few. Each and every day of your stay can be filled with so much entertainment.

If you treasure some quiet time, you can go to the local pubs for a drink or to watch football. The activities do not needarily have to be costly. There will always be something to keep you entertained.

In addition, London is easy to adjust to. It is a large city with a huge number of people. Despite this, it is a quiet and pleasant place. You get to enjoy the scenery and the outdoor experience more.

London has magnificent buildings. The buildings are unique and have fine architecture. The grandeur is pleasing enough to those in creative design and adds to their artistry. It is simply an inspiring town.

It is also amazing that you get to go to the museum for free. London has beautiful museums. They are also public and allow everyone to appreciate history and culture. Additionally, they hold art that has inserted for centers and do not restrict visitors.

Traveling to London is there before an experience worth taking. Another one of its appealing, notable and relaxing features are its green areas. The city is well planned and includes parks such as the hike parks and wild parks. As much as this may come as a surprise, there are also wild animals within some of these parks. The variety of parks is breath-taking. In addition, they are very accessible and are located at the heart of London.

This city is convenient and it is easy to get housing that is close to important amenities. That way, you can walk to work, the grocery store, bank, social joints and many other locations. The public transport system is also convenient and even if you do not have a car, getting around is not going to be a problem. You can also use your bike around the city. They have double buses that are like a free tour of London. You are further not limited on the taxis and will find a range of affordable ones.

Travel to London to also experience the abundance of culture. It is the city that attracts diverse nationalities and people. It is a great city for studies, work or business. It provides the opportunity to interact with interesting people from around the world.

The people are friendly and it is easier to form bonding relationships. The people are also more fun and outgoing.

What is a city without a cuisine? London is not left behind when it comes to amazing dishes. You will find a variety of quality meals. The food is fresh and delicious. Furthermore, you will easily find organic food in the stores.

London easily connects you to other towns and countries in Europe. It is convenient to travel. Moreover, regulation allows all workers to have at least 20 days of leave. It is made much more convenient with affordable flights.

Communication will not be an issue because internet and phone services are affordable. The plan is not only cheaper in London but also in other parts of Europe and America while roaming.

After all the good is spelt out, there is a compromise to make. London is an expensive town. So many people are moving to London and this is making it expensive in terms of rent and other amenities. Demand is increasing day by day.

All in all, London feels more like home and is a great place to tip travel to. It further makes you more of who you are and is an inclusive city.

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The Pros And Cons Of Funeral Insurance

Funeral insurance, also known as burial insurance is a type of insurance created to pay for the costs of memorial and internment services. Nowadays, many people especially those who are not getting any younger are getting funeral insurance to deal with the costs of burial and funeral services when they die.

Most of these people do not want to leave any type of burden, especially financial burden, to their loved ones. Some of the costs covered by insurance policies are cremation, burial, plots, music, flowers, taxes and even medical costs. Before purchasing funeral insurance, an interested person must consider things such as the location of the cemetery, arrangement and expenses of the funeral, cost of cremating and buying caskets or urns.

Aside from these considerations, he must also determine the advantages and disadvantages of this kind of insurance:

Cash to Shoulder the Funeral Arrangements. The insurance company will give the grieving loved ones lump sum cash that they can use for funeral arrangements. The amount of cash usually depends on the type of funeral insurance policy that the dead relative has purchased.

A Car to Make Funeral Arrangements. While the family members are on the verge of arranging matters of his funeral, the insurance company will provide a car to make sure that they still feel comfortable while dealing with his death and getting ready for his interment at the same time.

Bonus Monthly Payout. The family members who the insured person has left will be receiving monthly bonus cash from the insurance company. This amount of money is expected to help pay out for bills covering food and utility.

Chosen Funeral and Burial. A good thing about having a contract with an insurance company is that when he dies, he will have the memorial and interment services according to his will. He will have a funeral and burial that he thinks he describes.

Get A Tombstone. With the services that the company covers, the family members can choose a tombstone that will serve as its memory.

The disadvantages of purchasing funeral insurance are:

Insurance Policy May not Pay in Full. There are some companies offering funeral insurance that have waiting periods. These periods can reduce the benefits of the insured person. There can also be times when there can be no benefits at all. Some insurance policies can decrease in value as time passes by.

Insurance Policy May not be an investment. A person who chooses to have funeral insurance will have no control on how his money will be endowed. Another thing is that some companies offer very little interest rate. And lastly, some insurance policies are overpriced. This means that some of these policies cost more than the cost of funeral coverage. A person planning to get one must remember that by purchasing one means he is paying more premiumss than collecting insurance claims.

With the advantages and disadvantages of funeral insurance, a person can see that it will be highly recommended to apply for a funeral insurance policy that will fit his needs and requirements.

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Do You Have Sufficient Auto Insurance Coverage?

Imagine getting ready to leave your house and you open your door and the rain is pouring down. Now you start to frantically look for your umbrella…. ah, there it is! You step outside, open your umbrella, and you are now protected from that pouring rain. If it were a bright sunny day with no rain in sight you probably would not even care about where your umbrella is or if you even had one! The same is true about insurance. Until you need it, do you really care about it? Unfortunately, too many people realize that they have insufficient coverage only when an unexpected incident occurs and they have to place a claim with their insurance company.

So, a logical starting point to determine if you have proper insurance coverage is to understand the basics. To ensure that you do have the proper coverage, you first need to acquire a good understanding of the basics of auto, home, personal umbrella, and life insurance coverage. For this article, we will focus on auto insurance coverage.

Auto Insurance basically covers you for liability and property damage as it relates to your motor vehicle. There are other optional areas of coverage as well, but for our discussion let’s stay focused on the basics, which are the most important anyway. Your auto insurance policy’s first and/or second pages are the declaration pages of your auto insurance policy. The declarations pages describe your auto coverage limits in numeric dollar values.

Here is a sample of what you may see on your auto insurance policy’s declaration pages:

-Bodily Injury/Property (BIPD) 250/500/100

-Limited or Unlimited

-Medical (Med) $5,000

-Personal Injury Protection (PIP) 250 w/250 Ded

-Uninsured/Underinsured (UM/UIM) 250/500/100

-Collision $500 (Coll) Deductible

-Comprehensive (Comp) $500 Deductible

-Rental Insurance (RI) 80%/1500

Let’s take a look at each of these coverage definitions and amounts in more detail.

The BIPD represents Bodily Injury (BI) / Property Damage (PD). Basically, in the example above, this individual policyholder has liability protection for $250,000 per individual or $500,000 maximum per incident, plus $100,000 in property damage to the other party’s vehicle in a collision. Liability coverage is protection for times when you have been deemed and proven negligent in an auto accident and you therefore become legally liable for the resulting compensatory and/or punitive damages to the other party or parties. The BI, of the BIPD, will cover you for negligence on your part that resulted in bodily injury to the other party or parties. BI also covers the cost of attorney fees associated with any litigation brought against you by the other party. In the above example, this person has $250,000 in coverage for all inclusive liability and attorney fees per individual injured or $500,000 for the entire incident.

The PD, of the BIPD, covers the damage to the other party’s vehicle as a result of your negligence; thus, in the above example, up to $100,000 in property damage to the other party’s vehicle or property. Now, being cognizant of the litigious society that we live in, we ask if $250,000 per person or $500,000 per incident is enough BI coverage? This is a personal decision for every individual to make depending upon their current assets and net worth, and their knowledge of recent jury decisions and awards on BI cases. A major factor affecting this decision is an understanding that you are self-insured for any amounts awarded in excess of your BI coverage amount, should the jury award compensatory and punitive damages greater than your BI coverage amount. So, in this example, should the jury award $750,000 to the individual driving the other vehicle who suffered bodily injury because you collided with them as a result of your negligence, then you are self-insured for the amount in excess of $250,000 which in this case would be $500,000. If you do not have the $500,000 to settle the award, then the judge has many other options to ensure restitution to the injured party such as: garnishing your wages, selling off some of your assets, placing a lien on your property, etc. Now, you can get an umbrella policy to cover you up to a certain amount in excess of your underlying auto BI coverage. We will look at how an umbrella policy works in more detail in an upcoming article.

Next, we have “limited right to sue” versus “unlimited right to sue” coverage. Basically, under the “limited” right to sue lawsuit option, you agree not to sue the person who caused the auto accident for your pain and suffering unless you sustain one of the permanent injuries listed below:

-Loss of body part

-Significant disfigurement or scarring

-A displaced fracture

-Loss of a fetus

-Permanent injury

-Death

Please note that choosing this option does not waive your right to sue for economic damages such as medical expenses and lost wages.

Under the “Unlimited” right to sue lawsuit option, you retain the right to sue the person who caused an auto accident for pain and suffering for any injury. Most people will choose the “limited” option because it is far less costly and it provides the ability to sue the negligent party for most major and permanent injuries. However, many attorneys will usually choose the “unlimited option” for their own personal coverage and pay the significant extra cost because they want the right to sue for any injury.

PIP coverage stands for Personal Injury Protection coverage. PIP is paid from your own policy. PIP covers medical expenses, and possibly lost wages and other damages. PIP is sometimes referred to as “no-fault” coverage, because the statutes that enacted it are generally known as no-fault laws. PIP is designed to be paid without regard to “fault,” or more properly, without regard to legal liability. PIP is also called “no-fault” because, by definition, a claimant’s, or insured’s, insurance premium should not increase due to a PIP claim. A PIP claim may be subrogated by your insurance against the other party’s insurance company if the other party was determined to be the neglligent party in the accident. PIP is a mandatory coverage in some states.

Uninsured/Underinsured (UM/UIM) is coverage from your policy that may pay for injuries to you and your passengers, and possibly damage to your property, when as a result of an auto accident the other driver is both legally responsible for the accident and determined to be “uninsured” or “underinsured.”

An uninsured driver is a person who has no auto insurance coverage, or had insurance that did not meet state-mandated minimum liability requirements, or whose insurance company denied their claim or was not financially able to pay it. In most states, a hit-and-run driver is also considered an uninsured driver as it pertains to paying for injuries to you or your passengers.

An underinsured driver is a person who had insurance that met minimum legal requirements, but did not have high enough coverage limits to pay for the damage caused by the accident. In these situations, UIM coverage can pay you for your damages. It is important to note that uninsured and underinsured is separate coverage, although in many states they can or must be purchased together. Some states mandate purchase of UM/UIM, but many do not.

Collision coverage insures you for damage to your vehicle. No matter if it is a collision between your car and another car, or your car and a stone wall. You are covered if your car sustains damage as a result of colliding into something or something colliding into it, whether you are at fault or not. Your deductible will usually apply. If you collide with another vehicle and the other party is at fault, then your insurance company may subrogate the claim against the at fault party’s insurance company to recover the claim amount.

Comprehensive (Comp) basically covers what collision coverage does not. When your car sustains damage that did not result from colliding with another motor vehicle or object, the comprehensive portion of your policy will pay for the damages. If you do not have comprehensive coverage then you would have to pay out of your own pocket for any damage to your vehicle not related to a collision. Here are the perils typically covered by comprehensive auto insurance coverage: fire, theft, vandalism, broken or damaged glass, animal inflicted damage, falling objects, storms (hail, wind, etc.), and water damage. Your deductible will usually apply.

Rental Insurance (RI) is coverage for you to rent a car while your vehicle is being repaired because of a covered incident. In the above example of declaration page values, the 80%/1500 means that you have coverage for $80 per day and $1,500 maximum total cost to rent a car while your vehicle is being repaired. This is an optional coverage that many people take, but some do not.

Well, that is it! That is the basics of understanding your auto insurance coverage. Not so bad, right? Now that you understand the basics of auto insurance coverage you can review and analyze your personal auto insurance policy’s declaration page coverage information while taking into consideration your personal financials to determine whether or not you have sufficient coverage.

Stay tuned for future articles that will explain the basics of understanding homeowner’s, personal umbrella, and life insurance coverage. You never know when it is going to rain!

Joseph Rubino, Agent

NJ Licensed Property & Casualty, Health, and Life

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