Part II: How to Get What You’re Entitled To

In the last edition of RETIREMENT GAME PLAN, we talked about the misery of coming home from vacation to find that your home has been robbed and vandalized. 

A really smart way to ensure that you receive everything you’re entitled to under your homeowner’s insurance policy is to hire your own public insurance adjuster which is similar to hiring an attorney to represent your best interests in a court of law.

One of the challenges, however, is that even with the best public insurance adjuster, you will never receive what you’re entitled to if you can’t recall everything you owned that was destroyed or vandalized.

In other words, after living in a home for 30+ years, and under the duress of a catastrophe to your home, and the trauma of dealing with the loss, the last thing you’re going to want to do is sit down and try to remember every little detail about your home and its contents.

It’s right up there on the list with having your appendix removed without anesthesia!

The chances of you being able to remember everything in your home, the date you purchased it, and the current value, etc. are slim to none.

Since the amount of your claim that you’re entitled to is dependent on you being able to do this perfectly, what should you do?

Step One

My recommendation for years has always been to film the contents of your home with a video camera

However, in today’s day and age, the video capability of an iPhone or iPad does the trick!

Film the outside of your home from all directions.  While you’re doing this, talk into the camera and explain it as you’re filming it, especially anything out of the ordinary.

Then, film the contents of each room and closet in the house talking your way through everything.

Lastly, take a white sheet and spread it out on your dining room table. 

On the table, place any valuables you have.  Specifically, items you have scheduled on your policy: jewelry, china, silver, furs, etc…  And, then film what you’ve laid out, again talking into the camera and describing what you’re filming.

The Most Important Step to Getting What You’re Entitled To

Assuming for a moment that you filmed this with a traditional video camera, don’t keep the video tape in your home when you’re finished filming.  If the house burns down, the tape will burn along with it!

Instead, keep it in a fire proof safe, or in a safe deposit box at the bank.

If you filmed your home using an iPhone or like device, make sure to back up the videos in your Cloud account or somewhere other than in your physical home. 

Again, if you do so on the hard drive of your computer, it will burn in a fire as well and your great work will be lost.

Insurance Claim Time

When you have an insurance claim, you simply retrieve your video and hand a copy to your public insurance adjuster and insurance company. (Keep a copy for yourself.)

There will be no confusion whatsoever as to what you’re entitled to.

Would it be better if you also had receipts for every purchase you’ve made over the years?  Yes.  That would help tremendously. 

However, most people have not saved all of their receipts, so if you fall into that category, don’t sweat it.  Just go ahead and film everything right now. 

Your insurance company won’t be very happy with you, but if you ever have a claim, you’ll be very happy you took this step.

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Insurance Claims: Get What You’re Entitled To

Imagine for a moment that you’re driving home from the airport after one of the most memorable vacations of your life.

The weather is poor and the “haze” of being on vacation begins to lift.

As you begin to deal with an annoying case of “back to reality blues”, your mind can’t help but begin to plan when you can get back there again. 

You turn down your street, pull into your driveway and enter the garage. 

The contrast from being on vacation is always strong, but you begin to have the feeling that something really is different.

No, it must be your imagination.  You’ve been away for a while and you’re just out of your element right now!

As you enter the house, your jaw hits the ground as it becomes apparent that someone has been in your house while you were away. 

In fact, your entire house has been turned upside down. 

Then, the reality hits you: “WE’VE BEEN ROBBED!”

You drop your bags and run around looking for what’s missing.  It’s hard to tell because you’re so disoriented. 

As you do this, you can’t help but notice a funny smell. 

After 15 minutes of running around trying to figure out what those hoodlums took, you open the door to your finished basement.

“Uh-Oh”!

Your beautiful finished basement has over a foot of water on the floor!  And, as you trudge around down there, you see what the problem is.

Whoever robbed you thought it would be funny to break a window in your basement, turn on your garden hose, stick the hose through the broken window, and let water run in your basement until you return!!

This is a Nightmare!

After shutting off the water and patching the window, you collect yourself and try to think of what you should do first.

Call your homeowner’s insurance company?  Maybe. 

But, let’s stop and think about this for a minute. 

Is it in your insurance company’s best interest to pay you the biggest claim settlement they can, or the smallest? 

Well, of course, the answer is the smallest.

So, how can you make sure that you’re getting everything you’re entitled to get under your homeowner’s insurance policy?  And, at the same time, get your house cleaned up and back to normal?

“Public” Insurance Adjuster

One way to make sure is to immediately hire a public insurance adjuster

In addition to helping you maximize the settlement you’re entitled to in a timely manner, a public insurance adjuster relieves you of the paperwork burden by handling everything for you. 

And, because that’s all they do, they raise helpful points that you wouldn’t have even thought of.  (Especially in the middle of a crisis)

The analogy is going to court without an attorney to defend your rights.  Most people wouldn’t think of doing that. 

The same holds true if you suffer a loss to your property.  You want to make sure that you receive everything that you’re entitled to after paying insurance premiums your entire life.

Having a public insurance adjuster handle your entire claim from start to finish, including hiring cleaning companies, dealing with contractors, compiling the list of damaged or stolen property and assigning the replacement value, etc., allows you to concentrate on what’s most important to you, and that is getting your home back in order as quickly as possible.

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After You Retire, Is Dental Insurance Worth it?

While assisting new Relaxing Retirement members with their transition to Phase II of their financial lives (i.e. retirement) this past month, we were reviewing which group insurance coverages to continue when he fully retired from his company.

In addition to the obvious question about the best health insurance option to choose, the next question was “I assume we should also continue our dental insurance plan?

By the nature of the question he asked, it appeared obvious to him to continue, and it may to you as well, but I recommend giving it some serious thought to make sure that it is “insurance” you’re buying.  After all, his price tag was $120 per month!

If you’ve worked for a large company for some time and you are used to having dental coverage at little or no cost to you, you’ve become accustomed to having it.  It’s usually cost effective under those circumstances and a nice fringe benefit.

However, when you have to foot the entire monthly premium by yourself during Phase II of your financial life, you have to really step back and take a good look at what you’re getting.

3 Questions You Must Ask and Evaluate About Any Insurance

When evaluating any form of insurance, you have to ask yourself three questions:

  1. “What is my potential financial loss if I don’t have this insurance?” 
  2. “What is the probability that I’ll suffer this loss?”
  3. “Am I willing to risk absorbing this entire loss myself, or should I pass on some or all of the risk to an insurance company by paying a premium?”

As an example, when evaluating homeowner’s insurance, the obvious answer is, “I’ll lose my entire house in a fire and have to pay a large chunk of money out of my pocket to rebuild it!”  Now that’s a financial loss worth insuring (at the right cost). 

However, if the cost to rebuild your home in the event of a total loss is $350,000, but the homeowner’s insurance premium to insure against that loss is $350,000 per year, you wouldn’t run out to buy that policy! 

There’s no insurance going on there.  The insurance company has not absorbed any of the financial risk from you.  All they’re doing is holding your $350,000 to give back to you in the event of a loss.

Is There Really Any “Insurance” Here?

In many instances, this is what’s going on with dental insurance.  The typical policy pays for a couple of cleanings and a diagnostic exam each year (x-rays, etc.), and possibly a filling. 

After that, the policy usually only pays about 50% of your cost for a comprehensive procedure such as a crown or a bridge. 

If you stop and evaluate it, the financial loss of having to pay for cleanings, exams, and even a filling every year is minimal.  That is typically not a financial risk worth insuring because all you’re doing is getting back the premium you’ve paid. 

The real financial risk is the cost of the comprehensive procedure like two current members are dealing with right now where the cost is in excess of $25,000! 

This is where you have to evaluate and speak with your dentist about not only the probability of your requiring a procedure like this, but what your dentist’s price would be to perform it.

Once you know those numbers, you can evaluate your downside financial risk and whether dental insurance makes sense for you.

The key, as with any form of insurance, is to insure against the “big loss”.  In other words, insure against your house burning to the ground, not a broken window. 

If you follow those parameters with all of your insurances, and increase your deductibles, you can save a good amount of money in premiums every year and free up money for things you’d rather spend it on, like going out to dinner! 

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The Inexpensive Insurance Policy You Must Own Before Your Retirement Transition

Warning: This edition contains graphic descriptions that might be unsettling.

The smell of Fall is in the air.  There’s nothing like it.

The sun is bright, and the brown, orange, and yellow leaves are falling.

It’s 3:30 on a Saturday afternoon and you’re driving home from your granddaughter’s very first soccer game so proud of her for scoring a goal.

There’s nothing quite like the screams of an excited group of 7-year-old girls.

As you’re driving along, you have the big college football game playing on your radio, but you’re not listening very carefully because you’re still caught up in the buzz of your granddaughter’s soccer game and the beautiful Fall foliage.

Pulling into your neighborhood, you catch the tail end of a Breaking News sports update.

Unable to hear it clearly, you reach down to turn up the volume so you can hear the announcement more clearly.

At that very same instant, some neighborhood children are playing soccer in their yard.  As your car approaches, the soccer ball rolls out into the middle of the street where you’re driving and one of the kids chases after it in full speed forgetting to look both ways to see if a car is coming.

Just as you’re reaching for the volume knob on your radio, in the corner of your eye, you see him run out from behind that parked car, so you instinctively jam on your brakes.

But it’s too late.  You hear the sound you prayed you’d never hear, and he’s now lying on the ground motionless in front of your car.

As the paramedics arrive, the good news is the little boy is still breathing.

The bad news is that he’s not moving as they struggle to keep his body still and place him on the stretcher.

After what seems like an eternity, he’s taken in the ambulance to the hospital, and you are left there to talk with the police about what just happened.

Two detectives are snapping pictures of the car and measuring your skid marks in the street.

2 Weeks Later

A few weeks have now passed.  The shock of what happened has not gone away, but it has come into perspective.

The boy has just returned home from the hospital.  Several bones in his body were broken, and after multiple surgeries, the doctors are confident that he’ll be able to walk just fine after a good 6 months of physical therapy.

However, the permanent damage done to his right leg may prevent him from playing competitive sports for the rest of his life.

What Does This Mean for You?

As if dealing with the emotional torment of accidentally injuring a young boy wasn’t enough, now comes the worst part.  The police reports come back concluding that you were driving 36 miles an hour in a 30 mile an hour zone.  And, because of that, you’re considered to be 100% at fault for negligence.

You didn’t mean to hit the child.  You’re a careful driver.  You’ve never had an accident in your life.  Your driving record proves it.

But all of that doesn’t matter right now because unfortunately, you’re going to be at the wrong end of a very expensive lawsuit.  You can expect that within a few weeks, you will be summoned by an aggressive attorney requesting, among other things, a listing of all your income and assets.

And the only form of compensation the attorney will get from the case will be from receiving a percentage of the damages collected from you.

And it probably won’t be a small number.

Where Will This Money Come From?

The question for you is where will this money come from to pay for you to hire an attorney and to pay the eventual damages that will be brought against you?

It’s taken 35 years to build up enough in your Retirement Bucket™ of investments to be able to stop working if you want to.  You’ve given up so much in order to save for your future.

And, now, you’re finally reaping the rewards of your lifetime of hard work and dedicated savings.  You’re enjoying life like never before.

But now, everything you’ve worked your entire lifetime to save could be taken from you in an instant.

Your Strategy

This is a horrible story that I hope never happens to you. And, I would prefer not to have to share it with you.

However, as you can see, it can happen to anybody, so I’m telling it to you to motivate you to protect yourself.

The strategy and solution in most circumstances is to have the highest liability limits on your auto insurance possible.  But, even more importantly, because potential damages could easily exceed the limits on your auto insurance, is to have a separate Personal Catastrophe Insurance Policy, otherwise known as an “Umbrella” Liability Policy, also known in small circles as Lawsuit Insurance.

In most cases, if you have a quality policy with a quality insurance company, the combination of these 2 policies can protect you from the financial devastation of this horrible occurrence.

It won’t help in dealing with the emotional toll of injuring someone, but it can save you from the financial fallout, and preserve what you’ve taken your entire lifetime to accumulate.

And the good news is that it’s inexpensive.  Each million dollars of umbrella liability coverage costs only about $250 per year.

That’s a small price to pay for the peace of mind it can provide for you in case this ever happened to you.

Visit with your property and casualty insurance agent today and coordinate your homeowners, auto, and umbrella liability insurance.  Discuss precisely what each policy covers and what it doesn’t.

This may take only 30 minutes, but it could turn out to be the most important 30 minutes you’ve ever spent on your finances.

How Will You Pay for Your Health Care in Retirement?

Do You Still Need Life Insurance in Retirement?