Homeowners insurance is a practical investment to help protect you, your family and your property in the event of unforeseen and unexpected losses. Traditionally, it’s associated with fire damage, burst or leaking pipes, or stolen property, but occasionally it covers unusual events that make for sensational news stories and viral videos. Here are four claims homeowners never thought would happen to them.
(BPT) - Homeowners insurance is a practical investment to help protect you, your family and your property in the event of unforeseen and unexpected losses. Traditionally, it’s associated with fire damage, burst or leaking pipes, or stolen property, but occasionally it covers unusual events that make for sensational news stories and viral videos.
Here are four claims homeowners never thought would happen to them.
1. Bear B&B
Bears are notoriously curious and intelligent creatures that also have an acute sense of smell.
People who live in areas with bears for neighbors must not entice them with the aromas of food. Keep doors and windows on ground floors closed and locked while cooking or if you leave the house. A bear can easily get through the screen of an open window or manipulate a lever-like door handle to enter your home and cause significant damage.
“Encountering a bear inside your home would be a very frightening experience,” says Christopher O’Rourke, Vice President of Property Claims at Mercury Insurance. “Safety should be your first priority, so call your local police or animal control station to have them help you with the situation. You can worry about any potential damages after the animal leaves the residence, because your homeowners policy will most likely cover any damage to your home (though not your personal property), unless of course the bear is a family pet.”
2. The sky is falling
China’s Tiangong-1 space station plummeted back to Earth and made its re-entry into the atmosphere earlier this year, breaking apart over the southern Pacific Ocean. The odds of debris from the space station hitting you were less than one in 1 trillion, according to the Aerospace Corporation. If it had hit your home, though, homeowners insurance would’ve covered it.
3. Your house is stolen
Yes, you read that correctly. Your homeowners insurance will cover the entire house, not just the contents inside, if it is stolen.
O’Rourke explains, “We had an insured who was away on vacation and when he returned the foundation of his home was all that remained.
“A house moving company had mixed up the address with another house down the street that was scheduled to be moved. The movers came in, transported the house to another location and thought their job was done — wrong!
“You can only imagine his surprise at the mistake. While homeowners insurance covered the cost of getting things restored back to normal, I would suspect this was one of the strangest situations any insurer has ever encountered,” says O’Rourke.
Golf is a leisurely pastime enjoyed by millions in the U.S. It involves strolling across greens and riding in golf carts, so its slow pace may seem low-risk, but it can actually be quite dangerous. According to an article in Golf Digest magazine, nearly 40,000 golfers are admitted to emergency rooms annually after being injured while playing, most by errant golf balls and flying club heads.
Recreational golfers can also cause a lot of damage to personal property. If you live on a golf course, your house has probably been hit many times by errant shots — breaking windows, damaging roofs and leaving divots in exterior walls.
So, who’s responsible for these injuries and damage?
“Simply put, the golfer who hit the shot is responsible,” says O’Rourke. “There is good news, however, because recreational golfers would be covered by a homeowners, condo owners or renters insurance policy for damage or injuries that result from the wayward shot.”
Mercury recommends reviewing your homeowners insurance policy annually with your local insurance agent to ensure that you’re adequately covered for any unforeseen losses, both unusual and ordinary.
(BPT) - What's the state of your estate? Robert Fishbein, a vice president and corporate counsel in Prudential Financial's Tax Department, says now's a good time to find out.
Changes in federal estate tax law have significantly increased the amount at which federal estate tax is triggered, says Fishbein. The individual exemption is $5.49 million (2017 amount, indexed for inflation) so a couple can accumulate almost $11 million dollars of assets without federal estate tax depleting the value.
The $5.49 million will increase over time. As a result, most individuals no longer need an estate plan to minimize federal estate tax.
That said, Fishbein adds, there are compelling reasons for having an estate plan, and three core documents you'll need to create one: a power of attorney, a living will or health care proxy, and a will. In this article, Fishbein describes these core documents and how you can use them.
Power of attorney
A power of attorney is the document designating someone to make financial decisions for you, whether you're out of the country for a long period, have a physical injury preventing you from conducting business in person, or are mentally incapacitated.
A power of attorney can be "springing" - going into effect upon your incapacity - or "durable," meaning it goes into effect immediately. The challenge with a springing power of attorney is it can be subject to disagreement and dispute between the holder of the power and another family member. One solution is to require the incapacity be certified by a physician, although even those findings can be disputed.
With the durable power of attorney, there's no basis for contesting whether the holder of the power can act. The risk is the holder has the immediate right and ability to access and take action with respect to the financial assets subject to the power. One possible strategy? Limit the power to specific assets. This won't help if the grantor if the power is totally incapacitated and the holder may need access to all of the grantor's assets.
A durable power of attorney is arguably less problematic, provided you are comfortable with the person you're choosing. The holder of the power has a legal obligation, as a fiduciary of the grantor, to act in the best interests of the grantor and not in his or her interests.
It makes sense to have a power of attorney so you know your financial affairs will be attended to. The alternative could be a costly judicial process and court appointment of someone to manage your assets while you are living and unable to do so yourself.
Living will and health care proxy
A "living will" ensures your health care wishes are acted upon if you are unable to make such decisions. It lets you describe the types of treatment you do or don't want under specific circumstances. For example, if you have a terminal illness, you may not want extraordinary measures taken to save your life. The challenge is it's almost impossible to anticipate all possible scenarios to indicate what health care treatment you'll want.
An alternative to a pure living will is a "living will and health care proxy," wherein you designate an individual to make health care choices for you. The living will portion describes in general terms your health care philosophy, and the health care proxy allows you to name an individual to make health care choices for you consistent with that philosophy. The choice of such an individual is important, and you should make sure you are comfortable he or she understands and will act consistent with your wishes.
You should have a living will drawn up as part of your basic estate planning. Again, the alternative is a costly legal process for someone - maybe not of your choice - to get appointed as your proxy to make health care decisions on your behalf.
Last will and testament
A "last will and testament" serves several important purposes, including determining how your assets are distributed, who'll care for your minor children and who'll invest and distribute property held in trust for your children, grandchildren or other beneficiaries. The basic function of a last will and testament is to ensure your assets are distributed as you'd want. Absent a will, your assets will be distributed in accordance with applicable state law.
You'll also designate the legal guardian, and possible successors, for any minor children who survive you and your spouse. This is one of the most important and difficult decisions for parents - so difficult that it sometimes can hold up the entire estate plan. But agreement by the parents is important and avoids the possibility of someone else being court-appointed who may or may not share your child-rearing views.
With the increase of the federal estate tax exemption and an individual's ability to use the exemption of a deceased spouse, trusts for federal estate tax planning have been made largely irrelevant for most individuals. However, if you have minor children who could take property if both you and your spouse die, or grandchildren who could take property if a child of yours dies and leaves children, you'll probably need trusts to hold property for those beneficiaries. Such trusts will enable you to determine who'll invest the trust property, how it'll be used for the child's benefit and at what age the beneficiary will receive the remaining property.
Think you don't have a large enough estate to warrant setting up trusts for your beneficiaries? Consider even the most basic estate when you own a house, have retirement assets and maybe additional investments or property. Given the total value of these assets, you'd probably want to hold them in trust for minor heirs. If there's life insurance, a trust for younger beneficiaries will almost certainly make sense.
Although federal estate tax is no longer a significant consideration for most individuals, you may want to consider the cost of state estate tax. The state exemption is sometimes less than the federal exemption, and state estate tax can take a meaningful bite out of what you expect to leave to your beneficiaries.
Prudential Financial, its affiliates, and its financial professionals do not render tax or legal advice. Please consult your tax and legal advisors for advice concerning your particular circumstances.
The Prudential Insurance Company of America, Newark, NJ and its affiliates.
If you’re in the throes of settling an estate, whether by yourself or with the assistance of your siblings, consider these tips for getting organized; seeking help; selling property, such as a parents’ home; planning for the unexpected; and taking time to grieve to help chart a smoother course following the loss of a parent.
5 Smart Strategies to Settle an Estate
(Family Features) When a parent passes away, it’s usually left to their offspring to manage and disperse the remaining estate. In the wake of such a loss, emotions can run high, and the sheer amount of paperwork can quickly become overwhelming.
If you’re in the throes of settling an estate, whether by yourself or with the assistance of your siblings, consider these tips to help chart a smoother course.
Get organized. Keep a seemingly endless to-do list manageable by writing everything down. Create a system for prioritizing each task and if there are others who are willing to help, delegate what you can. Establish categories such as bills to pay and other outstanding debts, accounts to close, agencies and organizations that need to be notified of the death and so on.
Know your limits. Some estates are simple and straightforward: There’s a basic will, few assets, known heirs, and it’s easy to grasp what happens next. Others are far more complicated. If you find yourself in over your head, seek help from an expert such as an estate attorney who can guide you through the legalities and paperwork.
Focus on solutions. Remember that even the most seemingly hopeless situations can turn out well if you remain open to exploring solutions. When Karen Jones’ mother passed away, she and her four siblings were left with a house that needed a lot of repairs none of them could afford before it could be sold. Jones learned about HomeVestors from a sister and the two scheduled a free consultation with a local independently owned and operated franchise.
Within 24 hours, Aaron Katz with WinWin Properties presented an offer not only to Jones, but individually to all of her siblings who were not able to meet at the same time. Jones credits Katz’s professionalism, kindness and sensitivity during a difficult time for her family.
An option such as HomeVestors, the largest professional house buying franchise in the nation, offers cash payments and quick closing, which can be helpful in settling an estate. In many cases, homes can also be sold as-is with no repairs and with unwanted contents still inside.
Expect the unexpected. It may come in the form of a change in the will or old letters stashed in a closet, but it’s a safe bet that in settling the estate, you’ll come across something you weren’t expecting. Add this to the emotional simmer you’ve been holding steady and this may be the tipping point to boil you over. Simply put the new information on the back burner for now and return to it later, when you can deal with it more rationally and avoid letting a surprise stain your memories.
Take a break. In the aftermath of a loss, many survivors switch to autopilot, not only to distract their minds from the loss but to regain some sense of control in a situation that can feel helpless. While this coping mechanism may answer a short-term need, be sure to allow yourself time to properly grieve and avoid taking on so much that you neglect your own physical needs, such as food and sleep.
Settling a loved one’s estate isn’t likely to be easy, but taking it all one step at a time will help you take care of business while you make sure you’re still taking care of yourself.
For more information, visit homevestors.com.
Photo courtesy of Getty Images
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