Let's Go Boating!!!!

Boating season will be here soon. Are you ready to enjoy some fun on the water! Here are some boat and personal watercraft safety tips.

Preparation for being on the water:

*Know your boating rules, regulations and safe practices for boating safety. Iowa Boating Handbook-PDF version: http://www.boat-ed.com/ia/handbook/pdf_index.htm Online Courses may be available: http://www.boat-ed.com/ia/index.htm

*Alcohol and drugs do not mix with boating operation.

*Practice the "one third" rule – one third fuel going out, one third coming in – and one for reserve.

*Let your relatives and friends know your float plan. Where you are going, and when you will be returning.

*Watch the weather reports before you start out on the water. Watch for changes in waves, wind and clouds that may alert you to bad weather.

*Have your boat inspected by a professional. You want to make sure everything is in good working order.

*Have life jackets, floating devices, lights, fire extinguisher on board.

On the water:

*Wear U.S. Coast Guard approved life jackets. Life jackets should have at least a 50 m.p.h. impact rating. Life Jacket Zone" message coming soon to boat ramps located in State Parks across Iowa. The Iowa DNR has designated boat ramps to be "Life Jacket Zones" and is promoting that all boaters wear their lifejackets while on or near the water.

*Be aware for other boats, swimmers and objects. Know where other boats are before you make a turn or cross a wake.

*Do not operate your boat at dark without proper lighting.

* Follow markers and signs on the water.

*Be aware of vegetation and stay clear of it.

*Do not exceed the maximum load limit.

*Cold water cools the body 25 times faster than air of the same temperature. If you fall off your boat, get back on board as quickly as possible.

Especially for your personal watercraft:

*Wear a small whistle

* Make sure that the water you operate in is at least 30 inches deep.

*Avoid causing erosion by operating at slow speed and by not creating a wake when operating near shore or in a narrow streams or rivers

Should I Let My Friends Borrow My Car?

Do you have a live in relative or roommate? Are you getting married soon, and waiting to combine auto insurance until after the wedding? Do you let your neighbor borrow your car on a regular basis? If so, you may be opening yourself up to an uncovered claim!

If you live with a licensed driver that is not currently listed on your personal auto insurance policy or you have someone that regularly drives your auto that is not listed as a driver on your policy, it’s likely that your auto insurance will not cover an accident while they are driving your vehicle.

Typically the Personal Auto Policy has an exclusion of coverage listed for incidents which bodily injury or property damage is caused when an unlisted driver is driving ‘your’ vehicle. If there is an auto that is ‘furnished and available for regular use’ and the driver is unlisted on the policy and they hop into the vehicle and cause damage to a person or property, the damage will become your responsibility and likely be an uncovered insurance loss.

On the flip side, if someone wishes to borrow your vehicle and you grant them permission typically you and your vehicle would be covered. As long as they do not have regular access to your vehicle, then this is permissible use and typically covered by your policy. Keep in mind, when you borrow your car you borrow your insurance! That means claims that occur while someone else is driving will remain listed under your claims history.

It’s important to disclose household drivers to your insurance agent. We can work with your insurance carrier to list the other drivers on your policy so that they have coverage.  Contact us today to learn more.

Do you have a 401K & Retirement Income Plan?

Risks to lifelong retirement incomes fall into five key areas.

1.        Longevity

The need to plan for the possibility you may live longer in retirement than you ever imagined.

2.        Inflation

Even at a 2% inflation rate, $50,000 of income today would only be worth $30,477 in 25 years.

3.        Health Care Costs

Numerous studies have shown the majority of medical costs occur in the last five years of life, posing additional high costs in the very last stage of retirement.

4.        Proper Asset Allocation

Fear of being caught in a bear market causes some retirees and pre-retirees to become overly cautious and place their lifetime income needs solely with cash and fixed income instruments.  This strategy can have an adverse effect on their financial well-being.  It eliminates the upside potential and inflation hedge that a more diversified strategy may offer.

5.        Too-Rapid Withdrawals

The severity of the 2007-2009 market correction set off alarm bells for many retirees and pre-retirees.  The downturn was especially shocking for those who assumed they could withdraw up to 8% every year in retirement while presuming their portfolio would continue to grow.  Statistics show that a more conservative withdrawal rate of 5% or lower decreases the depletion risk of a retirement income plan.

Talk to us about our active management retirement planning process to reduce these risks in your retirement plan.  Millhiser Smith provides a number of financial calculators for your reference.

Do You Know all You Need to Know About Rental Reimbursement?

Before you rent a car, contact your agent to find out how much collision and liability coverage you have on your vehicle. In most cases, the coverage and deductibles you have on your personal Automobile Insurance policy would apply to a rental car, providing it is used for pleasure and not business. However, keep in mind, when renting an auto you have to sign a contract which could potentially make you liable for extra expenses which are not automatically covered under your auto insurance. Such as:

§   Loss of Use Costs the Rental Car Company incurs when a damaged auto is out of commission and cannot be rented out.

§   Diminished Value that the Rental Car Company incurs when they sell an auto that was previously damaged and they receive less than what they would have if the auto had not been in an accident.

§   Other Miscellaneous fees.

The best time to make the decision about whether you will need extra rental car insurance is before you’re standing at the car rental counter. Read on to learn about car rental insurance considerations and what you need to know to make sure that you’re covered.

It’s not uncommon for rental car agencies to offer you the opportunity to purchase additional auto coverages, but do you need them? 

§   The best way to cover yourself when renting an auto is to purchase the Collision Damage Waiver (CDW), or Loss Damage Waiver (LDW). This relieves you of financial responsibility if your rental car is damaged or stolen. It also covers gaps such as described above for Loss of Use, Dimished Value and Other Miscellaneous Fees.

Additionally, your credit card company may include some collision and theft protection if the rental car is paid for with your card. This includes coverage for “loss of use.”

§   If you don't have comprehensive and collision coverage on your own auto, you will not be covered if your rental car is stolen or if it is damaged in an accident. If you plan to rent a vehicle frequently, your best bargain is to purchase a Non-Owner Auto Liability insurance policy from us.

o   A Non-owned Auto Liability insurance policy covers you for damage that you may cause to someone else’s car and liability for injuries to its occupants, or to pedestrian, in the event of an accident. The policy will also provide medical payments coverage for you and your passengers, and under-insured and uninsured coverage. This pays for the cost of an accident involving a hit-and-run driver or a driver who has little or no insurance.

However, Non-Owned Auto Liability insurance does not provide collision or comprehensive coverage. Collision coverage pays for damage to the car you’re driving if you crash into another car or object, or the car rolls over. Comprehensive pays for damage to the auto if ‘other than collision’ occurs such as theft of the auto or hail damage.

§   In addition to a Non-Owned Auto Insurance policy, an Umbrella Liability policy is also an option to meet the underlying auto insurance policy requirements when renting a vehicle.

§   If you drive an older vehicle, but plan to rent a luxury vehicle, it’s important to make sure that your policy will cover the complete cost of the replacement value of the vehicle you are renting.

§   If you are renting a vehicle that is not classified as passenger car (such as a moving truck, 15-passenger van, etc.), you must purchase a separate policy from the rental company to be covered in that vehicle.

§   In general, your U.S. auto insurance does not cover you abroad. However, your policy may apply when you drive to countries neighboring the United States. Check with our agency to see if your policy covers you in Canada, Mexico, or countries south of Mexico.

Car rental agencies overseas usually provide auto insurance, but in some countries, the required coverage is minimal. When renting a car overseas, consider purchasing insurance coverage that is at least equivalent to that which you carry at home.

Also, if you are renting a car abroad, you may need an international driver’s license.

Employee Handbook Questions & Answers

Creating an employee handbook is a daunting process.  There are usually many questions that come along with creating an employee handbook, along with a lot of work.  Some of the questions that we often get are:

·         What needs to be included in an Employee Handbook?

·         Should I have an Employee Handbook?

·         How do I get started on an Employee Handbook?

Before beginning to write your handbook, consider asking yourself a few questions including:

·         What are your current policies both written and unwritten? 

·         How updated are the policies?

·          Do you currently follow these policies? 

·         Who is responsible for updating the handbook once it’s complete?

·          Who will you solicit feedback from before the handbook becomes official?

It’s important to consider all of these items because there are dangers for employers when it comes to employee handbooks. Dangers include:

·         Not updating the handbook as quickly as it should be allowing it to become outdated when it comes to federal or state laws

·         Content that is confusing among employees

·         Handbook rules need to be applied consistently, rules that are not can present major problems.

·         Handbooks are often used in legal action; policies drafted poorly can be presented in the court of law!

Millhiser Smith can serve as a valuable resource for your company when it comes time to writing or updating your Employee Handbook.  We have many examples of a handbook for you to choose from, as well as an employee handbook checklist for you to review.

If you have questions on where to get started, or would like to view these documents, please contact Cari Lamb at Millhiser Smith at 319.365.8611 or by emailing Cari at clamb@millhisersmith.com

Special credit to Business and Legal Reports for portions of this written content.

Bond, Surety Bond

Suretyship is a very specialized type of insurance that is created whenever one party wishes to guarantee the performance of another party.  Although many insurance agencies provide bonds to their clients, the process of obtaining a bond is actually much more similar to securing a loan than purchasing an insurance policy.

These similarities are evidenced by what is normally reviewed by a surety/insurance company before they will approve a bond:

·         Financial Strength/Stability

·         Company History

·         Continuation Plans

·         Credit History

·         Ability to Perform Tasks

The emphasis that’s placed on particular areas will change depending upon the type of bond and the line of work, but you can be assured an underwriter will always look first to the financial health/track record of the company/individual seeking a bond.

Here’s a brief summary of the various types of bonds most common today:

1. Contract Surety Bond

The contract bond provides financial security and construction assurance for building and construction projects by assuring the project owner (obligee) that the contractor (principal) will perform the work and compensate certain subcontractors, laborers and material suppliers, as outlined via their contract. Contract surety bonds include:

·         Bid bonds provide financial assurance that the bid has been submitted in good faith and that the contractor intends to enter into the contract at the price bid and provide the required performance and payment bonds.

·         Performance bonds protect the owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions.

·         Payment bonds guarantee that the contractor will pay certain subcontractors, laborers and material suppliers associated with the project.

·         Maintenance bonds guarantee against defective workmanship or materials for a specified period.

·         Subdivision bonds make guarantees to cities, counties or states that the principal will finance and construct certain improvements such as streets, sidewalks, curbs, gutters, sewers and drainage systems.

2.    Commercial Surety Bond

Commercial surety bonds guarantee performance by the principal of the obligation or undertaking described in the bond. Commercial surety bonds include:

·         License and permit bonds are required by state law or local regulations in order to obtain a license or permit to engage in a particular business (contractors, motor vehicle dealers, securities dealers, employment agencies, health spas, grain warehouses, liquor and sales tax).

·         Public official bonds guarantee the performance of duty by a public official, (treasurers, tax collectors, sheriffs, judges, court clerks and notaries).

·         Judicial bonds, also referred to as fiduciary bonds, secure the performance on a fiduciaries' duties and compliance with court orders (administrators, executors, guardians, trustees of a will, liquidators, receivers and masters).

·         Federal bonds are required by the federal government (Medicare and Medicaid providers, customs, immigrants, excise and alcoholic beverage).

·         Miscellaneous bonds include lost securities, lease, guarantee payment of utility bills, guarantee employer

Millhiser Smith has the ability & expertise to handle your bonding needs.  We’re able to guide you through the process, so you are able to focus on managing and growing your business.

To learn more about how Millhiser Smith can assist with your bonding needs, please contact our office and ask to speak with one of our surety advisors.

Flood Protection and Flood Insurance, What You May Not Know...

Tara Widdel,   CIC  CISR

Personal lines Manager, Millhiser Smith Agency, Inc

In our community of Cedar Rapids, Iowa, flood protection is a pretty hot topic. Cedar Rapids was devastated by a massive flood on June 13^th, 2008. We are still rebuilding from that flood and with that comes a lot of hard decisions and discussions on how to go about best rebuilding our city and protecting it from this type of disaster in the future.

About three weeks ago a reporter from the Cedar Rapids Gazette called me to get my opinion on flood protection, and asked if I thought that there was merit to the thought that some of our citizens expressed that flood insurance will protect our community, so there isn’t a need for a formal flood protection system, or flood walls, to be installed along the river. First and foremost, I am a true supporter of flood insurance, and what it can do to help our residents. For those that had flood insurance in 2008 versus those that did not would likely tell you how flood insurance tremendously helped them. With that said, flood insurance is not the answer indefinitely for flood protection for our community. When it comes to relying solely on flood insurance for widespread protection for our residents’ properties and businesses, here are some reasons why flood insurance should not be relied upon as the sole protection against potential future flooding risks:

1.       For those that are not required by their mortgage lender to purchase flood insurance, even though premiums are very affordable if located outside the 100-year flood plain, many opt not to secure a flood policy. So we have many residents not covered with flood insurance because they are not required to have it.

2.       Even when a lender requires coverage for a property, typically they are only requiring that the value of the property that is covered by a loan have flood coverage, and not for the entire value of the property nor do they require contents coverage. If the full value of the home is not required, many times the property is underinsured because the property owner does not opt to fully cover the property for flood loss. This leaves a gap in coverage.

3.       If a property continuously floods, in order for a policy to remain in force for future policy renewals, the NFIP may require additional measures to be taken to protect the home, which are usually costly. This includes raising the structure above base flood elevation, relocating the structure, demolishing the structure or flood-proofing (for non-residential properties only). The flood policy may only assist with a small portion of this additional cost if at all.

4.       Because the cost of flooding across the US is incredibly expensive, the NFIP can only offer basic coverage under the flood policy. It’s not as comprehensive as a homeowners or business owners policy, so the flooded property will not be fully replaced by coverage from a flood policy. A flood policy is meant to get that property back up to a functioning level, not necessarily to replace it to the state it was prior to the loss.

Even with a flood protection wall/ system in place, flood insurance should still be considered, but as you can see it is not the solution for all flood protection issues nor should it be the only solution considered. With weather patterns out of the ordinary, you never know when we could experience our next flood.

What many people in our area may not realize is that flood insurance can be extremely affordable if you are not in a special flood hazard area. For a residential home with a basement located outside the 100-year flood plain, $100,000 in building coverage, $40,000 contents coverage, the annual premium is $304. That equates to about $25 per month.  Also keep in mind, time is of the essence, there is typically a 30 day waiting period before a policy would activate. This 30 day waiting period is only waived if you are required by your lending institution to carry flood insurance.

At Millhiser Smith we are able to write flood insurance policies through the National Flood Insurance Program (NFIP). A flood insurance policy can be written to cover the structure and contents of a home or business.  For more information about flood insurance, please contact the insurance professionals at Millhiser Smith. We are licensed to fully address your questions and to get you a flood insurance quote for your residential home, condo, rental unit (contents only), or business.

 In June 2008 our city was devastated by flood waters, and to this day we’re rebuilding and will be for many years to come. I drive through the flood devastated areas of Cedar Rapids every day, and see firsthand the rubbish left behind, abandoned homes, structures barely standing up, windows and doors boarded shut, and here and there you find a nicely renovated rebuilt home or business that is striving to survive amongst the devastation surrounding it. When you see the rebuilt properties it’s a sign of hope and perseverance, and there are more and more of these properties each day. The homes and businesses that came back after the flood of 2008 had to fight hard, and their fight is not over. I’m encouraged by the strength of our community and its residents, and am proud to say I’m from Cedar Rapids.