Frees Advice: Planning

Non-Owned Auto Coverage

So, I don’t own a car. Do I still need coverage?

When you own a car and carry car insurance protection, the policy typically has two very important sections of coverage. The first is liability and physical damage. Liability protects you in the event you are sued by others for injuring them or damaging their property. Physical damage is also known as collision and other than collision and these protect the car in case you damage it. These coverages follow the car. If you are driving, you are protected. If you loan the car, you are still protected for what others might do. Hit a parked car and the liability pays for the damage to the car you hit and collision pays to fix your car. If you loan your car and the other driver strikes a parked car, the same claim settlement occurs. (If you have loaned the car, the other person’s insurance does not get involved.)

The second area of protection follows you. This includes the coverage for medical bills related to car accidents and Uninsured, UM, and Underinsured Motorist, UIM, coverage. Pennsylvania is a “No-fault State.” This means that regardless of who is at fault for an accident, you are responsible for your medical bills. You must have the first $5,000 under your car insurance and can buy coverage up to $1.1 million. Uninsured and Underinsured Motorist protection provides coverage for you if you are seriously injured by someone else who has no coverage, uninsured, or insufficient coverage, underinsured.

If you don’t own a car, you probably don’t need liability coverage or physical damage coverage. But if you EVER ride in a car belonging to your children, the neighbor, a fellow church member, Uber or Lyft, you have the potential exposure of being injured and needing the medical coverage, or needing the uninsured and underinsured if you are seriously injured.

Remember, I started by saying you need to weigh the risk of exposure against the cost of coverage. Fortunately, the insurance industry has a policy designed to protect people who don’t own cars but still have the medical and UM/UIM exposure. Believe it or not, it is called “Non-owned Auto Coverage.” On average, it costs about $150-$175 for $500,000 of UM/UIM and the maximum medical. (This can vary based on locations and drivers).

Want to learn more about this important protection? Contact your insurance professional. Don’t have an insurance professional? Please call us at 610-933-4950.

The Rogue Death Wave

In boating, there is a term called the rogue wave. This is a huge destructive wave that comes out of nowhere with disastrous effects. Death can do the same thing. As we all know, death comes too soon. We all die too soon.

It was Franklin that said “Only two things are certain; Death and taxes.” It is just as important to be prepared for both. Accountants, tax preparers, and financial consultants spend time trying to help all of us prepare for taxes. Few, if any spend any time preparing for death.

The topic is awkward, frightening, and very emotional. Ignoring the consequences of dying too soon can make things more awkward, more frightening, and much more emotional. What can you do about it?

The purpose of this information is to provide a guideline, or frame work, in which you can begin this process of reviewing your legal documents, your asset protection, access to passwords, and simply where all of the paper work is located. If you care about those around you then you need to spend time getting your affairs in order. Addressing all aspects of this eventual problem will hopefully reduce the burden on those left behind to handle your affairs.

“Show me the money.”  Jerry Maguire

What happens to your income when you die?  Unless you are planning to be dead for only a short period of time, the cash influx stops. You need to think about how things get paid for once the payroll deposits stop.  Make sure that you have a conversation with an insurance professional to determine how much you need. This can be based on simply replacing income, covering liabilities, or buying what your budget allows.

Life insurance should be purchased because you NEED it or because you WANT it. If you have children, you need coverage. If you are older, you may WANT it to provide education for grand children or to leave a gift to your favorite charity.

“The only disability in life is a bad attitude.”  Scott Hamilton

There are always motivational stories about the human triumph over adversity. We should all hope that we have the internal fortitude to overcome these challenges should we ever face them. It will be much easier facing these physical and mental challenges if you have addressed the financial end of being disabled.

Like life insurance, this coverage is designed to handle the financial consequences of not being able to do our job. Life insurance pays if you have the good fortune of being dead. Being disabled means that not only are you not bringing in your pay check, you continue to cause costs to be incurred.

Disability. You are 7 times more likely to be disabled than you are to die. While less than 1% of all term life insurance policies pay, the possibility of being disabled is significantly greater. The solution? Speak with an insurance professional to understand what coverage should be in place.

“I hope I die before I get old.”  The Who

We are living longer than ever before. There is only one thing worse than dying too soon and that would be living too long. What happens when you are no longer capable of taking care of yourself? Whether you need someone to stop and help with household affairs or help you get into your wheel chair, seven out of 10 people will need this assistance. How do you handle this potentially devastating financial burden? Long Term Care.

At an average daily cost of $200 a day, life in a nursing home gets very expensive very quickly. $200 a day means $6000 a month. $6,000 a month means $72,000 a year. The average stay in a care facility is four years which means almost $300,000. How many couples have an extra $300,000 lying around? What happens to the surviving spouse once the $300,000 is expended?

Speak with an insurance professional to better understand the exposure and the costs of securing vital protection for asset preservation.

“No job is finished until the paper work is done.”  Anonymous

I am sure you are not surprised that information from an insurance professional would start with all of the insurance options to address problems. These coverages are just a part of the process of protecting yourself against the rogue death wave. The next section that we will address are the important legal documents that will help assure your intentions once you are dead and give those left to handle your affairs a better understanding of your intentions. I will address the documents needed in the event you don’t die or you are stuck between life and death.

There are three vital documents that everyone over 18 should execute. They include a Durable Power of Attorney, an Advanced Directive, and a Will. (I am not an attorney and this is not intended to be legal advice. As with the financial vehicles mentioned above, you should consult an attorney on the specific drafting of these vital documents.) These documents should be stored in a safe, but accessible place. Keeping them in your safe deposit box is a bad idea as the POA would need the documents in order to access the box.

The Durable Power of Attorney.

As I understand this, it is a document that will allow the person I appoint to handle my affairs in the event I am unable to do so. This can be something as simple as picking up a piece of registered mail for me at the Post Office to handling the sale of real estate if I am incapacitated. Executing this before it is necessary or needed is important. Once you are unable to understand the concept of this power of attorney, it may be too late to get one.

The Advanced Directive.

This is also called a living will. It tells your loved ones what efforts you want then to take to keep you alive. Do you want all measures utilized? Do you want them to be able to disconnect the machines if it is only the machines that are keeping you alive? This is a document that allows you to advise decision makers, in advance, of your desire. It relieves them of the pressure of trying to guess what you would want to happen.

The Will.

This directs your appointed representative to handle the affairs of your estate. Simple or complex, someone needs to know what you want done with your assets once you have passed.

Now that we have dealt with the various insurance coverages that are available for protecting your assets from death, disability, or a stay in a care facility, and the important legal documents that will provide for direction , you should spend time organizing all of this.

I have a series of binders called “Robb’s Death Books.” As harsh as that sounds, they are designed to provide an organized arrangement for all the important paperwork in life. In my case, there are three books.

The first book contains all important documents. This includes car titles, birth certificates, banking documents, social security cards, and marriage licenses. This should be stored in a place that is safe but accessible. In addition to the storage of actual documents, this should also include user names and passwords for all electronic portals. (In addition to the list, I recommend that families use the same apps for password and user names storage. Make sure you use the same app and use a family password that everyone knows.)

All of the legal documents make up Book 2 in the Robb’s Death Book trilogy. This books includes all of the wills, POA’s and advanced directives for ALL family members. Remember, the oldest person doesn’t always die first.

The final book contains all of the insurance policies. This includes car insurance, home insurance, umbrella policies, life insurance, disability policies, and the Long Term Care coverage. Anyone in our family knows exactly where this information is located in the event it is needed at any time.

Other documents to be kept in a safe or safe place.

In the day and age of digital storage, many believe the keeping important documents electronically is a good idea. It is a good idea if there is electricity and internet access. All of that goes out the window after a hurricane or severe storm that knocks out power for days or weeks. You should be sure to keep original, or copies, close at hand of the following


  • Social Security Cards
  • Drivers Licenses
  • Wedding Licenses
  • Birth Certificates
  • Copies of medications
  • Car titles and registrations
  • Jewelry appraisals
  • Deeds
  • Insurance policies- car, home, umbrella, life, disability, long term care, etc.
  • Wills, Powers of Attorney, Advanced Directives, Trusts, etc
  • Updates lists of User names and passwords for online accounts

Home Winterization Tips

So, Halloween and the time change are behind us. That can only mean one thing. Those weird 85 degree days in October will not be around for some time. In fact, if the Farmer’s Almanac and the weather forecasters are right, we are going to be in for a snowy and cold winter. Remember the January through March of 2015? I shoveled snow and spread salt too many times. While there is nothing any of us can do to change the weather, we can get prepared for what Mother Nature may throw at us. Home winterization is an important part of reducing the possibility of things going wrong at the worst possible time.

One of the easiest ways for you to prepare your home for winter is to clean the gutters and downspouts. This will reduce the possibility of an ice dam if we get too much snow. Be sure to close any vents you may have in your house, like the one that handles the whole house fan in your attic. Change the filters on your furnace so that it functions at its highest efficiency. Be sure to disconnect any garden hoses and shut the water off to any exterior faucets. Do you need a snow shovel? Buy it now while the supply lasts.

Want to do slightly more on the winter prep? Have your heater serviced by a professional. Have a contractor check for and repair any damaged shingles. Have that same contractor check electrical outlets to see if there is a gap where warm air can escape, or worse yet, cold air can get in and cause a draft. Be sure to check the flue on your fireplace or gas stove.

Now, those things go a long way toward reducing issues for the house, but what about the occupants of the house? Buy some extra canned soup, tuna, and pasta. Get a couple of extra gallons of water and put a loaf of bread in your freezer. You may not be able to get out to the supermarket right away and having a stockpile of non-perishable food will make sure no one goes to bed hungry. If you don’t use these items during the winter, donate them to the local food shelter when spring breaks.

Long-Term Care Pt. II

There are a variety of different factors to consider when planning for long-term care. First, you should consider where you plan to live when you retire, what setting you prefer, and how much in long-term care payments you can afford to pay out-of-pocket. 

A few other points to make note of include: the age at which you apply for your policy, who to insure on the policy, and avoiding the assumption that you can pay for LTC on your own. The cost of LTC insurance is based off of your age and health when you apply, so the older and worse these two factors are, the higher your insurance may cost. There can be a large difference in the cost of insurance when purchasing it at age 50 compared to age 60. Another factor to avoid is insuring only one spouse on the policy. This can increase financial and emotional burden of LTC if the opposite spouse unexpectedly needs care. Lastly, depending on your financial situation it may be easy to assume you can pay for LTC on your own. Even for wealthy individuals, paying a manageable insurance premium may help protect your loved ones and assets. 

Long-Term Care Planning Pt. I

There are three steps to long-term care planning: understanding the risks, avoiding mistakes, and reducing costs. It’s hard to think about needing full assistance every day in order to get dressed, bathe, and eat, but with people living longer this day in age considering long-term care during future financial planning is a real need.  According to the National Clearinghouse for Long-Term Care Information, 70% of people who reach age 65 will need some sort of care in their lives. The risks with future planning are heightened by the unknown, or not knowing how long these services will be needed. For example, individuals with Alzheimer’s disease may need 24-hour care for up to 10 years. 
The three major risks of long-term care include the financial, emotional, and physical burdens it places on families and the consequences of not having a plan. A few years of paying for long-term care can harm a lifetime’s worth of savings. According to the American Association for Long-Term Care Insurance, the breakdown in costs of long-term care is as follows:

  • Home Health Aide Hourly Rate = $21
  • Homemaker/Companion Hourly Rate = $20
  • Adult Day Care Services Daily Rate = $69
  • Median Monthly Cost of Assisted Living Communities = $42, 750
  • Annual Nursing Home Semi-Private Room = $79,800
  • Private Room = $90,500

The financial impacts may exacerbate the emotional and physical burdens of providing care to a loved one. Procrastinating the formulation of a long-term care plan until it is actually needed may severely impact your finances, quality of life, and independence. Establishing a long-term care insurance plan may help reduce these three risk factors.