What Will Your Umbrella Policy Cover? What Doesn’t It Cover?

umbrella-policyUmbrella policies can be a great addition to your protection package, but make sure that you know what they will and will NOT cover. Just because you purchase the excess liability policy, doesn’t mean that you are covered for every possible situation. It is better to know the limits and restrictions before you need them than to find out they aren’t covered after the fact.

The following examples are only a brief description of some common situations that happen in real life. If you have any questions about your policy coverage or one that you are considering purchasing, be sure to check your policy or ask your agent before an issue arises.

What Is Covered:

1. Injury On Your Property – If someone falls on your property, trips over your child’s scooter that was left on the sidewalk or one of your children’s friends falls off the swing set in your backyard, you may be sued if they get hurt. Their injuries along with the potential legal costs and possible settlement will be covered.

2. Excess Auto Damages – If you or one of your covered family members are involved in an automobile accident that is your fault, the lawsuit that may follow along with any property damages and monetary settlement will be covered up to your policy maximum.

3. Dog Attacks – If your dog bites the paper boy, mail carrier, a jogger or one of your children’s friends, you will probably be sued for damages. Even if the person has provoked your dog on your property and then gets bitten, they will probably be awarded a settlement.

4. Civil Suits – A lawsuit against you for libel, slander, false arrest and a variety of other personal liability issues will be covered. If they win a court award in excess of your homeowner liability limits, the umbrella coverage will protect you up to its limit.

5. Others Property Damage – If by chance your dog chews up your neighbors Persian rug that was drying in their yard, your son is hitting a baseball and it through your neighbor’s three-story high leaded glass window or your daughter is driving on an icy road and fails to stop before she hits the house on the corner, you are covered.

What Is Not Covered:

1. Your Property Damage – An umbrella policy usually will not cover damages to your own property as this is what you own homeowners and auto insurance limits should cover. If your damages are over the limits of your own policies, your umbrella will not cover them.

2. Professional Liability – If you are sued for any type of professional liability, errors and omissions or any type of malpractice claims, your personal umbrella will not cover any of these costs. You can buy commercial or professional liability policies that may cover some or all of these issues.

3. Farm Activities – Any possible activities that are related to a commercial or family farm that could bring a lawsuit against you will not be covered by a personal liability policy. If you are involved in farm activities, you should look into specific farm liability protection.

4. Employment Practices – If you are being sued for any issues related to employment practices like discriminatory hiring or firing, sexual harassment in the workplace or no-compete clause violations, these will generally not be covered by most personal liability umbrellas.

Summary: As you can see, many different things can happen in life and unfortunately we live in a very litigious society. As lawsuits continue to get larger and larger, making sure that you have an adequate amount of protection becomes imperative. Don’t ignore the problem and hope it will never visit your family. Protect yourself, enjoy life ad sleep well at night.

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First Time Home Buyer Beware – 7 Common Pitfalls to Avoid

First Time Home BuyerAre you ready to buy your first house? That’s exciting and possibly terrifying at the same time. But don’t worry, if you know what to look for and have a structured plan of attack, you can maneuver through the obstacles and reach the finish line with a great new home.

Before you start your search, there are few things you will want to watch out for. Also known as… common pitfalls to avoid. If you can recognize these and figure out how to bypass them before they cause a problem, you will save thousands of dollars and plenty of headaches.

Here are 7 of the 15 pitfalls that are outlined in chapter 4 of my new book – How Much House Can I REALLY Afford? Practical Tips To Avoid Becoming House Poor.

Pitfall Number 1:

Falling in love with a house before shopping around. I always recommend looking at 20-30 houses before you place your first offer. This way you will see what’s out there, at what price points and know what features you really want. If you fall in love with one of the first… you may over-pay and miss an even better, more affordable house down the road. This is a very common pitfall and it can be very costly too.

Pitfall Number 2:

Cosmetic House Flippers. Beware of investors that purchase downtrodden houses and spruce them up with cheap labor and materials in order to “Flip” them onto an unsuspecting buyer. Don’t let that buyer… be you! As the saying goes… “You can put lipstick on a pig…it may look nice… but it is still a pig”

Pitfall Number 3:

Realtor Tells You To Offer Above Asking Price. In some very fast-moving markets, you may have to offer above the asking price, but most real estate markets are not moving that fast. However, most Realtors want you to believe that they are. This is one of the most common “games” that real estate sales people play. Don’t fall for it.

Pitfall Number 4:

Make sure to add a 24 or 48 hour – “Accept, Decline or Counter” clause to every purchase offer on a home. If you offer them 24-48 hours to make a decision, you will get your answer and/or a counter offer quicker so you can continue negotiating or move on to the next property.

Pitfall Number 5:

You will also want to add a “Mortgage Financing Contingency” clause which states that if you are unable to get the mortgage financing commitment under the specific terms and rate maximum that you are asking for, the deal is canceled and your deposit is refunded. Without it, you could be on the hook.

Pitfall Number 6:

Making Too Big of a Deposit. Whenever possible, only make an initial deposit of $500 to $1,000 with the contract. Try not to make any additional deposits until closing. If you need to make any additional deposits, don’t get influenced to deposit any more than the absolute minimum required. Let the realtors know that you will not be making any deposits over 2% of the purchase price before closing.

Pitfall Number 7:

Telling Your Realtor Everything. This can be an eye opener as well. Did you know that all realtors (unless specifically acting as a buyer’s broker) work for the sellers? This is true. Even if you are working with a realtor on your own, they get paid a commission from the Seller, not you.

Tell your realtor only what you want them to know and ultimately tell the sellers. Normally you will not be allowed to meet the sellers or attend the offer presentation. The less wiggle room your realtor has, the harder they can sell to get your offer accepted… as is.

I hope this helps you on your journey to buying a house, making it a home and keeping you financially secure. Being a home “owner” can be a great thing… but if done wrong, it can become a living nightmare. 

Check out my Amazon Author Page here for more details about this book and others. 

Low Cost College Credits – Get Yours Here

Low Cost CollegeMany high school students have the opportunity to participate in advanced placement classes. These can provide a nice cost savings when you get to college if you take full advantage of the program, its features and receive a satisfactory grade on the exam. Unfortunately, not all students are selected to participate in the AP program because of time constraints, grades or lack of availability from their school.

But there are other options available that anyone can utilize, such as the CLEP program offered through the College Board. By using this program properly, you could receive college credit for up to four semesters worth of college courses without ever stepping into a college classroom.

In order to make the most of your college education, as well as save the most money on tuition, room and board and graduate on time or early, the following steps will help you get ahead of the college game, before you even start.

Step 1: Make sure that you apply for and receive college credit, for all high school advance placement classes that you took and passed with a grade of 3.0 or higher. These will allow you to eliminate one college class for each qualifying AP exam that you passed. These alone will help, but with most students changing their major at least once, it may cause you to fall behind schedule and have to take additional classes later to catch up.

Step 2: CLEP exams offer another source of potential savings in this area. These credit by exam programs allow you to study online and take an exam that if passed will give you full college credit for the class without ever stepping in the classroom. There are over 30 classes you can take by exam and receive credit.

The CLEP program will allow you to get credit for several classes at the introductory level and the cost of studying and the exam itself is just over $100 per exam. This can be a great savings tools for students that want to ensure they graduate on time or those that want to graduate early and save an entire semester or even a year of college costs.

Step 3: Many successful students also use the CLEP program to get ahead so they can pursue a dual major or a minor in some other field of study. Whichever way you choose to use them, they will help you save money. Be sure to check with your college before you enroll in the CLEP program to make sure that they honor these credit by exam classes. Over 3,000 schools presently do. You can also check the College Board website for additional information on CLEP credits.

Step 4: Another strategy that many students use to get ahead is to take 18 credit hours each semester. Most schools do not charge extra for taking six classes instead of five, so use the opportunity to get the most out of your education. If you take one extra course each semester, you could also graduate early and save thousands.

Summary: While college is a great time to mature and grow socially, it is getting more expensive every year. By utilizing some or all of these strategies, any student can qualify for more college credit at substantially lower costs. Make sure that you take advantage of these opportunities and cut your student loans and other college costs to a minimum.

Why Many Realtors… Hate Working With Buyers

Home BuyersThis may sound like nonsense, but many Realtors do not like working with home buyers. How could that be? Why? Doesn’t every real estate transaction need a Buyer… and a Seller? Of course they do.

But think about whom Realtor’s actually work for in most transactions. Their commissions are generally paid by the Seller. That means they have a contract with the Seller to sell their house. If they successfully arrange for a qualified buyer who agrees, executes and closes on the deal, they receive their commission.

Sure they have to place the property on the MLS online, advertise the house, hold open houses if necessary and present offers as they come in, but if they consummate a sale, they get paid. Ideally, some Realtor’s would only work with Sellers if they could.

This can also be a conflict of interest for Buyers. If you are looking to purchase a house, do you have to pay the commission to a Realtor that you decide to work with? Generally No. If the Realtor that you are working with helps you find a house and you agree to a deal, they get paid their commission… from the Seller. Who did they really work for?

In most cases, they also work for the Seller. Even though they are helping you… the Buyer, by giving you advice and showing you houses in the area. They are still paid by the Seller of the home you end up purchasing.

Do you see the conflict of interest here? If both the Seller’s Realtor and your Realtor are being paid by the Seller, what kind of offers are they making on your behalf.

I have actually witnessed a situation where a Buyer told their Realtor to place an offer for $199,000, but I am willing to go up to $215,000 if needed. The house was listed with an offering price of $225,000

Guess what “your” Realtor is obligated to do when they present your offer to the Seller and Seller’s Realtor?

It went like this.

I have an offer from a young couple that wants to offer $199,000 for your house. I believe this is a nice offer, they have been pre-approved and their purchase has no contingencies. I have also been told that they are willing to go as high as $215,000 for the property….

What do you think the Seller and Seller’s Realtor are going to do? Accept your $199,000 offer?

Of course not, they will counter your offer higher than the $215,000 and then have you counter offer back with $215,000.

Did “your” Realtor help you with this deal? Did they fight for your best price? Did they get paid a higher commission on $215,000 than on $199,000? Who did they really work for?

When you are dealing with a Realtor, you need to know who they work for before you allow them to negotiate on your behalf.

For many Realtor’s, Sellers take up too much time and effort. Driving around, looking at houses, never finding the right house… it makes them wonder if you will ever buy a house. Or maybe you will find a FSBO, For Sale By Owner and cut them out of the transaction entirely.

At least with Seller’s, if someone brings them a Buyer… they get paid their commission. I hope you can see why many Realtors, don’t particularly like working with Buyers.

Remember there are many great Realtors out there. But as a Buyer… you should always be concerned with and know who is paying their commission? If you are looking to buy a house or know anyone that is considering it, please make sure to share this information with them.

For a simple solution to this problem, check out my new book entitled – How Much House Can I REALLY Afford? – on Amazon.com.

This article is just one of the many “Common Pitfalls to Avoid” that are covered in the book. Any one of them could cost thousands of dollars, cause headaches, plenty of stress and arguments in the process.

College Planning – Finding the Right College – The First Time

Which Way To CollegeFinding the right college can be a daunting task, but it can be very expensive if you do NOT find the right college the first time around. Most students that transfer out after one or two semesters at a college find that they take an extra one to three semesters to finish their college education. At the cost of $5,000 to $30,000 per semester, it makes great sense to perform a methodical and cost-effective search before deciding on a college.

Here are a few suggestion to make your search go smoother. First start with a broad search on the internet and at your high school guidance department. Select your criteria for distance from home, state or private school, field of study and any extracurricular or athletic programs that you want available. This should provide a list of 20 to 75 schools.

Next you will want to visit these college web sites and take their virtual tour if available. While on their site, be sure to take note of their estimated cost of attendance, usually in the admission or financial aid section. Start a handwritten or computer spreadsheet to keep track of these items and start comparing the colleges. Make sure to compare each college for the same categories, so you get a fair comparison.

Once you have the list narrowed to your top 10 “best fit” colleges that meet your needs and financial situation, it is time to start the formal search process. This will include visiting the college campus for an open house or a campus tour to further narrow the field. Be sure to rate and rank each school that you visit on the same scale so that a fair comparison can be made.

Next, take your top three or four schools and develop your contacts list at the school. Then arrange for overnight visits and ultimately make your final selection. During these overnight visits you will get an accurate look at the campus life, classroom and dormitory atmospheres. Make a specific point of visiting the library, dining halls and intramural activities that interest you.

Take notes about the things that you like and dislike the most at each college campus. There will almost always be one college that stands out as the best fit. Congratulations, you just methodically saved time and money. If you follow these steps, you will have a rewarding college experience and enjoy your life on campus.

Summary:

We all know how important a college education can be. For most families, other than buying a house, it can be the biggest investment they will make. Do your research, compare your choices, narrow them down and then take them for a test drive. You are guaranteed to save time, money and reduce the stress about making a wrong choice.

To learn more about College Planning, Financial Aid and other relevant topics, check out my Amazon Author Page.

To Maximize Financial Aid – High School Preparation Is a Must

College AidFor most families, the cost of their child’s college education will be one of the biggest expenses that they will incur during their working years. With the price tag of a four-year education ranging between $20,000 up to $240,000 or more per child, the impact on your financial well-being can be significant.

It is important to prepare for this expense in a variety of ways, but one that is commonly overlooked is the pre-college phase that happens during the high school years.

Freshman year in high school is a great time to begin thinking about college and the financial aid process. It is important that your student prepares themselves in the areas that will make them appeal to college admissions and financial aid departments.

What follows in this section is a brief overview of some of the steps that your student should be taking in an effort to get off to a good start. These steps are based on past students that have achieved success in college and obtaining maximum financial aid and scholarships.

Start by finding a club to join. Look for something that interests you, but don’t worry if you have no great experience or talents to offer at first. The whole purpose of these clubs is to help interested students develop skills for the future and show them the qualities of leadership and social interaction.

Next, begin looking into your school’s music, drama or athletic programs. By now you may have already been involved in some of these areas and have grown comfortable with your specific talents that you possess. Try to extend your comfort zone and experiment with school programs that you have not been involved with before. Showing colleges a diverse array of involvement and interests can be great when it comes time for applications and financial aid.

As you enter your sophomore year in high school, start investigating how you can get involved in community service projects and other local volunteer efforts. Giving back to your school, your town and your community can be a great opportunity to build valuable skills for future success in any field that you choose to explore as a career.

As you progress through high school, your goal is to begin preparing an impressive college resume, one that will be able to help you display your accomplishments, talents and specific skills. To discover more information about the high school preparation process and how it can make your financial aid efforts more effective, visit these topics and other books by this author on his Amazon Author Page.

Cutting College Costs To Reduce Education Debt

High college costs

With today’s high cost of a college education, students and parents are accumulating higher and higher education debt loads. The average student now graduates with student loans totaling over $26,000 according to the most recent statistics. And parents are taking other loans in the form of PLUS loans, home equity and 401K loans that are also be used to pay for the college education.

Hope and Solutions.

Most families are focusing on ways to get federal, state and university financial aid programs to pay more of the bill for their education, but in reality, these sources are limited.

The other side of the dilemma is often overlooked by students and families. This is the expense reduction and cost savings side of the equation. For many students, if they take an active and aggressive approach to reducing expenses, they can get the same high quality education and college experience for less and with substantially less loans.

Lets look at the multitude of ways that you can begin reversing the direction of your cash outflow by learning the specific areas of savings that any student, on any college campus, in any state can begin using to turn the tides and save money.

College Savings Start Early.

One of the biggest ways to waste money in college is the selection of the wrong college. If a student changes colleges after one or two semesters, it almost always lengthens their college career from four years to four and a half, or even six years. This can cost thousands of dollars extra. So a thorough college search, including open houses, campus tour and visitation programs may cost a couple hundred dollars up front, but will save thousands if your student graduates on time or even early.

Also the cost of college applications is no small matter when many cost between $15 – $65 each just to apply. Following the right college search guidelines, you will find many universities willing to provide a FREE application as a reward for your efforts.

College Freshman Savings.

This area starts with proper planning and knowledge of the strategies and inner workings of the college campus. Everything from textbooks, meal plans and campus housing arrangements leave many cost saving options hidden to those that are unaware of their existence. I am always amazed at how many students eventually find this information by their third or fourth year, then realize how much they could have saved during their first two or three years, if they had only known.

Second, Third and Fourth Year Savings.

After freshman year, more options become available to the average student. Unfortunately, the guidance given to upper-class students in these areas is almost nonexistent. Once the college has hooked a freshman, they spend very little effort to keep your business.

But that can be easily corrected if you are armed with the knowledge of what needs to be done. You have to take the initiative, see the right people, call the right departments and request the right forms to see any of these available savings or increased aid added to your bottom line. Most students never even apply because it isn’t openly advertised.

The Final Area… For Many.

Many students desire, or are compelled, to attend graduate school to get a job. The college is more than happy to accept your payment for these classes by check, credit card or student loan, if you are so inclined to continue handing it over.

But for those students that learn the right strategies and set them up in advance, they can usually get the college to pay for some or all of their graduate study and save tens of thousands of dollars or more in the process. In many cases you can get money from the college and get money from local businesses or future employers that will gladly help to advance your education in return for paid employment opportunities during your studies or upon graduation.

Summary:

The key with all these savings is to know what they are and find out how to start them before your opportunity is lost. To learn more about these strategies and discover additional ways to cut the cost of your college education, click here to visit my Amazon Author Page. Congratulations… your savings begin here. http://www.amazon.com/Keith-D.-Maderer/e/B0045KGSC0/