By MICHAEL SQUIRES
REVIEW-JOURNAL
For anyone caught speeding, running a red light or committing any number of roadway sins, it's an offer of absolution: no points on your driver's license, no rise in insurance rates, and no time in traffic school or court -- guaranteed.
The claims, proffered in advertisements on television, billboards and flyers, sound too good to be true to some.
"I wonder about it myself sometimes," said Las Vegas Justice Court Deputy Clerk Martin Lotz, who knows the realities of a traffic citation. "I can't speak for other courts, but in our court they can't guarantee that."
But, according to several people involved at nomotix.com, a large Missouri-based practice, the firms that offer this specialized legal assistance deliver on their promise most of the time.
For between $100 and $149 for most citations, the companies contract with an attorney to negotiate reducing moving violations -- which carry points and thus the threat of escalating insurance rates -- to nonmoving violations, which yield no points. The citations essentially become parking tickets, albeit expensive ones the customer must pay.
Chris Ceccarelli, manager of Ticket Resolution Services, said since his business opened its doors in July he has had only a handful of cases where attorneys he hired failed to provide the guaranteed result. About half of those were because of clerical errors, and the other half were in Henderson. Go figure.
"They're very successful," Ceccarelli said.
Darryl Dorfman, owner of Ticket Fixers, declined to give specific numbers but said he is successful in "most cases."
Though their advertisements and claims of success make it seem the industry works some dark art or has a brother-in-law in every traffic court in the county, court officials say that's not the case.
"They do what anybody can do, only they put it on a billboard," said Las Vegas Municipal Court administrator Jim Carmany. "There's nothing that's different for this group of attorneys than for any attorney or the public."
For example, traffic school isn't necessary for motorists to avoid getting points on their license for their first moving violation, Carmany said.
Traffic school does, however, lower the overall cost of getting cited. Including the cost of school and the reduced fine, it's about $80 cheaper in Las Vegas Municipal Court.
As long as a motorist isn't cited for identical violations in the same 12-month period, traffic school and driver's license points are avoidable, Carmany said.
Dorfman admits, "There really is no trick to it."
He said some customers just want to avoid the hassle of taking time away from work to mingle with the unwashed masses at traffic court.
Others, fearing an increase in insurance rates, want to be sure their record stays clean.
Dorfman claims courts benefit as well because citations are handled more efficiently and more lucratively.
Several courts allow lawyers to carry out negotiations and submit pleas by fax, what they call "fax adjudication" or "fax arraignment."
Some courts offer special "negotiated sessions" where a judge, prosecutor and attorneys representing dozens of motorists with citations can handle the cases in bulk.
"There does tend to be a frequent recurring result in many of the traffic charges," North Las Vegas' city attorney Sean McGowan said of the outcome during these monthly negotiated sessions.
But that's not because of any lawyer-to-lawyer professional courtesy or good-old-boy dealings, he said. It's a factor of the number of trials the courts can handle.
"We try to strike the best deal we can in light of our court resources to hold trials," he said. "Do people get better deals when they have a lawyer? Perhaps, because that person is one step closer to being able to take it to trial."
So it is with other courts. Las Vegas Justice and Las Vegas Municipal courts handle between 11,000 and 15,000 traffic citations in a typical month.
"We'd bog down pretty quickly if more went to trial," Carmany said.
It puts the attorney in a favorable position if the issue being fought over is points.
Dorfman believes the courts have shown their willingness to keep points off motorists' licenses as long as they collect fines. In fact, courts report only moving violation convictions to the Department of Motor Vehicles.
"I think the courts, in my opinion, view it as pretty much the same thing as long as they're going to get paid."
Thursday, August 16, 2007
Tuesday, June 5, 2007
What is an Annuity?
What is an annuity?
In its most general sense, an annuity is an agreement for one person or organization to pay another a stream or series of payments. Usually the term “annuity” relates to a contract between you and a life insurance company, but a charity or a trust can take the place of the insurance company.
There are many categories of annuities. They can be classified by:
Nature of the underlying investment – fixed or variable
Primary purpose – accumulation or pay-out (deferred or immediate)
Nature of pay-out commitment – fixed period, fixed amount, or lifetime
Tax status – qualified or nonqualified
Premium payment arrangement – single premium or flexible premium
An annuity can be classified in several of these categories at once. For example, you might buy a nonqualified single premium deferred variable annuity. For brief definitions of these categories, click here.
In general, annuities have the following attractive features:
Tax deferral on investment earnings
Many investments are taxed year by year, but the investment earnings—capital gains and investment income—in annuities aren’t taxable until you withdraw money. This tax deferral is also true of 401(k)s and IRAs; however, unlike these products, there are no limits on the amount you can put into an annuity. Moreover, the minimum withdrawal requirements for annuities are much more liberal than they are for 401(k)s and IRAs.
Protection from creditors
If you own an immediate annuity (that is, you are receiving money from an insurance company), generally the most that creditors can access is the payments as they’re made, since the money you gave the insurance company now belongs to the company. Some state statutes and court decisions also protect some or all of the payments from those annuities. And your money in tax-favored retirement plans, such as IRAs and 401(k)s, are generally protected, whether invested in an annuity or not.
An array of investment options, including “floors”
Many annuity companies offer a variety of investment options. You can invest in a fixed annuity which would credit a specified interest rate, similar to a bank Certificate of Deposit (CD). If you buy a variable annuity, your money can be invested in stock or bond (or other) mutual funds. In recent years, annuity companies have created various types of “floors” that limit the extent of investment decline from an increasing reference point. For example, the annuity may offer a feature that guarantees your investment will never fall below its value on its most recent policy anniversary.
Tax-free transfers among investment options
In contrast to mutual funds and other investments made with “after-tax money,” with annuities there are no tax consequences if you change how your funds are invested. This can be particularly valuable if you are using a strategy called “rebalancing,” which is recommended by many financial advisors. Under rebalancing, you shift your investments periodically to return them to the proportions that you determine represent the risk/return combination most appropriate for your situation.
Lifetime income
A lifetime immediate annuity converts an investment into a stream of payments that last as long as you do. In concept, the payments come from three “pockets”: Your investment, investment earnings and money from a pool of people in your group who do not live as long as actuarial tables forecast. It’s the pooling that’s unique to annuities, and it’s what enables annuity companies to be able to guarantee you a lifetime income.
Benefits to your heirs
There is a common misconception about annuities that goes like this: if you start an immediate lifetime annuity and die soon after that, the insurance company keeps all of your investment in the annuity. That can happen, but it doesn’t have to. To prevent it, buy a “guaranteed period” with the immediate annuity. A guaranteed period commits the insurance company to continue payments after you die to one or more beneficiaries you designate; the payments continue to the end of the stated guaranteed period—usually 10 or 20 years (measured from when you started receiving the annuity payments). Moreover, annuity benefits that pass to beneficiaries don’t go through probate and aren’t governed by your will.
In its most general sense, an annuity is an agreement for one person or organization to pay another a stream or series of payments. Usually the term “annuity” relates to a contract between you and a life insurance company, but a charity or a trust can take the place of the insurance company.
There are many categories of annuities. They can be classified by:
Nature of the underlying investment – fixed or variable
Primary purpose – accumulation or pay-out (deferred or immediate)
Nature of pay-out commitment – fixed period, fixed amount, or lifetime
Tax status – qualified or nonqualified
Premium payment arrangement – single premium or flexible premium
An annuity can be classified in several of these categories at once. For example, you might buy a nonqualified single premium deferred variable annuity. For brief definitions of these categories, click here.
In general, annuities have the following attractive features:
Tax deferral on investment earnings
Many investments are taxed year by year, but the investment earnings—capital gains and investment income—in annuities aren’t taxable until you withdraw money. This tax deferral is also true of 401(k)s and IRAs; however, unlike these products, there are no limits on the amount you can put into an annuity. Moreover, the minimum withdrawal requirements for annuities are much more liberal than they are for 401(k)s and IRAs.
Protection from creditors
If you own an immediate annuity (that is, you are receiving money from an insurance company), generally the most that creditors can access is the payments as they’re made, since the money you gave the insurance company now belongs to the company. Some state statutes and court decisions also protect some or all of the payments from those annuities. And your money in tax-favored retirement plans, such as IRAs and 401(k)s, are generally protected, whether invested in an annuity or not.
An array of investment options, including “floors”
Many annuity companies offer a variety of investment options. You can invest in a fixed annuity which would credit a specified interest rate, similar to a bank Certificate of Deposit (CD). If you buy a variable annuity, your money can be invested in stock or bond (or other) mutual funds. In recent years, annuity companies have created various types of “floors” that limit the extent of investment decline from an increasing reference point. For example, the annuity may offer a feature that guarantees your investment will never fall below its value on its most recent policy anniversary.
Tax-free transfers among investment options
In contrast to mutual funds and other investments made with “after-tax money,” with annuities there are no tax consequences if you change how your funds are invested. This can be particularly valuable if you are using a strategy called “rebalancing,” which is recommended by many financial advisors. Under rebalancing, you shift your investments periodically to return them to the proportions that you determine represent the risk/return combination most appropriate for your situation.
Lifetime income
A lifetime immediate annuity converts an investment into a stream of payments that last as long as you do. In concept, the payments come from three “pockets”: Your investment, investment earnings and money from a pool of people in your group who do not live as long as actuarial tables forecast. It’s the pooling that’s unique to annuities, and it’s what enables annuity companies to be able to guarantee you a lifetime income.
Benefits to your heirs
There is a common misconception about annuities that goes like this: if you start an immediate lifetime annuity and die soon after that, the insurance company keeps all of your investment in the annuity. That can happen, but it doesn’t have to. To prevent it, buy a “guaranteed period” with the immediate annuity. A guaranteed period commits the insurance company to continue payments after you die to one or more beneficiaries you designate; the payments continue to the end of the stated guaranteed period—usually 10 or 20 years (measured from when you started receiving the annuity payments). Moreover, annuity benefits that pass to beneficiaries don’t go through probate and aren’t governed by your will.
Thursday, May 31, 2007
Many Missourians Need Earthquake Insurance
Barely four out of every 10 Missouri homeowners carry earthquake insurance, a cause of concern cited Friday as Gov. Matt Blunt heard briefings on the state's earthquake preparations.
Blunt held a closed-door Cabinet meeting at the State Emergency Management Agency to hear summaries of the earthquake plans at each of the state's agencies. Of particular concern is what would happen if a major earthquake occurs along the New Madrid Fault, which extends from northeast Arkansas through southeast Missouri into southern Illinois.
The governor asked agencies to update their earthquake plans after Hurricane Katrina hit the Gulf Coast earlier this year, swamping not only homes but also the emergency relief efforts.
Blunt said he was pleased with the plans made by state agencies. The focus is on providing immediate care to people's physical and emotional needs, then restoring services and rebuilding homes, businesses and communities, he said.
Yet that could prove difficult for homeowners who don't pay the extra premium for earthquake coverage and cannot afford to rebuild on their own.
"A significant number are without earthquake insurance, including many Missourians within southeast Missouri,'' Blunt said.
Statewide, fewer than 41 percent of home, farm and mobile home insurance policies have earthquake coverage, according to Department of Insurance records. In the city of St. Louis and the 47 counties most prone to earthquake damage, 62 percent have earthquake insurance.
But that percentage appears that high only because 72 percent carry earthquake insurance in heavily populated St. Louis County. Earthquake coverage hovers around 50 percent in New Madrid, Mississippi and Pemiscot counties, where damage is expected to be the heaviest.
Department of Insurance officials said they are trying to draw attention to the need for earthquake insurance.
An earthquake centered near the Missouri Bootheel town of New Madrid produced the largest earthquakes ever in North America between December 1811 and January 1812. U.S. Geological Survey scientists have said there is a 25 percent to 40 percent chance of a magnitude 6.0 earthquake along the New Madrid Fault in roughly the next 50 years.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Blunt held a closed-door Cabinet meeting at the State Emergency Management Agency to hear summaries of the earthquake plans at each of the state's agencies. Of particular concern is what would happen if a major earthquake occurs along the New Madrid Fault, which extends from northeast Arkansas through southeast Missouri into southern Illinois.
The governor asked agencies to update their earthquake plans after Hurricane Katrina hit the Gulf Coast earlier this year, swamping not only homes but also the emergency relief efforts.
Blunt said he was pleased with the plans made by state agencies. The focus is on providing immediate care to people's physical and emotional needs, then restoring services and rebuilding homes, businesses and communities, he said.
Yet that could prove difficult for homeowners who don't pay the extra premium for earthquake coverage and cannot afford to rebuild on their own.
"A significant number are without earthquake insurance, including many Missourians within southeast Missouri,'' Blunt said.
Statewide, fewer than 41 percent of home, farm and mobile home insurance policies have earthquake coverage, according to Department of Insurance records. In the city of St. Louis and the 47 counties most prone to earthquake damage, 62 percent have earthquake insurance.
But that percentage appears that high only because 72 percent carry earthquake insurance in heavily populated St. Louis County. Earthquake coverage hovers around 50 percent in New Madrid, Mississippi and Pemiscot counties, where damage is expected to be the heaviest.
Department of Insurance officials said they are trying to draw attention to the need for earthquake insurance.
An earthquake centered near the Missouri Bootheel town of New Madrid produced the largest earthquakes ever in North America between December 1811 and January 1812. U.S. Geological Survey scientists have said there is a 25 percent to 40 percent chance of a magnitude 6.0 earthquake along the New Madrid Fault in roughly the next 50 years.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Saturday, May 12, 2007
AUTO INSURANCE PREMIUMS EXPECTED TO DROP IN 2007 FOR FIRST TIME SINCE 1999
AUTO INSURANCE PREMIUMS EXPECTED TO DROP IN 2007 FOR FIRST TIME SINCE 1999
Competitive Marketplace, Safer Cars, Fraud-Fighting Gains Contribute to Savings, I.I.I. Reports
December 5, 2006
The typical U.S. driver will pay less for auto insurance in 2007 than in 2006, with the average premium expenditure expected to drop by 0.5 percent, reported the Insurance Information Institute (I.I.I.)
The average annual cost for auto insurance premiums nationwide for 2007 is estimated at $847 per policy, the first decrease since 1999. This translates into a $4 per policy savings as compared to the $851 the typical U.S. driver paid in 2006. And while $4 may not sound like much for an individual policy, it translates into hundreds of millions of dollars in total consumer savings when spread across the U.S. The trend in the auto market stands in stark contrast to the health insurance industry, where premium rates for employer-sponsored policies has risen 87 percent over the past six years (2000-2006), according to a survey by the Kaiser Family Foundation and the Health Research and Educational Trust
“Competitive marketplaces, safer cars, aggressive fraud-fighting and innovative underwriting are joining forces in 2007 to drive down the price of an essential financial product,” said Robert Hartwig, exectutive vice president and chief economist of the I.I.I. “This is great news for drivers who were battered this year by higher fuel prices and rising auto repair costs.”
Hartwig said that savings would vary by driver, depending on his or her accident experience, and by state, with the greatest savings in states with the most competitive markets and lower savings in states where stringent regulations can counteract market forces.
Drivers pay more for auto insurance in states with significant urban populations, greater traffic density and a higher cost-of-living. Tort liability and other auto laws as well as each state’s auto body repair labor costs, liability coverage requirements and theft rates also have an impact on auto insurance prices.
The I.I.I. attributed the auto insurance price reductions to declining claim frequency (down anywhere from 3 to 5 percent in 2006 as compared to 2005), coupled with very modest increases in claims severity, with the average cost per claim, a figure that includes the price of medical care and property damage, rising only 2 to 4 percent in 2006 as compared to 2005.
In addition to fewer accidents, many industry analysts believe that fraud-fighting successes have contributed to a decrease in bogus bodily injury claims.
Safer vehicles and roads, as well as graduated licensing programs for teens, are other factors driving the downward trend in auto insurance premium costs. The changing demographics of the U.S. population, with millions of baby boomers born between 1946 and 1964 now all in what insurers calculate to be their safest driving years, are also contributing to these cost reductions.
“The I.I.I. is finding that the nation’s overall insurance rating system—how a company assesses the risk a particular driver represents—has on the whole become much fairer and more equitable through innovations in underwriting technology,” Dr. Hartwig said. By looking at a potential policyholder’s credit score, in conjunction with criteria such as their driving record and driving habits, insurers are able to match with greater precision than ever before the premium they charge in the context of the potential claims they may have to pay a policyholder, he noted.
Moreover, drivers’ auto insurance premiums are also affected by the amount of coverage they purchase. Every state insists on some level of coverage for its registered drivers. Yet the National Association of Insurance Commissioners (NAIC) estimated in 2004, for instance, that 23 percent of insured drivers did not purchase comprehensive coverage, and 28 percent opted against buying collision coverage. Drivers who buy neither comprehensive nor collision coverage have lower auto insurance premium rates while choosing to self-insure themselves for theft and other losses.
With an auto insurance market that is favorable to consumers, there are additional ways to save money, according to the I.I.I.
Raise your deductible. Higher deductibles on your car could produce savings of 15 to 30 percent or more.
Compare insurance costs before buying a car. Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injury or theft. These include air bags, anti-lock breaks, daytime running lights and anti-theft devices. Cars that are favorite targets for thieves cost more to insure. Information that can help you decide what car to buy is available from the Insurance Institute for Highway Safety ( http://www.iihs.org ).
Reduce coverage on older cars. Consider dropping collision and/or comprehensive coverage on older cars. It may not be cost-effective to continue to buy these coverages on cars worth less than 10 times the amount you would pay for the coverage.
Maintain good credit. Increasingly, insurers are using credit-based insurance scores to determine auto coverage premiums. This is because people with good credit tend to file fewer claims. All else being equal, a person with a good insurance score—credit information used by an insurer to predict claims—may pay much less for insurance than someone with a poor score.
Shop around. Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.
For additional information on auto insurance, go to the I.I.I.’s Web site at http://www.iii.org .
The I.I.I. is a nonprofit, communications organization supported by the insurance industry.
Competitive Marketplace, Safer Cars, Fraud-Fighting Gains Contribute to Savings, I.I.I. Reports
December 5, 2006
The typical U.S. driver will pay less for auto insurance in 2007 than in 2006, with the average premium expenditure expected to drop by 0.5 percent, reported the Insurance Information Institute (I.I.I.)
The average annual cost for auto insurance premiums nationwide for 2007 is estimated at $847 per policy, the first decrease since 1999. This translates into a $4 per policy savings as compared to the $851 the typical U.S. driver paid in 2006. And while $4 may not sound like much for an individual policy, it translates into hundreds of millions of dollars in total consumer savings when spread across the U.S. The trend in the auto market stands in stark contrast to the health insurance industry, where premium rates for employer-sponsored policies has risen 87 percent over the past six years (2000-2006), according to a survey by the Kaiser Family Foundation and the Health Research and Educational Trust
“Competitive marketplaces, safer cars, aggressive fraud-fighting and innovative underwriting are joining forces in 2007 to drive down the price of an essential financial product,” said Robert Hartwig, exectutive vice president and chief economist of the I.I.I. “This is great news for drivers who were battered this year by higher fuel prices and rising auto repair costs.”
Hartwig said that savings would vary by driver, depending on his or her accident experience, and by state, with the greatest savings in states with the most competitive markets and lower savings in states where stringent regulations can counteract market forces.
Drivers pay more for auto insurance in states with significant urban populations, greater traffic density and a higher cost-of-living. Tort liability and other auto laws as well as each state’s auto body repair labor costs, liability coverage requirements and theft rates also have an impact on auto insurance prices.
The I.I.I. attributed the auto insurance price reductions to declining claim frequency (down anywhere from 3 to 5 percent in 2006 as compared to 2005), coupled with very modest increases in claims severity, with the average cost per claim, a figure that includes the price of medical care and property damage, rising only 2 to 4 percent in 2006 as compared to 2005.
In addition to fewer accidents, many industry analysts believe that fraud-fighting successes have contributed to a decrease in bogus bodily injury claims.
Safer vehicles and roads, as well as graduated licensing programs for teens, are other factors driving the downward trend in auto insurance premium costs. The changing demographics of the U.S. population, with millions of baby boomers born between 1946 and 1964 now all in what insurers calculate to be their safest driving years, are also contributing to these cost reductions.
“The I.I.I. is finding that the nation’s overall insurance rating system—how a company assesses the risk a particular driver represents—has on the whole become much fairer and more equitable through innovations in underwriting technology,” Dr. Hartwig said. By looking at a potential policyholder’s credit score, in conjunction with criteria such as their driving record and driving habits, insurers are able to match with greater precision than ever before the premium they charge in the context of the potential claims they may have to pay a policyholder, he noted.
Moreover, drivers’ auto insurance premiums are also affected by the amount of coverage they purchase. Every state insists on some level of coverage for its registered drivers. Yet the National Association of Insurance Commissioners (NAIC) estimated in 2004, for instance, that 23 percent of insured drivers did not purchase comprehensive coverage, and 28 percent opted against buying collision coverage. Drivers who buy neither comprehensive nor collision coverage have lower auto insurance premium rates while choosing to self-insure themselves for theft and other losses.
With an auto insurance market that is favorable to consumers, there are additional ways to save money, according to the I.I.I.
Raise your deductible. Higher deductibles on your car could produce savings of 15 to 30 percent or more.
Compare insurance costs before buying a car. Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injury or theft. These include air bags, anti-lock breaks, daytime running lights and anti-theft devices. Cars that are favorite targets for thieves cost more to insure. Information that can help you decide what car to buy is available from the Insurance Institute for Highway Safety ( http://www.iihs.org ).
Reduce coverage on older cars. Consider dropping collision and/or comprehensive coverage on older cars. It may not be cost-effective to continue to buy these coverages on cars worth less than 10 times the amount you would pay for the coverage.
Maintain good credit. Increasingly, insurers are using credit-based insurance scores to determine auto coverage premiums. This is because people with good credit tend to file fewer claims. All else being equal, a person with a good insurance score—credit information used by an insurer to predict claims—may pay much less for insurance than someone with a poor score.
Shop around. Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.
For additional information on auto insurance, go to the I.I.I.’s Web site at http://www.iii.org .
The I.I.I. is a nonprofit, communications organization supported by the insurance industry.
Tuesday, March 27, 2007
Missouri Insurance Credit Scoring
Credit Scoring
The goal of every insurance company is to correlate rates for insurance policies as closely as possible with the actual cost of claims. If insurers set rates too high they will lose market share to competitors who have more accurately matched rates to expected costs. If they set rates too low they will lose money.
This continuous search for accuracy is good for consumers as well as insurance companies. The majority of consumers benefit because they are not subsidizing people who are worse insurance risks — people who are more likely to file claims than they are.
The computerization of data has brought more accuracy, speed and efficiency to businesses of all kinds. In the insurance arena, credit information has been used for decades to help underwriters decide whether to accept or reject applications for insurance. Now advances in information technology have led to the development of insurance scores, which enable insurers to better assess the risk of future claims.
An insurance score is a numerical ranking based on a person’s credit history. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming.
Statistically, people who have a poor insurance score are more likely to file a claim. Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance.
The goal of every insurance company is to correlate rates for insurance policies as closely as possible with the actual cost of claims. If insurers set rates too high they will lose market share to competitors who have more accurately matched rates to expected costs. If they set rates too low they will lose money.
This continuous search for accuracy is good for consumers as well as insurance companies. The majority of consumers benefit because they are not subsidizing people who are worse insurance risks — people who are more likely to file claims than they are.
The computerization of data has brought more accuracy, speed and efficiency to businesses of all kinds. In the insurance arena, credit information has been used for decades to help underwriters decide whether to accept or reject applications for insurance. Now advances in information technology have led to the development of insurance scores, which enable insurers to better assess the risk of future claims.
An insurance score is a numerical ranking based on a person’s credit history. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming.
Statistically, people who have a poor insurance score are more likely to file a claim. Insurance scores do not include data on race or income because insurers do not collect this information from applicants for insurance.
Saturday, March 24, 2007
Did You Have Substantial Property Damage in 2006?
You May Be Able to Deduct a Portion of Uninsured Losses from Your Taxes; Document Unreimbursed Losses, Including Deductibles, Recommends the I.I.I.
NEW YORK, March 26, 2007 — With less than a month until tax day, taxpayers are sifting through their files to assess last year's gains and losses. If you suffered a loss of personal property not entirely covered by insurance, a portion of the unreimbursed loss may be an allowable deduction on your federal income tax return, according to the Insurance Information Institute (I.I.I.).
“If your home, car or boat was damaged or destroyed by a windstorm, fire, flood, vandalism or other sudden and unexpected disaster, you may be able to deduct a portion of the loss from your taxes,” said Jeanne M. Salvatore, I.I.I.'s senior vice president, public affairs.To qualify for the deduction, these losses usually need to be substantial, said the I.I.I.
If you were significantly underinsured or had a large catastrophe deductible, you may have a sizable unreimbursed casualty loss. “Generally, you can deduct the loss to the extent it exceeds 10 percent of your adjusted gross income, less one hundred dollars," said Anthony Orlando, of the New York based accounting firm Feuer and Orlando LLP. “A special provision, however, was recently enacted for the victims of Hurricanes Katrina, Wilma and Rita. Losses incurred during those storms do not have to exceed 10 percent of adjusted gross income to be deductible. You would have to file amended tax returns for those years in order to take advantage of this.”
"If the property is used in a trade or business, slightly different rules apply, so it is important to ask your tax preparer for assistance,” Orlando noted.“Be sure to collect all receipts, insurance statements, police reports (if appropriate) and other documentation and present it to your tax preparer to see if you qualify,” said Salvatore. And, according to Orlando, medical expenses exceeding 7.5 percent of your adjusted gross income may also qualify for a deduction.
If you prepare your own tax returns, be sure to review the "Nonbusiness Casualty and Theft Losses" and Publication 502 on Medical and Dental Expenses for 2004, available on the Internal Revenue Service Web site ( http://www.irs.gov ). You can also contact your state income tax bureau to learn more about both the federal and state guidelines for this deduction. For more information about insurance, visit the I.I.I. Web site, www.iii.org.
The I.I.I. also has free, downloadable software for creating a home inventory, available at http://www.knowyourstuff.org . This can help consumers keep track of the value of their personal possessions when filing claims and substantiate losses if they suffered an unreimbursed insurance loss.
NEW YORK, March 26, 2007 — With less than a month until tax day, taxpayers are sifting through their files to assess last year's gains and losses. If you suffered a loss of personal property not entirely covered by insurance, a portion of the unreimbursed loss may be an allowable deduction on your federal income tax return, according to the Insurance Information Institute (I.I.I.).
“If your home, car or boat was damaged or destroyed by a windstorm, fire, flood, vandalism or other sudden and unexpected disaster, you may be able to deduct a portion of the loss from your taxes,” said Jeanne M. Salvatore, I.I.I.'s senior vice president, public affairs.To qualify for the deduction, these losses usually need to be substantial, said the I.I.I.
If you were significantly underinsured or had a large catastrophe deductible, you may have a sizable unreimbursed casualty loss. “Generally, you can deduct the loss to the extent it exceeds 10 percent of your adjusted gross income, less one hundred dollars," said Anthony Orlando, of the New York based accounting firm Feuer and Orlando LLP. “A special provision, however, was recently enacted for the victims of Hurricanes Katrina, Wilma and Rita. Losses incurred during those storms do not have to exceed 10 percent of adjusted gross income to be deductible. You would have to file amended tax returns for those years in order to take advantage of this.”
"If the property is used in a trade or business, slightly different rules apply, so it is important to ask your tax preparer for assistance,” Orlando noted.“Be sure to collect all receipts, insurance statements, police reports (if appropriate) and other documentation and present it to your tax preparer to see if you qualify,” said Salvatore. And, according to Orlando, medical expenses exceeding 7.5 percent of your adjusted gross income may also qualify for a deduction.
If you prepare your own tax returns, be sure to review the "Nonbusiness Casualty and Theft Losses" and Publication 502 on Medical and Dental Expenses for 2004, available on the Internal Revenue Service Web site ( http://www.irs.gov ). You can also contact your state income tax bureau to learn more about both the federal and state guidelines for this deduction. For more information about insurance, visit the I.I.I. Web site, www.iii.org.
The I.I.I. also has free, downloadable software for creating a home inventory, available at http://www.knowyourstuff.org . This can help consumers keep track of the value of their personal possessions when filing claims and substantiate losses if they suffered an unreimbursed insurance loss.
Subscribe to:
Posts (Atom)
