TURNING 18? GOT YOUR POA’S LINED UP?

TURNING 18? GOT YOUR POA’S LINED UP?

By Kim K. Steffan, Attorney

 

High school graduations make me think about kids becoming adults, leaving the nest, or making their way in the world. You may not have thought about why a financial power of attorney (POA) and a health care power of attorney (HCPOA) are important for young adults upon turning 18.

As our teenagers happily remind us, turning 18 makes one legally an adult.  If you are a parent of a 17 year old, you’ve been used to making decisions for him or her, giving permission for activities, maybe opening and managing a savings account for him or her, and receiving medical information.  All of a sudden, once your child turns 18, you as a parent no longer have the automatic authority to do those things, even if your child still resides at home.  A doctor may refuse to provide you medical information about your adult child because doing so would violate HIPAA.  Banks may refuse to allow you to move money from your child’s savings account to his checking account when he is in college, even if you used to do that for him.  How can we avoid these problems?

Young adults, like any other adults, should consider having a financial power of attorney (POA) and a health care power of attorney (HCPOA).  The financial power of attorney appoints someone else to handle their financial matters.  This includes getting their bills paid, moving money from one account to another, and signing contracts.  The POA can be set to appoint someone to act only if the young adult is physically or mentally incapacitated (e.g., due to accident or illness) or it can be set to allow someone he/she trusts to do these things anytime for his/her convenience (e.g., when he/she is away at college, traveling before starting a job, etc.).  A POA should be made effective anytime only if the person being appointed is someone the young adult fully and completely trusts, because it means that person can take actions about his/her finances, credit, and bank account even when the young adult is perfectly capable of handling these things for himself/herself.

A health care power of attorney (HCPOA) appoints someone to make medical decisions only if the person making the document cannot make those decisions for himself/herself.  If a young adult appoints a parent on her HCPOA, it means that if she has an injury or illness making her unable to make medical care decisions, the parent would be authorized to receive information from the doctor or hospital, and to make decisions based on that information.

Young adults most commonly appoint one or both parents (or, if raised by someone else, that person) to serve on their financial and health care powers of attorney.  Over time, the young person may develop other relationships making it logical to change the person appointed, like when he/she marries or has a long-term relationship.  The documents can always be updated later.

Many attorneys will prepare financial and health care powers of attorney for young people who have recently turned18 at a courtesy (inexpensive) fee that doesn’t cover the lawyer’s time.  Lawyers often do this just to help out, because they know it lets the family rest easier.  It is always acceptable to ask for fee information from a lawyer’s office either before scheduling an appointment or before the lawyer begins work for which you could be charged.

 

Kim K. Steffan is an attorney with Steffan & Associates, P.C. in Hillsborough.  She can be reached at 919-732-7300 or kim.steffan@steffanlaw.com.

 

YOUNG ADULTS AND ALCOHOL LAWS

YOUNG ADULTS AND ALCOHOL LAWS

By Kim K. Steffan, Attorney

 

Here are four terms that are important to understand criminal liability of adults and underage (under 21) persons.  How many of them do you know: “no exceptions state,” “zero tolerance,” “Good Samaritan,” and “400%”?

  1. As a “no exceptions state,” NC makes it a crime (a misdemeanor) for an adult to provide alcohol to someone under 21 for any reason, anywhere. There is no parent-child exception, at-home exception, or a dinner-table exception. Penalties include fines, community service, and possible jail time.
  2. North Carolina is a “zero tolerance” state for underage drinking and driving. It is illegal for an underage person to drive with any alcohol in his system, or while drinking alcohol. If alcohol is detected when the young person is stopped, his license is immediately suspended for 30 days, with a $100 fee to get it back; if convicted, he has a one year license suspension (and if under 18, no limited driving privilege), community service or jail time, a fine of up to $1,000, court costs of at least $190, plus his attorney’s fees.  This conviction may have to be disclosed on college applications, job applications, rent applications, etc.
  3. There are two places where the “400%” appears in this column. If convicted of underage drinking and driving, expect vehicle insurance to increase by about 400% for three years.
  4. If someone under 21 is convicted of purchasing or trying to purchase alcoholic beverages, it means a one year license revocation (which may be surprising, since the offense doesn’t involve driving) with no limited driving privilege, community service or jail time, court costs of $180, a fine, and attorney’s fees if a lawyer is retained. Vehicle insurance rates go up as well.  Penalties for underage drinking include community service or jail, a fine, court costs, and possible attorney’s fees.  Any criminal conviction can cause problems with applications for employment, college, or apartment rental.
  5. NC has a “Good Samaritan” law protecting from criminal prosecution someone who calls for emergency medical help for another person who appears to be having a drug-related overdose, including alcohol poisoning. To get this protection, the caller must give her name to the 911 operator, and must stay with the victim until help arrives.  The victim also receives immunity from criminal prosecution.  If a medical emergency like this happens at a party, fear can cause deadly inaction.  It is important to know that you can and should call 911.
  6. What’s the other “400%” reference? Orange County District Court records show that, from 2010 to 2015, prosecutions for adults who gave alcohol to someone under age 21 have gone UP by 400%.  Orange County law enforcement and courts take this offense seriously.  Alcohol contributes to the three leading causes of death among youths 12 -20 years old (unintentional injury, homicide, and suicide).  Alcohol consumption by high school students tends to spike around prom and graduation.  The most common place teens get alcohol is parents’ homes (theirs’ or their friends’).

 

Knowing the law may help keep you and those you love out of trouble, and from suffering potentially life-changing consequences.  Thanks to Gayane Chambless of the Orange Partnership for Alcohol and Drug Free Youth for assisting with resources for this column.

 

STANDBY GUARDIAN LAW

          Suppose you have been appointed by a Clerk of Court as the guardian (meaning either a general guardian or a guardian of the person) of an adult relative who is incompetent because of dementia, intellectual disabilities, or developmental disabilities. What if you then develop progressive or debilitating health problems of your own? How can you protect your loved one if your health problems at some point make you unable to serve, or even cause your death? A section of Chapter 35A of the NC General Statutes added in 2015 allows you to name a “standby guardian” to take your place if necessary.  It expands upon an existing statute allowing seriously ill parents of minor children to name a standby guardian for their children, to serve in the event of the parent’s death or disability.

          The standby guardian is someone who acts as a back-up guardian, ready to assume the responsibilities of a guardian of the person or a general guardian upon a triggering event, including the current guardian’s death, mental incapacity (as determined by the Clerk), or sooner upon the current guardian’s written consent (which may be a decline in physical health).  Without naming a standby guardian, if the current guardian died or became incapacitated, there would be a gap leaving no one serving as guardian until the Clerk is able to hold a hearing to appoint a new guardian.  Also, in that situation, the Clerk would not have the advantage of knowing whom the original guardian thinks would do a good job next.

          However, the standby guardian process is only available when the current guardian suffers from a progressive chronic or irreversible fatal illness.  It is not available when the current guardian is healthy.  You may be thinking that it should be available to any guardian since even a healthy guardian can be “hit by a bus” and killed – and you’d have a good point.  At some point in the future, a further expansion may permit this for any guardian, but not yet.

          If you are a guardian with a progressive chronic or irreversible fatal illness, you have two options to appoint a standby guardian.  One is by petition.  Until more specific forms are developed, use AOC Form E-209, which is the form for guardians of minor children.  The Clerk will hold a hearing to confirm both the guardian’s progressive illness and the suitability of the person nominated as the standby guardian.  Then the Clerk will enter an order appointing the standby guardian and issue him/her letters of appointment that list the conditions upon which the power becomes effective. When the standby guardian receives documentation of the triggering event (like a death certificate for the original guardian), he/she must file it with the Clerk.

           The other way to name a standby guardian is by a written designation witnessed by two adults.  When the standby guardian receives any of the documents listed in the statute for a triggering event, his authority begins.  However, he still must file a petition with the Clerk within 90 days of receiving documentation of the triggering event. If the Clerk finds the statutory requirements have been met, the Clerk will enter an order appointing the person and issuing guardianship letters to him/her.

          While the statute does not address all problems involved in managing guardianships of adults, it does solve one.  For more information on standby guardianships, contact the Clerk of Court’s office or consult an attorney.

 

 

EXPUNGING CRIMINAL RECORDS FOR YOUNG DEFENDANTS

You may know someone who committed a youthful mistake resulting in a criminal record.  That someone may even be you.  Even if you’ve had a clean record since, this history can interfere with getting a job, renting an apartment, obtaining a professional license, or establishing favorable child custody rights.  Wouldn’t it be great to make this record go away?  For many charges and/or convictions of juveniles or young adults under 21, it is possible to make them go away by a process called “expungement” or “expunction.”

  • Delinquent or Undisciplined Juveniles (e.g., “found guilty” of skipping school, being where minors are not allowed, driving a car without a license, running away, etc.): You can have these records expunged by applying after you are 18, provided you were not found guilty of any later crimes as a juvenile or as an adult.  It is not available to serious crimes (Class A through E felonies).
  • Juvenile Whose Case was Ultimately Dismissed: If you were charged with a crime or alleged to be delinquent or undisciplined but the case was dismissed (including where you completed a deferred prosecution program), you can apply to expunge the charges any time after you are 16.
  • Conviction of Misdemeanor Under 18:  If you were convicted of a misdemeanor like simple assault or shoplifting when under 18, you can expunge the record if you wait two years to apply, and if you don’t have any felony or misdemeanor convictions within that time (except minor traffic offenses).  You are not eligible if the offense involved impaired driving, however.
  • Conviction of Non-Violent Felony Under 18:  If you were convicted of a non-violent felony when under 18 (e.g., felony larceny, felony drug offenses), and if this is the only conviction on your record, you can have it expunged.  To be eligible, you must also perform 100 hours of community service. Expungement is not available for offenses involving impaired driving. The waiting period to apply is four years after conviction (if no sentence was imposed) or four years after finishing probation or incarceration.
  • Conviction of Misdemeanor Possession of Alcohol Under 21:  This can be expunged by waiting two years from the conviction (or from completing probation) to apply, if you do not have any misdemeanor or felony convictions during that time (other than minor traffic offenses).  Note that driving while impaired convictions are not eligible for expungement, regardless of age.
  • First Offender Conviction of Certain Toxic Vapors/Drug Paraphernalia Charges Under 21:  This conviction can be expunged if you completed a first offenders program for toxic vapors or drug paraphernalia. Alternatively, apply more than 12 months after conviction.  You also must have a clean record of no misdemeanor or felony convictions since the original offense (except for minor traffic offenses).
  • Certain Gang Offenses Under Age 17: Expungement is available if this is your only felony or misdemeanor (other than minor traffic offenses) during the minimum two years between your conviction (or completion of probation if you were placed on probation) and your application. You are also eligible for expungement if your charges were dismissed under a conditional discharge for first time offenders program.
  • Dismissal or Not Guilty Due to Identity Theft:  At any age, if misdemeanor or felony charges were dismissed or you were found not guilty as a result of someone fraudulently giving your name to police, you can have the charge expunged.

 

If you have a charge or conviction expunged, you can and should respond to questions about your criminal background as if this event never happened.  That’s the purpose of expungement.

Some expungements are simple, with forms available from the Clerk.  In other circumstances, expungement is more complicated, and you will likely want an attorney to help you.  Some expungements require a Clerk’s fee, and some do not.  More information is available from the Clerk of Court or from an attorney.  Steffan & Associates, PC can assist you in successfully navigating an expungement.

ARE RETIREMENT ACCOUNTS PROTECTED FROM CREDITORS?

ARE RETIREMENT ACCOUNTS PROTECTED FROM CREDITORS?

By Kim K. Steffan, Attorney

 

            Job losses during difficult economic times caused some people who had always paid their bills to become delinquent on debts like credit cards and consumer loans.  In some cases, creditors got judgments against them, or threatened to.  A common question in those cases is whether their creditors can take their retirement accounts.  Many of those clients have put a little away each year for a long time, and would hate to lose this retirement nest egg.

            The good news is that retirement accounts which you fund while you are working are generally safe from most creditors.  N.C. General Statute section 1C-1601 covers what assets creditors can seize and sell to satisfy judgments – a topic which is entirely separate from filing bankruptcy, by the way.  Under that statute, money in your 401(k), traditional IRA, Roth IRA, and/or 403(b) is protected.  Whether you file bankruptcy or not, NC law applies to allow an unlimited dollar amount of protection for qualifying retirement accounts.  Your contributions to your employer’s pension plan (like the N.C. State Retirement System) are also safe, but for a different reason – because they are held by the pension plan and are not assets in your name. 

            In fact, if you see creditor problems coming up, you might choose to contribute as much as you can (subject to annual limitations by law, which depend in part on your age) to protect those dollars from creditors too.  If those same funds are left in your bank account or used to purchase an extra vehicle, for example, a creditor can easily take the funds or the vehicle to satisfy a judgment entered against you.

            The rule I’ve described governs consumer debt like credit cards, furniture store loans, deficiency judgments on vehicle loans, personal loans, etc.  As you might guess, there are some non-consumer creditors that can seize your retirement accounts – e.g., when the United States, North Carolina, or a County is the creditor, or when needed for paying alimony or child support.

            Some clients follow up with this question:  Didn’t I hear news about a U.S. Supreme Court case making retirement accounts fair game for creditors?  The Clark case in the summer of 2014 held that when you inherit an IRA from someone other than a spouse, your inherited IRA funds are not protected from your creditors.  Why treat IRAs inherited from someone other than a spouse differently than retirement accounts you have funded?  Those accounts are treated differently for tax purposes than the retirement accounts you fund for your retirement.  Inherited IRAs (from other than a spouse) don’t have to be left untouched until you retire.  In fact, the IRS requires that you take the money out of these inherited IRAs within a few years anyway (because they want to tax you on the income).  That makes these inherited IRAs more like money market accounts than like true retirement accounts.  A special rule still protects IRAs inherited from a spouse, because the law recognizes that most couples plan together for retirement using both spouses’ accounts.  A lot of news coverage that was just too summary made it sound like the USSC had held all retirement accounts were fair game for creditors, which is not accurate. 

            So, if you’ve fallen into trouble with consumer debt, you can usually rest easy that your retirement accounts you’ve worked hard to put away for your future are safe.  They will withstand consumer creditor claims and still be there to help support you and your spouse during retirement.

 

NC DRONE LAW

NC DRONE LAW
In recent years, more uses for drones (technically “unmanned aircraft”) have been developed. Farmers want them to identify where water or fertilizers are needed. Law enforcement envisions using them in criminal investigations. Private investigators could use them in surveillance. News organizations want to have them photograph dangerous places, like storm aftermath or riots. Amazon would like them to deliver packages to your house. A new state law took effect October 1, 2014 limiting the use of drones.
Note that the Federal Aviation Administration (FAA) has its own rules about drone use. The FAA is still developing rules, but basically a drone cannot be used for commercial or business purposes without an FAA permit. Under both federal and state laws, it is generally lawful for anyone to use model aircraft under 55 pounds in the sight of the operator on property where he has permission, away from manned aircraft, for recreational purposes.
The rest of this article assumes that the drone operator has an FAA permit, and assumes that the operator seeks to use the drone for something other than recreational purposes. A NC Department of Transportation license must be obtained before using a drone for commercial purposes. Under the new law, a person, company, or government agency may use a drone to conduct surveillance of any person, dwelling, or land only with the consent of the person or of the owner of the dwelling or land. Permission of the landowner is required to launch or retrieve a drone from their property. Without permission, no one may use a drone to photograph any individual for the purpose of publishing or disseminating the image. There is an exception for news agencies photographing newsworthy events or places where the public is generally invited.
Special rules for law enforcement attempt to apply existing laws about warrants to drones. If officers get a warrant based on probable cause, they don’t have to rely on these exceptions. Just as a police officer can search in plain sight (e.g., in an open front yard) without a warrant, an officer’s drone can view and photograph in plain sight. Since warrants aren’t required when an officer has a “reasonable suspicion” that quick action is needed to swift action is needed to prevent imminent danger to life or serious damage to property, to prevent the imminent escape of a suspect or the destruction of evidence, to conduct pursuit of an escapee or suspect, or to facilitate the search for a missing person, a drone can also be used without a warrant for these purposes.
Some privacy advocates worry about police using drones to photograph protestors. The new law allows officers to use drones to photograph gatherings to which the general public is invited on public or private land (e.g., if the protestors are gathered on a public street). If the protestors hold a closed meeting at someone’s home in order to plan an upcoming gathering, drones cannot lawfully take those photos without consent. However, consistent with federal law, police may use drones without a warrant to counter a high risk of a terrorist attack by a specific individual or organization if the US Secretary of Homeland Security or the Secretary of the NC Department of Public Safety determines that credible intelligence indicates that such a risk exists. If police gather evidence in violation of the statute, it is not admissible in criminal court unless the court determines that it was “obtained or collected under the objectively reasonable, good-faith belief that the actions were lawful.”
The new law makes it a criminal offense to use a drone to disrupt a manned aircraft, or to disrupt someone who is lawfully hunting or fishing. It is also a criminal offense to distribute images taken by a drone without the consent of the person photographed or the owner of the property photographed. If you are the victim of unlawful surveillance or photography, you may seek a Court injunction to stop it. You may also sue in civil court for actual damages. If the case involves disseminating photos, you may choose to sue for $5,000 per image instead of proving damages. Because technology changes rapidly, we should expect to see further development in federal and state laws concerning drones.

HOMEOWNER LIABILITY

Falling trees? Holes in the ground? Playground equipment? Have you ever thought about the liability issues you might face as a homeowner? There are many. Insurance helps in some cases, but not all.
A tree on your property falls into the middle of your neighbor’s house. Are you liable? It depends (which is the lawyer’s favorite answer). If the tree was healthy and came down unexpectedly, like by a lightning strike, no, you are not responsible for the damages. You weren’t negligent, and you haven’t done anything wrong. On the other hand, if you knew or should have known that the tree trunk had rotted, you would have had an opportunity to fix the problem. In that case, you would be liable because you have been negligent. Many insurance policies would cover this type of liability. If you see a neighbor’s tree is becoming dangerous, it is best to alert our neighbor politely. Preventing the problem is better than figuring out who must pay for the damage.
What if your friend has a two foot wide hole dug in her yard as part of a landscaping project, and you fall into it, tearing ligaments in your leg? Is your friend liable for your damages? If the hole was clearly visible, then no, because the law says you should have seen the danger and avoided it. If the hole was concealed or hidden, so you reasonably would not have seen it, then your friend was negligent, making her liable. Even if the fall was your fault, there may be a little bit of help for you. Your friend’s homeowner’s insurance may have what’s called “medical payments” or “medpay” coverage. Medpay is a small medical benefit payable to anyone who has medical bills from being injured on your property, no matter whose fault it was. Medpay is usually limited to about $1,000 in reimbursement paid when the injured person submits medical bills to the insurance company.
Your child’s friend comes over to play on your playground set, and takes a fall. If you have kept the playground equipment in a reasonably safe condition and if you are supervising play appropriately for the children’s ages, you aren’t legally responsible.
Intentional acts are usually not covered by insurance. If your college age teen has friends over and a fight breaks out in which he slugs his now-former friend, this is an assault. Other than medpay, your homeowners’ insurance isn’t likely to pay for the damages. If the injuries are serious, the damages may be substantial, and your teen is legally liable for them without any real help from insurance.
Do you have homeowners’ insurance? Sometimes I hear a client say that she plans to cancel her homeowners’ insurance policy to save money now that her mortgage is paid off. Mortgage lenders always require homeowners’ insurance to protect their loan investment in the property. Upon further thought, the client may realize that homeowners’ insurance is still important to protect her own investment in the home even though there is no lender to require it. The policy protects her if someone is hurt on the property, and pays to rebuild in the event of a fire or catastrophic storm. Good insurance coverage can help a homeowner sleep better at night.

MEDICARE DECISIONS AS YOU GET READY TO RETIRE

MEDICARE DECISIONS AS YOU GET READY TO RETIRE

            Health insurance decisions become more complicated as baby-boomers approach retirement age.  Many people want to know when to apply for Medicare, and how it works with their employer or retiree health insurance plans.  Here are some rules to keep in mind for persons without disabilities; rules for disabled persons are different.

            You will be eligible for Medicare when you reach age 65.  This may be different than when you begin receiving Social Security retirement (which could be as soon as age 62 for early retirement or as late as age 70).  About 3 months before you turn age 65, you should receive a letter from Medicare requesting that you start the process of deciding when to sign up for Medicare.  If you do not receive this letter, you should contact Medicare yourself about this time.  If you would like, you can sign up for Medicare as early as 3 months before you reach age 65. 

            The initial enrollment period for Medicare begins 3 months before you reach age 65, and ends 3 months after you reach age 65.  Here’s a trap for the unwary.  If you do not enroll in Medicare during that time period (unless you have a qualified reason to delay your enrollment, like coverage under a current employer’s plan), when you enroll later you will face a penalty in the form of higher premiums and a delay in starting coverage.

            What if you have coverage at age 65 through your current employer’s (or your spouse’s current employer’s) group health insurance plan?  First, this means you can delay signing up for Medicare until that group coverage ends, if you wish.  If your group policy offers good coverage, you may not want to pay Medicare premiums also.  If your employer has 20 or more employees (or is in a multi-employer plan), the company must offer current employees 65 and older the same health benefits under the same conditions as it offers to younger workers.  If you have coverage under one of these larger employer plans and Medicare, the group plan will pay first, with Medicare paying second.  If your employer has less than 20 employees, your group plan may or may not offer coverage to employees who are eligible for Medicare.  If you have coverage through a smaller employer’s policy and Medicare, then Medicare pays first and the group policy second. 

            Do you have retiree health insurance from a job you or your spouse has retired from?  Once you are eligible for Medicare, many retiree policies reduce their benefits so that they only supplement what Medicare pays.  If your retiree policy does this, you will need to sign up for Medicare when you are eligible for it.

            There is much more to discuss about various Medicare topics, which will appear in later articles.  More information is available from 1-800-MEDICARE or online at www.medicare.gov, or through your employer’s human resources office.

WHEN IS THE BEST TIME TO START SOCIAL SECURITY RETIREMENT BENEFITS?

WHEN IS THE BEST TIME TO START SOCIAL SECURITY RETIREMENT BENEFITS?

As more baby boomers approach retirement, they will need to decide when to begin receiving Social Security retirement benefits. The earliest date you can claim Social Security retirement benefits is age 62. You will receive a reduced monthly benefit at age 62 because (if you live to full life expectancy) you will be receiving checks for a longer time. If you wait until full retirement age (age 66 for those born 1943-1954, age 67 for those born 1960 and later, and 66 and some months on a graduated scale for those born between 1955 and 1959), you will receive a higher monthly benefit, but based on life expectancy, you will not receive it for as long as if you had begun to receive it at age 62. You can wait until age 70 to start benefits, for a higher yet monthly benefit (since you won’t receive it as long, based upon life expectancy).
If you start receiving benefits before your full retirement age, your monthly benefit may be reduced if you continue to work. If you take benefits early, as of 2012 you can earn up to $14,640 per year from work without reducing your benefits. In general, above $14,640 per year, you will lose $1 in benefits for each $2 you earn from working. Your benefit will not be reduced because of income from sources other than working (like interest or dividends). If you wait until full retirement age to take Social Security, you can keep working and earn as much as you like without losing benefits.
So, how do you decide? Here are some factors:
1. How long do you expect to live? The “breakeven” point for all 3 scenarios where they work out the same (claiming at 62, claiming at full retirement age, and claiming at age 70) is 85 years according to the Social Security Administration (SSA). Based on your health and family history, if you do not think you will live to be 85, you may do better to take Social Security as early as possible. If you think you will likely live beyond age 85, and if you can wait until age 70, you may collect the most in benefits over your lifetime.
2. As of 2012, if you want to keep working and you are fortunate to earn substantially more than $14,640 per year, your monthly benefit at age 62 may be quite small. For example, if you earn $30,000 per year, you will lose about $640 a month off your monthly benefit.
3. What about health insurance? You will not qualify for Medicare until age 65. For cost reasons, you may want or need to keep health insurance through your job until you reach age 65. Alternatively, if you can be added to a spouse’s employer policy, that may bridge the gap.
4. What will your retirement financial needs be? SSA and many financial planners advise having about 70% of your pre-retirement income for a comfortable retirement. Depending on your Social Security benefit, your other savings, and your living expenses, you may need to work past age 62.
To compare different options, visit your local Social Security Office (in Durham or Burlington), or go to www.socialsecurity.gov/estimator. There are many other issues to consider with Social Security and Medicare. We will address these topics in separate articles.

MAKING GOOD INSURANCE CHOICES

            Everyone knows that lawyers don’t sell insurance.  So, when a lawyer recommends a particular type of coverage, you know it’s not to make a sale.  Knowing your options for liability insurance coverage can save the day financially, and save you some legal troubles too.

            Buy More than Minimum Limits for Vehicle Coverage:  This is not a place to try to save a few bucks.  Minimum limits coverage for vehicle policies is only $30,000.  If you cause a wreck and the other person has to have major surgery, that alone can cost more than $30,000.  Then the other driver has a right to sue you personally, and you’ll have to pay your own lawyer to defend you (since insurance doesn’t have to pay for your lawyer after they pay their limits).  Even if you don’t own a lot of property, you might not want to lose what you have, and you don’t want an expensive legal bill.  Coverage that is a step or two above minimum limits is usually not that much more expensive, and is well worth it.

            Uninsured/Underinsured Motorist Coverage (UM/UIM for short):  Always choose this coverage on your vehicle policy.  It protects you and your passengers.  If you are in a wreck caused by another driver, your damages may be more than the other driver’s coverage.  Suppose you have medical bills, lost income, and pain and suffering of $100,000.  Suppose the other driver has a $30,000 policy, and that insurance company pays it to you.  You are still $70,000 short, and the other driver may not own enough property to bother going after.  If you have a $100,000 policy and you purchased UM/UIM coverage, your insurance company will pay you the other $70,000.  It’s even more important when the person who hit you had no insurance at all.  UM/UIM coverage is inexpensive, and helps you protect yourself.  Be aware that you cannot buy UM/UIM coverage when you buy only a minimum limits policy, since it isn’t available on those policies.  That’s another reason it is best to buy a policy with limits higher than the minimum.

            Umbrella Policies:  If you have enough assets to be worth protecting, consider a personal umbrella policy (PLUP for short).  It increases all of your personal insurance coverage (home and vehicle) for any risk covered under the policies to $1 million.  (They can be purchased for more, but most people choose $1 million.)  The real beauty is that coverage is often only about $200 per year, which is a modest expense for something that gives you so much more protection.  If you own property that is worth more than your current insurance coverage, even if you aren’t a Rockefeller, you should consider a PLUP.  Businesses can have umbrella coverage too, called a commercial umbrella policy (CLUP) that raises any coverage on your existing policies (premises liability insurance, fire insurance, company vehicle insurance, etc.) to $1 million or whatever other higher amount you choose.

            When a client sees me about an injury, fire, theft, or other casualty, one of the first things I do is to see what insurance coverage is available from which policies.  If you make good insurance choices that give you the most “bang” for your “premium buck,” you’ll be better protected financially and can save legal bills for things that otherwise would not be covered by your policies.

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