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.



            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.



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.


            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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