Consumer Insurance Blog

As the economy eases and the real estate market shows signs of revival, many people whose home buying plans were on hold are now beginning to look around. If buying a new home or vacation property is on your agenda, the Insurance Information Institute (III) has some advice for you: make insurance considerations an important part of your home buying process. In addition to looking at considerations such as location, neighborhood, and home features, you need to do a risk assessment of the home and property so you don't find yourself owning something with some unpleasant surprises down the line.

For a quick overview of issues and considerations that you should be thinking of, see III's Home Buyer's Insurance Checklist and short video on the topic:

If you had an un-reimbursed loss of more than $500 due to fire, theft, or natural disaster, you may be able to claim that on your taxes. According to the IRS:

"A casualty loss can result from the damage, destruction or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake or even volcanic eruption.

A theft is the taking and removing of money or property with the intent to deprive the owner of it. The taking must be illegal under the law of the state where it occurred and it must have been done with criminal intent."

• Un-reimbursed losses due to theft, fire, accidents, storm damage, or similar events if losses are greater than $500 and 10% of your adjusted gross income. (This would include money that you paid in a deductible)
• Losses that occurred in federally declared disaster areas. See: 2009 Federally Declared Disasters
• Financial losses due to insolvency or bankruptcy of a bank or financial institution

Types of losses that wouldn't be deductible:

• Home or household damage that is gradual, progressive, or the result of normal wear and tear
• Items that you lose, break, or damage in the course of normal use

If you have insurance, you must have filed a timely insurance claim. Any reimbursement you received from insurance must be taken into account and subtracted when figuring your loss. This includes any expected reimbursement even if you have not yet received it.

To claim a deduction for casualties and theft, you need to use Form 4684. Here are Instructions for Form 4684

For more information:
The go-to source for all information on tax deductions is the IRS. The booklet Casualties, Disasters and Thefts - 2009 Tax Returns explains the tax treatment of casualties, thefts and losses on deposits. It includes the following information:

• Definitions of a casualty, theft, and loss on deposits.
• How to figure the amount of your gain or loss
• How to treat insurance and other reimbursements you receive
• Deduction limits
• When and how to report a casualty
• Special rules for disaster area losses

Other resources
Should you do your own taxes? See how you fare on this 25 question tax quiz

If you are filing your own taxes or gathering your documentation for your accountant, use this handy tax checklist.

October is National Fire Safety Month. To kick things off, the Home Safety Council (HSC) is teaming up with Lowe's to hold Safety Saturday on Saturday, September 26, 2009, a day-long safety celebration.

Lowe’s stores nationwide are planning family safety activities geared to educating you and your family on how to keep safe from fire and other home dangers. Some stores are partnering with local fire departments to host a side-by-side burn demonstration to show how quickly a home fire spreads and becomes deadly when it isn’t controlled. The demonstration compares the limited damage in a room that is protected with a home fire sprinkler system with the extensive damage that occurs in a room without a sprinkler.

Even if you can't attend one of these events, the idea of dedicating a Saturday to making your home safer is a pretty good one. According to the HSC, the home is the second most common location of unintentional fatal injuries, with moving motor being the first. About 20% of all fatal injuries occur in the home. The top five leading causes of unintentional home injury death are falls, poisoning, fire/burn, choking/suffocation, and drowning; together these account for 90% of all unintentional home injury deaths. And for every one death, there are approximately 650 nonfatal injuries. HSC says that children under age 5 and adults over age 70 are the highest risk groups for home injury, both fatal and nonfatal.

HSC offers excellent Step-by-step Safety Guides on a variety of topics to help you safety-proof your home. They also offer a library of Safety videos for kids and adults.

Given that it's Life Insurance Awareness Month, we thought we might offer a few tools for you to assess your risk of imminent mortality. We've mixed the serious with the silly to lighten things up a bit.

Death Risk Rankings is an interactive tool from CarnegieMellon that calculates your risk of dying in the next year and allows you to compare that risk to others in the world.

Cardiovascular Risk Calculator - estimate your chance of a cardiac event, dying from heart disease, and your overall chance of dying in the next 10 years.

Dead at your age - enter your birthday and find out what celebrities and famous people you have outlived.

Are you likely to die of a shark attack? Compare the relative risk of shark attacks to humans to various other risks.

Life Expectancy Table - find your age and your sex to learn the additional number of years you may expect to live. A footnote says that one-half of individuals can expect to live beyond their life expectancy and one-half will not live to that age.

The Death Clock bills itself as "the Internet's friendly reminder that life is slipping away... second by second." Enter your date of birth, sex, bmi and smoking status. You can choose to your results on a scale ranging from "sadistic" to "optimistic" - or just plain "normal."

Are you planning to live to be 100? There are about 250,000 centenarians alive today, including several hundred "supercentarians" aged 110+ years. You can get a good idea of your chances of joining their ranks with the Living to 100 Life Expectancy Calculator. This calculator asks you 40 quick questions related to your health and family history, and takes about 10 minutes to complete. It uses medical and scientific data to estimate how old you will live to be. In addition to estimating your life expectancy, it offers a "to-do" list for you and your physician, along with a list of things you can do differently and how many years you will likely add to your life if you do so.

This calculator was developed by Doctor Thomas Perls who is the founder and director of the New England Centenarian Study, the largest study of its kind in the world. We like it because it gets you thinking about lifestyle factors that can influence your odds. But for those of you who want a shortcut, you can get an estimate of your remaining years by viewing the life expectancy chart published by the Office of the Actuary of the Social Security Administration.

Interestingly, according to the CIA World Factbook's life expectancy chart ranking various countries, here in the U.S., we rank at #50 at 78 year and 11 months. Macau tops the chart with a life expectancy of 84.36 years. Meet a few of the oldest people on earth at this site, or view portraits and read the stories of some people whose lives span three centuries.

By the way, if you are planning to live to 100, make sure your retirement planning takes that into account - life expectancy is an important factor in your financial planning - talk to your insurance agent if you expect to join the ranks of centenarians!

In this video, Dr. Joe Bresee of the CDC Influenza Division describes swine flu - its signs and symptoms, how it's transmitted, medicines to treat it, steps people can take to protect themselves from it, and what people should do if they become ill.

Additional resources:
PandemicFlu.gov - Individuals & Families Planning - tools to help you plan for challenges that you might face, particularly if a pandemic is severe.

Swine Influenza (Flu) - Resources, updates and news from the Centers for Disease Control and Prevention. It includes a chart that lists confirmed cases by state. Also see the CDC Twitter feed CDCemergency and What's new on the CDC Swine Flu Site

Taking Care of a Sick Person in Your Home

Hand Washing: An easy way to prevent infection - Learn the proper way to kill germs from the folks at the Mayo Clinic

General Instructions for Disposable Respirators - brief video from the CDC that demonstrates how to put on and take off disposable respirators.

Frequently asked questions
CDC: Swine Influenza and You
Frequently asked questions from PandemicFlu.gov
World Health Organization - FAQs (PDF)

Swine Flu Maps
Global disease alert map from HealthMap
H1N1 Swine Flu

If you suffered unreimbursed losses of more than $500 due to severe storm damage, fire, theft, disaster, or loss on your deposits in 2008, you may qualify for a tax deduction. You must be able to document the extent of your loss and if you were compensated by your insurer, you must subtract the amount of compensation from your overall loss. A short clip from the Insurance Information Institute offers more information:

Kimberly Lankford of Kiplinger's discusses storm-related tax deductions and points to a helpful casualty loss calculator.

Or you might go right to the source -the IRS provides a variety of publications and tools about available deductions. Here are a few:

Casualties, disasters and thefts - for use in preparing 2008 returns; explains the tax treatment of casualties, thefts and losses on deposits. A casualty occurs when your property is damaged as a result of a disaster such as a storm, fire, car accident or similar event. A theft occurs when somebody steals your property. A loss on deposits occurs when your financial institution becomes insolvent or bankrupt. This publication discusses definition of losses, how to figure the amount of your gain or loss, how to treat insurance and other reimbursements, deduction limits, and any special rules.

Tax relief in disaster situations - various resources and fact sheets

IRS FAQs for disaster victims

Disaster losses - PDF brochure from the IRS

2008 - federally declared disasters and emergencies

In today's tough economic climate, the National Association of Insurance Commissioners (NAIC) notes that many former homeowners may now be renters, either due to their own choice to downsize or due to a home foreclosure. In the light of this, NAIC offers an alert about renter's insurance, which discusses the importance of renters' insurance and dispels some of the most common misperceptions that people have about this type of insurance.

• "Renter’s insurance is too expensive, and I already have enough bills to pay." The average renter’s insurance policy costs between $15 and $30 per month. Replacing all of your possessions or being liable for an accident on your premises will cost much more.
• "I don’t have that many valuables; renter’s insurance isn’t worth the cost." Renter’s insurance policies can cover everything from electronics to clothing to household appliances. Even a minimal number of items could add up to thousands of dollars’ worth of merchandise, which can all be covered in a basic policy.
• "My landlord has insurance, so I’m already protected." Your landlord has insurance for structural damage to the building, and might even be protected against damage caused by tenants. However, this coverage does not extend to your personal property, nor does it protect you from being liable for damage you might cause to the building inadvertently (e.g., a kitchen fire or a plumbing mishap).

The alert also includes other common questions and answers related to renter's insurance. You can also view this brief brief video on Renter's Insurance. If you have questions about whether or not you need renter's insurance, how much coverage you need, or what it will or will not cover, your independent agent is also a good source of information.

Whether you are a homeowner or a renter, the Insurance Information Institute offers a free downloadable home inventory software This software will help you create a room-by-room inventory of your personal possessions. Having an up-to-date home inventory will help you:

• Purchase enough insurance to replace the things you own
• Get your insurance claims settled faster
• Substantiate losses for your income tax return

With the anticipated landfall of Gustav, we're thick into hurricane season, which continues through November 30. Homeowners in the hurricane belt here in the U.S. are preparing for what is expected to be an active September and October. Disaster relief organizations such as the Red Cross offer hurricane preparation advice, with information about a personal evacuation plan, including supplies that should be part of your emergency kit.

A few preparatory steps can also make filing insurance claims after the storm an easier process. The National Association of Insurance Commissioners (NAIC) offers a special disaster preparedness section of their website, along with a one page tip sheet on Storm Preparedness: A Four–Step Process . Among their recommendations:

• Review your insurance coverage in advance to understand what your insurance policy covers and what it excludes.
• Take an inventory of your property - photos or videos can be helpful. They suggest storing photos on the web or with a relative.
• Move all of your important documents to a safe location. Take them with you if you evacuate. Be sure to include the name of your insurance companies and agent, policy numbers and contact information.

And should your home or property suffer damage, NAIC's guide to What Consumers Should Know When Faced with A Loss can also be very helpful.