Tax reminder: don’t forget to claim any eligible casualty, disaster & theft losses


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.”

Losses that may be eligible include:

  • 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

Does homeowners insurance cover a flooded basement?


Here’s a question thousands of homeowners and renters will be asking now that the recent heavy rains are abating: Will insurance cover the water damage in my basement? Unfortunately for most the answer is “probably not.” Standard Homeowners’ insurance does not cover damage from flooding, so unless you have a specific flood insurance policy, you will have to foot the bill for any water damage from the recent rains. The Insurance Information Institute offers this rule of thumb: water that comes from from top down (ice dams, for example) is generally covered, but when water comes from the bottom up, such as in flooding, it’s not covered.

Many homeowners who live in a low-risk flood area think they do not need to insure against flooding but the reality is that in any given year, about one-third of all claims paid by the National Flood Insurance Program are for policies in low-risk communities. Over a 30-year mortgage, your home has a 26% chance of being damaged by a flood, compared to a 9% chance of fire. Water damage repair can be costly – you can learn just how costly with this inch-by-inch interactive cost of flooding calculator.
You can learn more about floods, your risk of flooding, and the National Flood Insurance Program (NFIP) at Floodsmart.gov. Don’t get caught short – talk to your agent about flood insurance options – if you are in a low to moderate risk zone, insurance can be very affordable.

Behind the wheel: when being too polite is dangerous


In this day of road rage and road rudeness, it seems a little crazy to take issues with drivers who are polite — but in an article by Joseph Younger entitled When Courtesy Turns Dangerous, CarandTravel reminds us that there are times when politeness can inadvertently get you into trouble. This is generally at intersections or right of way situations. “Drivers who cede their legal right of way out of courtesy, thinking that they’re doing you a favor, might actually put you at risk.” They offer a handy list of “Dos and Don’ts” – if you are in the “courteous driver camp” it might make you think twice about the error of your ways; and if you are a recipient of such courtesy, it explains why a traffic favor may not be such a favor after all.

Rules of the Road Refresher
Safety Blog at Consumer Reports comments on this article, and says that the right thing to do in a “right of way” standoff is to follow the rules of the road. They post a handy list of “right of way” rules from New York.

Massachusetts right of way rules can be found in the driver’s manual. We’ve excerpted the main rules, but the manual offers a handy refresher for these and other traffic laws.

Intersections not controlled by signals
You must yield the right-of-way to any vehicle that has entered the intersection from your right or is approaching from your right.
Look for any traffic approaching from the left. Even though you may have the legal right-of-way, make sure that the other driver is yielding to you before you proceed.

Four-way stops
At an intersection controlled by stop signs in all directions, you must yield the right-of-way to…

  • Another vehicle that has already come to a full stop at the intersection
  • A vehicle on your immediate right that has stopped at the intersection at the same time as you

At a four-way stop, vehicles must proceed in the order they stopped. The first to stop is the next to go. If in doubt, give the right-of-way to the driver on your right.
Confusion can develop at four-way stop intersections. You should try to make eye contact with the drivers of other vehicles at the intersection to better judge their intentions and avoid accidents.

Turning Left
When making any left turn, you must first yield the right-of-way to any:

  • Oncoming vehicle
  • Vehicle already in the intersection
  • Pedestrians or bicyclists crossing your intended path of travel

Private Roads, Driveways, and Unpaved Roads
If you are entering a paved thoroughfare from a private road, a driveway, or an unpaved road, you must stop first and give the right-of-way to pedestrians, bicyclists, or vehicles traveling along the road you are entering.

Through-ways
If you approach a designated through-way, you must yield the right-of-way to traffic on the through-way before you turn.

Intersection of Single or Two-Lane Road and Multiple-Lane Road
If you are traveling on a single or two lane road and come to an intersection with a larger road, you must yield the right of way to vehicles driving on a divided highway or a roadway with three or more lanes.

Rotaries
Traffic moves in a counterclockwise direction around a rotary. You must always yield the right of way to vehicles already in the rotary (unless directed differently by local signs or police officers) and to pedestrians. You should use your turn signals in the same way as any other intersection: travel through the rotary and, when you are ready to exit, use your right turn signal.

Other situations that require you to yield the right-of-way

  • Pedestrians who are walking in or crossing a roadway
  • Any animal that someone is leading, riding, or driving
  • Funeral processions (in MA, it is against the law to disrupt or cut through a funeral procession)

Risk, insurance, & the movies


Because it’s the Friday of Oscar weekend, we thought that films and movies would be an appropriate theme for today’s post. You might have opinions about which films had the best acting or the best special effects but can you guess what the riskiest movies of the year were? We’re talking natural disasters, filming in multiple foreign locations, impressive stunt work, explosions, car chase scenes – anything that would add to potential risk and liability that the movie studios must bear.
Well, now you will be able to regale your friends and family with film-related risk trivia because Fireman’s Fund Insurance Company, a company that has a long history insuring major Hollywood films, has just issued its annual list of The Riskiest Movies of 2009. The awards go to “2012,” “Crazy Heart,” “Inglorious Basterds,” and “Nine,” but you’ll have to read the article to learn more about why. You can compare this year’s crop of risky films to the 2008 list.
A 2008 USA Today article Lights! Camera! Risk! Insuring movies is risky business offers a more in-depth look at some of the risk issues involved in film making. These can include such disparate hazards as wild and trained animals, technology glitches, actors who have to leave the set mid-production to go to rehab, and weather related events that may delay production schedules or pose danger to the cast, the crew and the props.
Insurance professionals in the movies
Over the years,there have been a few excellent films that feature insurance professionals – but they aren’t usually very flattering. Marcus Covas reminds us of a few of the more prominent roles, and he offers an interesting list of the Top Movies No Risk Manager/Insurance Professional Should Miss. His list includes ten films, and he discusses the insurance issues that are at play in each of the films.
In addition to the roles Covas cites in his article, there was a 1959 film called Alias Jesse James, which starred Bob Hope as an insurance agent. The premise of the film, according to IMDB, is that the outlaw T.J. ‘Jesse’ James (Wendell Corey) tries to kill insurance agent Milford Farnsworth (Bob Hope) who has been mistaken for him in order to collect on a big policy. If you have the time and the inclination, you can watch the entire film online.

Beware the “free” lunch


It’s nice to have a gourmet meal prepared by a celebrity chef – but $70,000 is a little too much to pay for that privilege. That’s the amount of money that one elderly couple lost in an unscrupulous investment scheme. They, along with about 90 other investors who “were elderly and of limited means,” were cajoled into high risk investment schemes over fancy lunches and dinners.
Milt Freudenheim discusses these free-lunch scams in his New York Times article Bad Investment Advice Can Turn a Free Meal Costly.

“Financial fraud is the No. 1 consumer protection issue for AARP,” said Andres Castillo, who heads an AARP program that monitors free lunch seminars and similar presentations. In an AARP survey last year of people 55 and older, 9 percent said they had attended a free financial seminar within the last three years. That translates into approximately 5.9 million people, the group said.

Freudenheim quotes one S.E.C. official as saying that if a person tries to sell you something, you should ask two questions before you go further: “Are you licensed?” and “Is the product registered?”
Freudenheim also offers consumer resources, some of which we’re recommended previously:

We would also add:
The National Association of Insurance Commissioners map to state insurance departments, where you can review agent licensing information.