Earthquake
Insurance


Since the beginning of the 20th century, earthquakes have occurred in 39 states. Approximately 90 percent of American live in areas considered seismically active. Even so, only a small percentage of people have earthquake insurance. It is estimated that only 15% of California homeowners have earthquake insurance. Many people assumed their homeowners, condominium and renters insurance policies fully protect them, but if they look at the typical policy, they will see it doesn't cover earthquake loss.

Do I Need Earthquake Insurance?

When you consider your resources, ask yourself how much of your investment in your home you are willing to risk. For many California homeowners, their home is their biggest financial asset. Without earthquake insurance, how do you plan to protect that asset from the costs of earthquake damage? If you have a typical home loan and deed of trust, did you know you remain responsible for the loan balance even if your home is damaged or destroyed by an earthquake?

Government disaster-relief programs are extremely limited-they are designed to help you get partly back on your feet, but not to replace your home and everything you lose.

How Much Earthquake Insurance Should I Have?

Like the basic questions of whether earthquake insurance is right for you, how much coverage is right for you depends on your individual circumstances. The following questions may help you decide:

  • Can you afford to replace your household possessions (such as sofas, beds, TV's, furniture, refrigerators, and clothing) if they were destroyed in an earthquake? How much would they cost?
  • If you have to find temporary accommodations because you cannot live in your home as the result of an earthquake, how much will you need to pay for those additional living expenses?
  • If you own your home, how much home equity do you have? Can you afford to risk losing that equity if an earthquake damages or destroys the home?
  • How much would it cost to rebuild your home? do you have assets available to repair or even rebuild your home after an earthquake?
  • Do you have a mortgage, second mortgage, or line of credit on you home? Can you afford to continue to repaying those loans while also paying to rebuild or replace your home?

    To find out more about earthquake insurance contact your L/B/W insurance agent at (661) 702-6000 or go to our website and request a quote. www.lbwinsurance.com
2008-A year of change for Non-Profit Organications and Schools that sponsor
403(b) plans

On July 26, 2007 the US Treasury Department released final regulations for tax sheltered retirement plans under Internal Revenue code (IRC) §403(b). These regulations consolidate, update and supersede the IRC guidance for 403 (b) plans. Prior to thei IRC issue, the 403(b) section of the IRC code had been left relatively unchanged since 1964. change apparently was a long time coming!

The new regulations mean that 403(b) plans may have to be operated more like 401(k) plans, regardless of ERISA status. The employer will have to assume responsibility in areas in which they may not be familiar. Employers will need to address plan document design and implementation, assumptions of administrative and fiduciary responsibilities both for the management of their plans as well as the investments. Fee disclosure, employee education, compliance testing and vendor due diligence also need to be addressed prior to the end of the year to ensure compliance with the final regulations.

While the wait to get the regulations finalized was long and much debated, the time frame in which plan sponsors must comply with the regulations is not. As burdensome as making these changes will be, compliance is not optional, nor, barring further changes, is the pace at which it must occur.

Should you have questions about your 403(b) Plan or any Qualified Retirement Plan, please do not hesitate to call at (661) 702-6050.

Mary L. Kotzman
Accredited Investment Fiduciary
VP-Financial Planning

Securities and Investment Advisory Services offered through Capital Analysts Incorporated, Member FINRA/SIPC

 

New 2008 Laws

  • Beginning July 1, 2008, California will prohibit drivers from using wireless telephones without a hands-free device while driving. A separate law prohibits all drivers under the age of 18 from using a cell phone even with a hands-free device. Both laws have exceptions for emergencies.
  • Smoking will not be allow in any vehicle if minor children are inside. The prohibition applies regardless of whether the vehicle is in traffic or parked. Police will not be able to stop a car just to check for smoking, but then can cite the driver if they pull them over for another reason. Drivers could face fines up to $100.
  • Bicycle reiders must have some sort of illumination devices while riding on the highway, street or sidewalk at night. The law is not clear if riders will be required to have headlights or if reflectors will be enought. Failure to have illumination devices could result in a ticket that requires the rider to attend a bicycle safety class.

DISCLAIMER: This newsletter is for educational purposes only. It is not a solicitation and it is not to be used as tax and legal advice. Please seek professional assistance with your tax and legal issues.

Securties and Investment Advisory Services offered through Capital Analysts Incorporated Member FINRA/SIPC.
CAI does not offer tax or legal advice services.
L/B/W and CAI are independent, non-affiliated entities.