Insurance Insights: The Cleary Insurance Blog
The Cleary Insurance blog covers insurance, risk management, and financial planning for New England businesses and individuals. Our team of licensed advisors and specialists publishes regular articles on commercial and personal coverage, employee benefits, life and financial planning, and insurance compliance. Browse recent articles below, or use the category filters to find topics relevant to your business or personal situation.
Changes in Massachusetts Workers’ Compensation Rates
Presented by Michael Regan
The Commissioner of Insurance recently approved a general revision of Massachusetts workers’ compensation rates that was effective April 1, 2014, applicable to new and renewal policies. There was no change to the overall rate level; however most individual class rates will change to reflect industry group differentials.
This may not necessarily be a bad thing for you! Depending on the classifications used for your workers compensation policy the rates may increase or decrease within a range for any particular industry.
Workers’ compensation rates were last raised in 2001 by one percent. Although Loss of Wage coverage has not changed, medical costs, as we all know too well, have been skyrocketing and workers compensation rates have not kept pace. Given the recent political climate, there has not been an appetite by regulators to approve any increases.
After many years of asking for relief and not getting any, the insurance industry took a harder stance on writing workers compensation policies in Massachusetts. Some existing accounts were receiving non-renewal notices and new business was scrutinized by underwriting with a fine tooth comb. The end result was a spike in business to the Massachusetts Workers Compensation Assigned Risk Plan.
Some may see the allowance for rate changes within industry ranges, as a fig leaf offering between regulators and carriers. To the public there is no overall change, but it allows the carriers to get some rate relief in specific industries and classes that have been troublesome and the changes may better predict workers compensation losses. Bear in mind that not all rates will increase. In fact many are decreasing. For example; the rate per $100 of payroll for Electrical Wiring (code 5190) was $2.84 and is now going down to $2.74.
If you would like to review the effect of these changes on your policy please click on the following link https://www.wcribma.org/mass where you can look up the rates as well as see what other changes may impact your business.
At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.
Top 9 Garage Door Security Tips to Prevent Break-Ins
Garage doors are a common weak point when looking at security in a whole-home approach and an easy target for thieves. Garage doors are not only a weakness, but provide criminals a shelter once inside. To the casual passerby an open garage with a work truck pulled up to it doesn’t look out of place or scream break-in.
Securing your garage door doesn’t just mean the roll-up door; as you’ll read in the article below, you have to look at every entrance point as a vulnerability. Not that any loss to your family isn’t devastating, but one that occurs through a preventable measure just shouldn’t happen.
History of Automatic Garage Door Openers
When the first generation of automatic openers came out they all featured the same code. You can imagine the security risk by having one of these openers. Thieves could just drive a neighborhood pushing their purchased transmitter and if you had the same brand as they did; jackpot!
The second generation of openers increased their security by featuring dip switches that could be set by the owner to a unique combination. While this did increase security, most owners would leave the default setting on and guess what? Jackpot! Another security risk of the second-gen openers is that a code grabber could be utilized to gain access to your system. A code grabber device works by locking onto your signal and memorizing it. Then, all a thief would have to do is re-transmit the code and they were in.
Modern automatic garage door openers now feature rolling-code technology, where your remote will transmit a brand new security code each time you press your remote. There are over 100 billion codes, so the likelihood of a code grabber working is very slim. Be sure that your opener features this rolling-code technology! If need be, talk to your garage builder to include this technology in your opener.
Here are the top 10 most important things you can do to secure your garage.
- Don’t leave the garage door remote in your vehicle – If a thief breaks in to your car and steals the remote he has a way into your home.
- Invest in a keychain remote opener – Stop using that remote you clip to your visor and get a keychain remote opener that you can leave on your keys.
- Keep it locked – Put a deadbolt on the door between your house and garage; is it really that much of an inconvenience to have to use a key each time you come home?
- Make sure the door from your garage into your house is as secure as your front door – Ensure you have a strong, sturdy door made out of solid-core wood or reinforced steel and install an Anti-Kick device like the Door Devil on it!
- Don’t leave your garage door open – It is amazing how many people just leave their garage door open all the time. It’s just inviting someone to pop their heads in and grab something.
- Install a wide-angle peephole in the door between your house and your garage – You’ll at least be able to see what’s going on if you hear a strange noise; rather than opening the door to find out.
- Frost or cover your garage windows – Don’t do thieves any favors by enabling them to see when your vehicle is gone, a better idea would be to replace the door with one that lacks windows.
- Make sure your garage door is in excellent condition. If needed, contact local garage door repair companies for maintenance. Also, padlock the throw latch on your garage door when you’re out of town. If you don’t have a manual lock on your garage door, you can use a c-clamp tightened down on each side of the door track to effectively “lock” down the door. It’s similar to those small window track locks you can buy for your home interior windows.
- Don’t neglect maintenance on the mechanical parts of your roll-up garage door and keep an eye out for corrosion.
- Don’t forget the door from your garage to your house; check the frame, locks, hinges and any replaceable items. If needed, get in touch with Overhead Door Company or a similar firm in your area to upgrade the doors for added security.
Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures, and create a customized insurance portfolio. Give us a call today at 617-723-0700.
Key Points in the President’s 2015 Budget Proposal
Presented by John Steiger
On March 3, President Obama announced his $3.9 trillion budget proposal for fiscal year 2015. Although the budget is more of a presidential “wish list” at this point, it includes initiatives that, if passed by Congress, could have a great impact on wealthy and middle-class Americans alike.
Social security claiming strategies
The proposed budget briefly mentions eliminating “aggressive Social Security-claiming strategies, which allow upper-income beneficiaries to manipulate the timing of collection of Social Security benefits in order to maximize delayed retirement credits.” Many industry professionals are interpreting this to mean the end of the file-and-suspend strategy, which allows a social security claimant to file for benefits and immediately suspend them. The claimant’s spouse can then begin collecting his or her spousal benefit, while both the claimant and the spouse allow their retirement benefits to grow until age 70 using delayed retirement credits.
It’s important to note, however, that the language in the proposal is vague, and it’s unclear whether the ultimate target is the file-and-suspend strategy. Additionally, there is some question about how this change would take place—whether through an internal Social Security Administration rule change or an act of Congress. If the latter, it could take a great deal of time to implement, if it passes at all.
Tax cuts for middle-class Americans
The President’s budget proposes several tax incentives for middle-class workers, including doubling the maximum value of the Earned Income Tax Credit for workers without children, families with more than two children, and married couples, as well as expanding the child and dependent care credit.
Student loans and grants
The President also proposed student loan forgiveness for qualified taxpayers who borrow through federal programs. Any forgiven loans would be excluded from gross income. Additionally, Pell Grants would be excluded from gross income, provided that the funds are spent according to the program rules.
Loss of tax benefits for high-income individuals
As in past years, the President renewed proposals that would eliminate some tax benefits for wealthy Americans. Specifically, for individuals in the 33-percent tax bracket and higher, and those subject to the alternative minimum tax, the value of certain exclusions and deductions would be reduced to 28 percent. Additionally, the budget reintroduced the “Buffett rule,” which would require taxpayers with an adjusted gross income above $1 million to pay a tax rate of at least 30 percent on their income, excluding any charitable giving. Finally, the President proposed extending the temporary exclusion from income for forgiven home mortgage debt to January 1, 2017.
Changes to RMD rules
Another proposed change would waive the required minimum distribution (RMD) rule for individuals whose aggregate retirement plan and IRA assets do not exceed $100,000. Additionally, nonspouse beneficiaries of retirement assets would be required to fully deplete inherited assets within five years. Finally, the President proposed instituting RMD requirements for Roth accounts.
Retirement account changes
Along with the President’s proposal to institute RMD requirements for Roth accounts, contributions to those accounts would no longer be allowed after age 70½. Additionally, nonspouse beneficiaries of retirement accounts would be allowed to move funds into an inherited IRA using a 60-day rollover, as opposed to the current direct-transfer requirement. For taxpayers who accumulate retirement benefits over a certain threshold, further contributions and accruals would be prohibited. Finally, small businesses that do not offer qualified retirement plans would be required to offer automatic enrollment in an IRA for their employees.
Changes to estate and gift taxation
The budget proposal seeks to increase the maximum unified estate and gift tax rate from 40 percent to 45 percent and to reduce the exclusion amount from $5 million to $3.5 million for estate and generation-skipping transfer taxes, and $1 million for gift taxes. Additionally, the President proposed redefining the meaning of a gift transfer (by eliminating the present interest requirement) for purposes of the annual gift tax exclusion. The annual exclusion would be modified from $14,000 per donee to $50,000 per donor.
The President also proposed a minimum 10-year term for grantor retained annuity trusts; a 90-year limit on the duration of the generation-skipping transfer tax exemption; modifying the generation-skipping transfer tax treatment for health and education exclusion trusts; and coordinating certain income and transfer tax rules for grantor trusts.
Higher tax rate on investment manager income
As in past years, the President’s budget proposes taxing the carried interest portion of fund manager compensation as ordinary income instead of as a capital gain. This would increase the tax rate on that compensation from 20 percent to as much as 39.6 percent.
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John B. Steiger is a financial consultant located at 460 Totten Pond Road, Suite 600, Waltham, MA 02451. He offers securities as a Registered Representative of Commonwealth Financial Network®, Member FINRA/SIPC. He can be reached at (781) 547-5621 or at john@financialconnector.com.
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