Does Minimum Coverage Mean Minimum Protection?



In the event you cause an accident, you can become responsible to others for their injuries and/or for property damage. This is where your auto insurance liability limits come into play. Most states, including Pennsylvania, require that you purchase a minimum amount of bodily injury and property damage coverage. However, purchasing only state minimum limits may not be enough. Having adequate liability coverage can be the difference between being well protected and potential financial disaster.

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Q. Pennsylvania requires minimum insurance coverage of 15/30/5. What does that mean?

A. Minimum liability limits of 15/30/5 means the insurance company will provide bodily injury liability coverage up to $15,000 per person injured in any one accident, and $30,000 for all persons injured in any one accident, and up to $5,000 for property damages in any one accident.

Q. If I have minimum limits, what happens if I have an accident and damages exceed my policy limits?

A. Your insurance company will only pay up to the amount of your policy limits. So, if you’ve chosen Pennsylvania’s minimum property damage limits of $5,000 and cause an accident which results in $25,000 in property damage, the insurance company will only pay $5,000, and you will be responsible for the remaining payment $20,000.

Q. Why would I want to buy more insurance than state law requires?

A. Auto insurance is your safety net, and works best if it provides proper protection. Carrying state minimum protection may be more affordable in the short term. However, because you could be personally liable for damages or injuries to others which exceed your policy limits, you should seriously consider purchasing liability insurance with limits higher than is required by state law.

Q. Is increasing my limits right for me?

A. Increasing coverage limits may not be as costly as you think. If you’re interested in protecting you and your family’s present well-being and financial future, and securing a little more peace of mind, as your independent insurance agent, we’re here to help answer any questions and help you review your available options.

The bottom line – if you’re legally responsible for damages or injuries to others which exceed your coverage limits, you’ll be responsible for the difference. The time to discover you don’t have adequate insurance/coverage is BEFORE you’re involved in an accident, not AFTER.


 

Call Members 1st Insurance Services today

for a FREE quote!*

Personal Insurance: 

(800) 283-2328, ext. 5245

Medicare, Long-Term Care, or Group Health Insurance:

(800) 283-2328, ext. 6269

Petplan Pet Insurance:

(866) 467-3875

For an instant quote, visit members1st.org » Products & Services » Insurance Services or ask at a branch for our Insurance Services brochure!

*Insurance services available to PA and MD residents only.

Financial Tips by Age Group – Decade by Decade


Mixed GenerationsThere are two “golden rules” in personal finance that apply, regardless of how old you are: 1) live within your means, and 2) look forward to the future and save for it.

These are two very simple concepts, but very powerful. If actually applied to your everyday life, they can mean the difference between being constantly stressed about your finances, and feeling secure and in control. Below are some more specific suggestions by decade.

20’s

Tip #1: Establish a positive credit history. A good way to establish good credit is to get a credit card, use it often, and pay off the ENTIRE balance ON-TIME, every month. Paying before the due date and avoiding interest charges is critical to your financial health.

Tip #2: Don’t be in a rush to move out of mom and dad’s house. If you have landed a job, take the time to get a strong financial foundation and establishing savings, before you move out on your own. Stay focused on paying down any student loan debt you may have.

30’s

Tip #1: The 30’s are when you may become established in a career and ready to purchase a home or finance a wedding. Before taking the next step, review your credit and current debt load.

Tip #2: If you are ready to purchase a home, determine how much you can afford to spend. This might be very different from the amount you are approved for by a lender. This is a big commitment. Make sure you take your future lifestyle into consideration, so that you do not feel cash strapped.

40’s

Tip #1: Be careful with the upgrades. You may be advancing in your career and ready to buy a bigger house, or nicer car, because things are going well. This is a slippery slope, so be careful!

Tip #2: Review your emergency savings. You may be socking away some money, but is it enough? There are plenty of “rules of thumb” for how much you should have in savings. Three months of expenses? Six months?  This is a personal decision with no right or wrong answer.

50’s

Tip #1: As retirement gets closer, review your debt load and retirement savings. Most of us do not want to enter our retirement years with debt. This is the decade to avoid getting further into debt, paying off existing debt, and increasing retirement savings.

Tip #2: Don’t overextend yourself helping others. You may have kids in college and aging parents, but you should never lend money that you need yourself.

60’s

Tip #1: This is the decade when most people decide to retire. Before retiring, be sure to find out exactly what your income will be and review your budget. The Social Security Administration has a retirement benefits estimator available at ssa.gov that can be used to estimate income.

Tip #2: For most of us, housing is the biggest expense in our budget. If you are a homeowner, even if your home is paid in full, there are property taxes, upkeep costs, and utilities. Consider if the home you are living in is the right fit for you as you age.

Written by Katie Bossler, GreenPath personal finance counselor

Information courtesy of GreenPath Financial Wellness


 

Visit our website at members1st.org for more educational articles and information about our low-cost products & services!

How to fund those spring home repairs


Home maintenance
Do you watch all of those home shows on the home and garden channel? We bet you have a home repair or remodeling list that’s a mile long and a price tag that will require three jobs to pay for.

Home repair and remodeling doesn’t have to break your budget. It’s often financially impossible and overwhelming and maybe even impractical to do all of the things you want to do to your home all at once. Take a step back and take a good, long and hard look at your home inside and out and prioritize the “must do’s”, “would like to do’s”, and the “this can wait.”  The last thing you want is for your home to become a major cash and emotional drain.

Here are some tips to help you figure out how to pay for it all:

Establish a home emergency fund for small repairs and appliance replacement

While every home repair store offers its own credit card, that may not be the best option for you, especially because the interest rates may be high. Establishing a home emergency fund for small repairs such as a new faucet, shutters, replacing boards on your deck or fence, landscaping needs and appliance repairs is worth the sacrifice.

Anyone who is a homeowner knows this – appliances have a buddy system. When one goes, others tend to follow. Could you afford to replace the washer, the refrigerator, and the freezer at the same time? How would you pay for those?

What if the repair is beyond what cash you have on hand?

This is where you may have to get a loan. Larger home repairs such as heating & air conditioning systems, electrical and plumbing, additions, new roofs, painting, new siding, and so on may require you to tap your home’s equity.

A home equity loan is a loan in which you borrow against the equity you have in your home. These loans are typically five to 20 year terms.  Essentially, your home is lending you money. With a  home equity loan, you get a fixed amount of money, at a fixed interest rate, for a certain amount of time.  Interest is generally tax deductible.

A home equity line of credit is a variable rate type of loan and works similar to a credit card. You have an established credit limit based on the equity in your home and you may borrow up to that limit. Your interest rate can change over the life of the loan but you are only charged interest on the amount you have outstanding. As you make payments on your line of credit, that opens up how much you can continue to borrow against your line. And, like a home equity loan, the interest is generally tax deductible.

In either case, you will need to have your home appraised to determine your home’s value. Once the value has been established, there’s a calculation that’s used to determine how much of your equity you can borrow. The calculation is simple – once the appraisal is available, multiply the value of your home by the loan to value limit set by the financial institution. Lenders typically allow you to borrow 80%, 90%, and even up to 100% of your home’s available equity. Then, subtract the first mortgage balance to determine the maximum amount you can borrow on a home equity loan or line of credit.

Example:
Home value based on appraisal: $200,000
Current first mortgage balance: $100,000
Calculation: $200,000 (home value) x 90% (loan to value allowed by lender) = $180,000
$180,000 – $100,000 (balance owed on first mortgage) = $80,000 (maximum loan or line you can get)

Whether it’s a small repair, major kitchen renovation, hardwood floors throughout the house, a yard overhaul or a painting project, we can help you finance your home repair needs throughout every season of the year.

NOTE: Members 1st Federal Credit Union offers a variety of options to help you finance any home repairs or improvements you may need. In addition to our home equity products, we also offer a signature loan and VISA Platinum Rewards Credit Card

The Mortgage Process: Simplified


Every wonder what is involved in the Mortgage Process?

Middle-aged couple with sold signBelow are a few steps to help explain how the process works at Members 1st.

  • Step One: Pre-qualify- When you pre-qualify for your loan, you learn how much home you can afford, which saves you time and gives you negotiating power. This step is fairly quick and assesses your income, assets and credit
  • Step Two: Make an Offer- Once you find the right home, your agent will assist you in writing up an offer for purchase.
  • Step Three: Apply- Complete a full application. Provide supporting documentation such as bank statements, W-2’s, pay stubs and tax returns. This can be done online or in person.
  • Step Four: Lock Your Rate- Once your offer has been accepted, you can lock in the interest rate for your loan. This means that if rates increase your rate will not change.
  • Step Five: Underwriting-Now Members 1st will underwrite/approve your loan, obtain an appraisal and gather any other needed documents.
  • Step Six: Closing-All the documents will be prepared and ready for your signature at closing. Be sure to bring your closing cost funds, identification, and other requested documents. Then sign and leave with the keys to your new home!

 

For more information about Members 1st mortgages or to apply online, click HERE.

Or call our mortgage experts at (800) 283-2328, ext. 6026.

 

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What’s the Difference?


Have you wondered what the difference is between a bank and a credit union? They’re both financial institutions. They both offer similar products and services. That’s true and that’s about where the similarities end.

We have all heard countless news stories of various financial institutions merging or changing their name or being bought by one or another. It’s hard to keep all of the players straight in the financial services industry.

We’d like to share with you the differences. This may be helpful to those of you who are looking to switch financial institutions or maybe have yet to ever open an account. Know that when you’re a credit union member, you are part owner of that financial institution and you have a say, no matter how much  money you have. Typically, people qualify for credit union membership through their employer, organizational affiliations such as a church or a social group, or through a community-chartered credit union. There are no stockholders, only a volunteer Board of Directors elected directly from the credit union’s membership.

banker video with play

What’s the difference between Members 1st Federal Credit Union and other non-credit union financial institutions? Take a look:

banks v credit unions

Learn more about the history of the credit union movement:
Historical timeline
The Credit Union Difference
World Council of Credit Unions

 

 

 

 

What to do if you can’t pay your taxes


Taxes problem

Tax time can be tough, especially when you don’t have the money to pay what’s due. You may have gone into tax season knowing you were going to owe money and that you wouldn’t be able to pay. Or perhaps you were walloped with a large, unexpected amount due. Either way, you’re in a fix, and you have to figure out how to get out of it responsibly.

File anyway

You may be tempted to avoid the whole situation by not filing your returns. That’s dangerous. You may have to pay a penalty for failing to file your return, which can be higher than the penalty for failing to pay everything you owe. The Internal Revenue Service is also more likely to agree to a manageable payment plan if you demonstrate that you’ve made every effort to report your earnings honestly and on time.

Pay what you can

Because penalties and interest are based on the amount due, you can make things easier for yourself and lower the overall cost by making a partial payment. Don’t be tempted to pay with a credit card, though. That can be a more expensive and riskier solution.

Apply for a payment plan

This is your best chance of getting the debt paid off without major damage to your credit history and at minimal added expense. If you’ve filed your tax returns and you owe less than $50,000 in combined taxes, penalties and interest, you can use the IRS’ online application to set up an installment payment plan. You can also call the IRS directly to talk about your situation. The best number to call is 1-800-829-1040.

Make this the last time

How did you get into this situation? If it was because you didn’t ask your employer to withhold enough from your pay, you need to correct that now so you’re not in the same position next year. If you’re self-employed or have to keep track of your own tax obligations, consider meeting with an accountant to get advice about how much money to set aside or how much to pay quarterly. Some people find it helpful to set up a dedicated account to save for taxes and put in part of each paycheck so they’ll have enough set aside when tax time rolls around.

All of these solutions may hurt in the short term, because they’ll reduce the amount of money you have to spend every month. But careful tax planning is a crucial part of managing your finances. You’ve seen what can happen if you don’t adequately plan for taxes. You don’t want to let it happen again.

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Note: If you are in a situation where you owe taxes and need help making a tax payment, visit your local Members 1st branch or www.members1st.org. We have a variety of affordable loan options for you as well as our VISA Platinum Choice Rewards Credit Card available to assist you with your tax payments. You may also want to consider opening a Vacation Club (which matures each year on April 1) to set aside money for potential tax bills in the future. Other potential savings products include a Supplemental Savings Account or Money Management Account. Ask an associate for details.

Members 1st also offers TurboTax discounts for members. Click here to learn more.

Members 1st also offers GreenPath Financial Wellness, a program that can help you set up a budget and gain insight into managing your finances.

 

Will your Homeowner’s Insurance Replace Your Entire Home?


Spring in SuburbiaYou’ve heard it before – “A man’s home is his castle”. And, like most people, your home is also your most valuable possession. That’s why it’s important that, in the event your home is either destroyed or damaged, your homeowners’ policy will cover 100 percent of the cost to either replace it, or repair it.

 

Q: What is replacement cost?

A: Replacement cost refers to the cost to rebuild your home or repair damage, using materials of a similar kind and quality, without deducting for depreciation. If you’re adequately insured, your home will be replaced or repaired to its prior status. As an illustration, imagine your 10-year-old roof is completely destroyed, and would cost $30,000 to replace. If you’re adequately insured, with replacement cost coverage, even though the roof has lost half its useful life, the insurer will cover the entire cost to replace it.

Q: What happens if I don’t carry enough insurance on my home and suffer a loss?

A: Many insurance companies require you to insure your home for at least 80 percent of its replacement cost. If your home is insured for less than 80 percent replacement cost, the insurance company may assess a “penalty,” and only pay for part of a loss.

Q: What factors might contribute to my home not being insured to at least 80 percent of replacement cost?

A: Making improvements to your home, such as finishing a basement, upgrading a bathroom or kitchen, or adding a new room, patio or deck, can increase the overall value of your home, and , as a result, the replacement costs. Increases in the cost of building materials, labor rates, energy costs and inflation can add significantly to replacement costs as well.

Q: Wouldn’t I be better off insuring my home to 100 percent of its replacement value?

A: Yes, absolutely.

Q: Under a standard homeowner’s policy, my contents are insured on an “actual cash value” basis – What does that mean?

A: “Actual cash value” represents the depreciated value of damaged property, as a result of age, wear and tear – the insurance company will only pay you what the damaged item is actually worth when it was damaged. However, many insurance companies offer an option to insure contents at replacement cost.

Q: Are there other coverage options I can discuss with my agent?

A: Yes. Just a few would be:

  • Guaranteed replacement cost coverage
  • Extended replacement cost coverage
  • Ordinance or law coverage
  • Water Backup coverage

Q: What can I do to ensure I maintain adequate homeowners’ coverage?

A: If you’ve made changes or improvements to your home, are unsure of what “loss cost valuation” method your policy contains, or are simply concerned about having and maintaining adequate coverage, contact Members 1st Insurance Services and request a coverage analysis.


Ask Members 1st Insurance Services for a FREE quote!

Click HERE for more information!

Call us at (800) 283-2328, ext. 5245, visit your nearest branch, or visit members1st.org » Products & Services » Insurance Services.

*Insurance services available to PA and MD residents only.

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