Department of Labor Releases Final Rule Regarding Overtime Exemptions under the Fair Labor Standards Act

Recently, the Department of Labor (DOL) released its final regulations making changes to Part 541, governing overtime exemptions under the Fair Labor Standards Act (FLSA).

Here are the key elements of the new regulation that you need to know now:

1. Salary Threshold Changed to $913/week ($47,476 per year)
This threshold doubles the current salary threshold level. While this level is slightly lower than the threshold in the proposed rule, it still encompasses many employees that are currently classified as exempt.

2. Automatic Salary Threshold Increases Every 3 Years (Not Annually) to Maintain Level at 40th Percentile in Lowest-Wage Census Region
Automatically updating the salary threshold, however, does not allow the government to take into account changing economic conditions, specific impact on certain industries, or regional differences. It also denies the public the ability to have input on the threshold as required by the regulatory process.

3. Duties Test is Unchanged
DOL did not make changes to the standard duties test.

4. Effective Date is December 1, 2016.
With the rule going into effect on December 1, 2016, employers should review their current workforce immediately to determine which employees are affected, whether to re-classify those employees, and to execute a communications strategy. Employers should keep in mind the periodic adjustments and set a regular review process.

5. Highly Compensated Employee (HCE) Exemption Is now $134,004 per year
The final rule retains the methodology in the proposed rule setting the threshold at the 90th percentile of full-time salaried workers nationally.

Intentional Acts and Weapons Liability

There is nothing new about a business owner keeping weapons under the store counter or in the vehicle used to take deposits to the bank. The laws, however, raise questions about liability insurance for weapons-related incidents, so it’s a good time to brush up on coverage issues.
There are at least three ways an insured can injure someone with a weapon:
Accidental discharge of the weapon,
Intentional shooting with an intent to injure the person (shooting a criminal), or
Intentional shooting with accidental consequences (shooting an innocent person standing behind the criminal).

There’s no coverage problem with the accidental discharge. The commercial general liability policy covers the insured’s legal responsibility for bodily injury or property damage to others as the result of an accident. Costs for defense and payment of any subsequent judgment or settlement are provided.

For the other two types of incidents, however, the intentional acts exclusion in the policy presents a problem for the individual or commercial insured seeking defense or indemnity following a shooting incident.
The intentional acts exclusion in the CGL policy reads as follows:

2. Exclusions

This insurance does not apply to:

a. Expected or Intended Injury

“Bodily injury” or “property damage” expected or intended from the standpoint of the insured.

This exclusion does not apply to “bodily injury” resulting from the use of reasonable force by an “insured” to protect persons or property.

Most courts have treated this exclusion narrowly, so that not only must the action which causes the damage be intentional (striking a difficult customer), but the damages must be reasonably expected (broken jaw vs. paralysis). In an auto-related case (Tanner vs. Nationwide), the Texas Supreme Court said a similar exclusion in the personal auto policy is “effect-focused and cause-focused, voiding coverage when the resulting injury was intentional, not merely when the insured’s conduct was intentional.” According to the decision, if the exclusion were to preclude coverage for reckless acts that didn’t result in deliberate injury, insurance coverage would disappear for many accidents.
The exclusion applies to “the insured” who intentionally causes the damage, and not to all insureds who may be sued as a result of the damages. Thus, the named insured business would be protected in a suit brought by a customer who was intentionally injured by a third party or an employee of the insured.

The exception to the exclusion applies to bodily injury only, and permits the use of “reasonable force” by the insured to protect persons or property, such as when a store owner grabs a customer suspected of shoplifting or shoots a burglar or robber, and the customer or criminal later sues the insured as a result.

Cyber Checklist for Risk Managers

If the value of personal information makes us vulnerable, the value of health care information exponentially expands the bullseye. According to Reuters, medical records are worth up to 10 times more than credit card numbers on the black market.

As a health care organization, it is our responsibility to protect the integrity of our patient’s records, and we take this responsibility very seriously.

All too often the effort has been focused on preventing and managing massive cyber-attacks. However, it is critically important that we be mindful of the exposure the individual employee represents in our cyber security.

This could be the employee who inadvertently faxes data to the wrong person, leaves their computer unattended and at risk, or the employee who intentionally sets out to hurt the organization as a retaliatory measure.  This is a real exposure that is often overlooked.

It’s important that you act in lock step with network security and organizational teams in order to detect, stop, and address the untoward event appropriately.  Cyber threats can be overwhelming and a contributor to sleepless nights.

To help us break this threat apart into manageable steps we have created a checklist for the risk manager.

Checklist for Risk Managers

• Work with board and executive leadership to ensure support for cyber initiatives.
• Provide for strong data breach identification and management policies and procedures creating a zero tolerance culture for data breaches.
• Ensure that education and training occurs at all levels of the organization at least annually to include basic definitions, policy content and zero tolerance culture.
• Create a breach response team in partnership with Organizational Integrity, Finance, Legal, Risk, IT security, Human Resources, and Communications to ensure are all working together for immediate detection, response and action when a breach occurs.
• Negotiate a robust cyber insurance policy that has breach response, liability coverages, as well as coverage for regulatory actions, fines, and penalties.
• Create data breach preparedness planning opportunities.
• Leverage insurance carrier for education and loss prevention opportunities.
• Appreciate the regulatory landscape through education and training.
• Develop contracts with external partners including forensic firms, law firms, and public relations firms to assist during a large breach event.
• Train, test, revise, train, test, and revise!

The answer to many cyber threats is having the force of an integrated cyber security and breach response team as your shield.

Your Cyber Security Rests on Your Weakest Link and Your Lawyers

According to the Association of Corporate Counsel, “employee error” is the most common cause of data security breaches for employers.

Other common causes of security breaches included insiders stealing company data and phishing attacks.

The survey of 1,000 in-house lawyers for organizations in 30 countries found that most respondents anticipate that their role in cybersecurity, which was traditionally the domain of IT departments, will increase in the coming year.

However, only 10 percent of lawyers surveyed said they have a budget for addressing cybersecurity. Although half of respondents said their organizations carry cybersecurity insurance, only 19 percent of those who experienced a breach said their insurance policy fully covered their losses.

According to the report, health care is the industry most at risk for a cyber attack, followed by insurance and manufacturing/retail. Nicole Hong “Employee Error Leading Cause of Data Breaches, New Survey Says,” blogs.wsj.com (Dec. 9, 2015).

Commentary

Attorneys are becoming more involved in data security, as this survey shows, because cybersecurity is a legal and liability issue as much as an IT issue.

When personal information is compromised as a result of poor cybersecurity, customers, employees, or other victims can file a class action lawsuit against the organization for jeopardizing their confidential information. As more class actions occur, so will legal involvement.

Data breach lawsuits can be extremely costly. One of the most notable recent cybersecurity failures was the 2013 Target breach of up to 110 million customers’ credit and debit card information. In 2015 Target settled a resulting class action lawsuit for $10 million. In addition, Target agreed to reimburse thousands of financial institutions as much as $67 million for costs incurred from the breach.

In 2013, health insurance company, AvMed Inc., agreed to pay $3 million to settle a class action lawsuit for maintaining inadequate data security because of the 2009 theft of laptop computers containing the personal information of 1.2 million customers.

Although attacks by international hackers garner more attention, this report shows that employee negligence actually poses the greatest risk to an organization’s cybersecurity.

In order to protect data security, employees should receive training in the following:
1. Mobile device security, including never leaving mobile devices unattended in public and physically locking them in the office when not in use;

2. Malware prevention, including regularly scanning computers for malware;
3. Identity theft, including not sharing personal information on email or insecure websites;

4. Phishing, including never clicking on links in an email;

5. Passwords, including how to create strong passwords by using pass phrases; and

6. Wi-Fi security, including never using an insecure public network to send confidential information.

The Hyatt Data Breach: What It Means for Employers and Employees

On November 30th, Hyatt Hotels discovered that hackers “managed to breach its network, access the payment processing system and possibly steal payment-card information belonging to visitors.”
The spokesperson for the hotel chain did not give details about the scope of the attack: how many customers were affected; how many of the company’s 627 hotels were affected; how long the network was infected; and what malware was used to attack the network. The company did state that “the malware was programmed to collect payment information, including card numbers, expiration dates and verification codes.”
Hyatt has assured the public that steps have been taken to strengthen the security of its systems in all of its hotels around the world. The hotel chain has also advised customers to review their payment-card account statements closely and to report all unauthorized charges to their card issuer immediately. Chris Smith, “Hyatt Hotels Chain hit with credit card stealing malware,” bgr.com (Dec. 25, 2015).

Small & Large Employers Alike Are Feeling the Impact of PPACA

A human resource consulting firm recently released the results of its annual survey on employer-sponsored health care plans. One piece of good news from the survey is that average health care costs per employee experienced a smaller increase this year (3.8 percent) as compared to the increase in 2014. This is the third year in a row in which increases have been below four percent.

Unfortunately, small employers, those with 10 to 499 employees, experienced higher average cost increases at 5.9 percent. Large employers with 500 or more employees fared better with an average increase of 2.9 percent.

However, 23 percent of large employers face paying the “Cadillac” tax in 2018 if the coverage they offer is considered high-cost insurance. The number of affected employers is expected to increase to 45 percent by the year 2022.

Employers are looking at a variety of ways they can reduce health care costs. Offering health plans that are consumer directed with a high deductible is their primary strategy. The survey found that 25 percent of covered employees use this type of plan along with an employee savings or reimbursement account.

Even with cost-saving measures, the employers surveyed expect their per-employee health benefit expenses to rise by 4.3 percent in 2016. “Survey: One in four large employers at risk for ‘Cadillac’ tax,” www.businessrecord.com (Nov. 20, 2015).

The Importance of Disconnecting in a 24/7 World

Smartphones and other smart devices have become an extension of who we are. Sixty-four percent of American adults own a smartphone, and 67 percent admit to checking them even when they aren’t ringing or buzzing with messages or call notifications.

We’re always on, and we’re always connected. But what is this constant state of connection costing us in terms of workplace concentration, performance and productivity? Here are a few effects of constant connection:

Sleep Loss — Smartphone screens emit a blue light that suppresses the production of melatonin, the hormone that tells your body when it’s time to sleep. When your sleep cycle gets disrupted, your concentration and memory can suffer.
Lack of Concentration — Researchers at Florida State University found that phone notifications alone were enough to significantly disrupt performance on tasks that required high levels of attention. Subjects were three times more likely to make mistakes while their phones were buzzing or ringing. The level of distraction was comparable to that of answering a phone call or text.
Less Creative Thought — Research has shown that some of our most original thoughts come during times of boredom, when our minds are free to wander and make new subconscious connections. But we’re spending so much time on our mobile devices, we’re not giving our minds any free time to roam.
Motivation Lulls — According to research, intuitive thinkers are more likely to turn to their smartphones when faced with a problem rather than use their own brainpower.
Tips for Disconnecting

Use Your Brain — Remember the good old days when you could easily recall phone numbers, home addresses and directions to a new neighborhood? Try doing things the old-fashioned way to keep your mind sharp.
Create a Schedule — Set aside a specific time to deal with smartphone notifications each day. During that period, you can check messages and return calls and emails. Don’t vary from the schedule unless it’s an absolute emergency.
Enjoy Downtime — Make sure your time off is just that. If possible, turn off the smartphone in the evenings and on weekends so you can concentrate on yourself.
Get Some Rest — Put the smartphone away an hour or two before bedtime so your body can properly adjust and prepare for sleep, and don’t forget to turn off the phone while you’re sleeping!

Wage & Hour Alert

The law firm Seyfarth Shaw LLC reports that cases under the Fair Labor Standards Act (FLSA) rose 7.6 percent in a 12-month period, continuing a trend. The firm expects the number of cases to top 9000 in 2016.

FLSA matters include charges for failure to pay; failure to pay minimum wage; misclassification; and child labor. Although raising the minimum wage receives the most media attention, the greatest risk for employers in 2016 is misclassification.

Misclassification includes classifying non-exempt employees as exempt and classifying employees as contractors. Misclassification has the attention of the DOL, the IRS, and the trial bar.

The DOL argues that misclassification is a form of wage theft. The IRS argues that misclassification is tax theft. Trial lawyers take misclassification cases because they are easy to prove and have large damage awards. The common theme of all three parties is they want employers to pay more.

Employers argue that they are simply doing what was allowed in the past before the litigation storm, but that argument falls on deaf ears, including those of federal court judges and juries.

The Seyfarth announcement states that some federal courts have made it easier for trial attorneys to certify classes of employees for FLSA matters. Opposing class certification successfully was one way defense lawyers could stem the litigation tidal wave. With that slowly eroding away, one can expect more wage and hour class actions. “Federal Wage and Hour Lawsuits Up 8%, To Record High, Firm Finds,” http://www.staffingindustry.com (Nov. 24, 2015).

Adding to the mix, 2016 is an election year, and the Obama Administration’s DOL has stated its plans to make changes before it departs.

Already promised by the DOL, but delayed, is the moving of the threshold for payment of overtime from $23,660 to a proposed $50,440. In general terms, any employee making less than the proposed $50,440 is due overtime no matter their position or job duties. This change will be fundamental and will impact every employer, especially small and rural employers and start ups that do not have the capital to pay hefty salaries, but need work hours to get a business off-the-ground.

The hits keep coming for 2016 with the July 15, 2015, DOL Administrator’s Interpretation No. 2015-1, http://www.dol.gov/whd/workers/Misclassification/AI-2015_1.htm. The Interpretation will make it more difficult for employers to classify workplace participants as contractors. The recent popularity of the new Uber work model and the use of contractors to avoid paying benefits, like the mandates of the Affordable Care Act, has many in Washington concerned. According to the DOL, misclassification leads to lower collection of tax revenue.

Although not a certainty, there is talk that the DOL will narrow some of the exemptions for 2016. If that does happen, it will also increase overtime exposure for employers.

The result of these judicial and regulatory changes is a wage and hour tsunami that will begin in 2016 and that could crest in 2017 or 2018 unless legislative changes are made. Until then, employers need to start filling their sand bags and prepare because 2016 will be a year of wage and hour change.

Insurance Lies Most People Believe

Myths, legends and lies are hard to dispel and correct, especially when doing so appears to financially harm the teller or believer. If the myth is true, the teller/believer does not need to purchase the coverage on which the lie is based; but if the information is false, the insured is forced to make a business decision not previously required.

Belief in and dependence on an insurance lie can financially harm the insured far more than the additional premium necessary to cover the exposure masked by the myth. But be warned, exposing these, or any, insurance lies leads to charges like, “You’re only trying to make more money off me.” Or, “Well that’s not what ‘so-and-so’ told me.”

Remember, “so-and-so” being quoted is not the insurance professional; further, the mere fact that a multitude of people believe in a lie or myth does not change or alter reality.

Beyond the non-insurance “so-and-so’s” spreading these lies, there are also agents perpetuating some insurance myths. When insurance agents or other so-called “financial experts” put their seal on such harmful lies, correcting the problem is that much harder. Lack of knowledge or dependence on what the agent heard someone else say without checking the facts are the two main causes an agent might pass along false information.

Following is a short list of myths, legends and lies told by and believed by insurance clients. Some of these are the result of just plain ignorance (not stupidity, just lack of understanding); some are the result of an “expert’s” faulty advice; and a few are actually promulgated and spread by insurance professionals. The list is far from all-inclusive.

“If I don’t have anything, they (the plaintiff, lawyers and court) can’t get anything; you can’t get blood out of a turnip.”

Want to bet? The belief that an at-fault individual cannot be financially harmed because he doesn’t have much is one of the most insidious lies conceived by its originator. Future wages can be attached; possessions can have liens placed against them, etc. Many states don’t allow the court to take someone’s house in settlement, but the at-fault party will be unable to amass much beyond the house until the debt is satisfied. A lot of what can be done might be subject to state law, but the pound of flesh will somehow be exacted.

“There is no need to purchase liability limits higher than my net worth.”

A slightly smarter version of the above lie. A person’s net worth is the value of all they own minus all they owe; why should it be the magic number, that’s not all the attorney is going to ask the court to award. More than one individual with a net worth of $250,000 (for example) has lost a $1 million (or more) negligence suit. A key rule of risk management is, “don’t risk a lot for a little.” Umbrella and excess policies are very inexpensive, bordering on cheap, compared to the limits that can be purchased – invest the small amount of money in the large amount of protection.

“That’s why I buy insurance.”

The context of this statement indicates whether this is a problem. If the insured has done all he can reasonably do to avoid a loss or injury (to the point of maximum benefit without undue burden), then there is nothing intrinsically wrong with this statement. However, if this statement is made because the insured is unwilling to take any or very few steps necessary to reduce the potential for injury or damage to persons or property, then his attitude has morphed into a moral hazard. While this may not be a limits or coverage myth, it is a statement that should make the agent question whether or not this is an insured with whom she wants to do business. Additionally, claims submitted by such individuals may need to be viewed with an eye towards possible “irregularities.”

 “Corporate status will protect me from liability; I’ll just declare bankruptcy and shut down.”

Courts can and do pierce the corporate veil in small, closely held corporations. Not being able to provide legal advice (which is a disclaimer agents should provide), this is not to be construed as legal advice; but do not let a statement such as this one go by unchallenged. Governance and tax considerations should drive the choice of a legal entity-type, not protection against personal liability. A one- or two-man corporation can very likely expect to see the veil of corporate protection removed if the injury or damage is severe enough. Many insureds use this myth to avoid purchasing an umbrella or excess policy. As stated above, don’t risk a lot for a little; find court cases where the veil has been pierced and the affect on the owners.

“Insurance is all the same.”

This myth is the hardest to overcome. GEICO, Progressive, Allstate and others have effectively convinced individuals that insurance is all about price. Even insurance agents have contributed to this lie. My first phone calls as an agent began with, “I’d like to see if I can save you money on your insurance.”

Insurance should be about the protection provided not the cost. That is not to say the cost should not be considered, but you must consider the relationship you are building with your insurance carrier(s).

 “It’s better to pay small liability claims out-of-pocket rather than report them to the insurance carrier.”

Who gives this advice; lawyers, insurance agents or the guy down the street who feels like he got away with an accident without it affecting his insurance premiums? I myself was a party to one of these situations on my way to visit a client.

Traffic was stop-and-go and the guy in the truck behind me neglected to do the first part – stop – and he rear-ended my vehicle. Pulling off the road into a parking lot to avoid holding traffic up even more, we exited our vehicles to inspect the damage. The driver apologized and admitted he just wasn’t paying attention (first mistake); talking further he asked, “I wonder how much it’ll cost to fix your bumper?” As it happened, we had pulled into the parking lot of an auto body shop, so I said, “Let’s ask.” (This is absolutely true.)

I found a service tech, he made a phone call and said it would cost $565 for parts and labor. The guy who hit me said, “Let me go to the bank, I’ll get you the money.” Now, I had him give me his driver’s license to hold until he returned to assure he would come back (he offered me his son to hold, but I already have two kids and didn’t want to risk adding a third). Fifteen minutes later he returned with cash in hand, I had the body shop order the part and the bumper was expertly replaced and he has nothing on his insurance or driving record. I did advise him to let his agent know, and I’m sure he did so that same day – NOT.

This appeared to work to his benefit; but what if, after thinking about it for a day or two, I decided to make some money off this accident? Is there a chance I could have begun suffering from “non-specific soft tissue injury” and developed some pain that could have only been cured by a large cash settlement?

The answer is, yes. Once he received a letter from my attorney and tried to report the claim to his insurance carrier, could they have denied the claim? Based on personal and commercial auto policy provisions, yes the claim could be denied as prompt notice was not provided to the carrier as per the “Duties…” requirements.

Make sure you notify your agent. From there, it depends on the relationship between your agent and the insurance carrier. Business auto policies state that the insured must notify an “authorized representative.” Personal auto policies simple say “We must be notified.” It is not clear if “we” includes the agent – that question is answered in the agency/company contract.

“Statute does not require me to have workers’ compensation, thus you (a higher tier contractor) can’t require it either.”

Most states require an employer with one or more employees to purchase workers’ compensation. However, 13 states don’t require workers’ compensation until the number of employees surpasses a certain threshold (usually three, four or five).

Regardless, statute is the minimum requirement in a particular jurisdiction. A contract can place requirements on the parties to a contract more stringent than statute; contracts just cannot relieve parties of statutory duties (allow them to do less than is required by law). Thus, if a contract requires a subcontractor to provide workers’ compensation coverage, then work comp must be provided even if the subcontractor has less than the minimum number of employees required by statute.

“I pay him with a 1099. He’s an independent contractor, not an employee.”

IRS and insurance rules differ greatly regarding the definition of an “employee.” Paying someone with a 1099 might make the worker an independent contractor for tax purposes (it’s not that simple with the IRS either) but there are far more stringent requirements within workers’ compensation administrative procedures as to whether the person qualifies as an independent contractor or an employee. Anytime a business owner floats this potential lie (or misunderstanding), more questions are needed to ferret out the truth. Examples of questions include, but are not limited to:

Does the employer/contracting party control the worker’s ways and means (i.e. does the employer tell the contractor when to show up, how to do the job and when to leave, or is the contractor free to perform the obligation and come and go as he pleases?);
Are the tools and materials supplied by the employer/contracting party or the worker;
Does the independent contractor work for anyone else or is his sole or major source of income the contracting party; and
Does the “independent contractor” carry his own insurance?
The level of control is the deciding factor when deciding whether a worker is truly an independent contractor or a “de facto” employee (based on the totality of the control). Don’t allow belief that a 1099 is sufficient to avoid accepting responsibility for an injury to the worker.

“If a workers’ compensation injury is less than a certain amount, I do not have to report it to the insurance company.”

Well-meaning agents may have been the creator and perpetuator of this myth. First Report of Injury laws in some states do not require the state to be notified of an injury unless it surpasses a certain threshold. The labor department in one state, for example, does not have to be notified of an injury unless it exceeds $2,000 in medical costs or results in one or more days of lost work.

Based on those requirements, it sounds reasonable for an agent to tell an employer not to notify the insurance carrier of a small claim (the worker needed a few stitches and was back to work that afternoon). However, the law says only that the STATE does not need to be notified unless the injury surpasses that threshold; nowhere does it relieve the employer of its duty to notify the insurer. In fact, the workers’ compensation policy specifically mandates the employer to notify the insurance carrier of all work related injuries, not just those that must be reported to the state. The reporting requirements before a state  must be notified are those placed on the insurance company (or self-insured entity) not the employer. Employers must report all work related injuries “at once.”

Not only is this belief fallacious because of a misreading of the statute, it is also dangerous should an injury be worse than originally thought. Use the above employee as an example. He just cut his finger and had to get stitches, not problem. But suppose he develops blood poisoning leading to major complications later; the insurance carrier may hold a hard line and deny coverage for failing to comply with the policy provisions found in Part Four of the Policy (“Your Duties If Injury Occurs”). Belief in this lie could be very expensive.

(First Report of Injury requirements for all 50 states can be found in Appendix “E” of “The Insurance Professional’s Practical Guide to Workers’ Compensation.”)

“Flood insurance is only for those in ‘flood zones.’”

Every structure located in an NFIP-participating community is in a “flood zone;” your house or building just may not be in one of the more hazardous zones. This is really trying to say, “I don’t need flood insurance because I’m not in a special flood hazard area (SFHA).” It’s just not the correct terminology, but your agent needs to and must know the correct terms when discussing flood coverage. Further, being located outside a SFHA does not guarantee safety from flood loss. Approximately 30 percent of all flood claims are to properties outside of “high hazard” areas (Special Flood Hazard Areas).

New Year, New Financial Outlook

A national survey revealed consumers have an alarming lack of knowledge about their own insurance coverage. As the New Year gets started, Tower Insurance urges consumers to resolve to get their insurance coverage and finances in order.

More than one-third of consumers in the study said they have never conducted their own research prior to purchasing an insurance policy. Almost 40% of consumers in the study say they are not confident or only somewhat confident that they have adequate and appropriate insurance coverage for their needs.

The new survey also found that more than one-third of policyholders have not met with or even talked to their insurance agent within the last year. A new baby, marriage, divorce, death, home renovation or a major purchase could significantly impact your insurance needs and costs. We encourage consumers to stay in contact throughout these life changes, as they can be crucial to your financial security.

Tower Insurance Agency wants our consumers to understand the basics of protecting their family, home, finances, and property. When you review your insurance policies and budget, consider the following:

Know Your Limits

Insurance

One of the most important criteria when selecting an insurance policy is your coverage limit. For an example, Davis Dyer Max can increase the liability limits on a typical homeowners policy from $100,000 to $300,000 a year for as little as about $25 annually. Your coverage limits deserve a closer look.

Budget

Most people set financial goals at the beginning of the year, but by the time March rolls around, the goals have fallen to the wayside. Eric Amado of http://www.wfaa.com says, “Set realistic goals for yourself. Instead of trying to pay off your credit card immediately, allow yourself the year. Set a date and make a plan and you will reach that goal.”

Cheaper Is Not Always Better

Insurance

While price should be a factor in insurance decisions, choosing coverage based on price alone could ultimately be a costly mistake; Insurance policies differ widely, with varying deductibles, coverage limits and exclusions. Review your insurance policy and consider whether saving $50 per year on your premium, is worth the risk of not having thousands of dollars-worth of coverage if you ever need it.

Budget

Buying a more economical car, versus buying a more expensive luxury vehicle is commendable when trying to save money; however, buying cheaper appliances like washing machines and refrigerators can end up being more costly, than beneficial. The lifespan on appliances and other purchases may be so short that you end up having to replace the item anyway. Sometimes it is better to purchase quality from the start.

Don’t Disregard Discounts

Insurance

Many consumers fail to ask about insurance discounts for which they may qualify. Companies often offer some unique, regional, very specific and, at times, quirky discounts. When every dollar counts, some may be able to nickel and dime their way to big savings.

Check with your agent to see if any apply to you. These discounts can make a substantial difference in premium costs:

– Installing a security system
– Living in a gated community
– Updating the roof and/or wiring in a house
– Teen drivers with good grades
– Graduating from certain colleges
– Carpooling
– Budget

Subscribing to www.coupons.com and shopping at wholesale clubs are some of the basic ways to get discounts and get more bang for your buck. Ask your employer about discounts or cash back when opting out of using company insurance. Also, paying bills in a lump sum, instead of monthly, may turn into big discounts and savings.

Contact Tower Insurance Agency and let them be a guide to helping you the reach your 2016 Insurance and Financial goals. Happy New Year!