Musings while on vacation – Observer-Reporter

While on vacation with my family, I realized I did not write my column before I traveled. Hence, here is my best effort on several random topics.

If you are traveling outside the country, buy travel insurance. It is easy to do through your airline, and, based on personal experience, is needed. Very few health plans cover you outside the country.

Years ago I went down a water slide in the Bahamas and was flown by medical transport back to Pittsburgh to have my pelvis fixed. Everything went well, but the cost was in excess of $100,000.

The week before I left for vacation, one of my insureds had a neighbor’s house catch on fire. Their house was damaged and they asked if the neighbor’s home insurance would cover their damage. I asked if the neighbor did anything to cause the fire. If so, was it accidental or intentional? If the neighbor did nothing, then no, they would not be responsible. If the neighbor accidentally did something to cause the fire, then their insurance company may provide coverage under the liability portion of the policy. If the neighbor caused the fire intentionally, then the insurance company can deny all coverages.

This is a family vacation and while sitting at the table writing, the other insurance agents in my family graciously added their two cents. What if the person’s house who caught fire was held liable? Most home policies limit liability to $300,000. As we know with today’s inflation, homes are more expensive. Seems this one example explained the need for an excess liability policy commonly referred to as an umbrella policy.

I stopped writing to get some sun and chase grandkids. That reminded me I wanted to explain the new rules for 529 educational savings plans. One of the reasons some people gave for not starting 529 plans was that if the child decided not to go to school or got a scholarship the money would be penalized and taxed. To help with this problem Congress passed the Secure 2.0 Act in December of 2022. Plan beneficiaries can roll up to $35,000 into a Roth IRA starting in 2024, as long as the account has been open at least 15 years. This is an excellent way to pass money on to your children and grandchildren.

Every year we take a family ski trip. On one of those trips, we decided to go down to the bottom of the mountain for dinner. My youngest was driving, and I had time to look out the window and enjoy the ride. It was raining when we got to the car, and halfway up the mountain it was snowing and slushing, and by the time we got to the top it was snowing so hard it was difficult to see. It made me think how difficult managing the risks of everyday life is.

One moment we are worrying about insuring our first car, the next moment insuring our first house. Do we have enough life insurance and disability insurance? How are we going to educate our children and save for retirement? Which Medicare supplement plan is best? Everything happens too fast and few people can manage things alone. Early planning and working with a known trusted professional is a path to succeeding.

Bob Hollick is a State Farm insurance agent in Washington. If you have a question, email him at Bob@Bobhollick.com/.