Car accidents, lawsuits, insurance requirements (and what happens when you don’t meet them), power of attorney… All reasons to talk to an attorney (preferably in advance), and this week we’re joined by Trevor Orme of Necessary Legal (https://necessarylegal.com/) to get answers.
Episode Recap
FRIENDLY TAKEAWAYS:
- Don’t let a dealer sell you additional services during recall work.
- Make sure your insurance lines up with new Arizona auto insurance laws.
- You can protect your own assets from an at-fault accident.
- It’s a Sellers Market and the Arizona real estate market is on fire.
More Dealer Recalls: Are They Legitimate?
More recalls this past week. 2006-2010 Kia Sedonas or Serentas have electrical short problem — even when the car is turned off! You’ll be getting a notice by April 10th. Brand new Mercedes AMGs, Teslas, Honda Passports, Ford Flex Taurus, Honda Odysseys, Mazda CX5, BMW X7, Chevy Silverados, and more! Stay on top of your recall notices. Some of these Lexux/Toyotas are still sitting at the dealers and are getting new engines. February has had an unusual amount of recalls. Steve’s never seen this many recalls. Steve’s theory is — and his truck just got a recall — so he took it in. First, he did his own oil change. When he went to the dealer, their “ASE Certified” mechanic says he needs an oil change. Steve, obviously, questioned it. They tried to sell him a $150 oil change based on their old records, not because they looked at the car — even though they said they looked at the car. It’s dealer scare tactics. So, are all these recalls just a way to drive revenue? Remember, all they’re required to do is the recall. There’s nothing additional that you have to pay for to get your recall work done. It’s because of the Magnuson-Moss Act.
If you get a recall notice — get it taken care of! But you don’t have to buy other services. Trust your local shop with those services.
New Insurance Laws in Arizona: Protect Yourself
Things are changing in Arizona, and there’s one big positive change in automotive insurance coverage. Trevor explained the new Arizona law, SB-1087, which increases the minimum liability required to drive on our roads. It also increases the property damage coverage. That means that the drivers on the road will have more insurance. That means you’ll get more money if you’re in an accident. Arizona is one of the last states to make this move.
What happens if you’re in an accident and the coverage doesn’t cover the medical bills? There’s more than just medical bills. There’s lost work and pain and suffering. That can all add up. Then, you compare it to the insurance value, and there’s not enough there. That’s why you need under-insured coverage, to cover that gap. Of course, you can go to court to get their assets, but that’s going to be a long battle. Only the first $150,000 of a home’s equity is protected in a case like this. One could try bankruptcy, but that’s its own separate case. So, there are several avenues of recovery. There may be a business to go after, but on the balance, it’s difficult to obtain money above what the insurance covers.
What about uninsured drivers? That’s where it’s important to separate civil versus criminal cases. One might end up in criminal trouble, but that doesn’t mean they have insurance or money to cover the damages. You can’t get blood from a stone. It seems unfair.
Limit Your Liability When At Fault in an Accident
What about an accident that’s the other way around — you caused it. How do you protect yourself? It’s an asset protection plan, which is different for everybody depending on their assets. You can define your money, to make it harder to reach. First, make sure you’re properly insured. That’s your first layer of protection. Try to have $250,000 of coverage, not this $25,000. And look at those maximums per accident. If you hurt a handful of people, the benefit will be divided. Then, get an umbrella policy, to cover anything and everything. Try doing that through the same company. Most companies require you to have that base, $250,000 policy to get umbrella coverage.
What about putting your assets in LLCs? Trevor recommends doing a combination of the two: more insurance and other protections. Put money in your home. If you have a business, put money there — make sure your entity is sound, don’t mix business and personal expenses, have your board meetings, make it real. Lawyers will dig until they find something. If insurance is there, there’s no additional digging. Again, protect yourself.
Is it expensive to get more insurance? To go from the old minimum ($15k) to the new minimum ($25k) is only like 7% increase. An umbrella policy won’t cost you much, either. Matt Watson had an example of a client who ended up with a $900,000 liability after an accident — all covered by his umbrella policy.
What if you’re not able to make a decision for yourself after an accident? Your family needs access to funds and other records. There are three basic documents you need: a living will (which tells people what to do if you end up in a vegetative state), a medical power of attorney (which gives somebody the ability to make medical decisions) and, finally, the financial power of attorney (which give others the ability to make financial decisions). These things are all available and free on Trevor’s site.
The Arizona Housing Market is On Fire
If you’re selling a house, the news is good these days. The market has increased 7% between September and January, and it’s going to go up more. Offers are coming in over the asking price, using money gifted from family. It’s a Sellers Market. Felecia recently put in five offers of a couple, and they didn’t get their house. Two things will keep a deal from happening for a buyer — a cash offer and waiving appraisals. Russell Shaw says deals up to $1,000,000 are getting lost to cash. The median cost of a home is up 11%, year-over-year. Phoenix is the hottest growing market. Today, we have half the number of listings while the population continues to grow. Why is there such a low inventory? Felecia’s theory is, “Why move?” The houses here are nice, big houses and are affordable. So, people aren’t moving, which keeps inventory low. People are only moving because of life circumstances.
Matt Watson called in to reiterate how important having the right coverage is.
Wrap Up
Until next week, Drive Friendly Arizona!
