Insurance on Vacation
Home policies usually pay out if your possessions are stolen or destroyed, but not if they're lost.
I’m planning my summer vacation and want to check on my insurance coverage. Are the valuables I bring along covered by my homeowners insurance? Does my auto insurance cover rental cars? And what does my health insurance cover while I’m away? -- D.D., San Diego
Your homeowners insurance generally covers your possessions when you’re away. Some insurers cap your coverage at 10% of your insurance limit for possessions. So if you have $100,000 worth of coverage for possessions at home, the policy would cover $10,000 worth of stuff you have with you while you’re away (minus the deductible).
The type of coverage is the same as you’d have for things in your home: Your insurance usually pays out if your possessions are stolen or destroyed, but not if they’re lost, says Jeanne Salvatore, of the Insurance Information Institute. One exception: You may have up to $500 or so in lost-luggage coverage from your insurer, and you may also have some coverage from your credit card company. You can buy special coverage for certain items, such as jewelry, that includes “mysterious disappearance” and insures the items up to their appraised value without a deductible. (Jewelry coverage typically costs $15 to $20 a year per $1,000 of appraised value.) Your auto insurance policy covers a rental car at the same levels as for your own car while you are traveling in the U.S. You may also have collision coverage on a rental car through your credit card (see Wipe Out Pesky Fees). You generally won’t need to buy extra liability coverage if you have ample coverage on your own policy. Contact your insurer about the rules for your own car or a rental if you’re driving outside the country.
Your health insurance policy should provide coverage for emergency care while you are traveling in the U.S. Most policies do not provide coverage while you are traveling outside of the U.S., although some may cover emergency care. Travel insurance can fill that gap and also cover a potentially big expense: emergency medical evacuation. You can compare travel policies at www.insuremytrip.com.
Lost savings bonds
I received some savings bonds in the 1980s, but I haven’t been able to find them. Is there any way to track them down, and are they still earning interest? -- W.Y., Milpitas, Cal.
First, see whether you can dig up any information about the bonds using the Bureau of the Public Debt’s Treasury Hunt system. This system provides information on series E bonds issued in 1974 or later (all series E bonds have matured and no longer earn interest). If it finds a match, it will ask you to leave your contact information. Someone at the Bureau of the Public Debt will follow up.
If you don’t find a match through Treasury Hunt, you may have had other types of savings bonds. Fill out Form 1048 (available at www.treasurydirect.gov), listing your name, Social Security number, the approximate dates on which you received the bonds (or at least a range of years), and any other information you may have, such as the bond series and denomination. If you don’t have all of this information, provide as much as you can. Then print it out and mail it to the Bureau of the Public Debt (you cannot submit it online) at the address printed on the form.
If the bonds have matured, the Bureau of the Public Debt will give you cash; otherwise, the bureau will reissue the bond. All series E and H bonds have matured. Series EE bonds mature 30 years after the issue date; series HH bonds mature in 20 years.
Old enough for catch-up contributions?
I’m turning 50 in early December. Can I make catch-up contributions to my Roth IRA and 401(k) anytime this year, or do I need to wait until after my birthday? -- A.S., via e-mail
You can start making catch-up contributions to your IRA and 401(k) anytime in the calendar year in which you turn age 50. That means anytime in 2012 you can add $5,500 to your 401(k) above the $17,000 annual contribution limit, for a total of $22,500 for the year. You can add an extra $1,000 to your Roth beyond the $5,000 annual contribution limit, for a total of $6,000 for the year.
Education tax breaks
My son will be starting college this fall, and we’ll be paying his first tuition bill soon. We have money in a 529 and in our regular bank account. Which account should we withdraw from first? -- T.K., Chicago
Before you tap your 529 plan, see whether you can take advantage of the American Opportunity tax credit, which provides a tax credit of up to $2,500 each year for eligible college costs. You can’t double-dip on tax breaks -- that is, use a tax-free distribution from a 529 or Coverdell education savings account to cover the same expenses for which you claim the tax credit -- so you would not qualify for the credit if you paid all the bills from the 529.
To qualify for the American Opportunity tax credit, your adjusted gross income must be less than $90,000 if you’re single or $180,000 if you’re married filing jointly (the size of the credit starts to phase out if you earn more than $80,000 if single or $160,000 if married filing jointly). Money you spend on tuition, fees and books in the first four years of college can count toward the credit.
The credit is worth 100% of the first $2,000 you pay for eligible expenses, plus 25% of the next $2,000 of eligible expenses. To maximize the tax breaks, you could pay $4,000 of the tuition bill from your bank account, then use the 529 for any remaining tuition, plus room and board (which is eligible for 529 money but does not count toward the American Opportunity credit). For details, see IRS Publication 970, Tax Benefits for Education, at www.irs.gov.
Social Security statements by mail
We used to receive our Social Security statements by mail once a year. I understand the government stopped sending paper statements. How can we check for any errors? -- Robert Blair, Liverpool, N.Y.
The Social Security Administration did discontinue mailing paper statements in 2011, but in February it reversed course and resumed mailing statements to workers age 60 and older who are not already receiving Social Security benefits. It will also mail statements to workers at age 25.
Everyone else can check their Social Security statements online. Go to www.ssa.gov/mystatement and create a “My Social Security” account. You’ll need to provide data about yourself that matches the information on file with Social Security, as well as answer questions about your financial accounts that only you are likely to know.