Author: Steve G

Insurance blog, articles, and news written by Stephen Gebhardt, founder and CEO of Gebhardt Insurance Group an Insurance agency in Casa Grande, Arizona.

Maricopa County Excise Tax Bonds

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Excise Tax Bonds

Excise tax bonds can come into play in multiple industries and vary by state and county.  For instance, in Maricopa county ADOT has issued Transportation Excise Tax Bonds to help fund the design and/or construction of certain highways within Maricopa County. Excise tax bonds may also be used in liquor, state and fuel industries.

What Are Excise Tax Bonds?

“A special tax bond is a type of municipal bond that is repaid with revenues derived from taxation of a particular activity or asset. These bonds are repaid with either excise taxes or special assessment taxes, but not by ad valorem taxes”. In layman’s terms a special tax bond is raised by a federal, state or local government entity. These funds are generally used for special projects such as improving highways, public schools, etc. Investors that purchase these bonds earn interest and then when the bond matures are paid back the principal.

Bonds are issued for a specific purpose and the funds can only be used for that purpose. Investors need to be paid interest on their investments which is where excise taxes come in. Excise taxes are implemented on a specific item to then pay the interest to the investors. For example, if a bond is issued to help fund cancer research, a tax may be levied against the sale of cigarettes to produce excise tax revenue.

Excise Tax Bonds in Maricopa County

Sales tax bonds or, excise tax bonds are types of surety bonds, which many businesses are legally required to have to operate in Casa Grande and Maricopa County. These types of tax bonds are typically required on “luxury” items such as cigarettes, alcohol, gambling, etc. The state of Arizona reserves the right to require businesses to post a bond to make sure that the business can pay the tax amount. In this manner, the state protects its potential revenue and earnings.

How Do These Bonds Work

There are three parties involved in these types of bonds.  There is the principal, the obligee and the surety. Here’s how each party is involved in the process:

The Principal: The principal purchases the bond to ensure the revenue is ultimately paid. If you need are required to provide a bond you would act as the principal.

The Obligee: The obligee is the government entity that is requiring the bond. The obligee is the entity that’s financial interests are protected by the bond.

The Surety: The surety is the bond company (us). We can issue the bond and provide financial security to the obligee. We can discuss your specific industry needs and ensure that you meet state and local bond requirements and bond amounts for the best price possible.

How Much Will Your Excise Tax Bonds Casa Grande Cost?

There are many different factors that go into determining the cost of your bond.

  • Risk – Think of your surety company like an insurance company. If you don’t hold up your end of your financial and business obligations, the surety has to pay the bond to the government entity. The higher the risk that the surety has to pay out the bond, the higher the cost of the bond. 
  • Credit Score – Credit scores are often used to determine your fiscal responsibility. Businesses with good credit are typically rewarded with lower rates and costs while lower credit scores may result in higher costs. 
  • Previous History – If you have a strong track record of successfully meeting your businesses financial obligations you can often obtain better rates than a new or struggling business. 
  • Bond Amount – The higher your required bond amount the higher your rates/cost. Conversely, the lower your bond amount the lower your rate/cost.

If you are looking to do business in Casa Grande or Maricopa County and think you need a bond, give our office a call. Our experienced staff can walk you through the process and requirements and make sure you get the bond you need so that you can focus on what’s important – running your business.

Maricopa Permit Bonds

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If you are in the energy business you are probably familiar with energy surety bonds. These types of permit bonds are regulated by government agencies and in most cases required by the state and/or county. As an operator of a type of energy business such as wind, solar, or oil drilling installation of new sites or operation of existing entities you will be required to follow a slew of laws and regulations.

Regulations:

This can include obtaining proper permits, following all compliance regulations and carrying the appropriate insurance to protect the state and/or county in the event you don’t meet your obligations.

For instance, if you want to install a gas pipeline, you are required by Maricopa county to obtain a permit. You must complete an application as well as payment and submit it to MCDOT for approval. Your application may be returned with comments or items that are required to be changed prior to being approved. When you are granted approval, and all your other obligations have been met you can begin work. Some projects will have inspections throughout and all projects should notify MCDOT upon completion. As you can see, the county has a vested interest in these types of undertakings and regulates them as such.

Surety Bonds:

Surety bonds are like a type of insurance for the state or county. You, as the principal of the project, are required to carry a surety bond for any new or ongoing energy activity in Casa Grande or Maricopa county. The surety bond protects the county financially in the event that you do not live up to your responsibilities and that lack of performance has a negative financial impact.

The Mechanics of Surety Bonds:

Insurance companies issue a surety bond to the principal, in this example you, and name the County as the obligee. As the principal, you are responsible for the cost of the bond. Then, if you fail to fulfill your obligations, the obligee can file a claim which the surety bond will pay. The bond company can then in turn recoup the money from you. There is typically an annual premium for the bond for the length of your project.

Which Bond is Right For You?

There is no one size fits all solution here. You want the type of surety bond required, for the amount of coverage you need without overpaying for coverage you don’t. Some items that will help determine the type and amount of the best bond for you include:

The type of project you are working on: if your project is potentially more expensive or complex, the cost to insure against financial loss may be greater.

The number of sites: Multiple locations/sites mean more complex projects and opportunities for things to go wrong. This typically increases the risk and expense of a bond.

Where you live: Your state and county will have specific bond minimums that will have to be met so your location is an important factor.

Your obligations (and the length of said obligations): Your financial obligations and the time frame of the project can both impact the cost of your bond. The longer your project and the more financial responsibility, the greater the potential risk.

Your credit: The bond company doesn’t want to deal with a claim against you or their bond. It acts like any other insurance company in that the lower the risk, the less expensive the fees. Your credit is taken into account when reviewing your bond application. If you have good credit, it can help lower your costs, while a lower credit score can do the opposite.

If you are navigating the world of surety and permit bonds, leave the heavy lifting to us so that you can invest your time in your project. Whether you want to install a new wind generator or are taking over existing oil wells we can get you through the bond process in no time at all. Our team of experts have years of experience making sure our customers meet their legal obligations and have the bond that they need. Give our office a call and give us the opportunity to earn your business today.

Comprehensive vs. Collision Coverage for Car Insurance in Arizona

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Comprehensive Insurance and Collision Coverage

In the United States, almost all jurisdictions require drivers to maintain minimum levels of auto liability insurance. There are also various types of optional coverage that motorists may consider. In this post we will take a close look at comprehensive and collision coverage for Arizona residents. 

What is Comprehensive Coverage?

Comprehensive coverage pays for damage that your vehicle incurs from things such as theft, vandalism, or a hail storm. Without this type of coverage, you would have to pay for losses or repairs “out of pocket.”

This form of coverage is purchased in conjunction with collision coverage. When a motorist adds these two types of coverage to their liability insurance policy, they have “full” coverage.

What is Collision Coverage?

As the name implies, this form of coverage is used to repair or replace your vehicle following a collision. It is applicable in collisions with objects or those involving other motorists.

Unlike bodily injury coverage or property damage liability insurance, collision and comprehensive insurance may apply regardless of who is “at-fault.”

Coverage Requirements for Drivers in Arizona

Arizona requires all drivers to maintain minimum levels of liability coverage. Current requirements are $15,000 in bodily injury per person and $10,000 for property damage.

Those leasing a vehicle or financing the purchase through a lender will be required to maintain collision and comprehensive coverage. The reason that a lender requires drivers to maintain these coverages is for their financial protection.

During the period when the borrower is making payments, the vehicle acts as collateral in case of default. If the vehicle was damaged or stolen and the motorist didn’t have adequate coverage, that collateral would lose its value and the lender or motorist would have to foot the whole bill.

Understanding “Full Coverage” Auto Insurance

Collision and comprehensive auto insurance are generally purchased together on a policy. The term “full coverage” describes when a motorist adds these two forms of coverage. This is in addition to the minimum requirements of liability insurance. The difference between the two is that collision insurance covers damage that occurs while the driver is operating the vehicle.

Collision Insurance

When you are the cause of a crash that damages your vehicle, collision insurance is used. This is coverage that would be used if you strike a tree or ended up driving your car into a ditch. The cost of collision coverage has continued to escalate due to the higher costs of repairing today’s newer vehicles.

Comprehensive Insurance

This coverage is applicable for use when the insured party incurs losses or damage that do not occur while driving. Some of the most common uses for comprehensive coverage are as follows:

  • Windshields: Damage to the vehicle’s glass are generally covered by comprehensive coverage. Windshields are positioned in a vulnerable location and can be struck with considerable force. For example, a piece of metal or a rock may fly out of a truck bed on the highway. This flying object has some momentum of its own. It then strikes the windshield of another vehicle traveling at a high rate of speed.
  • Animal collision: The most common major collision that occurs between vehicles and animals involve deer. These animals are dangerous for various reasons. They can easily weigh more than 100 pounds. They are a taller animal that often will be dangerously propelled on to the windshield following impact.
  • Hail damage: A hail storm can potentially create significant damage to the exterior of a vehicle.
  • Fire damage: It is possible that an electrical problem can create a fire. When a fire is exposed to highly flammable materials such as gasoline, the damage may result in a total loss.
  • Theft: Comprehensive coverage can be used when a vehicle is stolen. Arizona is among the 10 leading states for the total number of vehicles stolen. The state’s close proximity to Mexico makes it easy for thieves to transport stolen vehicles across the border to be sold.
  • Vandalism: Arizona law makes vandalism a felony when the damage is valued at more than $250. Unfortunately, it may not deter teenager troublemakers from randomly causing damage.
  • Falling objects: A storm or high winds can cause problems such as falling tree limbs that can cause significant damage to your vehicle.

Uninsured Motorist Coverage

This coverage protects you if involved in an accident with a motorist who does not have the required liability insurance. It may also apply if you are in a “hit-and-run” accident where a motorist flees the scene, leaving no one to pay for the damage.

Underinsured Motorist Insurance

Underinsured coverage protects a motorist if the cost of injuries or property damage exceeds the liability limits of the driver’s policy. For instance, underinsured motorist insurance would apply if someone is involved in a crash that costs $12,000 worth of repairs to their car and the at-fault driver only had liability insurance to cover $10,000.

Other Optional Coverage

Many insurers offer medical payments or personal injury protection policies. These are specifically used to cover medical expenses in case you or your passengers are injured in an accident.

Perhaps you need surgical care for a broken arm? In very serious accidents you may also require a hospital stay or some type of therapy or rehabilitation. These costs can quickly become unpalatable.

Rental reimbursement are another common option. When your car is in the shop being repaired after an accident, the policy may offer a daily reimbursement amount towards renting a car. This is helpful in allowing you to continue to go to work and travel.

Understanding Deductibles

Comprehensive and collision insurance both generally have deductibles, which is the dollar amount a driver must first pay “out of pocket” when filing a claim. They often range from between $500 to $2,500. After the deductible is paid, the insurer pays the remaining costs of repair or replacement up to the maximum coverage limits. The average monthly premiums usually decrease as the deductible amount increases and vice versa.

Is Your Vehicle Costly to Insure?

The type of vehicle that you choose to drive has a considerable impact on comprehensive and collision insurance premiums. The worth of the vehicle itself is also a major factor. Insurers know that high-priced vehicles will cost more to replace or repair, so they compensate for that by charging more on the premiums.

Newer cars are more costly to repair because they are more likely to have advanced features, such as blind spot monitoring and rear cameras. On average, a five-year-old car costs roughly 12% less to insure than a new model. As the car ages, motorists can expect that rates will decrease by roughly 2.5% annually.

Do these new safety features result in lower rates? Many new advanced safety features are designed to help with preventing accidents. The problem is these additional features increase the costs of repairing or replacing the car. These vehicle owners may notice a slight reduction in the cost of their liability insurance, but these savings may be offset by an increase in comprehensive and collision coverage.

Hybrid, electric, or other “green” vehicles generally will cost more to insure. This is because higher costs may be incurred to pay for the damage. A recent report indicated that this increase equates to roughly 7% compared to traditional gas-powered vehicles.

Most Expensive to Insure

Average Annual Premium

Least Expensive to Insure

Average Annual Premium
Audi R8

$4,102

Subaru Outback

$1,392
BMW i8

$4,032

Chevrolet Colorado

$1,414
Dodge Viper

$3,921

Ford Escape

$1,438
Nissan GT-R

$3,865

Fiat 500X

$1,441
Porsche 911

$3,403

Subaru Crosstek

$1,446

Factors That Impact the Cost of Comprehensive and Collision Policies

Insurance companies use statistical data to determine the rates of their policies for different drivers. They consider a host of factors that relate to the likelihood that you will have an insurance claim. These factors mainly are assessed to determine the likelihood that you will file an insurance claim. They will consider your demographics information. For example, teenage males will have higher premiums because they are inexperienced drivers and tend to take more risks.

  • Age and demographic. New and inexperienced drivers are among the most costly to insure. Aside from their inexperience behind the wheel, they are more prone to distractions and reckless decisions. Men pay slightly higher insurance rates than woman across most age ranges. Those who are married and those who own a home are more likely to have lower rates.
  • Location. Accident rates are generally evaluated by insurers based on your zip code. Your neighborhood may historically have a high rate of vehicle theft. Arizona ranks as #22 among U.S. states for the cost of car insurance.
  • Driving record. Those who are cited for traffic violations are typically going to pay higher rates. The insurance company will likely review your driving record initially and then each time the policy is renewed.
  • Claims history. Insurers will check your history of filing insurance claims. The more claims you file, even though these claims usually aren’t because of your fault, the higher your premiums will rise. There is a central database that retains this data.
  • Credit history. In the majority of U.S. states, insurers may check your credit history when determining rates. Your previous history is a major factor in the rate you pay. Data suggests that those with a poor credit history are more likely to file an insurance claim. 
  • Vehicle safety rating. All vehicles are evaluated for safety. They are subject to crash tests that may reveal the likelihood of serious injury in the event of a wreck. Insurers look at your recent driving record to see if you have any violations. They also look at your recent history of claims. The safer your car, the less your premiums should be. 
  • Theft. Certain models of vehicles are more commonly stolen than others. Overall, auto theft rates have declined considerably since the 1990s. Arizona ranks close to the national average for the number of vehicles stolen. 

Arizona drivers pay approximately 12% less compared to the national average. The following charts analyze two examples of how rates are impacted by certain factors.

Your Credit Rating

The following analysis was done showing how the amount of money paid by Arizona motorists changes based on their credit.

Exceptional Credit Score (800-850)$1,024.30
Very Good Credit Score (740-799)$1,238.79
Good Credit Score (670-739)$1,529.22
Fair Credit Score (580-669)$1,915.90
Poor Credit Score (Less than 579)$2,443.66

Your Geographic Location

The same organization also did a rate comparison based on where the policyholder lives in Arizona.

Phoenix$1,602
Glendale$1,536
Avondale$1,502
Peoria$1,409
Mesa$1,408
Tucson$1,362

The 10 Percent Rule

Some experts subscribe to a guideline known as the “10% Rule” for when to drop comprehensive and collision insurance. This means that the added annual cost for these coverage types should not surpass 10% of the vehicle’s book value.

For example, if the value of your vehicle is $3,000, the additional premium cost should not exceed $300 annually. Keep in mind that this is merely a guideline and may not apply in all circumstances.

Finding Discounts for Auto Insurance

There are a tremendous number of discounts offered by auto insurance companies. Many providers offer discounts for those with a clean driving record.

One commonly offered discount is available to those who “bundle” other types of insurance together. An example would be purchasing your home and auto insurance through the same insurer.

Multi-car discounts may apply to those who have multiple cars or motorcycles. Some insurers will offer “usage-based” discounts. These may be available for those who drive significantly less than the average motorist. Those who are active in the military are also commonly eligible for discounts.

Benefits of Having a Local Agent for Comprehensive Insurance in Phoenix Arizona

In today’s fast-paced environment, there are many benefits of having a local, independent insurance agent. You can save money and time because your agent can quickly compare insurance quotes from multiple insurance companies. Your agent will find a great policy suited for your specific needs and provide you with personal service and support.

Car Insurance Coverage for Arizona Drivers

The Gebhardt Insurance Group provides auto insurance solutions for drivers across demographics. With decades of combined experience, our team of professionals will assess the specific coverage needs for you, your family, or your business. Contact us today at (520) 836-3244 to speak with one of our local agents.

Medicare Plan Options Maricopa AZ

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Medicare Plan Options

Medicare is a federal program established back in 1965 largely in response to difficulties that older Americans were having in obtaining private medical insurance. At the beginning of 2019, there were more than 38 million people enrolled in Original Medicare and more than 22 million participating in various Medicare Advantage plans.

Medicare has been credited with significantly improving the well-being of mature Americans. When originally implemented, prescription drugs were not as widely used as they are today. In recent years, the program has added measures such as Part D in efforts to keep pace with this trend in healthcare.

Medicare Basics

There are several parts of the Medicare program that address different medical concerns. Part A can be viewed as largely used for hospital-based care. It is used for inpatient hospital expenses, skilled nursing facility care, and hospice care. Expenses can quickly accumulate in these settings. The services provided by doctors while in the hospital are largely covered by Medicare Part B.

Medicare Part B is used for services provided by physicians and other medical providers. It covers various preventive care services including vaccinations, screenings, etc. Home health care services may potentially be covered by Part A or Part B based on the circumstances. Durable medical equipment such as wheelchairs, specialized beds, and others are typically paid for by Part B.

In 2019, Part B had a $185 annual deductible for most participants. This is an amount that the patient must pay before the Part B coverage begins paying. It can be compared to the deductible that applies to comprehensive and collision automobile insurance coverage. After the deductible has been paid, Medicare typically pays 80% of the subsequent costs.

In 2006, Medicare Part D was implemented to assist with the costs of prescription drugs. This optional program is managed by private insurers that follow Medicare guidelines. There are a host of various Part D plans with differing costs and coverages. Those with Original Medicare generally choose one of three types of prescription plans as follows:

  • PDP: This stands for Medicare Prescription Drug Plans, which is for those with Part A and/or Part B
  • PFFS: These are Private Fee-for-Service plans for those in Medicare Advantage Plans with a designated provider network
  • MSA: Medical Savings Account plans are similar to Health Savings Accounts (HSAs) that those not enrolled in Medicare commonly use.

Understanding Original Medicare

Original Medicare is essentially comprised of parts A, B, and D. There is typically a monthly payment or premium for Part B coverage and then a separate Part D premium. Those with Original Medicare are typically required to pay a 20% coinsurance “out-of-pocket.”

With the costs of medical treatment today, this 20% can begin to be very costly for many. This is one reason why “Medigap” supplemental coverage plans are popular. Based on financial considerations, some people qualify for assistance from Medicaid to cover coinsurance.

Medicare Advantage

Some individuals opt to participate in a Medicare Advantage plan, often referred to as “Part C.” There are many varieties of these plans. They do cover all “medically necessary” treatment based on Original Medicare guidelines. Advantage plans are popular among those seeking coverage for hearing, vision, dental, and others. They typically also include a prescription drug plan.

Medicare Advantage Plans are managed by private insurance companies and typically require that treatment is provided by their “in-network” providers. Those who use an “out-of-network” medical provider should expect to pay additional “out-of-pocket” expenses. Some of the types of Advantage options include Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans.

Important Terms to Know:

  • Coinsurance: This is a percentage of costs that the patient must pay for services after any deductible is satisfied. (Usually 20%)
  • Copayment: This is a fixed amount that a patient pays for certain services or supplies. For example, the plan may require a $10 copayment when picking up a prescription or a $20 copayment for a doctor visit.
  • Premium: A monthly or other periodic payment required for participation in these types of plans.
  • Preventative services: This is also sometimes called “wellness care” services. These include flu shots, mammograms that screen for breast cancer, Pap tests, etc.

Enrollment Times

Once an individual turns 65 they are typically eligible for Medicare three months later. Those who are eligible that have not enrolled may do so during “special enrollment” periods. These eligibility and enrollment provisions vary based on the circumstances. You may want to discuss your options with an insurance professional.

Rights Regarding Medicare

There are some basic rights that those on Medicare are entitled to. All participants are to be treated “with dignity and respect” and not be subjected to any forms of discrimination. All personal and health-related information is to be kept private. Emergency care services are to be covered and participants always have a right to file a grievance regarding the quality of care.

Arizona State Health Insurance Assistance Program (SHIP)

SHIP is a “counseling service” available to all Arizona’s Medicare beneficiaries to help them navigate the program. This assistance may benefit those trying to determine a program that is best suited for their needs. Another option is to consult with an experienced insurance professional that can easily explain your options.

Choosing an Independent Insurance Agency

Why might an independent insurance agency be particularly helpful in understanding Medicare? An independent agent represents its customers instead of any specific insurance company. Independent agents recognize that their customers benefit from the ability to review policies from many carriers. This applies to find competitive rates as well as identifying a solution that is best suited for your individual needs.

Established Insurance Provider in Arizona

The team of professionals at the Gebhardt Insurance Group is a tremendous resource for advice on Medicare. Our expertise extends well beyond Medicare. Clients have been experiencing excellent customer service and support for many years now. This includes insurance products to protect your home, life, automobile, business, and more. Contact our office today at (520) 518-8008.

Permit Bonds Maricopa

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Surety bonds are issued as a commitment that assumes liability if another party fails or defaults on an obligation that they have made. A surety bond involves three parties who enter a contract based on the provisions within a surety bond agreement. They may be required by governmental entities, by owners of a specific project or to maintain compliance in certain occupations or business markets.

There are three distinct parties to these bond agreements. The principal is the party that must satisfy the bonding requirement. Without securing a surety bond, the principal would be unable to conduct business with an obligee. The obligee is the party that instituted the bonding requirement. This may be an individual, government entity or organization.

The surety company is the third party to the agreement that is assuming liability on behalf of the principal. Issuers of surety bonds in Arizona must have met the requirements specified by Arizona law.

Contract Surety Bonds

Surety bonds are broadly categorized as either contract or commercial bonds. A contract bond may be necessary for contractors that are seeking to obtain licensure or to become eligible to bid on specific construction projects. The bond serves as a safety measure if the contractor fails to satisfy an obligation.

A contract bond will allow for financial compensation for the project owner (principal) if the project is not completed or is not completed correctly based on the terms of the agreement. Financial compensation from these bonds also may be used to pay others involved, such as suppliers or subcontractors that were not compensated.

Commercial Surety Bonds

There are also many types of commercial surety bonds. Often they are a requirement from a governmental entity. Some of the more common commercial surety bonds include the following:

  • Those conducting business in certain industries or working in some professions may need to secure license and permit bonds. Some of these bonds apply to freight or mortgage brokers, automobile dealers, and more.
  • Judicial or court bonds may be required among parties involved in legal matters.
  • Probate, trustee or fiduciary bonds may be legally required. These apply to someone assuming a fiduciary or “entrusted” role for the property or assets of others. This includes an administrator appointed to manage a family’s estate.
  • Some public officials may require bonding. These include government officials that oversee important public assets. An example may include those managing the treasury.
  • Miscellaneous bonds are simply those unable to be classified within other categories. They may be required by those who accrue fuel taxes or consume significant utility resources, and many more.

Who Issues Surety Bonds?

Surety bonds may be issued by an organization that specializes in these products or those who offer a variety of related products. Often sureties are issued by certain divisions of insurance companies or those operating in other financial product markets. In Arizona, these organizations must be licensed to do business by the Department of Insurance.

When issuing surety bonds, these organizations undertake a process that is similar to the underwriting process conducted by insurers. The issuer of the bond must make an assessment based on the potential risk involved. The issuer may review the buyer’s credit history, the base of assets, and other indicators related to financial stability.

Permit Bond Overview

Certain businesses are required by law to complete pre-licensing requirements. License and permit bonds are generally among the provisions that are necessary for legal operation. These bonds are part of the overall commitment that is made to adhere to laws and regulations required by federal, state, and local agencies. License and permit bonds also protect the customers of the business, which may include consumers and governmental entities.

License and permit bonds can be viewed as insurance the business pays for the protection of others. Those who honor their commitments and abide by the law rarely have any claims made against their bond. If a claim is made against the bond and paid by the surety company, the business is then responsible for repayment.

Why Might a Permit Be Required in Maricopa County?

One local agency that has permitting requirements is the Maricopa County Department of Transportation (MCDOT). They require that a permit be obtained for projects involving the roads, which generally require bonding. Examples include repairs or installations of sidewalks, curbs, and underground utility lines. In some cases, structural projects that involve “signs, mailboxes, fences, and landscaping” will require permits.

General Surety Bond Requirements in Maricopa County

Some of the general bonding provisions or conditions implemented by MCDOT include the following:

  • Parties may not cancel a bond until related work is completed and approved by the County, thus “releasing” the bond
  • The surety bond issuer may only be deemed liable up to the amount of the bond
  • If a project is not completed within the specified time, the bond may need to be extended for a short period
  • If the project is well behind the completion schedule, the principal may be deemed as in default and a claim against the bond may occur
  • If a claim is made, the issuer of the bond may reach a monetary settlement agreement or have another contractor complete the work according to the original provisions
  • In some instances, there may be some unforeseen changes required to complete the work. A new bond is not required or additional “add-on” bond coverage is only necessary when the cost of the changes exceeds 20%.

Right-of-Way Permit Bonds in Maricopa County

MCDOT will always require bonds unless the work is being conducted by a public entity with a net worth that exceeds $1 million. For very small projects requiring temporary access a nominal $2,500 bond is sufficient.

Bond Requirements for Oversize or Overweight Permit in Maricopa County

In the interest of public safety, a special permit and bond may be required to move oversized or overweight loads on the roads in Maricopa County. Often these moving projects are required to be completed at night and a bond of at least $10,000 must be secured.

Arizona Agency Provides Permit Bonds

The Gebhardt Insurance Group is an established independent agency that offers a truly comprehensive group of products. Examples include insurance that protects homes, vehicles, and businesses and a variety of surety bonds. We look forward to speaking with you and encourage you to contact us at (520) 836-3244.

Commercial Performance Bonds in Casa Grande and Maricopa

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A surety bond is a contractual agreement that ensures a party’s commitment to properly satisfy a “debt, default, or failure.” There are three different parties involved in these agreements. The obligee may be a government agency or other owner of a project needing to be completed.

The principal in the agreement is the party that is committed to performing services or providing products such as a contractor. The surety is a state-approved entity that is protecting the owner of the project (obligee).

Contract vs Commercial Bonds

The National Association of Surety Bond Producers explains that the two categories of surety bonds are contract and commercial. Commercial bonds are also commonly referred to as miscellaneous bonds. Contract bonds are often associated with construction projects. A contractor may be required to secure a bond as a means of protecting the owner of a project if the contract is not satisfied. 

Commercial surety bonds may be a requirement according to state statute, local ordinance or another agency requirement. Individuals and businesses must secure a surety bond to remain compliant with these laws. They are most commonly issued for one-year but certain types extend for two years.

Types of Commercial Surety Bonds

  • License and permit bonds: Those who operate in certain professions may be required to obtain these types of bonds. Common examples include automobile dealers, mortgage brokers, and various specialty contractors.
  • Court (or judicial) bonds: Parties that are involved in judicial proceedings may secure bonds that protect other litigants or parties. They may or may not be required by law. Common examples include appeal bonds, guardianship, and attachment bonds.
  • Fiduciary (or probate) surety bonds: These may be required for those who are administering a trust that is subject to court oversight. A fiduciary is commonly also referred to as a trustee. A fiduciary role is associated with those in a position of trust that has some ethical or legal relationship with another party.
  • Public official bonds: Those who hold public office may have a bond requirement. They commonly apply to those serving as a treasurer or county clerk. This protection is afforded to the public if the official commits acts of wrongdoing.
  • Miscellaneous bonds: The term miscellaneous applies to surety bonds that do not fit into the primary categories. There are many types including fuel, warehouse, and utility bonds.

Performance Bonds

Construction projects generally require that contractors are prequalified before being deemed eligible. A performance bond provides the project owner with protection in the event of default or another failure to complete a project. Contractors may be assessed based on their financial standing and work history.

The project owner is placed in a risky position when a contractor fails to meet their obligations. The bond may be used to retain another contractor or otherwise provide critical financial resources to ensure the work is properly completed.

Bonds vs Insurance

Surety bonds are often incorrectly viewed as being a form of insurance. They are not insurance policies and will not protect a party from problems such as those involving construction liabilities. A surety bond is used to compensate for obligations specified on the bond. The requirements of the value of a bond may vary based on a host of factors.

For example, an Arizona contractor’s license bond amount is determined by estimating the volume of earnings for the coming year. The bond’s value may range from roughly $5,000 to nearly $100,000. Bond value and type vary in Arizona and differ in other states or for specific circumstances. In California, contractors are generally required to maintain a $12,500 bond.

In Washington State, the contractor is required to meet both surety bond and insurance requirements. To be an eligible contractor for Northern Arizona University, the requirements include commercial general and automobile liability insurance. This is in addition to worker’s compensation coverage and the surety bond(s) specified in the contract.

Agency Provider of Commercial Bonds in Arizona

The Gebhardt Insurance Group offers a truly comprehensive array of products for individuals, families, and businesses. This includes insurance for your home, life, and automobile and contract and commercial surety bonds. We now have offices in Casa Grande and Maricopa for the convenience of our customers. You are encouraged to contact us today to speak with one of our professionals.

Medicare Insurance Casa Grande and Maricopa

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The Centers for Medicare & Medicaid Services (CMS) is responsible for managing the Medicare program in the U.S. currently. It is a division of the Department of Health and Human Services (HHS). The budget estimates of HHS programs are approximately $1,120 billion in required funding with another $95 billion in “discretionary” spending. 

Millions of Americans rely on healthcare that is funded through Medicare and Medicaid, which is one reason why healthcare is the single largest part of the Federal Budget. As a result, new legislative measures and changes to the program occur continuously in efforts to reduce costs. In Arizona, roughly 1.2 million people are beneficiaries of Medicare. 

What is Medicare?

Medicare is a federal program that was established in 1965. It is a health insurance program for those ages 65 and over. It is also used by some people under the age of 65 that have certain diseases and disabilities. The program is divided into Parts A, B, C, and D. 

Part A is intended for inpatient care in hospitals, skilled nursing care, hospice, and home health care. 

Medicare Part B provides coverage for services from doctors, wellness care and other outpatient care. It is also used to pay for some medical equipment such as mobility devices and beds. Parts A and B are commonly referred to as Original Medicare. Medicare Part D is operated by private insurers according to Medicare-specific guidelines for prescription drug products.   

Those with Original Medicare may add various supplemental plans. Medicare Part C consists of alternative “bundled” plans commonly called Medicare Advantage. They generally have Part A, B, and D coverage included. They may also include additional benefits such as dental and hearing. 

Prescription Drugs in Arizona Medicare

Arizona residents that qualify for Medicare are generally eligible for Medicare Advantage and Medicare Prescription Plans. Medicare Part D coverage began in 2006 and is available from licensed insurers. Those using prescription plans should review them annually to see if they are still the best option for their needs. 

Those with employer-provided prescription plans may be eligible to continue with those that are considered “creditable.” When comparing prescription drug plans, a good starting point involves reviewing the plan’s covered drugs. This is referred to as the formulary. You will also want to consider the co-payment amount that must be paid “out-of-pocket” for prescriptions. 

Arizona Department of Economic Security (DES) and Medicare

The Arizona DES has two programs that are designed to assist the state’s Medicare beneficiaries. These plans are the State Health Insurance Program (SHIP) and the Senior Medicare Patrol (SMP). There are five classifications of plans in Arizona as follows:

  • Health Maintenance Organizations (HMOs): A group of medical providers including doctors and hospitals establishes set rates for Medicare patients. Patients generally must receive care from the providers participating in the HMO.
  • Preferred Provider Organizations (PPOs):  A form of managed care where services are provided by doctors and hospitals participating in a specific network. Patients who receive care from providers outside of this network will likely have additional costs.
  • Private Fee for Service (PFFS): A private insurance plan that accepts Medicare patients. The insurance plan dictates the prices paid for the medical services offered.
  • Medicare Saving Accounts (MSAs): A savings account is established exclusively to pay for medical expenses. Medicare allocates a certain amount to the account annually.  These accounts may have high-deductible plans with a $2,000 minimum.
  • Special Needs Plans (SNPs): A form of HMO designed for those who qualify for both Medicare and Medicaid. They also have chronic medical conditions or those need long-term medical assistance. 

Arizona Senior Medicare Patrol (SMP)

This is a group of professionals and volunteers that seek to assist Medicare patients by uncovering fraud and errors. Most states have these organizations. Some of their efforts include counseling and education. The agencies often identify illegal marketing practices and detect fraud such as ordering and billing Medicare for unnecessary tests or procedures.   

Original Medicare

Original Medicare typically includes Part A and Part B only.  Some individuals, including those with employer-provided insurance plans, may elect not to participate in Part B. 

Original Medicare does not typically cover dental, vision or hearing-related services. The program tends to have higher “out-of-pocket” expenses such as copayments and deductibles. 

Medicare Advantage

Usually this “Part C” includes A, B, and D. It provides coverage for a wider range of services compared to Original Medicare and tends to have lower “out-of-pocket” costs. The plans involve contracts between private companies with Medicare.

What are Medigap Policies?

“Medigap” policies are considered to be Medicare supplement plans. They are offered by private companies. Some of the gaps that these plans cover include deductibles and copayments. These differ from Advantage plans because they are separate and require that you still maintain an Original Medicare plan. 

Medigap policies do not cover long-term care coverage, dental, hearing or vision. Since 2006, they also became unable to offer prescription drug coverage. Spouses must purchase Medigap policies separately. 

Independent Insurance Agency in Arizona

The Gebhardt Insurance Group is an experienced team of professionals. We have office locations in Casa Grande and Maricopa. We currently represent dozens of the leading insurers.  Contact us six days a week at (520) 836-3244 for cost-effective insurance solutions and exceptional customer service and support.

Contract Surety

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Contract Surety

Similar to an insurance policy, a surety bond is a commitment to satisfy a “debt, default, or failure” of another party. There are three parties involved in these agreements. The obligee is the party that is having some type of project completed and is often a governmental entity. The principal is the contractor or another service provider that will be performing the work. The surety is the third-party that is insuring or assuming financial liability to protect the project owner (obligee).

There are two general types of surety bonds. These include contract surety bonds and commercial or miscellaneous surety bonds. As the name implies, a contract bond is based on a formal agreement or contract. Commercial bonds are typically required according to legal statutes. Types of commercial bonds include permit or license bonds that are required by law in a given jurisdiction.

Contract Surety Bonds

A contract surety bond applies to most construction projects. The contractor purchases a bond from a surety company. If the contractor does not fulfill their obligations, the surety company will provide the compensation necessary to the project owner. Contract surety bonds may be classified as bid, performance, payment, or warranty bonds.

Bid Bond

Contractors that wish to bid on a contract may be required to complete a bond form and secure a bid bond. These are issued to protect the project owner in case the contractor who was awarded the contract does not follow through. The surety company will evaluate the credibility of a contractor, which may “screen out” bidders who are not qualified. A surety company will only issue a bid bond to those they deem as reputable and qualified.

Performance Bond

A performance bond protects the project owner if the contractor does not properly complete a project. It also applies if there is a failure to adhere to the contract’s details and specifications. The Arizona Revised Statutes state that bonds must be issued by a “surety company or companies holding a certificate of authority” in Arizona. The amount of a performance bond is based on the full value of the contract.

Payment Bond

A payment bond is usually issued in conjunction with a performance bond. Payment bonds are issued by a bonding company to ensure that the project is completed without any liens. Any suppliers of materials or subcontracted providers may be compensated by a payment bond if they are not paid. A “payment only” bond is rarely issued.

Warranty Bond

A warranty bond is sometimes referred to as a maintenance bond. These are issued for the protection of the project owner in case it is determined that poor workmanship or defective materials were used. This applies for the term of the defined warranty period where the warranty bond is viewed as collateral.

Arizona Contractor License Bonds

The State of Arizona Registrar of Contractors has a requirement that all contractors have a bond as part of licensing. The amount required varies based on the specific trade license classification and their estimated volume of work. This requirement allows for either a surety bond or the contractor to make a cash deposit bond. For a residential contractor, an additional bond or deposit amount of $200,000 is required for a state recovery fund.

Surety Bond Provisions in Arizona

Arizona law specifies that bond requirements are met before executing any contract for “construction, alteration, or repair” of the following: 

  • Public buildings or structures
  • Public works or improvements for any county, city, or town
  • Projects involving drainage, irrigation, flooding, electric, power, and more
  • Any “tax levying” improvements in a district 

Agency Provides Contract Surety Bonds in Arizona 

The Gebhardt Insurance Group in Casa Grande is an established independent agency that has been serving the region for many years. Our team of professionals effectively determines the specific needs regarding bonds and insurance to protect individuals, families, and businesses. Contact our office today by calling (520) 836-3244.

Miscellaneous Surety in Arizona

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Miscellaneous Surety

What are miscellaneous surety bonds? The term miscellaneous refers to something that is diverse or having various traits.

Surety bonds are defined by the National Association of Surety Bond Producers as a “promise to be liable for the debt, default, or failure” of another party. This involves a third-party that contracts to guarantee that a party will satisfy an obligation. Three parties exist in a surety bond agreement.

  • Principal: This is the party that is required to obtain a bond. It is generally a business or individual that acquires a surety bond as a way to qualify to conduct business with an obligee.
  • Obligee: The obligee is the party that has implemented a requirement that any potential principal makes this pledge or guarantee. 
  • Surety Company: This is the party that is assuming responsibility for the performance of the principal. A surety company is a recognized entity that has satisfied requirements to function in this role within a jurisdiction. 

Two General Categories of Surety Bonds

Contract bonds are contractor license bonds or bid bonds required to be eligible for construction projects. This bond is used for financial compensation in case the contractor fails to complete the project or to complete it properly. Bond funds may also be used in case of default to compensate material suppliers or subcontractors.

Commercial surety bonds are the type that include miscellaneous surety bonds. These bonds are often required by government statute, ordinance, or other provisions. Commercial surety bonds are generally classified among the following five categories.

  • License and permit bonds apply to many different professions or industries as business service bonds. Examples may include automobile dealers, mortgage brokers, and more.
  • Court bonds or judicial bonds may be a requirement for parties in judicial matters. Examples may include injunction bonds, appeal bonds, and more.
  • Fiduciary or probate bonds may be required for those who are assigned or appointed to represent a trust or estate. Examples may include trustee bonds and executor bonds.
  • Public official bonds are often a statutory requirement that acts as a protection for the public. They may apply if a government official commits wrongful actions. Examples may include treasurer bonds, notary bonds, and more.
  • Miscellaneous bonds are any type of bonds that do not fit under the other four classifications. Examples may include fuel tax bonds, utility bonds, and more. 

Miscellaneous Surety Bonds

Bonds that do not have similar characteristics are categorized as miscellaneous. These are a form of commercial bonds. Examples may include warehouse bonds, title bonds, Airlines Reporting bonds, union wage and welfare bonds, and more. Those who operate in this realm are generally regulated by the same state agency that oversees the insurance market.

What is a Surety Bonding Company?

Surety bonds are commonly issued by affiliates or designated divisions of insurance companies or financial product providers. These entities will typically need to satisfy eligibility requirements that demonstrate financial strength. There are some similarities between surety bonds and traditional insurance products. One critical difference is that surety bonds are agreements between three parties instead of two.

Companies that issue surety bonds underwrite their bonds similarly to lenders and insurers.  A surety may evaluate a contractor’s credit history, assets, and overall character. These are variables used in determining whether a party is likely to satisfy their obligations. The surety companies use contracts called general agreements of indemnity for their protection before issuing bonds.

Surety Bonds for Telecommunications Licensing in the City of Phoenix

These are local bonds license and permit bonds that specifically apply to telecommunication providers in the City of Phoenix. New licensees must establish a $100,000 bond during the implementation phase. This requirement is later reduced to $50,000 for the duration of the lease. In addition to bond guarantees, licensees may be required to keep $40,000 in a qualifying account to further secure their obligations.

Surety Bonds for the Administration of Probate and Wills in Arizona

These are the types of bonds required by the state for personal representatives to an estate.  This requirement is waived if specified in the will. A bond is not required for representatives of a “national banking association” or those with a bank permit. This also applies to a title insurance company or certified trust business representatives.

Parties with an interest in an estate may petition for a bond. Courts may require bonds if they have “reasonable proof” that the estate administrator may be placing the petitioner at risk. The same applies to a trustee. A bond may be put in place to “secure the performance of the trustee’s duty.”

When the terms of a will do not specify the bond amount, a “best estimate” may be made. This may involve a need for appraisals to be made for assets such as real estate. The amount of the bond may be lowered if estate assets are placed into a secured account approved by the court.

Arizona IFTA Bonds

The Arizona Department of Transportation may require a bond that ensures a supplier of fuel will pay all applicable taxes. This bond is called an International Fuel Tax Agreement (IFTA) that protects the state. The rate may be up to a maximum of 15%, which is based on the credit history of the applicant.

Commercial Utility Agreement Bonds

The City of Mesa requires that commercial entities maintain a surety bond for utilities in addition to a commercial security deposit. The amount required is based on city estimates that equal 2.5 times the company’s maximum monthly billings. This requirement may be evaluated and potentially eliminated after thirty-six months. To qualify, their payment history must show all payments have been made promptly.

Independent Agency for Business Insurance and Surety Bonds in Arizona

The Gebhardt Insurance Group is an established insurance agency that works with individuals, families, and businesses to create customized insurance solutions. Our team of experienced professionals will identify the specific types of coverage you need. As an independent agency, we can compare options from dozens of carriers to find the best overall value. We look forward to speaking with you. Contact our office today at (520) 836-3244!

Energy Surety

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Energy Surety

A surety bond is similar to an insurance policy. These are agreements to satisfy a “debt, default, or failure” of a party in case they do not fulfill their commitments. The parties involved in these bonds include the obligee, principal, and surety. Principals are those that must secure a surety bond. This may be a requirement to be eligible for a project, become licensed, or to qualify for another benefit. 

The obligee is the party that has implemented a requirement for a surety bond. The surety is a third-party that is entering into an agreement to assume the financial liability on behalf of the principal. Often, sureties are available from designated branches of insurance companies and similarly are often sold through brokers or agents.

Energy Utility Bonds 

The energy and utility markets are generally in strong demand for services. Energy utility surety bonds may be required for the financial protection of those operating in this sector. The principal in this arrangement is often a large buyer (consumer) of energy. The utility provider may require a bond in case the buyer is unable to make their ongoing payment obligations.

Examples of large consumers of energy may include manufacturing companies or other types of corporate entities. Utility service providers often use discretion when providing energy for larger consumers. The surety bond may be a requirement before the utility is accessible to the principal’s property.

Those who issue surety bonds also use discretion when deciding whether to issue a bond. For example, businesses with a history of defaulting generally must pay higher premiums for coverage or they may be denied. The premium amount that the principal must pay is based on the necessary total bond amount. This is based on the estimated potential liability involved and other factors.

Energy Contract Performance Bonds

Energy contract performance bonds may be a requirement of a state or federal agency.  These commonly include those responsible for environmental compliance. Those required to secure energy performance bonds may include those actively drilling into the earth to locate oil sources or implementing solar energy grids.

These bonds may be required for those responsible for plugging wells or developing wind energy sites. The financial protection of a bond may be needed if a problem develops, such as an environmental disaster.

Energy Broker Bonds

Energy deregulation within the U.S. continues to expand. Energy brokers function as sellers between those involved in the production and the consumer. The government typically requires energy brokers to obtain surety bonds. These bonds are used as a financial guarantee to protect the general public from potential failures, which adheres to regulatory requirements.

Broker bonds are not unique to the energy industry. Traditionally, surety bonds are also a requirement for those acting as freight brokers and more. 

Established Arizona Agency Provides Surety Bonds

The Gebhardt Insurance Group, based in Casa Grande, has proudly been serving clients in the region for many years now. As an independent agency, we can offer products such as insurance and surety bonds from various carriers. Contact us today at (520) 836-3244.