Jonathan Clements's Blog, page 41
May 7, 2025
A Tale of Excess
On a recent family trip to the UK I learned something new about car rental insurance. During my many years of business travel, we were always told to turn down the collision damage waiver, or CDW, insurance offered by the rental company. Our personal credit card provides rental car insurance, but you must decline the CDW and reserve and pay with that card.
When we picked up our car hire just outside of Oxford we were pleased to see we’d been upgraded to a BMW 500 sedan. We inspected the car, took pictures of the few minor blemishes, and reviewed the additional insurance options. They offered something called excess insurance, which I was unfamiliar with. It was explained that in the event of damage we would be liable up to the value of the car. Excess insurance would cover that, but at £35 pounds per day. I declined this insurance down, thinking our credit card would cover any damages.
You can probably guess what’s coming next. Within a mile or so of leaving the office we missed a turnoff on a rotary and had to get off and head back on the highway. I made a distracted right turn on the entrance ramp in front of an oncoming VW van. The other driver did a great job of trying to miss us, and the impact was at a shallow angle at fairly low speeds. No airbags deployed and the car was still drivable. There was a significant crease, however, on the left (passenger side) of the car from front to back.
The mental damage was greater. The car hit right where my wife was sitting. We were both pretty shaken by the incident, but managed to safely drive back to the car hire office. The staff at the office were extremely professional and caring. Their first concern was our well-being. Once he ascertained that we were OK, the office manager gingerly explained that, since we hadn’t elected the excess coverage, we were responsible for the entire value of the car. We had to purchase the BMW at £56,685 pounds!
As you can imagine this added to our state of shock. Once we understood the situation we chose to divide the amount over 3 credit cards, with the majority charged to the card that we used to make the reservation. We were told that once the repairs had been made they would refund the difference between the excess amount and the actual damages.
After that we cancelled our reservations for that evening in the Cotswolds and returned to Oxford to regroup. At the hotel I contacted our credit card company and initiated a claim. The representative I spoke to had never heard of excess insurance, but was quite helpful. I initiated the claim and followed it closely over the next 6 weeks. I had to provide documentation of the accident, the rental reservation, the final receipt, an accident report, a drawing of the accident, and credit card statements showing the charges and future refunds.
After about three weeks I received a detailed damage report listing the repair costs, fees, and a refund of £43,030.93 pounds. The refund was deposited to our credit cards within a week of receiving the letter. The insurance claim through our credit card for the remainder took a few weeks longer. They initially denied the claim because of the confusion about using multiple credit cards to pay the excess fee, and which card was used to make the reservation and pay for the rental. I had to write a detailed letter explaining the situation and appeal their decision. The case had to be reviewed by their senior appeal board. We never received notification of their decision, but 2 weeks later we received a FedEx package with a check reimbursing us for the repair costs and fees, about £13,654.07.
Clearly this process was unknown to the American insurance companies. I even to spoke to our personal car insurance broker and they were amazed. At the end of the day, we lost about $127 due to currency conversions. We were able to manage the situation and pay off our April credit card bills on time with no interest charges. It didn’t help that we also had a sizeable tax due in April, as well as a $14,000 payment for our next trip this summer. April was a challenging month, but we weathered the storm and came out intact.
There are some obvious lessons from this story. I didn’t properly research auto rentals in the UK. I also didn’t understand the nuances of our credit card’s auto rental insurance, especially how they interact with the rental company’s insurance and our personal auto insurance.
I’m grateful that no one was injured, and that we had the financial resources to manage this. Afterwards I wondered what would have happened had we not had the available credit to charge the full excess. Our credit score has always been very high, but it took a 100-point hit from this. I’m not too worried and will monitor it to see if it returns to its previous level.
Sadly, the accident precluded us from completing our plan of touring the Cotswolds, and Hope Cove. We considered using trains or car services, but we elected to return to London and fly home the next day. Ironically, that coincided with the electrical substation fire that shut down Heathrow airport, so we spent a final weekend enjoying London. There is still a lot of the UK we want to see, but we’ll have to think about how we want to accomplish that.
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Quinn questions the value of a seven inch matzah ball in a $33.00 bowl of chicken soup?
A few days ago Connie and I went to a unique NJ restaurant for a light dinner.
We each had a root beer, we shared a pastrami and turkey sandwich and one bowl of matzah ball soup. The bill was $108 before tip. Now you know why Harold’s NY Deli is unique.
Have you concluded it is a upscale, white table cloth place or just a rip off? Now, the rest of the story.
The sandwich is so large they give you six extra slices of bread to break it down. We made two stacked-high sandwiches out of half of it. The soup comes in a large bowl with a matzah ball 7” in diameter, two individual bowls and a huge ladle.
Nothing they sell is actually for one person or two for that matter. A pickle bar comes with each meal.
On the breakfast menu one pancake is $24.95, but it’s the size of a Mini-Cooper tire.
If you want desert be warned, the cakes are fourteen inches high. A slice of carrot cake is $28.95 - designed for 2-4 people they say.
I wonder the reaction of a new customer not knowing what they are getting into. The menu has meals for $100 and more - for several people or a few nights at home, but you need to read the fine print to learn that. The Hungarian Goulash dinner is $112.95
When people leave with their leftovers, it looks like they are carrying a weeks groceries. We have 3/4 of a matzah ball, a half gallon of soup and fixings for two large sandwiches in the fridge. They even give you a cup to take home what’s left of your drink if you like. Take some pickles and slaw too.
It’s a marketing gimmick, but it works and it’s fun-as long as you can use the leftovers - and don’t pass out at the first glance of the menu.
Is there value? Probably not. I suspect some of those leftovers are thrown out. One thing for sure, this place is not for dieters or healthy eating choices.
On the other hand, two meals for two people comes to $27 each - but it’s still just soup and a sandwich.
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May 6, 2025
Am I Really Married?
I’m in the process of completing my retirement paperwork. For context, I’m retiring on the same day from two systems—the University of California (where I work now) and CalPERS (which administers the pension fund for the university system I previously worked for). My husband, who worked for a state agency, retired from CalPERS in 2016 and has been drawing his pension as well as using his retiree health benefits for both of us. We elected pensions with full survivor continuance for all three.
So here’s what’s weird. I got a message from the UC retirement system saying that the marriage certificate I uploaded as support for him being my survivor won’t serve. We were married in a church in 1983 and have a certificate signed by the officiant that we’ve always used as official documentation. The analyst who messaged me says the certificate is “ceremonial” and doesn’t show that it was filed with a county clerk. I had three options to resolve this, including the easiest one, which was to upload a previous 1040 that showed we are married filing jointly with both of our signatures.
CalPERS has never said a word about the marriage certificate, not when we separately filed for our pensions, and not when he had to prove I was eligible for health coverage. I keep a scanned copy of the marriage certificate handy for when they ask for it every few years (to reconfirm the spousal coverage). CalPERS has been much easier to deal with in general than the UC counterpart, which leads me to think they’re more competent with more modern processes. It’s possible that this UC analyst was wrong or overthinking things.
The immediate problem is resolved by the 1040, but now I’m wondering if I should follow up with the county clerk where we got our marriage license, which happens to be a different county from where the ceremony was performed. It might make sense to have an “official”certificate in case this problem ever happens again. And it makes me wonder—did the “ceremonial” certificate ever get properly filed, and if not, are we really married? (I’m mostly kidding about the last question, but the whole thing made me wonder.) Weird.
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Ch-Ch-Changes?
Stocks vs. bonds vs. cash investments
U.S. stocks vs. foreign shares
Large-cap vs. small-cap stocks
Growth vs. value stocks
If you've tweaked your asset allocation, I'd love to know what changes you've made—and why.
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May 5, 2025
Backstage at Antiques Roadshow
Hundreds of people who had won free tickets in an online lottery lined up at the entrance to the Georgia Railroad Museum. Most carried small items in tote bags. One woman pulled a grandfather clock in a little wagon. Another wheeled a wooden chest with a sailing ship painted on its lid.
Once they showed their printed tickets to security, visitors were directed to the triage tent. There, nattily dressed experts in bow ties and pocket squares gave their items the once-over. If one was worthy of further evaluation, their admissions leaflet was stamped with one of 23 specialist areas, such as Chinese art, ceramics, dolls, sports memorabilia, games and toys.
At the specialist booths, guests would queue up again, some under the hot Georgia sun and others beneath the shade of a towering locomotive in the museum’s roundhouse. They might wait 10 or 20 minutes to be seen at a busy booth, such as furniture or paintings. Everyone seemed cheerful and relaxed, wondering if they had a prize.
The show’s experts evaluated some 1,300 objects in one day at the railroad museum. Of these, about 10% are selected for a filmed appraisal with well-known experts like Leigh Keno or Lark Mason. And of these 130 filmed scenes, approximately 30 will make it into the final broadcast.
No doubt we’ll see many wonderful and valuable objects when the Savannah show is broadcast in 2026. Yet the odds of making it into that broadcast are 30 out of 1,300, or roughly 2%. As I looked about the grounds, I saw people lugging cherished objects, like ladderback chairs or dolls from the 1970s. I didn’t see anything that seemed of great value.
Still, I didn’t meet any disappointed people at the taping. At the feedback booth, fans of the show shared that they were excited just to be there. They had the additional satisfaction of unraveling the mystery of a family heirloom.
Like the woman at our inn, who at breakfast the next day showed us what she’d had appraised. It was a green soapstone carving of two monkeys flanking a small flower vase. Bow-tie wearing expert Lark Mason told her it was a ceremonial object given to Chinese monks who had returned from overseas missionary trips.
That’s a fascinating story. As to its value, Mason said it was worth about $50. And that’s what the woman said she had paid for it about 40 years earlier.
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FAQs IRS added March 20, 2025 regarding Employee Retention Credit
Due to the COVID-19 pandemic and a spike in unemployment federal tax law was modified and the Employee Retention Credit (ERC) was born. The ERC was a refundable tax credit for certain eligible businesses and tax-exempt organizations that had employees and were affected during the COVID-19 pandemic. The business, tax community and the Internal Revenue Service continue to deal with compliance aftermath of the ERC.
On March 20, 2025 the IRS updated their frequently asked questions about the employee retention credit in the section headed "Income tax and the ERC".
https://www.irs.gov/coronavirus/frequently-asked-questions-about-the-employee-retention-credit
The three added Q&A's on 3/20/2025 appears to be good for business, tax preparers and the government. Prior to the changes explained in the updated Q&A the ERC rules typically meant that employers who received a ERC benefit would have to amend prior year business income tax returns to disallow wages that were the basis of the ERC cash the business received, often in a subsequent tax year.
The updated ERC FAQs now have provisions where the business may include the prior year overstated wage expense (due to the wages being reduced by the ERC) amount as gross income on their income tax return for the tax year when they received the ERC. The FAQ detail and examples can be found at the above link.
I expect this small change in a IRS procedure will eliminate a large amount of mostly useless work for all parties. I welcome a step in the direction of tax simplicity.
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Sharing What We Read: Book Reviews for HD Readers
I'd like to pose a question to fellow HumbleDollar readers: What would you think about creating a dedicated space on the HD site where we can share book reports on titles relevant to the community—books on topics like investing, asset allocation, behavioral finance, risk management, financial history, and similar subjects?
Personally, after I read a book that I find valuable, I like to write a short report highlighting the ideas that stood out to me. It helps reinforce what I’ve learned, and allows me to refer back to these summaries later. I usually post them on my Facebook timeline, but I wonder if the HumbleDollar community might benefit from a shared venue for this kind of content.
Such a space could help others decide whether a particular book is worth their time—and might spark some thoughtful discussions along the way. Would you find this useful? Would you be interested in contributing?
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Financial Advisor – NEVER AGAIN
My wife and I each have our separate Fidelity accounts, since she like her independence, but I have managed her investments since our marriage 37 years ago. She agreed to let another person manage her account, just in case this 81 year old passes on prior to her.
Initially, there not many changes to the account and the results were marginally doing well. Then he suddenly he sold a fund that we had owned for a very long time, without my knowledge or consent. This particular fund, Fidelity Contrafund, had been out performing many other similar funds and had a five year annual return of 20%. Sadly, this one sale resulted in a long term capitol gain of $56,801. I was shocked and dismayed to say the least. When I contacted the advisor, his response was "You hired us to manage your account, that's what we do."
Of course it was to late to cancel the transaction, so I was left with a unacceptably large tax bill. I immediately canceled his "free service".
My advise - if possible manage your own stocks and mutual funds, no one cares about your bottom line more than you do.
Respectfully,
Robert Fay, Nevada
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Follow up on Dividend Investing
The Wall Street Journal today ran this timely article for investors who wish to further explore this strategy.
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