Month: February 2021

Boulevard of Broken Pipes

Boulevard of Broken Pipes

  • Texas had a devastating winter storm and resultant power outages the last week.
  • As a result, many businesses or homes have suffered significant damage.
  • You want to be prepared and provide your insurance company extensive documentation of the damage that you have sustained to maximize your claim.

What a week it has been. I wasn’t able to get an article out last week because I was without power. I lost it Monday morning and it didn’t come back on until Thursday morning. I was one of the lucky ones, however. I had a friend who had power and was able to stay with him until I got power back. I hope everyone reading is even luckier.

Or at least I thought I was one of the lucky ones. Then my tankless hot water heater defrosted on Friday and water started gushing everywhere. So I am now without hot water while I await a new water heater.

Unfortunately, I know that many out there are in the same position – at both your residence and your commercial properties. In this article, therefore, I’m going to talk about what to do if your house or your commercial property has damage from the storm – including broken pipes that lead to flooded buildings.

First Step – Read the Policy

So your pipes or your water heater have burst/exploded. What do you do now? Contrary to the subtitle of this section – the first thing you need to do is stop the water from going everywhere. I reckon you knew that one, but its important to say. Because part of your obligation under the insurance policy is to mitigate damages.

But once you have the initial remediation and stopped any further damage, its time to pull out your property insurance policy. The policy will tell you exactly what coverage you have. And it can vary widely depending on your policy. So you want to make sure you read it carefully. Its possible, for example, that your policy may not cover the damage to your pipes themselves but will cover damage that the burst pipes caused.

Once you read the policy, its time to make the claim. Obviously every insurance company has its own way to file a claim. And often your broker can help you do so. But you want to file it as soon as possible. You don’t want the insurance company to complain of any delay in filing the claim.

What to Provide Insurance Company

Once you file your claim, Texas law requires your insurance company to get to work quickly. Under the Texas Prompt Payment Act, your insurance company has to respond to you, acknowledge the claim, and get to an investigation very quickly. Obviously when there is a disaster like this last week, it can bog insurance companies down. But they still need to follow up quickly.

Once the insurance company starts its investigation, you want to make sure you have documentation you can give them. Because lets be honest – insurance companies don’t make money by paying out much on claims. So the more evidence of damages you can give them, the better.

I, therefore, recommend you take the below steps when preparing for your claim:

  • Pictures – Take lots of pictures of damage. The more pictures you have, the easier it is to show the extent of the damage.

  • Save your receipts – For any damage related expenses you have, save your receipts. This can include hotel receipts, lost income, etc.

  • Business Interruption – If your business is damaged and you can’t run it, you may lose income as a result of the damage. Your policy may include business interruption insurance. So make sure you are tracking those potential losses.

  • Track your time spent – Its also possible that you have coverage for time that you and your employees spend on the clean up. So make sure you are tracking that time as well.

  • Second opinion – If you think the insurance company is not treating you fairly, bring in a contractor and/or plumber who can give you a separate estimate on the cost of repairs.

 This is obviously a very stressful time for homeowners and businesses alike. But if you follow the steps above, hopefully you will not have any issues with your insurance company and can get back to work as soon as possible.

If you do have a problem with them, however, please do not hesitate to call Bukowski Law Firm at 512-614-0335. We can help you deal with your insurance company so you can get on with your life.

Stay safe out there.

How Much does a Microchip Cost

How Much does a Microchip Cost?

  • Central Texas is in the running for another exciting corporate expansion. Samsung has proposed building a chip factory that could create 1800 new jobs.
  • In exchange, Samsung has asked for more than $1 billion in tax incentives.
  • While we DEFINITELY want Samsung to come here, its not clear to me if incentives that large are a good idea.

The last few years have been great for the Central Texas economy. We wrote a little about this when Tesla decided to open a new plant in Austin. They were just the latest of a steady stream of companies that have decided to move operations to our fantastic City.

And now the new hot topic is Samsung. Austin is apparently in the running for Samsung’s new chipmaker factory. One of the deciding factors appears to be whether the City will give Samsung a big tax break.

As I was reading about Samsung’s request, it got me thinking about the tax incentives that cities provide companies to get them to open a new business in those cities. Are they a good idea for cities? Do they have an overall positive effect? That’s what we are going to talk a little about in this week’s article.

Now, before I begin – just so everyone doesn’t get mad at me – I am not some communist. I love companies. I love when they open new businesses and provide new jobs. Capitalism rules. And, if you haven’t been able to tell through this blog, I have some real issues with our City Council. And I’m happy to tell you all about it if you buy me a beer.

But I also think that if we are going to spend a lot of our tax dollars on something, we should know if it works, right? If it is a good idea. So that’s what I want to learn about.

What Samsung May Bring

First lets talk about this potential exciting new development that Samsung is talking about. It is proposing to build a 7 million square foot next generation chip fabrication plant. The plant would create approximately 1800 jobs.

In exchange for building this, Samsung is requesting the following:

  • 100% tax abatement over 20 years from Travis County (worth an estimated $718 million);
  • 50% tax abatement from Austin over 5 years (worth an estimated $87 million); and
  • A Chapter 313 incentive from the Manor school district (worth an estimated $253 million).

Combined, that’s over $1 billion in tax incentives that Samsung is requesting. Undoubtedly this is an opening bargaining position from Samsung. Its unlikely that will be the final number offered. And, as mentioned above, Samsung will allegedly bring 1800 new jobs in exchange for those incentives.

Its easy to see why Cities give incentives. Companies bring jobs and people. And that excites the local economy – people make money, they spend money in the local area, the company and employees pay taxes, etc. Getting a company to move to your city and create jobs is fantastic. That obviously goes without saying. So when a company asks for incentives to create those jobs, its easy to see why a city may agree.

Is this a Good Deal for Central Texas?

But is it a good idea? That’s the big question, right? And I have to admit up front – I have no idea. I am not an economist and I am outside my comfort zone at this point. But that really hasn’t stopped me from opining previously, so why not?

When researching for this article, I Googled. And what I found were a number of articles that said tax incentives are out of control and not a good deal for cities.

It seems like a relatively simple calculation – do the jobs created by the company bring more to the locality than that locality gives up in taxes?

Bloomberg Citylab called incentives worse than useless because, among other reasons, governments hand out the money to companies and then do not follow up to see if the companies are meeting the promises they said they would meet. The Institute for Taxation and Economic Policy called incentives expensive for states and a drag on the nation. Specifically, it found that incentives are:

  • Windfall benefits – rarely the deciding factor in whether a company locates to an area;
  • Runaway benefits – impossible to design a structure where the locality gets all of the benefit of the company;
  • Displacement, not growth – while incentives benefit one company, they do so at a cost to another;
  • Neglected alternatives – tax incentives can lead to cuts in needed spending elsewhere; and
  • The wrong signal – large tax incentives can harm a locality’s reputation.

Even if all of these things are correct, though, the problem is that other cities are giving/will give companies like Samsung similar incentives. So if Central Texas wants to be competitive with other localities and get Samsung to build here (which we do) – it may have no choice but to give incentives to compete with other municipalities.

Alternatives

But if these studies are correct – and tax incentives are a bad idea – what is a city to do? Like I said, we still want Samsung to come here.

In late 2019, economist Timothy Bartik had some alternative suggestions. He thought cities should:

  • Target incentives to distressed areas;
  • Cut back on long-term incentives; and
  • Cut back on the size of incentives.

As I mentioned above, I’m not an economist. I don’t know if Bartik or the groups above are correct and incentives are generally not worth it. It seems to be the overwhelming economic consensus that this is the case. But, as mentioned above, we want Samsung here. So how do we get these companies to keep coming?

I honestly don’t know. But I hope that doesn’t stop us from asking the tough questions.