We all want to save money on things like insurance. It is rarely used, so we feel like we can and should cut corners on coverage options that we don’t think are necessary or that we don’t understand. Heck if I am honest I considered doing that this very week myself, BUT I didn’t, and the reason why is because there is real value in insurance. But we must remember insurance is for the catastrophic. It is designed to protect you and your assets from ruin. So, it’s for when you have a total loss and you are facing BIG losses that you don’t want to be skimping on things that can cost pennies a month. Enter the Value of an Independent Insurance Agent
Here are a few things for auto insurance.
- Liability limits – Do you know what the numbers 15/30/10, 25/50/25, 50/100/50, 100/300/100, or 250/500/100 mean? Did you know the cost from one to the other can be VERY little? When was the last time you increased your limits. GASP! Increase insurance?!? Many of us purchase state minimums when we are struggling college students, then later become business owners, professionals, or just increase what we are earning, and never adjust our insurance to protect us. This has particularly been an issue recently as more of us purchase our insurance online. Don’t cut corners on liability insurance ever, ever, ever. Medical bills are increasing and its almost criminal that the state minimum limits are so low, because they barely cover anything.
- Uninsured and Underinsured Motorist coverage – There are uninsured and underinsured driver’s everywhere (see point number 1). What if you get hit by one. We recently had a lady come into the office that had been hit by an uninsured driver on her way to Phoenix she sustained injuries that cost millions of dollars in medical bills. She didn’t have any uninsured and underinsured motorist coverage. Heath insurance covered much of this, but uninsured and underinsured motorist is SO much more.
- Medical Payments – Medical payments is a no-fault coverage, meaning you don’t have to be at fault for it to pay out. But I have medical insurance, so. Do you car pool? Do have other people’s kids in your car? You see where I am going? If not, your medical payments coverage might be the only or best coverage they have. Even if you do have health insurance, medical payments can pay your deductible. With health insurance deductibles increasing more and more every year this can be a HUGE benefit.
The list can go on and on. I will spare you. But this much I will say. Changes to your policy are often made with the intent to save money, not being fully understanding the consequences until after a loss. So, my plead to you is that before you go changing your policy please ask your insurance agent for examples of how the coverage works and an example of when it would be used. Ask for the worse case they have seen. Yes, it can happen here, and yes it can happen to you.
What’s the answer? Look, if you need to save on insurance, ask us, let us shop for you. Sometimes in the best-case scenario you can save money AND increase your coverage. Imagine. That’s the benefit of an independent insurance agency, like Gila Insurance Group LLC.
5 Coverage options to ensure you have on your policy!
Homeowners insurance is all the same, right? So, I should always buy on price, right? Wrong. It’s true that most stick-built homeowner’s insurance policies have a similar base. It’s called an HO3 policy form. It covers your house and other structures for everything, unless its excluded. It covers your personal property for a list of specific things that could happen and pays their actual cash value, it has liability, and medical payments. That’s about everything you need right? Well, not really. While the base policy is very similar from company to company most customers have higher expectations of how their insurance policy will respond. So here are 5 things most customers should consider purchasing to ensure your policy responds like you think and expect it will.
- Personal Replacement Cost – We don’t like leaving insurance companies with the ability to wiggle out of paying things they should. Personal property replacement cost does exactly that. Imagine your TV is 4 years old. It is damaged by a fire in the kitchen. Can you imagine the company coming in and saying your TV new cost $500, but its 4 years old so here’s $100 bucks, and we all hate insurance companies again. Adding Personal property replacement cost eliminates this possibility. You have a TV that cost $500 we will buy you a new TV of like kind and quality. Meaning we aren’t going to buy you a 70inch Sony if you had a 35 in Vizio. We will get you as close to what you had before. Personal property replacement cost awesome addition.
- Special Form on Personal Property – This is tricky, but remember I said on a basic HO policy your personal property, your stuff is insured for a list of things. Your house on the other hand is insured for everything unless its excluded. Question: Why would you insure the house differently from how you insure the couch inside the house… seems odd. Again, this is about meeting your expectations, and make sure your policy responds in the way you want it to.
- Extended or Increase replacement cost – When your house burns down, and you choose to rebuild you understand the idea of replacement cost. Before that it can be a fuzzy concept, so here goes my attempt to explain. You may have purchased your house for $200,000, but how much will it cost to rebuild? In times where the cost of things is going up (like now) it might cost you $225,000 to rebuild. Your agent may have even run a “cost estimator” to determine that it would cost $200,00 to rebuild the house when you bought it, but who pays for the additional $25,000? Extended or Increased replacement cost will if you have it. What this endorsement or change to the policy does is create a slush fund of a little extra cash in case it costs a little more to rebuild. There are some rules about this add on. So, don’t think you can underinsure the home to save money and be saved by extended replacement cost.
- Personal Injury – Did you know libel, slander, defamation, and cyber bullying are excluded on your insurance policy? Here’s a question for you have you ever said something bad about someone? What about on a social media site? What about your kids, have they? If so you have probably been guilty of defamation. These lawsuits can be hard to prove the social media has opened a whole new can of worms. Adding personal injury to your policy can ensure that you are prepared and covered for even the weirdest of lawsuits. I mean people are sensitive these days, but not you ; ).
- Water backup of sewers and drains – Gross. Yeah it is, and its typically not covered unless you add it to your policy. It can get expensive but $5,000 or $10,000 of this coverage can be worth every cent.
Just because you think it should be covered, doesn’t mean that it is. Be sure your policy will respond the way you think it will and start with these 5 coverage options.
Personal Property Insurance is important, but often overlooked. What’s included in personal property? It’s what you put in the moving truck, or what would fall out of the home if you could pick it up and turn it upside down. Your clothes, furniture, electronics, toys, some appliances, and all the stuff in your garage. So how do you cover it?You will be asked to figure out what your stuff is worth. This can be a tough exercise. Let’s be real, it’s difficult to even keep track of what stuff you have. Lots of questions; few answers. So let’s get to some answers:
First off let’s start with taking inventory. We recommend taking a look at KnowYourStuff.org its a great website from the Insurance Information Institute, and they have several tools and an app and lots of information that can help you figure out what stuff you have, and what should be insured.
From there you can determine the value of your stuff and what it would take to replace it in the event of a claim, like a fire. Typically insurance companies will include a percentage of the value of the home for your personal property. In some cases its 70%, 50% or for others its 40%, but these are just rules of thumb, and more coverage can be purchased, but you have to have some idea of how much coverage you need.
There are two ways that personal property can be covered.
1. Replacement Cost – As always the replacement cost option is always the best option. In the event of a claim it replaces what was damaged with like kind and quality. Meaning you would be able to replace what was damaged with a new version. It does not account for depreciation.
2. Actual Cash Value – What is the value of your TV you purchased 5 years ago today? What’s the value of the shirt you’re wearing, if its the most comfortable you own, probably not much. In an actual cash value loss settlement situation, that’s the question that comes to mind. Take what it cost new and depreciate it to figure out what it is worth today, and that is what the insurance company pays. That often means you are getting pennies on the dollar for your stuff. Not great for sure, but it is what is the cheapest, and most common way for people to insure personal property.
Typically you have a choice between Replacement Cost and Actual Cash Value for your personal property. This is a choice you should make based on your personal property and how important it is to you.
A few other cool things about insurance for personal property.
- If you have special property like jewelry, guns, furs, and other super cool stuff you will need to “schedule it.” This means that you will want us to make a special note saying this stuff is covered, because its usually is subject to limits.
- Your stuff, or at least a percentage of your stuff is often covered worldwide, even when its out of the house. Okay, it’s not much, but 10% worldwide coverage can go a long way if you have a weird loss.