Category: Umbrella Policy

7 Simple Steps to Get More Value from Your Insurance Plan:

Chris

Let’s run through seven simple, cost effective tips and tricks to getting more value from your insurance plan!

  • BUNDLE your policies with one company

I hope that the insurance commercials have convinced everyone that putting all of your personal policies with one insurance company is beneficial; however, we still see many people that are reluctant to do it for one reason or another.  99% of the time you will save money on your costs if you package the policies with one company (be sure to look at the total plan’s price – not just the price of one policy!).  Furthermore, and just as important, it provides your agent with more leverage if you ever have a claim or renewal issue when an underwriter may be considering non-renewing a policy or rating the policy in a different tier.

  • Inform your agent of any utility and (especially) roof updates!

This one is easy – let your agent know if you’ve gotten a new roof, purchased a new furnace/air conditioner, or updated your electrical panel (more applicable to older homes).  Many companies offer discounts if you’ve updated these items and all companies have now started rating for the age of your roof.  So, it’s very important – and very easy – to make sure the age of the roof is correct on your insurance policy, especially if you’ve replaced your roof in the last few years!

  • Lower your comprehensive deductible.

Yes, you read that right, lower your comprehensive deductible.  But, won’t my price go up!?  Yes; however, it’ll go up minimally.  Furthermore, most comprehensive claims (animal hit, glass damage, hail damage, vandalism, etc.) are much smaller than if you’re involved in an accident with another vehicle (which is then a collision claim).  They are also much more common – which means if you want to keep filing claims, you’ll need to keep paying your deductible!  Unless you want to self-insure any damage to your vehicle (and at that point, remove all physical damage coverage from your policy) – it makes sense to lower your comprehensive deductible.

  • Increase your liability limits! PS – buy an umbrella policy!

Wait, won’t this also increase the cost of my insurance!? Yes.  But it will provide you with additional value and coverage at an exponential rate vs. the cost.  The cost of insurance may increase a few percentage points, but you can increase your protection by a multiple of 2-3 times.  Most people think they’ll never need that much liability protection; however, if you have to carry insurance (and you do in the state of Wisconsin) – you might as well purchase enough to protect you, your family, and your assets in case you ever do hurt someone or damage their property.  And, if you really want peace of mind – for less than $10/month (or less than 3 cups of coffee at Starbucks) – you can purchase an umbrella policy!

  • Additional Expense/Rental Car

If you are in a household where there are as many drivers as there are vehicles – it’s essential that you have additional expense/rental car coverage.  Contrary to what most people think, this coverage does not provide protection if you go on vacation and rent a vehicle (that coverage is extended elsewhere in most insurance contracts).   This coverage covers the additional cost of rental/loaner vehicle that you may need while your car is being repaired after being in a covered insurance claim.  For example, I hit a deer and file a claim with my insurance company.  I bring my vehicle to the body shop and they tell me they are backed up and it’ll be 2 weeks before my car will be repaired, but they will give me a loaner while my vehicle is being repaired.  You’ll be on the hook for this cost (usually about $30-$35 per day!) unless you have additional expense/rental car coverage on your policy!

  • Pay the premium in full, if possible!

Many companies are offering SUBSTANTIAL discounts if you pay the insurance premium in full.  We have companies that are offering up to 11-12% discount for paying the premium in full.  That is a considerable savings off any expense – especially insurance expenses.  It’s always painful to pay the full amount at once, but if the company is offering a meaningful discount to do so – it often makes sense.

  • Buy TERM Life Insurance

Yes, I think everyone needs life insurance and that it is an important part of any comprehensive and inclusive risk management program.  No, I don’t think the policy that your employer is providing is sufficient protection (topic for another day).  I do believe that TERM life insurance is the best option for most individuals.  Term life insurance is the most cost effective life insurance option and is the easiest to understand (pays a death benefit if the insured dies during the term of the policy).  Whole life insurance and universal life insurance policies both have their place in some risk management programs and may be the best option for some; however, for most people – term life insurance is the way to go.  But, Chris – my whole/universal life insurance policy builds cash value!  Yes – but it’s often at a minimal rate of return.  What we recommend doing is taking the cost difference between term and the other options and investing it with a professional – like Fox River Capital – that are experts at maximizing your rate of return.

IL Passes Rideshare Insurance Law – Is it enough?

Chris

“Failure is not fatal, but failure to change might be”. – John Wooden

The IL legislature passed legislation that provides regulation for transportation networking companies (TNCs) – which should eliminate many insurance gaps, according to the Property Casualty Insurers Association of America. The measure will require background checks on drivers, vehicle inspections and chauffeur licenses for drivers who work more than 36 hours in any two-week period. It also requires clear disclosure to TNC drivers about insurance coverages.

The key component of the legislature is that the commercial liability insurance policy will be the primary policy from the time the driver’s app is on or he/she is available to accept a passenger. The bill has been sent to the governor for approval.

The goal of the legislation is two-fold:

1. Increase clarity on which policy is primary (personal auto vs. commercial).

2. Avoid increases in personal insurance rates

 

While increased legislation usually creates more problems than it solves, the goal of this legislation is noble. Ideally, an insurance company would step up and provide a unique and differentiated product customized for this exposure; however, it doesn’t appear as though there is any interest from any company. As the quote from John Wooden at the beginning of this post emphasizes, failure to change may be fatal. I’m hopeful that insurance companies become more flexible with their products and policies offered in this ever-changing world. It’d be a shame to let the barbaric coverage forms provided by insurance companies hinder the entrepreneurial spirit of this country.

Uber, Lyft and Auto Insurance

Chris

The Zebra, an internet-based insurance agency, recently posted a fantastic article on insurance coverage and how it relates to Uber and Lyft (the article can be found here).

Everyone loves Uber, UberX, and Lyft – and why shouldn’t they? They are easy to use, affordable, and convenient. They allow their drivers to reap the monetary benefits of taxi drivers – without any of the typical costs associated with a taxi driver. It’s a classic win-win, right!?

When you talk to Uber drivers – they often speak of how they don’t have to carry a commercial insurance policy because Uber has a ‘master’ policy. Yes, Uber does carry $1 million of liability insurance (including $1 million of uninsured motorist and underinsured motorist coverage, as well as contingent comprehensive and collision coverage). However, this ONLY applies while you are transporting an Uber/Lyft customer (as your personal auto policy has an exclusion for providing coverage while transporting people for hire). What insurance applies while you are on your way to pick up a customer? The personal auto policy would be primary and the commercial policy would provide excess coverage, as The Zebra has illustrated in this fantastic graphic.

 

Lastly, most personal auto insurance carriers would cancel your personal auto policy if they knew you were hauling people around for hire on your free time. It’s an exposure that their current pricing models do not account for. As always, the insurance industry is slow to accommodate new technology and business models; however, the state of IL has recently passed a rideshare legislation with an insurance component (which we’ll dive into in a future post).

There have been no major lawsuits against any of the large rideshare companies, yet. When (not if) one happens – it’ll be interesting to see how the insurance components will handle the situation and if $1 million of coverage will be enough to cover the exposure. As Keith McCullough of Hedgeye Risk Management says, “At first risk happens slowly, then it happens all at once”.

Golf Season is here! Does my insurance provide coverage if I hit someone!?

Chris

golfSpring is upon us (finally) and that means golf season is here!  I’ve been asked by a fellow golfing companion and a club pro the following question twice in the past few weeks, so I thought it may be worthy of a short blog post.

If I hit someone or hit (and damage) their car – does my personal insurance apply or is the golf course responsible?

Fore!!  Yes, if you hit the drive – you are liable for any subsequent damage.  The golf course may get named in the lawsuit – if it reaches court – but they are not going to be liable for any resulting damage from a golf ball that you hit.  You can try and run or hide; however, you are responsible for subsequent damages.

Coverage is afforded under the personal liability portion of your homeowners policy.  Generally, no deductible applies for this coverage.  If coverage is exhausted on the homeowners insurance policy, a personal umbrella policy may apply if needed.  There is no coverage under your personal auto policy (another common misconception)!

As always, it’s best to consult with your insurance professional to discuss any potential claim or coverage scenarios.  Furthermore, a golf lesson and some practice on the driving range may be the best way to avoid this claim scenario.

Does it matter what insurance company you do business with?

Chris

As an independent agency, we have many options and companies to work with.  Ultimately, this provides a great benefit to our customers – one advisor/professional to work with who has dozens of companies to choose from to find the best coverage and rates for you.  First, the customer needs to decide what is most important to them when choosing an insurance company.  Some factors to consider are as follows:

  1. Claims Service – Yes, different companies have different levels of claim service.  Some companies make the process very easy and provide great support during the process; however, other companies pay claims begrudgingly and can make the process painful.  This is one of our highest priorities when choosing a market for you because a successful claim settlement equals a happy customer.

  2. Price – Price is a dominant force in our industry and is usually a consumer’s top concern.  Price does matter but it is important to verify that other factors are not being omitted to create a lower price – specifically coverage (amongst others).

  3. Coverage Options – Do you have a unique risk exposure? Does the company you have your insurance with offer all the coverage you need?  These are important questions to consider when electing to place business with a company.

  4. Deductible Options – Many companies are increasing home deductibles and limiting deductible options.  If the company you’re with doesn’t have a suitable deductible for you, it may be worthwhile to ask your insurance advisor to explore other options.

  5. Size & Financial Stability – As an independent agency, we represent small, local mutual companies to Fortune 100 companies.  Size does matter – to a point.  It’s important that the company you’re with has enough capital surplus to cover any catastrophic events that may occur.  Furthermore, it’s important that the company allocates enough resources to critical functions of the company (i.e. customer service/support, claims, underwriting, etc.).  With that said, bigger does not always mean better.  We represent some regional companies that are AM Best A+ rated (financially stable) and provide good service, claims service, and pricing (if not better).

As always, it’s important to discuss these factors and any other factors that may apply to you with your insurance advisor to provide the best fit for you.  Every individual and family is different and subsequently, has different needs.  As an independent insurance agency, we feel that our flexibility and options provides a massive competitive advantage and most importantly, the best options for you.