What Your Insurance Agent Forgot to Tell You...

Learning about insurance is excruciating for some. How many times have you read about someone wanting to sit down and read a good book on insurance? Yeah, it doesn't happen often. And your insurance agent... do you think they are going to tell you all the insider insurance stuff?

So, if you have trouble reading a full article on any insurance subject or if your insurance agent is not your best friend, these quick tips will get you enough insurance knowledge to make you look like you know what you are talking about... and I bet you will learn a thing or two! Of course, going more in depth with your insurance knowledge is best so let this be a springboard for you to eventually dig into more insurance information!

This list will be updated regularly with great quick tips. If you have any tips you think are worthy of this list please email them to me.

So, here goes... The Best Little List of Insurance Tips Ever!:

1. One of the best ways to save on your auto, home, or health insurance is to raise your deductible. You don't want to make a claim anyhow on an amount you can afford, so raise your deductibles to the top amount you would be willing to pay out of pocket before your insurance kicks in. Raising your deductibles can save you a lot of money so it is worth checking into.

2. Get to know your grace period! Just because you forgot to pay your insurance bill on time does not mean it is canceled. Most policies have at least a 30 day grace period in which you can make your payment and your policy will still remain in effect. So before you assume your insurance is gone, check out your grace period and pay up!

3. Keeping your policies with one agent can pay off. Sometimes you can find cheaper insurance at different agencies but there are two reasons to stay with one insurance company or agent: First, you can get a multiple policy discount and second, your insurance agent is likely to work harder for you when it comes to claims and service.

4. Ask for discounts! Don't assume your insurance agent will automatically give you all the discounts available. This is not because they don't want to but because they don't always know what discounts apply to you.

5. Credit and insurance goes hand and hand. Most insurance companies are partially basing rates on your credit history. Whether you think it is fair or not, it is happening. So, if you have some small credit issues get them cleaned up or if you can't and still want to save, shop around because each insurance company has a different way to evaluate your credit.

6. Skip the credit card insurance offers and warranties. Those offers by your mortgage or credit card companies to pay your balances are not worth the cost. It is always better to make sure you have a good life insurance policy to cover your debts. Also, extended warranties are just mini-insurance policies and they are hardly ever worth the amount you pay for them, especially if you take care of your items.

7. Need cheap health insurance? Choose a high deductible policy and haggle with your doctor! Yes, you are comfortable doing it with the used car salesman so why not with medical professionals? People do it, even insurance companies haggle and get rates reduced! Getting a high deductible insurance policy, or better known as "emergency insurance," will save you tons of money in premiums because it only kicks in usually after you have paid the first 5-10 thousand dollars (hence "emergency policy"). So, if you have other procedures the doctor would like to do that you will be paying for out of pocket... haggle with your doctor or the hospital. It sounds strange but you can reduce your costs and don't worry because others are doing it too!

8. You may not have to pay that "out-of-network" charge on your health insurance bill.As long as you followed your obligations of choosing an in-network doctor and an in-network hospital, if for some reason another professional at the hospital gives you care and they are not in-network then you don't have to pay. Your health insurance company will send you a bill anyhow, hoping you will pay but make sure you make it clear that you know you are not obligated to pay.

9. Insurance agents make way less on term life insurance. Term life insurance is basic life insurance that does what it is meant to do: it gives you a certain amount of life insurance for a certain amount of time. It is one of the most popular choices in life insurance because most families just get it while their kids are young... most people don't need life insurance when their dependents do not depend on them anymore. It is also very popular because it is the lowest cost option in life insurance and therefore gives you the biggest life insurance bang for your buck. That makes it a very low commission product. This is not to say that other life insurance options are not a good choice, but make sure you know why your agent is trying to sell you a particular life insurance product.

Another hidden danger of divorce mortgages - home insurance

Did you know home insurance is required to close or keep a mortgage?  If the house you buy (or keep per divorce) is later found to be uninsurable, the lender (based on contract language in the loan documents) can call the loan - essentially canceling your mortgage before it's barely begun.

Did you know pending insurance claims on a house will likely prevent a mortgage from closing?

Another casualty - your credit score:  In divorce, if you cannot individually qualify for home insurance on the family house you own with your EX, you cannot individually refinance the mortgage. 

Many of the dangers from owning a house without home insurance are obvious.  But if the marital joint mortgage is not individually refinanced, you and your EX are still linked through a major debt - the mortgage.  One late mortgage payment drops both of your credit scores (20-100 points); foreclosure is reported on both spouses' credit reports.  As a result, you're not really divorced - financially speaking. 

Solution - more information:  To check your home insurance "health," ask your insurance agent for a copy of the C.L.U.E. report for your house.  C.L.U.E. stands for Comprehensive Loss Underwriting Exchange.  Under federal fair credit laws, home owners are entitled to one free C.L.U.E. report per year. www.choicetrust.com or http://tinyurl.com/dm67d

As always, a licensed insurance professional can help you determine your best options now for a stronger financial future.

When we leave our home in Radnor Pennsylvania for the winter to spend 4 or 5 months in Scottsdale Arizona, we typically can find someone to "sit" in the house while we are away. Last winter we found no one, and spoke to our agent about how to insure the home.

We were advised that we were in luck, and our regular homeowners insurance company would be able to insure our vacant home at an additional premium. In February of that year, we had a major claim when vandals broke into the house, stole some items, but even worth left about $20,000 of damage in the house.

When we filed the claim with our insurance we were in for a big shock. We had assumed the coverage was pretty much the same because it was the same insurance company. We quickly learned we had no coverage for this incident because the new policy was a reduced level of coverage. Our agent told us "you just can't get the same level of coverage when a home is not being occupied" and this is what people live with. Basically.. we had no other choice?

However, no one explained the coverage was to such a lesser degree. Our advise, when you put on a vacant dwelling insurance policy make sure you know exactly what you are buying.

In a recent industry report we learn that one in five of U.S. adults, nearly 45 million people, say that it is acceptable to defraud insurance companies under certain circumstances.

Four of five U.S. adults, think that insurance fraud is unethical.

One in four Americans, think it is acceptable to defraud insurance companies.  A full 8% say it is quite acceptable, to take undeserved money from insurers.  A further 16%, think it is somewhat acceptable.

The statistics go on to show that one in 10 people, agree it is okay to submit a claim for an item that is not truly lost or damaged, or for injuries that did not occur.

Two of five people, would be not very likely or not likely at all, to blow the whistle on someone who defrauded an insurer.

Yet, 95% of all those surveyed would like to see their insurance rates decrease.  In my opinion, we really need to put more of an incentive to report fraud and dramatically increase the penalties for committing it.

What are your thoughts?

Do you have clients that believe that reporting a claim to their insurance company should be avoided if it is not serious? As insurance professionals we all know, this is just not the case.  This is one of the insurance myths addressed in a series of two articles in Insurance Journal (see here & here).

An auto accident – a fender bender where one party paid cash on the spot to settle the claim – is used as an example of why not reporting a claim is a bad idea.  The author correctly points out that a subsequent, and late, claim for bodily injury might be declined by the insurance company based on a failure to report the claim in a timely manner.  While this is a simple and obvious example, we still see this avoidance of claim reporting from commercial insureds from time to time, including professional liability insurance insureds.

Other myths addressed in the article:

·         I don’t have anything, so I don’t need insurance

·         He is a 1099 employee, and therefore an independent contractor

·         I only need Flood insurance if I am in a flood zone

I found a very interesting and persuading article that I would like to share with you. Steven Pearlstein, a business columnist for the Washington Post recently commented about the health insurance reform debate. Currently the debate revolves around how much each American should pay for their heath insurance, particularly if their health insurance premium should be tied to their lifestyle choices such as smoking and lack of exercise and other lifestyle factors. Here is an excerpt from Pearlstein's article... he has a good point, take a look:

"Those who want to prohibit insurance companies from charging higher premiums to people who smoke, drink heavily, abuse drugs or have unhealthy diets apparently take the position that these behaviors should be subsidized by those who take better care of their health.

And those who rail against limits to end-of-life care are effectively saying that patients willing to follow the best medical evidence about what works and what is cost-effective should be required to subsidize those who don't.

In a free country, people have the right to decide what to buy, where to live, what to eat and drink, and how much medical care to buy. They're even free to negotiate for health benefits instead of wage increases. What they don't have is the right to expect that everyone else should pay for their choices through higher taxes and higher health insurance premiums.

One of the aims of health reform should be to make health insurance more like fire insurance, reducing as much as possible the moral hazards and the cross-subsidies while protecting all Americans from medical catastrophe."

What do you think?

Think your Homeowners and Auto insurance has you covered?  In just the last two months here are six situations that resulted in claims that were not covered by the individual’s current insurance carriers.  In most cases these could and would be covered by a Personal Excess or Umbrella policies. Here are some examples of clients' liability risks I've encountered:

• Chartering 30-foot sailboats to sail with friends at the Jersey Shore
• Serving on the board of a Local Hockey Association
• Serving on a church board that oversees the Fall Festival with gambling and liquor exposures
• Renting a restaurant to host his daughter's wedding party, which will involve signing a contract to indemnify the restaurant for any lawsuits arising out of the event
• Driving a company-furnished car with no coverage for injuries to coworkers
• Transferring the ownership of a home to a trust

Bottom-line, see an expert and make certain you have the appropriate coverage in place.

 The cheapest insurance in the world is not having any, and it’s also the most expensive!

I'm often asked "how can I save money on my insurance?"  Below are a few general tips on how to save on homeowners and auto insurance.

1. Ask for periodic updates. Like a financial advisor, your insurance broker should know the details of your individual circumstances so that changes in your status are reflected in your coverage. For example, your broker may suggest increasing deductibles in order to decrease your premiums.

2. Consolidate your policies with one insurance company. Many companies offer discounts for multiple policies. Start by purchasing homeowners and car insurance with the same company. When a new need arises, contact the broker you use for those policies first. Avoid duplicating coverage. For example, you may not need towing coverage if you belong to an automobile club.

3. Look for specific discounts. Your broker may be able to decrease your premiums if you have good credit, have a home security system or are a non-smoker. Additional potential discounts are listed on www.hubinternational.com/savings.

4. Maintain a good driving record. Driving safely will help you maintain a preferred rate. Share all safety features of your automobile with your broker for maximum credit and remember that premiums are set by the value of the vehicle. The more expensive your car, the more expensive your premium will be.

5. Improve your home and make it disaster-resistant. Homes with maintained foundations, water heaters and roofs can qualify the owners for reductions in their premiums.

“Obtaining the proper insurance coverage for a good value starts with consulting an insurance broker who has national access to experts in the areas you need coverage,” said James Kane, president, HUB International Personal Insurance. “Insurance brokers -- unlike insurance agents -- work for the client, not the company. Our job is to look for the best comprehensive combination of service, coverage and price.”

Working with a broker who has access to products from multiple carriers, a strong pulse on the local market, and knowledge of coverage options is critical to ensuring you get the best service and price possible. Start by getting a thorough, professional recommendation from a licensed insurance broker who can identify ways to help you save on your insurance. For more information, email me at Daniel.Guest@HUBinternational.com or call direct Daniel Guest 609-203-8293.

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I’ve been speaking with a lot of our clients lately and although they’re in different industries with different business models, they share a common concern.

With the nation in the midst of the worst economic recession, more and more of our clients are finding that their customers can’t pay. Even large customers. And even those that they thought were financially stable. 

The good news is that there is protection against this blind spot and potentially deadly time bomb. It’s called Credit Insurance. Think of it as a firewall against receivables risk, protecting you against much of your vulnerability.

Everyone I’ve talked to loves it. It lets them focus on their business and leaves the risk to a third party.

Anyway, just thought I’d share. If you have any questions, never hesitate to reach out to me directly.

Regards,

-Daniel

It’s an all too common nightmare: a professional or business person works hard all of their lives to accumulate a certain level of wealth and then loses it all when they are hit by an unexpected lawsuit. Perhaps a visitor is injured in their home(s) or they are involved in an accident with an uninsured motorist.

If they do not have adequate insurance to cover the liability, personal assets may be seized. A life of success wiped away.

So-called umbrella policies are designed to provide a financial shield against this, but large umbrella policies can be costly and may involve complex underwriting.

One attractive but little known way to make this simpler and often less expensive, is to acquire group umbrella coverage.

Under this approach, a group of 10 or more individuals working in the same company or professional practice purchase the coverage under a group umbrella program. Each person can select their own limit, based on their individual needs, and even offer it as a perk to others in the company.

Everyone that I’ve talked to loves it. It’s an efficient way to place an all-important buffer between yourself, your assets, your lifestyle and the risks that can play havoc with all you’ve worked for.

Protect yourself!

-Daniel