Quote of the Day: Insurance with a DUI

Today's Quote of the Day comes from a client in Gilbert, Arizona and highlights the benefits of sticking with an independent agent that looks out for your best interests.

 "Susan" became a client about three years ago when her policy with Farmers was non-renewed or cancelled because of a DUI conviction. I was able to find her a company willing to insure her three vehicles - a 2006 Hyundai Santa Fe, 2006 Chevy Cavalier, and a 2008 Nissan Altima but, as you can imagine, it wasn't cheap. So we shopped every year at renewal time to make sure she was still getting the best available rate. This month, the DUI became three years old. We shopped it again and found a policy that was 50% lower than what she had been paying. She was psyched not only to be paying a lot less, but it also meant she was putting this further into the past and getting her life back to normal.

Many of you researching insurance prices for your vehicles may have been convicted of DUI. Many, many more of you have been issued a photo ticket for speeding or something else. If you're one of the lucky ones that hasn't had a ticket in years - don't worry, it's coming. When your record is marred and have to deal with the stress of having your premiums increase or facing a policy cancellation, that's when you will really value my services. Having an agent you know that looks out for your best interests can relieve a large burden off your shoulders when it counts the most (and save you a lot of money!). I've been happy to help Susan and I would be happy to help you.

Call or email me anytime. If you have been refused by other providers because of a DUI conviction or multiple tickets, I may be able to help.

Why Does My Renewal Go Up?

Photo by Jerry Bunkers.

If your auto (or homeowner's) insurance renewal goes up it’s not necessarily what you did or didn’t do, it’s probably just a statewide (or nationwide) rate increase by the insurance company. Insurance companies are not in the business to lose their shorts, they are in the business to be profitable and, at the minimum, to cover their losses. If their losses ratio is up then they are not bringing in enough premium to cover their losses so they will increase premiums across the board.

Traditionally, insurance companies have made their money by collecting premiums and then investing it in the stock market and other ways to make a return, which would add to profits and cover overhead and losses. We all know how the stock market is doing, so lately they haven’t made the kind of return they would like. Insurance losses are at the same levels, if not higher, and they need to be covered. To stay in business, a company has to be profitable and sometimes the answer is to raise premiums on you and me. 

Let me also say that when the economy is bad and everyone is hurting for money, insurance fraud rises. (Here's some stats from the Coalition Against Insurance Fraud.) When the insurance companies spend tons of money on fraud, everyone’s premiums increase.

Of course, there is a chance your renewal may also be going up if you are considered more risky to insure. It's important to know that insurance companies will rate you on your driving record, accidents or claims record, and your insurance score. Your insurance score is made of a lot of different factors, but it usually corresponds to your credit. If you have great credit, chances are you will have a great insurance score which will result in lower premiums - and vice-versa. I have heard former executives say that out of the three reports, if they were to choose just one of those reports to look at and be profitable in choosing your rate, it would be the insurance score. Statistically, I was told, if you have great credit chances are you are responsible, which means in turn that you are a safe driver, less likely to file claims, commit fraud, etc. In other words, you are less likely to add to their losses. It may seem unfair, but that's the reality of the insurance business. These guys are in it to make money and the more of a financial risk you are to them, the more you will have to pay to be insured. 

“What does my credit have to do with my insurance premiums?” is a question I get asked a lot. Now you know. During an insurance quote, I ask about your credit. I don’t see your credit score or your credit report. I don’t know how many credit cards you have and what the balances are, nor do I want to know. I'm just trying to get an idea or what to expect when we start running numbers and checking out providers. 

The good news in all this, is that the insurance business is highly competitive. There's lots of companies out there, some you may never even have heard of before, fighting for your business. Instead of going from site to site filling out free quote forms, call me. I know who gives what deals on what types of cars, how you can combine policies for the biggest discounts, and when the best time will be to renew or re-shop your policy. Best of all, it doesn't cost you anything extra and only takes a few minutes. 

Quote of the Day: A Prius and 3 Properties

Today's Quote of the Day comes from a recent client of mine - we'll call him "Steve".

Steve lives in Phoenix and has insurance policies on four major assets: his primary residence (a 2,400 sq. ft. ranch-style home built in 2004), a second house (vacation home), a rental unit (one-family home), and a 2006 Toyota Prius. For the past 5 years, Steve had all properties covered with a policy from Progressive. His yearly cost was coming out to about $3,200.00. This year, however, he decided to do some shopping and found us on the internet.

After a brief conversation and quote, we found that I could increase his liability limits, because of his net worth, and switch to a policy under MetLife. With the increased coverage, his yearly total came out to just right over $2,000.00 - a total saving of about $1,200.00 per year. That's about $100 bucks per month for all you math wizards. Not bad.

How Hard Does Your Insurance Agent Work for You?

This is a fun video starring yours truly, but I think it makes an important and serious point that I'd like to briefly explain - that is, the value of having a dedicated insurance agent that you can call your own.

To all the first-time visitors here, I'd like to ask you a question: How many of you have a particular professional you can call on, that you know by name, when you need to talk about serious financial matters like insuring your teenage daughter's first car, buying a home, or protecting your family with a life insurance policy?

My guess is that far too many of you do not. When the inevitable insurance issue arises, like when you get in a car accident or move out of state, most of you probably dial the 1-800 number on your insurance card and are greeted with a machine made to sound like a real person. After pressing "1" for English, you are then presented with a number of options and filtered to the appropriate department, at which point you are handed off to a customer service rep. that you've probably never spoken to before - and never will again.

That doesn't seem to be the best way to deal with something as important as your property, which is really your money. Money does not grow on trees, as they say, and securing your hard-earned assets with the appropriate coverage should be handled with great care. There is no single solution that will be optimal for every individual or family. Even choosing the right umbrella insurance can be tricky.

As an experienced Personal Insurance Advisor and Independent Agent, I know my clients personally and spend as much time as is needed with each and every one of them to make sure their families and assets are properly and satisfactorily protected. From our first phone conversation and initial quote to every subsequent policy adjustment I will be there to explain your options, answer your questions, and make sure you are getting the best value available. I take the time to understand your needs and help you put together the policy that best fits your budget and requirements.

So, if you haven't already, I invite you to take a few seconds to complete the "free quote" form here on my website and experience for yourself the benefits of having a dedicated agent that works for you. Most of my first-time contacts are happy to find out they can save money and increase the quality of their coverage at the same time. Even if you don't sign up with me, in the very least I hope that next time you have an insurance question you'll think, "Oh yeah, I'll call Matt."

Homeowner's Insurance F.A.Q.

Homeowners Insurance

Here are answers to some frequently asked questions we get as insurance agents that might be helpful. In addition to the questions we have included coverage items to look for before purchasing your next policy.

1.  What is covered?

This may sound like a basic question but it is a very important one. The good news is the standard home owner policy covers most hazards or “perils” to the dwelling.  It is probably easier to answer what is not covered vs. what is.  Although this list is not complete, here are a few of the major ones that are not covered:

-       Flood

-       Earth Movement (Earthquake, landslide, sinkhole)

-       War

-       Nuclear Hazard

-       Intentional Loss

-       Wear and tear

-       Governmental Action

-       Birds, vermin, rodents, or insects

For anything not covered under a standard homeowner's insurance policy, consider Umbrella Insurance, which also protects you above and beyond the limits of your existing policy.

2.  Do I need to purchase a different type of policy if I am renting my home?

Yes. There are many different types of policies depending on the use of the home. Writing a policy incorrectly could leave you exposed. Landlord or rental policies cover you for the extra exposure of having a tenant in the home. For example what if the tenant of your home is found liable for an injury to someone while on the property? If the policy is written as a primary home there would potentially be no coverage for the risk associated with the tenant.

3.  Does a tenant need his own insurance if he is renting my investment property?

The answer is yes for multiple reasons. By having the tenant purchase what is known as a “renters” policy, or "renter's insurance", the landlord and the tenant both benefit. The Landlord gets an added layer of protection in the event the tenant is found liable for some damage or injury to someone while on the property.  The tenants get coverage for their personal belongings (furniture, clothes, T.V. etc) as well as liability protection for their actions as well.

4.  Is there added exposure if my home is vacant? 

Yes. Many people do not realize there are vacancy exclusions in almost every home policy. The time limit can vary but most policies state that after 30 to 60 days of the home being vacant coverages are limited. (If the home is a seasonal and is correctly written this would not apply).  Losses from theft, vandalism, water leaks, could potentially go uncovered. If you know your home is going to be vacant for an extended period of time having a property management company check on the home periodically could mitigate a lot of the risk.   

5.  How can I save money on my home insurance?

This is the question everyone wants to know. Home insurance pricing is based on many factors, (age of home, proximity to fire station, estimated replacement cost, security features etc).  Although insurance companies use the same criteria, you will find that their rates will vary greatly.  Probably the best way to save money is to quote your insurance with multiple companies. You can call several companies for a quote or use an independent agent that can get multiple quotes for you. Choose a high deductible.  A 1,000 deductible should be a starting point.  It is not uncommon for policies to be written at 5,000 deductibles or higher. The savings can be well worth it. Make sure you let your agent know about any security features. Monitored alarms for fire and/or burglary will shave off 10% or more.  

Now that I have a great quote on my home insurance does the policy have the coverage I need?  

Many people think home insurance is the same from company to company.  Here are 3 things to look for in a great policy:

 1. "Guaranteed replacement cost"   What happens if your home burns down and the cost to rebuild is 300,000 and your policy is written for 250,000?  Most policies have some sort of "extended replacement" cost but that may or may not be enough. A policy written with the language "guaranteed replacement cost" puts the burden on the insurance company to make sure there is enough coverage in the event of a total loss.

 2. "Water back up coverage" I know what you’re thinking........"Why would I need water back up coverage on a home in the AZ desert?” This is an essential coverage often times overlooked by agents and insureds. If water backs up through your toilet, sinks, bathtubs, etc and causes damage to the flooring, chances are you may be out of luck. The standard home policy does not cover this.

 3. "Building ordinance coverage" Many cities are requiring the construction or remodeling of homes to include certain extras or upgrades to bring them up to city building code. What if the city your home is in now requires all homes to have fire prevention sprinkler systems throughout the house? (Such a law was passed in Scottsdale, AZ not too many years ago)  If your home needed repair from an insurance claim you might be stuck paying the bill for the extra work. 

 Another confusing aspect of home policies is the breakdown or separation of the coverages.  What exactly are all those numbers and letters referring to and do I need less or more? Here is a summary of the coverages sections for you to refer to:

Coverage A - Residence (Dwelling)

This provides protection on: the house and attached buildings (dwelling, attached garage and porches, etc.), building equipment (furnace, hot water heater, etc.), fixtures, built in components, outdoor antennas including lead-in wiring and accessories, carpeting, building materials and supplies located on the insured premises for use in construction of or to the residence. 

Coverage B - Other Structures

This covers fences, driveways, sidewalks, and other permanently installed outdoor fixtures, outdoor antennas including lead-in wiring and accessories, carpeting, building materials and supplies located on the insured premises for use in construction of or to a related private structure.

Coverage C - Personal Property

Personal property you own or in the care of you or your relatives residing in your household is covered. This coverage includes detachable building items such as window air conditioners, curtains, drapes and outdoor equipment not permanently installed.

This also includes coverage for the property of students who are resident relatives while temporarily living away from home at a school or college.

Certain types of personal property are subject to specified limits of protection.

Coverage D - Additional Living Expense

Any extra reasonable and necessary costs incurred (up to your policy's specified limit) is covered if you're forced to live in temporary quarters due to the loss or repair of your home following a covered loss to your property. This coverage is for additional expenses above and beyond your normal household expenses. The increase in living expenses applies to such expenses as rental of temporary quarters, meals in restaurants and laundry service.

Coverage E - Personal Liability

Personal liability coverage protects you against covered losses caused to others while on your property and elsewhere. It also safeguards you against accidental damage to someone else's property.

Coverage F - Medical Payments

This coverage provides for the necessary medical expenses (subject to policy limits) for non-residents injured on your property, regardless of fault. Medical payments will be paid if expenses are incurred within three years from the date of accident.

Make sure you are not just getting a great rate but also getting the protection you need. Having an agent that understands these risks is even more important than ever. Your home is one of the biggest investments you will ever make. Making sure you have the right policy is essential to protecting that investment long term.

This was part of a Homeowner's Insurance presentation that a friend of mine gave a while back. I think it answers a lot of the most frequently asked questions on this topic and I'll continue to add to it. You may also want to compare it to the FAQ produced by the Arizona Department of Insurance. Hopefully this can be a useful reference for any of you preparing to buy a home or switch policies. If you have any questions not answered here, please let me know.