Do you really trust your ability to choose the right insurance coverage?


These are trying times, many people are experiencing hardships through no fault of their own and whether you have been laid off, working less hours etc. making ends meet for many Americans has become difficult to say the least.

Though many understand that they can’t just lower all of the monthly expenses  some are necessary expenditures such as the mortgage, electric, heat, food etc. There are some that could be reviewed and lowered if done correctly.

Insurance policies fall into this category, many people consider insurance a necessary evil and would more often than not do without it if given the choice.

But, really? Having been in the insurance business for over 40 years, I have delivered life insurance checks to grieving families, homeowner claim checks for natural disasters, fires, theft and more. Auto accidents and liability suits can be unnerving but giving a client the peace of mind that they are covered is without a doubt the most satisfying part of my job.

The internet and advertisements offering lower insurance premiums catch almost every person’s eye and why not? If you are paying a premium with Company A, the chances are if you are a good risk you could pay a lower premium with Company B. But are you sure you are comparing the same coverages when you get these quotes? Recently, two of my long-time clients called me to say they received quotes from a BIG INSURANCE COMPANY who advertises on TV, Radio, and all over. We spent some time reviewing the coverages that this company offered and here is what we found. Both insureds had a quality company providing them with coverage for their two autos and home. The other company offered to bundle them but did not inform them that it would be with two different companies. On the Auto portion they lowered the Uninsured and Underinsured limit to 100/300 from 250/500, they didn’t offer them OBEL (other basic economic loss) coverage, for No-Fault of (Personal Injury Protection) they offered only the require minimum limits of 50,000 when their current policy provide an additional $100,000 in coverage. They increased the deductibles on the vehicles and home and gave the Homeowners a 5% Hurricane deductible when they had a 3% one.  These changes did in fact make a difference but the representative on the phone kept coming back to the savings in premium which accounted for less than $250 per year on the auto and $300 on the home. When you take into account the changes proposed by the representative the insured would lose over $250,000 in coverage in the event of a loss on the auto and on the home in the event of a hurricane the change in the percentage accounted for over $25,000 in a possible deductible.

Continuing with  the homeowner’s section, they offered replacement cost on the dwelling and contents but lowered the contents limit, from the current limit provided. The Replacement cost on the dwelling only provided an additional 25% over the dwelling limit which under most circumstances would be fine, but the representative ended up lowering the dwelling limit by lowering the estimated cost to rebuild. Many clients have difficulty in understanding this concept of rebuilding costs. The average home can be built new for less than repairing a damaged home but either way if this limit is too low the insured can run the risk of being underinsured and will be subject to coinsurance. This is a penalty condition in every single homeowner’s policy written. Believe it or not many insurance agents don’t even realize this and all too often don’t realize their errors until it is too late after a claim. Many insurance agents understand the importance of providing the proper coverage at a reasonable rate, but many will appeal to a person’s effort to save some dollars and hope that nothing happens to show that they in fact provide inadequate coverage to their client.

Thinking of making a change? Ok but make sure that you can trust the person who you are working with saving money is important to all of us, but not if you are going to be uninsured or underinsured for a claim.

So, the moral of the story, the most expensive insurance policy ever written is the one that doesn’t provide the proper coverage after the claim.


Happy New Year to you and your family and best wishes for a better 2021.

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