November 2016 - Susman
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Cyber Monday

Welcome to Cyber Monday – a newer holiday season shopping tradition where rather than in-store door-buster deals, you can find crazy deals online at many your favorite online retailers.  Because so much shopping will take pace online today, it is very important to protect yourself, your credit card information, and to know how to shop like a pro.

        Prepare by setting up all your accounts ahead of time on the sites that you know you want to shop.  All your information will be ready and this will decrease the number of clicks you must make during your check-out…and could help you get the item before someone else takes it from the inventory.

        Look for deals and special codes on social media.  There are tons of exclusive discounts

        Make sure you really consider the ‘deal.’ The item might look like the item you want for a great price, but it could very well be a secondary style made with cheaper parts.  Double check specifications and model numbers.  Always make sure that what you think it is, is really what you want.

        Protect your purchase and identity by using a credit card rather than a debit card

        Double check the discounts to make sure it really exists on your exact item

        Only shop on legitimate websites and save all receipts, emails, and tracking info for all purchases

        Look for cashback, bounce back, and points programs to save you more money in the future.

 

Everyone has their own style of online shopping.  We hope you find all the deals you are looking for an if you come across anything super amazing, please send it our way!

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Can You Get Extended Care Without Burdening Loved Ones?

[podcast src=”https://html5-player.libsyn.com/embed/episode/id/4843564/height/360/width/450/theme/standard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]We are all living longer than ever before. As we age, well, things start happening with our bodies. We need a little extra help, a little extra care. We need long-term care insurance. The question becomes is it cost effective to purchase long-term care insurance and if so at what age? Is it even worth the money or are there other alternatives? This week’s Susman Insurance Agency podcast helps you answer these questions and more. The transcript follows:

JIM: Hello, and welcome to this week’s Real Wealth. Today, we’re going to talk about a topic that nobody wants to talk about and that’s long-term care planning. A lot of times I know when people think about long-term care planning they’re always thinking nursing homes, and that’s probably getting further and further from the trust as care solutions continue to change and evolve. Today joining us we have Michael Staeb. (SP?) It’s kind of interesting, he’s kind of a young guy and he’s dealing with a product that normally is associated with people as they get older, and Michael, I know you’ve spent a lot of time in the insurance industry, even when you were in high school, how did you get involved in something like long-term care?

00:44

MICHAEL: Well, as you mentioned, in high school I was working for my mother, who is a disability income protection specialist who works with advisors like I do, and so I kind of got insurance in my blood early on. While I was in college I was working for a general agency, one of the big mutual companies here in the Seattle area, and they, in particular, weren’t huge in the long-term care market. But as I got further into my career I kind of saw that this was such an underserved market. There were lots of advisors out there who understood the risk that long-term care presented but weren’t comfortable talking about it so they didn’t bring it up. As I moved from being in a career agency to moving into independent brokerage, I kind of picked up the mantel and wanted to become an educator for long-term care to advisors so that they were comfortable talking with their client.

1:33

JIM: I have to reiterate what you just talked about. I’ve been in the business for 30 years, and it’s probably the most needed and least talked about product or service that we offer, and I think it’s because none of us want to face the issue of getting old. I know they talk about 80 is the new 60 and 40 is the new 20, and all this and we’re all striving to stay young and young looking and all that, and long-term care is usually just something that happens to somebody else, and it’s easy to kind of put that aside, but when you see the devastating impact it has on families, it can truly be a problem. When we talk about this, I always emphasize the word planning, and that doesn’t necessarily mean insurance. Although insurance can play a vital role, I think every family is going to probably face this with somebody they know or themselves personally, and to not have a plan just means you’re planning on winging it. Talk about how you perceive the need for a long-term care plan.

2:31

MICHAEL: Oh, I agree with you completely. Long-term care planning doesn’t automatically mean insurance. It tends to be the most advantageous way to do it, but it’s certainly not the only way. You mentioned, our own federal government, the long-term care segment of Medicare, has put out statistics and studies that say of American’s who are 65 and older today, 75%, or three out of every four, will need long-term care services before they die. There’s no insurable risk in the American economy as great except for maybe health insurance, which we’re all required to have. I wish that we had a similar mandate for long-term care because the risk is so great, and as you hinted the impact on clients and their families can be astounding. I can give you a quick example of a client I’m currently working with, a young lady, young-ish, she’s in her early 40s, recently divorced, is financially independent herself, but she came to me asking for more long-term care coverage on top of what she already has because her father, who was diagnosed with Parkinson’s and lived with the disease for 21 years, her family, which fortunately was relatively affluent was able to pay out-of-pocket for his care. Over that 21 years his care totaled approximately $1.6 million, which is an astounding figure for just one person.

3:55

JIM: I dealt with it in my own family. All four grandparents died in a nursing home after anywhere from a five to seven year period of time, and then my mom, she received home health care, she had terminal cancer and she needed round-the-clock care and spent three weeks in a nursing home when we just didn’t have enough people available. The thing that I talk about with a long-term care plan, insurance isn’t the end-all, although it can play a very important role, but having family members, having different choices, where do you want to be when you receive the care, do you want to be able to stay at home. Here in my state, I think the home health care is just narrowly past assisted living and nursing home is a distant third. It used to be most long-term care was in a nursing home, so we’ve definitely seen the dynamics change. One thing I’d emphasize to people from a personal note, when my mom needed the care, there is five of us in the family, five of us kids, and four of them live out of state. I’m the one that’s here in the state where my mom was when she needed the care, and what we did is me being the one here we did all the running around. We would have taken her in and had her at our home, but she didn’t not want to die in front of her grandkids. That was something that she just wouldn’t hear anything of it. We ended up renting a house for her, she did not want to be in a nursing home, and us five kids pitched in and she actually ended up being on Title 19 because she never saved any money, and Title 19 paid for a lot of her medical care but they were very limited on what they would do for home health care, and they only covered somebody coming in once a day for a couple hours and she needed 24 hour assistance, the rest of the time she needed somebody there. Well my siblings all took time off of work; I took time off of work. We had cousins, sisters, brothers, friends, everybody was taking time to be there with my mom, eventually we ran out of shifts, and speaking for myself, I’m in business for myself and my siblings were starting to say hey you can take off of work, you work for yourself, you can control that, you should be able to be there, we can’t take off of work. Well the thing is, as a business owner if I take off of my business, my business won’t be there, and the interesting dynamic we had is we started to get tension among family members as people started pointing fingers, and I’ve seen that happen time and time again because there wasn’t necessarily a plan in place. I’m sure you see that all the time.

6:25

MICHAEL: Absolutely. There’s another example of a family member on my in-laws side where my grandfather-in-law is dealing with late-stage dementia. He’s had it for I believe roughly about 10 years now. Fortunately for his family he has six children who divvy up their time to be with him because it’s not particularly safe for him to be on his own. That of course creates tension just like you mentioned among siblings. One person might have one opinion of what proper care and attention is, which might be completely different from what another sibling feels it should be. That is certainly a difficult point, actually when it’s family or informal care as the industry calls it when it’s given by a nonmedical trained family member.

7:06

JIM: That’s something you should take care of before it starts raining. I always talk about the leaky roof syndrome. You know when the sun’s shining you don’t need to fix the roof, and when you get someone who’s sick that’s where one of the steps has to be naming a healthcare power of attorney and having those documents set up ahead of time to help try to at least reduce some of those hard feelings, and I’m a big advocate too of family meetings where you discuss with your family what your wishes are to try to mitigate against different family members thinking different things, and a lot of times that happens because there is no discussion and all of a sudden you are faced with decisions and nobody really knows for sure what mom or dad would have wanted because it was never written down and the legal authority was never made clear.

7:50

MICHAEL: Exactly. You mentioned earlier your own mother being eligible for Title 19, so she was receiving Medicaid benefits is that correct?

7:57

JIM: Yup.

7:58

MICHAEL: That’s a common misconception with clients when I’m meeting with them and their advisors, is they believe, many of them, that the government will take of them. When it comes to long-term care services that just unfortunately isn’t true. We’ll talk about Medicare first. Medicare does actually have very limited long-term coverage. It is 100% coverage but only for the first 20 days and the insured has to pay from days 21 through 100 for the first $140/day of services and Medicare covers the excess. That said, Medicare only covers the first 100 days, and you have to be able to get into a Medicare facility which there are waiting lists for in most part of the company. The average long-term care claim from an industry standpoint is about 2.93 years, and of course it varies a little bit based on age, so 100 days is not even close to covering what an average long-term care event is going to cost. Let’s say someone says alright I get my 100 days of Medicare and then I’m going to go on Medicaid. Medicaid is intended, at least Medicaid long-term care is intended for people who are effectively destitute. The spenddown requirements are very, very high. You can keep your primary residence, you can keep a vehicle, you can keep $2000 a month of income, but you effectively have to sign over to your state Medicaid program the bulk in anything in excess of that, or you have to spend it down first before Medicaid will start paying. Like you mentioned this evening, most people don’t want to go into a nursing home, which is the only thing Medicaid pays for. You cannot receive Medicaid benefits for home care, assisted living, or anything that is not a Medicaid classified nursing home facility.

9:44

JIM: When you talk about being able to keep the home, there are certain restrictions, you have to have a likelihood of getting back to that home or a community spouse, but that doesn’t mean your home asset is protected, at least not in my state. In my state they’re going to put a lien on that house, so let’s say for the sake of discussion, you’re in the nursing home for three years and it’s $80,000 a year and it’s $240,000 and your house is worth $150,000, they’re going to go after the estate and they’re going to take that $150,000 because you had a $240,000 balance that was paid on your behalf, so a lot of people, and I know what you’re saying there, they have these misconceptions it’s all going to be taken care of, but it’s only going to be taken care of once you have nothing left for all intents and purposes. Now if you’re a spouse of someone that goes to a nursing home, they let you keep a certain amount of assets, but it still has a devastating impact financially and even though they allow the community spouse to keep a little bit more, it’s still going to be somewhat restricted and limited. They’re certainly going to have a step back as far as quality of life. Why don’t we take a short break and when we come back I know there’s very few sources. People got to use their own personal sources or count on something like Medicare or Medicaid in the extent that they’ve gone through all their assets, let’s talk about when we get back what are some of those options and how can they plan for it and make sure that their quality of life is protected but also protecting the family. Please stay tuned.

11:11

[BREAK]

11:41

JIM: Welcome back as we continue to visit with Michael Staeb (SP?) who has really focused his practice in the area of long-term care planning. Before the break we were talking about some of the issues that face people when they need long-term care and what happens when you don’t have a plan. Let’s talk about having a plan. A lot of times we’ll talk to people that might be in a little bit more of a fortunate situation, and I know when I do the math you almost can’t have too much money when it comes to the cost of long-term care. At what point do you feel someone might be self-insured where they don’t really have to look at doing too much planning, they can just rely on their resources?

12:19

MICHAEL: Really I look at it as kind of a two-pronged approach when someone can afford to self-insure. I kind of created a formula based on my own opinion of what it takes to fund a long-term care need, and you might want to adapt these numbers based on the median income for the area in which you live or what long-term care costs in the area you live. In the Seattle Metro area the way that I look at it is it’s not really a net worth thing, so someone who has a net worth of $10 million versus someone who has a net worth of $500,000, may or may not meet this formula, so here’s how I look at it. I look at it as you need to have in a cash or cash like asset, $300,000 per person, so $600,000 if it’s a couple, it needs to be able to grow on a guaranteed basis, 3% compound, it needs to not be allocated for any other purpose such as retirement savings, housing wealth, education funding, so it’s not allocated for any other reason that you’re going to use down the road, and most clients, even multi-millionaires, may not have $300,000 set aside that meets all that criteria. The reason being is even if you do have $300,000, in order to guarantee yourself 3% growth you’re going to have to be putting money into that account from somewhere else, and even if you do have $300,000 and you can afford to add 3% compound to that every year, is that really the best leverage for your money.

13:43

JIM: I’ve been kind of skewed in a sense where I look at that and I think that would take care of a lot of cases, but one thing I found to be true, and I’m sure you found the same thing is the average stays have been increasing due to two reasons, one is more people have long-term care and we’ve seen a lot of rate increases in the general long-term care space because they didn’t anticipate the amount of people that would be needing long-term care, and one of the big reasons is, if they have insurance they won’t beg, borrow, steal, and kill themselves to stay out of a nursing home, so one thing is they’re going in sooner because of the insurance, but because of medical technology we’re living longer and becoming more susceptible to things like Alzheimer’s and Parkinson’s and other issues that could require us to need to stay. But I do remember one case where I volunteered for a couple that were kind of homebound, the wife had a stroke, she was in a wheelchair and things like that, her husband was taking care of her, and we kind of adopted them as grandparents in the grade school that I went to and I did the snow shoveling and stuff like that. They ended up in a nursing home and they lived in that nursing home for over 20 years as a couple. The wife passed away eventually and the husband died shortly after, but 20 years in a nursing home. I think back to when I first got involved in the business, there were a couple companies that had come out with nursing home policies, and I remember them having $10 and $15 a day benefits. When those policies first came out, that was the first nursing home policies, that was enough to cover the costs of a nursing home, and now we’re looking at facilities that might be $300 or $400 a day depending on what part of the country you live in, so if we fast forward that 30 years we might be looking at with just normal inflation $20,000 or $30,000 a month might be the average cost, and when you look at that it literally can get to be in millions of dollars. The way I look at insurance or whether or not to self-insure, you look at anybody with money they don’t self-insure their house, they don’t self-insure their factories, they don’t self-insure their cars, even though they could afford to write out a check for any one of those things to replace it, and something like long-term care where the sky is literally the limit. Because of medical technology they keep you alive for 10 or 15 years and you’re in a facility at $10,000, $20,000, $30,000 a month, while it doesn’t take too many of those months before not only are you into hundreds of thousands of dollars, you could get into millions, and you talked about the case just earlier in today’s show, $1.6 million, that’s no chicken feed to be able to pay for. When you look at long-term care insurance I’m a huge believer that insurance companies they’re designed for situations like this.

16:35

MICHAEL: Exactly.

16:36

JIM: Long-term care is part of the plan, where you’re going to be at is part of the plan, who is going to help, what family members are available, we got all these different things to consider, so if we’re looking to transfer the risk to an insurance companies, I know there’s new options now. We have Traditional, we have linked benefits, we have what’s happened in history, what’s happening today, what do you see people doing and what do you see as some of the things that people should be looking at with their insurance professional as options?

17:04

MICHAEL: When I’m meeting with advisors and clients, I usually start off by given them a broad overview of all the types of long-term care policies that are out there, whether it’s traditional linked benefit or what have you. I don’t want to go into a meeting assuming that what I like best is going to be what they like best, because that automatically assumes I’m taking what I want and putting it on them, which doesn’t always work. I go in presenting a little bit of everything. I show them what a traditional policy looks like and we talk about the pros and cons. The biggest con of course is as you mentioned rate increases on traditional products have been horrendous and that’s probably putting it mildly. Quick example of a rate increase that I dealt with a few years ago, there was a 52-year-old woman who had purchased a policy 11 years prior. It had accumulatively doubled in cost because of her rate increases over time, and buying comparable coverage from a different carrier at that time was still double what her premium was today. I couldn’t recommend that she replace it in that scenario. Even clients that are coming to me with existing traditional products, ninety-nine percent of the time I’m recommending they keep them, because even if the price had doubled as it had in that one example, it’s still far more cost effective than switching to a new carrier today. When you get into linked benefit products I break it into really two categories, asset based long-term care and rider based long-term care. Both of these are based on a life insurance chassis, but with an asset based product we’re usually paying for it over a specified amount of time. It could be all at once, it could be over five years or ten years but usually not longer than that. We call it asset bases because most of the products in that category have some sort of a return of premium component where if you pay $100,000 over the course of 10 years and you decide 20 years down the road that you think that was a bad decision or if you need the money back, you have that guaranteed provision to get it back. In the rider base space we have more flexibility because this is where we’re adding a long-term care rider to an otherwise stand-alone life insurance policy that you could buy without the long-term care rider. I’m seeing probably about 80% of the cases that I’m working on going to this rider base space, and usually that’s for a couple reasons, one, we’ve got guaranteed premiums, which are also true in the asset base space. No one in traditional space had a guaranteed premium, and because of how those products are built I don’t expect that we will probably ever see guaranteed premiums in that space again. In the rider base space, usually we’re talking with clients who have a life insurance need anyway, so they’re already planning for, pay for, permanent life insurance, and by adding a long-term care rider, the incremental cost is dramatically less than a traditional long-term care policy. The way companies can price for that is, so let’s say, Jim, that you’re an actuary in an insurance company, you’ve already priced what it’s going to cost you to provide $250,000 of permanent life insurance guaranteed for a 55-year-old female. Now all you have to price for is what is it going to cost you to pay that out in a monthly installment early. Does that make sense?

20:20

JIM: Absolutely.

20:22

MICHAEL: Once I’ve explained that to clients they understand why those products are so popular, and of those three segments that we talked about, traditional, asset based and rider based, while the traditional space continue to shrink, we’re really down to what maybe seven or eight companies left in the traditional market?

20:41

JIM: Yup.

20:42

MICHAEL: In the rider based space, that segment is actually growing. There are more companies entering that market every day. We’re probably up to I’d say half a dozen that have a true long-term care rider and probably another dozen that have some variation usually called a chronic illness rider.

20:58

JIM: I’ve seen different statistics for median stays and things like that, and when you look at that space you can get the Cadillac coverage that will cover you for just about everything. Maybe you don’t need just about everything covered, maybe you want to cover a shorter stay or the linked benefits, really can help fill the gap and buy time. Especially if you have a couple, having that extra help and having an extra source of cash that you don’t need to live on, because as you talked about earlier, having money that’s not supporting all the other things, and if you have to set aside money for a long-term care plan it buy options to say the least. Let’s talk about some alternative funding of long-term care outside the insurance. Are there other ways to take care of it?

21:44

MICHAEL: There are, so beyond self-funding or shifting the risk to a long-term care insurance company, there’s a couple methods that we’re seeing certainly growing, I won’t say growing dramatically, but the IRS has changed some of their rules regarding use of qualified funds to cover long-term care without incurring an income tax, and obviously a client is going to need to work with their CPA or their tax professional about how to make that work, but that is certainly a growing segment of long-term care planning is using qualified money, particularly for the baby boomer generation, which has a massive amount of qualified money relative to any other generation so they have those assets. The second that’s kind of an alternative funding is using home equity. If we go back to, I’ll use my parents as an example, my parents are right about 60, and their parents were expecting to leave their home to their kids. I look at myself and my younger brother, neither of us are really expecting or even wanting our parent’s home. We love the home we grew up in, but I’m on my second him, my younger brother is probably going to be buying his first home in the next couple years, and my parents are only 60 so they’re still going to be in that house another 15 to 20 years, so it is very likely we don’t need that housing wealth because we’re not going to move into it.

22:59

JIM: We h ad a guest a while back about modifying the home and making it safe so that a spouse could take care of her husband, in this case I think the spouse might have been 110 pounds dripping wet, taking care of a 270 pound husband who was immobile and they were able to install life systems throughout the house so she could safely help move her husband around and take care of him versus the alternative going to a nursing home and ending up on title 19, they were able to do that through private pay, and that was one of the resources that they used. I know we’ve gone over. I could talk about this forever. I’m very passionate about it and it’s good to hear other people who are passionate. The moral of the story here is there are a lot of options. Long-term care is a reality for many Americans, and just ignoring it does not make that reality going away. You should be sitting down with your insurance professional, you should be looking at these alternatives, and making sure you have a long-term care plan. You may plan to just take your lumps as they come, but if you just take the time to look at, with some of the solutions that you talked about it’s really literally taking money from your left pocket, putting it in the right pocket and that money is earmarked for long-term care, and with some of the solutions that are out there you can leverage your dollars to help better weather the storm of a long-term care stay or needs for you or your spouse. Any other final talking points you want to bring up, Michael.

24:26

MICHAEL: It is such a huge liability for our country coming up and grossly uninsured, and the important part as you mentioned is clients need to be working with advisors who can help them, and if the advisor isn’t comfortable talking about long-term care, there are plenty of resources out there that the advisors can reach out to and find.

00:41

JIM: Well thanks for joining us Michael. It’s always good to have a reminder for people planning, especially when we’ve got $10,000 baby boomers a day retiring. This is an issue that every single one of them should be figuring out what their long-term care strategy is and make sure they’re ready to face that if it comes into their lives. Thanks Michael.

25:07

MICHAEL: Thank you Jim, it’s been a pleasure.

25:08

JIM: Thanks for joining us this week, and tune in again next week as we explore another phase of the Real Wealth process. Remember, if anything you heard in today’s show you’d like to get more information about, contact your Real Wealth advisor.

Doomsday – oops, Black Friday!

Happy Thanksgiving!!  Well, happy day AFTER Thanksgiving – or better known as Black Friday.

Black Friday.

The one day during the year where some people rush through the holiday family meal where they are supposedly giving thanks to/for all they have, only to go stand in line for hours to get a “deal” on items which, they more often purchase for themselves – and forgetting what it is that they were thankful for in the first place.

I am a fan of putting money into business, but unfortunately it is days like today that can sometimes bring out the worst in people.  Later this evening we will be hearing news reports about people getting in fights, trampled, or even worse.

It is sad, disappointing, and scary.

On another note, this is the perfect time to remind you that you need to either get insurance that you don’t already have (and need) or update your current polices.  There is not better day than Black Friday to make sure your car is protected during gridlock traffic around the mall, your health insurance will cover an injuries that may occur or flu bugs you pick-up while standing next to that sick lady in line, and your life insurance – well, just in case.

All jokes aside, we wish you a happy holiday weekend and season and hope you have all the insurance you need for the moments that you need it the most.

black-friday

 

Gobble, Gobble

be-thankful-rustic-thanksgiving-greeting-card

Here comes Thanksgiving!

In a few days we will all be sitting down with our favorite people (hopefully they rank among our favorites) and eat all the delicious food.  However, there are the dangers of Thanksgiving that one must be aware of (cue ominous music). For example, the classic, “Who poisoned the sweet potatoes and marshmallows?” Or, or… you know, you could accidentally get a turkey leg stuck in your throat and choke. People have been known to display extremely gluttonous behavior on this wonderfully hazardous day!

Or…

A tribe of angry Native Americans could charge into your family gathering, wielding spears packed with the wrath of centuries worth of being misunderstood and segregated, then having a holiday created in their name depicting what really happened as something worth celebrating.

We are just kidding – we hope! We just wanted to give you a laugh and a smile, but also wanted to express the importance of the various types of insurance you need to protect you during the holidays – and on all days!  Happy Thanksgiving everyone!

Renters Insurance Tips – November 2016

[podcast src=”https://html5-player.libsyn.com/embed/episode/id/4803460/height/360/width/450/theme/standard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Do you rent a house or apartment? If you do, chances are the landlord required you to get Renters insurance. Sure, you got some old policy, but do you know what it is you have? Would you purchase it if you weren’t forced to in the first place? This week Karl Susman speaks with Maureen about her “friend” who had a very unfortunate experience that would have been taken care of if she only had Renters insurance.

BEGINNING OF TRANSCRIPT [00:01]

Karl Susman: Hi there. Karl Susman here. Thanks for downloading and listening to this week’s podcast. This week we have our generic per insurance consumer out there, Maureen, on the phone with us. How are you today?

Maureen Durocher: I’m great, feeling super generic. How are you?

Karl Susman: Feeling super generic. Well, then, our goal is to get you as un-generic as possible to educate you in the exciting world of insurance. Now, if we can make insurance exciting, we should be able to do anything. Isn’t that right?

Maureen Durocher: I agree. I agree.

Karl Susman: Okay, great. This week, we are going to talk about tips and information on renters insurance. So, I’ll ask you, I’ll just open it up to begin with. When you hear renters insurance, what’s the first thing that comes to your mind?

Maureen Durocher: To my mind, the first thing is that I have to have it. I currently live in an apartment. And the minute I signed the lease, they’re like, “You have to have it.” And I’m like, “Okay, I have to have it.”

So I think, for me, it was just… Well, actually to be totally honest, when I signed the lease, there was a little sign that sat on the agent’s desk and it said, you know, use those renters insurance. And I did, because it was sitting right there.

Karl Susman: Interesting.

Maureen Durocher: Yeah. So I just signed up with the one that was there and paid the monthly fee. But it was an online experience again that said how much do you think you need covered, and you clicked the box that tells you what you owe, and you pay from there. So that, to this point, had been my renters insurance experience.

Karl Susman: Interesting. So you purchased renters insurance not necessarily because you thought you wanted it, but because when you rented your apartment, they told you had to have it. Is that a fair assessment?

Maureen Durocher: Correct. Yes.

Karl Susman: So let me give you an idea of some of the things that renters insurance covers, because a lot of times, most people are like you. They say, “Well, I’m living in an apartment. I don’t need renters insurance. What do I need insurance for?” Right?

Maureen Durocher: Right.

Karl Susman: But there are a lot of things that renters insurance covers that you probably didn’t realize you wanted to have coverage for.

The first thing is, so you move in to your apartment. And what do you do? You move your stuff in. So, all of your stuff, everything from your computer to your furniture to your pictures – believe it or not, even your pets – everything that’s not in the apartment when you first move in that’s there once you move in is all considered your personal property.

So in the event that there’s a loss… And a loss could be anything from a fire to a pipe breaking in the wall and damaging your stuff. It could even mean someone that breaks in to your car and steals your personal property out of your car. If it’s personal property that normally resides in your apartment, all of these things should be covered under a good renters insurance policy.

So I would guess, you probably have a fair amount of money invested in your stuff. But let’s even just think of some of the more expensive items like your computer or your phone. Or, can I be horribly sexist and say your clothing? Maybe you spend a lot of money on that.

Maureen Durocher: [chuckles]

Karl Susman: And in the event that any of those things are damaged or stolen, you’d basically have to go and pay to repurchase them. A renters insurance policy would actually pay for you to repurchase those things in the event they are damaged or stolen.

Is that something that you are aware of? Or, is that sort of news to you?

Maureen Durocher: I knew that that’s why the policy exists – to pay if something happens to your stuff. But I didn’t… Your clarification of anything that wasn’t done in the apartment prior to you moving in now becomes covered under that, under a good policy. That was your keyword, under a good policy. Because I’m unaware of what’s covered if I only signed up online.

Karl Susman: Right. Well, that’s again, when you sign up online, you’re not really talking to anyone and no one’s taking the time to educate you.

Maureen Durocher: Right.

Karl Susman: So, take advantage of this podcasts and you’ll be able of this stuff.

But, again, renters insurance is, it’s not just a matter of your stuff. We’ll get to it in a second. But you’re right, everything that wasn’t there that becomes there after you move in… That didn’t sound right. But all of your stuff is part of your personal property.

And again, what’s significant is, it’s not just a matter of, “Okay, my stuff’s in my apartment. It’s a high-rise. It’s secure. I’m not worried about people breaking in.” Blah, blah, blah. That might be true.

However, having said that, do you know that the number one claim on renters policies, it’s not for people breaking in and stealing stuff? It’s for damage by water. It’s called non-weather water.

So that could be toilet overflowing maybe in the unit upstairs. It could be a pipe breaking in the wall. Now, all of a sudden, you’ve got three or four inches of water in your apartment. Or, maybe there’s a pipe that breaks and it just sprays all over your furniture.

All of those things will be covered under a renters insurance policy. And one of the reason your landlord of the apartment building is requiring you to have it – only one reason, we’ll get to the other one in a moment – is because they don’t want you going after them if there’s damage to your property because of a loss. They don’t want you to turn around and come to them and say, “Hey the pipe broke. Pay me.”

Maureen Durocher: I see.

Karl Susman: They want to be able to shift that responsibility and say, “Yeah, pipe broke. Yeah, it’s our problem. It’s our building, but this is why we managed to force you into buying renters insurance. Go claim it from the insurance company there and leave us alone.” That’s one of the reasons they want to be sure you have coverage.

Maureen Durocher: Right. Because that’s literally, you know, no keys till you show proof of policy, “Okay, you got it. Here you go. Now, you can move in.”

Karl Susman: Interesting. No keys without policy. I like that.

So that’s one of the main reasons that they’re doing that. Another reason that it’s… Another type of usage case – and I’ve already alluded to it and most people aren’t aware of this – that their personal property is covered when it’s out of the apartment as well. The most common usage for that is when people are on vacation. Or, when they leave something in their vehicle, if it’s stolen from there, then they’re going to have coverage potentially on the renters policy there.

Did you know that your personal property is covered whether it’s on your apartment or in your car, or when you’re on vacation? Or, is that news to you?

Maureen Durocher: That’s absolute news to me. I had no idea.

Karl Susman: Well, hopefully, you were the carrier. If not, we know you will be soon. But hopefully, you were the carrier that offers that coverage.

Maureen Durocher: [Laughter]

Karl Susman: Usually, it’s called personal property away from premises. Usually, it’s a percentage of your personal property. So, for example, if you have $50,000 in total personal property, when you add up your furniture and your clothes and your computers and – wow, I was just going to say stereo but that’s probably dating me – if you add all of that up, then a percentage of that, usually it’s 10% it’s covered away from the premises. So, in that case, you’d have $5,000 in coverage for things that are away from your house or your apartment. So that’s a major coverage factor that you want to have.

Another main part of renters insurance – and this is probably the number one reason that your landlord requires you to have it – is the liability coverage. Were you aware that renters policies come with liability coverage? Or, is that sort of news to you?

Maureen Durocher: That’s news as well. Yes.

Karl Susman: Wow, I’m actually surprised. I thought you’re going to say you were somewhat familiar with liability insurance on a renters policy. But let me tell you what it’s for.

So let’s just say you’re out and about. Maybe you’re going to the airport. I seem to like vacation analogies, I’m not sure why.

Maureen Durocher: [Laughter] Kind of take a trip.

Karl Susman: Yeah, I like that direction. So, let’s say you’re at the airport and you put your suitcase down. You’re walking over to print your boarding pass, and somebody turns around and trips over your suitcase and breaks their arm. Not unreasonable. It doesn’t sound like something that would be impossible to have happened. And they sue you. That’s sadly what happens.

If you have a renters policy that has liability coverage, as long as it’s personal liability and not premises liability… Again, you know, in the big parenthesis. Hopefully, you’ve spoken to your agent or broker about it, so they’re giving you the right thing. Then, your renters insurance liability will cover you for that liability and cover you for that lawsuit that’s coming against you and for the damages and for the injury and the pain and suffering and all the heartache that you’re going to get from this guy that just happen to back up over your suitcase.

Maureen Durocher: Seriously, that’s news to me. I mean, I’ve seen silly things like that happened. It’s not silly when someone gets hurt, but things like that happen in grocery stores, the airports, and whatever the case may be, and it never occurred to me that that can be something from your renter policy.

Karl Susman: Yeah. Liability coverage is a big one. Now, let’s say you’re in your apartment and you’re having a party – you would never do such a thing – but let’s just say that you’re in your apartment and you’re having a wild party, and somebody gets hurt. It could happen.

Maureen Durocher: Right.

Karl Susman: Maybe they’re wrestling and they’re just getting a little rowdy. Maybe somebody trips or slams their thumb in the door, whatever it might be. And, again, the renters insurance policy is going to give you coverage for people that are injured in your premises as well.

Again, you never think about it until it happens. But because you are renting, and so nobody thinks that they have any exposure but they still have that liability exposure even if they have people that are friends.

I’ll give you an example. I had my niece, actually, many years ago was at our house. And she was just running, tripped and fell. And she chipped a tooth. Of course, she doesn’t want to sue me. It’s my sister’s daughter. Nothing like that. But she had to get… Fortunately it was baby tooth, so that was okay. They capped it till it fell off. But my homeowners insurance liability which is no different than the renters liability picked up, and took care of the dentist, took care of the cap, took care of all of that stuff.

Again, it’s not necessarily that you’re doing anything wrong or you’re not a careful person. You have exposure and liability that comes with the renters policy or the example I just gave. A homeowners policy is there to protect you. And it’s super inexpensive.

Let me actually…

Maureen Durocher: I…

Karl Susman: Yeah, go ahead.

Maureen Durocher: I was going to say the story that you’re telling, that’s not far off from something that I experienced as well. I’m talking about the liability of what happens inside your apartment or the place you’re renting. That part makes sense to me than knowing what happens outside of it. That’s definitely news to me.

But inside, I didn’t realize it would cover that much. Because we always think, “Oh, if someone gets hurt in my place,” you’re not worried that others going to sue you without thinking about there’s another option and make sure their expenses are covered.

Karl Susman: Right. Lastly, what I wanted to point out about renters insurance is that the cost factor is negligible.

So, I’ll give you an example, depending on what type of a building – or don’t forget, you might not be an apartment renter, you might be renting a house, it just depends – but, generically speaking, a renters insurance policy that’s going to give you personal property coverage like we’ve talked about, liability coverage like we’ve talked about and a bunch of other things that we haven’t talked about, you could be looking at a premium of $400 a year. That’s it. Not a lot of money at all.

Maureen Durocher: No. Yeah.

Karl Susman: And the number one reason that people don’t have it like we talked about initially is because they don’t think they need it. They don’t think they have to have it. They don’t think that it’s necessary. And at that type of a cost, why in the world would you go without it? Truly.

Maureen Durocher: Right, absolutely. And deferment doesn’t make sense for sure.

Karl Susman: No, it doesn’t. Not for that cost. Plus, like we talked about since… In a previous podcast, we talked about auto insurance and saving tips on your auto insurance premium. You know that sometimes depending on the cost of your auto insurance, since you’re able to get a discount on your renters and your auto insurance together, sometimes the cost of the renters insurance can even be offset completely by the discount you’re getting on your auto insurance.

I’ve seen that happen almost completely, where it was a very expensive auto insurance policy. There was a person with some driving history. We call them – what’s the word, I just forgot it now – unlucky drivers. We don’t call them bad drivers. We don’t call them bad drivers.

Maureen Durocher: [Laughter] I hope not.

Karl Susman: It was either unlucky or unfortunate, or whatever it might be. So, the auto insurance premium was relatively high. And we added a renters insurance policy for her. And that cost was almost entirely absorbed just because of the amount of money she was saving on her auto insurance policy, by bundling them together.

Maureen Durocher: Wow.

Karl Susman: So in her case, she darn near got coverage for free for renting just by adding the two policies together.

But we’ll talk about bundling policies together in another podcast later on. Now, at least, you can have an idea that not only is renters insurance inexpensive, but it covers an awful lot of things for that amount of premium for sure. And if you’re a renter…

Maureen Durocher: Yeah, so many things.

Karl Susman: Yeah, you don’t have to be a homeowner to have coverage for your stuff and to have liability protection as well.

So what’s your takeaway from today?

Maureen Durocher: That it’s not one of those, “Okay, you just have to have it so you can move in.” It’s something that you need but you also should want to have it. That’s definitely the takeaway.

Karl Susman: Sure. It’s funny because now you understand why the landlord is mandating you to have it and somehow you feel like when you’re forced to do something, it’s never to your benefit. But, in this particular case, it’s to their benefit but it’s also very much to your benefit.

Maureen Durocher: Yes, absolutely.

Karl Susman: So, okay, that’s going to do our show today on renters insurance. And again, I thank everyone for listening. Feel free to subscribe to the podcast if you haven’t already and we will speak again next week.

Maureen Durocher: Sounds good. Thank you.

[END 14:02]

So Little Time

Wake. Workout. Eat. Shower. Coffee. Makeup. Hair. Coffee. Clothes. Drive. Coffee. Work, Work, Work, Work. Eat. Work, Work, Work, Work. Drive. Eat. Makeup. Hair. Clothes. Drive. Socialize. Eat. Drive. Sleep. REPEAT.  (sometimes I forget about the whole eating and sleeping thing)

That is just a ‘normal’ day. That doesn’t include my to-do list.

Life is full of schedules, activities, appointments, routines – and then some.  If you are like me, then you know that slowing down is not an option.  I am working hard to build a career for myself and attempt to have something that resembles a social and love life.  I don’t have time to stop and a read bunch of paperwork or add additional appointments to my schedule.  I don’ want to be bogged down with information that is overly technical and that doesn’t give me exactly what I need in a few short bullet points or paragraphs.  When I need to get something done, I want to do it in the most effective and efficient manner possible.  Time is the most precious commodity.  MY most precious commodity.  I don’t want it wasted.

When it comes to purchasing an insurance policy, I need to know that whether it is for auto, home, earthquake insurance, flood insurance, jewelry, renters, condo, house, life, or health insurance the entire process with be efficient, knowledgeable, and straight to the point.  With our business, online, over the phone, or in person – purchasing the insurance YOU need insurance has never been easier.  There are numerous methods to find quotes and purchase inventory – online, over the phone, thru an app, and even in person (GASP!). With so many options, there really isn’t a time excuse.  You can choose what will best fit in to your schedule. I mean, I can choose what will best fit in to my schedule.

I know the importance of having the proper insurance coverage, which means I also know I need to make the time to get it!

I am busy.  You are busy.  Let Susman Insurance Agency do the work for you, so you can use your time for that crazy-busy schedule.

Nobody Has Time For That!
Nobody Has Time For That!

Electronics breakage insurance

[podcast src=”https://html5-player.libsyn.com/embed/episode/id/4803439/height/360/width/450/theme/standard/autonext/no/thumbnail/yes/autoplay/no/preload/no/no_addthis/no/direction/forward/” height=”360″ width=”450″]Chances are if you’re listening to this show, and thank you by the way, you’re listening on a computer or a mobile phone. The begging question is do you have insurance to cover your mobile phone or computer in the event you drop it, or somebody walks off, or runs off with it? Coverage is available and cheaper than you think! Join Karl Susman this week as he explains a little known type of insurance coverage to cover all of your electronics.

BEGINNING OF TRANSCRIPT [00:00]
Karl: This is Karl Susman. This week on the Susman Agency Podcast we’re going to talk about insurance coverage for your electronic gadgets. Today we also have exciting and soon to be not-so-generic guest Maureen on the phone with us. How are you Maureen?
Maureen: [Laughing] I’m doing great. How are you?
Karl: We’re just still generic at some point you’re going to be so well-educated you will not be able to consider generic anymore, so.
Maureen: I know, still generic, eventually, I think you gonna hit mediocre, so I’m almost there. Still generic, and then hit mediocre, and then educated.
Karl: We’ll get there, there you go. Well, this week, what I wanted to chat briefly about was insurance coverage for all of our electronic gadgets and gizmos. I actually hate the expression gadgets and gizmos. I know why we use it but we’re talking about insurance for things like our phones, our computers, and our tablets, things like that. So as I usually do, I’ll start of by asking you, do you have or you aware that there’s a way to get coverage for your electronic items specifically.
Maureen: I don’t have it for the items specifically. When I had a cellphone, I added extra insurance coverage [unintelligible 01:31 – 01:31] with the plan and you could, you know, twist it up a little bit. And then I don’t have any other specific insurance. When I buy a computer, I have a desktop, a laptop, a tablet that I take with me, like I definitely have [unintelligible 01:43 – 01:43] gadgets [unintelligible 01:46 – 01:46]
Karl: Right.
Maureen: And besides, getting extended warranty which I knew it was the same thing, I don’t have specific coverage.
Karl: Let me talk about a little bit about what the coverage is. Maybe it’s fair to start of by talking about the type of coverage that comes with most property policies. Property policies meaning renters, condominium, home owners, things like that. And you’re going to get as you eluded to you’re going to get some coverage on those policies for your electronic items. However, you’re going the, for the same amount the, the same types of paroles that you normally have and I give you example. On a home owners policy you have coverage for fire, right?
Maureen: Right.
Karl: You have coverage, so if you have galaxy note 7 maybe that will make sense for you but for forgetting that, in the event of a lost to your phone, what do you think is more likely to happen for to burn up or for to be broken?
Maureen: Broken for sure.
Karl: Probably broken. Right. Well breakage, breakage is not a standard coverage on your home owners or your renter or your condo owners policy. So just because you prefer to have coverage for your phone if it breaks, that doesn’t all of a sudden create that coverage under your home owners policy. So breakage just a number one cause or number one or number two cause of lost on for your gadgets and things in only going to be covered the same types of losses that the policy covers everything else for. So in the event of your phone being broken, you’re not going to have coverage for that under your home owners or your landlord or condos or renters policy. So what do we do? You can get an insurance policy that specifically will cover things like breakage for your personal electronic devices. It’s not expensive. It will cover usually for what’s called all parole coverage. So they’ll say “ok, we’re going to cover your device for everything that happens to it unless we exclude it”. And then they’ll exclude things like intentional damage, things like that. You can’t get coverage if just decide to be deliberately abusive to your device, things like that. And what happens with this type of coverage is you can get a policy for what is called state of denouncing you’ll go and say “alright, I’ve got a phone and my phone cost me 500 bucks. In the event that I damaged the phone or I lose it,” loss is another one. People lose things. They lose their phones a lot. And loss again is not a covered parole under a home owners or renter or condominium owners policy. It be nice but it just doesn’t exist. Theft is covered but not loss. Now it’s one of those you know, great areas people can sometimes get quite frustrated and I totally get it because [unintelligible 04:31 – 04:31] gone obviously somebody took it. Yeah that’s true. But again, this is why you wanna have an agent or broker helping represents you. You wanna be sure that you file the claim properly and you would say that something is stolen if stolen and lost if it’s lost. With this specific electronic policies, electronic protection policies, then you would have coverage whether if it’s lost or stolen or damaged. It’s basically the most broad form of coverage that you will get to protect your electronic devices. And again, I recommend people to look at this policies when they have a laptop, when they have an expensive phone, if they have a tablet, some of the tablets now are super expensive. There are 12 inches super shiny and they can cost [unintelligible 05:19 – 05:19] over thousand dollars sometimes and they break, let’s face it. When you walk around with the 12-inch piece of glass and you’re tapping on it all the time. Chances are you can possibly have it damaged or someone can steal it when you have to put it down when you’re running out to get a cup of coffee. So –
Maureen: Great.
Karl: Electronic breakage coverage great for all of your smaller, portable electronic items that you take around with you. Having said that, do you have any types of expensive electronics that you have just at home?
Maureen: Oh yeah.
Karl: Like what?
Maureen: [unintelligible 05:53 – 05:57] that is way more expensive than my desktop and my laptop. My tablet is definitely the price is [unintelligible 06:05 – 06:05]
Karl: A lot of times, you know, you’ll have, you used to be that you’re most expensive computer was the one at home and now it’s sort of turn around where you might keep it at home. But it’s not necessarily the most expensive item because it’s the portable stuff that’s really more expensive [unintelligible 06:24 – 06:24] And just because something stays at home or goes out with the electronic breakage type of policies, then they’ll typically cover you whether the damage occurs at home or away from home. So again, it’s a very, very broad form of cover that you can get to protect your electronics and again, it’s not covered with the same type of provisions on home owners or renter or condominium owners policy. So if you’re looking to get coverage for this things, you definitely makes a lot of sense to do that. Plus, if you have a claim as I’m sure people are aware, if you file a claim on your property insurance policy, your home owners policy, renter or condo, then you actually have a record. Sounds terrible, but it’s true. You have a claim that you file that it’s there. When you file a claim on one of this separate policies, it’s separate from your property insurance and therefore, you don’t have that claim history that’s following you. It kind of reminds me of when you go, when you rent a car and they try to sell you their own car, the insurance [unintelligible 07:22 – 07:22] and they say “oh, well if you buy our insurance then we don’t report it to your insurance company and it won’t affect your blah, blah, blah”. What they neglect to tell you is they might not report it in to the insurance company where in the event you have an accident, they have to report it to the BNV and the BNV is going to tell the insurance company, so you’re really not [unintelligible 07:39 – 07:39] you’re not really getting out of anything by doing that other than you might be saving your insurance company money from having to pay the client. But they’re still gonna turn around and rate you as you have an accident because guess what, you have. But [unintelligible 07:53 – 07:53] we’ll talk about that in different show [unintelligible 07:55 – 07:55]
Maureen: [unintelligible 07:55 – 07:57]
Karl: Yeah definitely something we’ll talk about on different show. That’s really all I have about electronic breakage insurance. It’s something very inexpensive to get. For example, you know, 500-dollar policy on my phone my [unintelligible 08:09 – 08:09] you know. 80-90 dollars a year and you know, not expensive, and typically companies will give you a lower rate the more years you keep it. So if you have a policy and you just keep renewing it and they’ll actually give you a slightly lower rate year after years as long as you’re not having claims. So I’m an advocate. I think with all the expense stuff out there, it makes sense to toss a couple of bucks at one of these policies to know that in the event they break or you lose them or they’re stolen, that you get them back. What about you?
Maureen: I am an advocate now for sure.
Karl: Yeah.
Maureen: I mean [unintelligible 08:44 – 08:44] salon giving a pedicure [unintelligible 08:48 – 08:50] definitely [unintelligible 08:52 – 08:55] massaging the table really hard and I watched the other person [unintelligible 08:59 – 09:00]
Karl: Right
Maureen: [unintelligible 09:01 – 09:04]
Karl: That’s bad.
Maureen: And that instant, will that fall under the breakage and coverage of –
Karl: Absolutely.
Maureen: Is it? [Laughing]
Karl: Absolutely, they will absolutely, whoever this mysterious friend of yours is that had that horrible thing happen, they will definitely have coverage under one of these policies for that.
Maureen: Too bad she didn’t have that [unintelligible 09:23 – 09:23] when that happened
Karl: Too bad she didn’t know about that. You see every time, everyone at this show that you helped and call and we talked about, not only do you end up costing yourself because you have to buy more insurance, but you end up kicking yourself for not having it before.
Maureen: Oh men. Can I, you know I, too bad she didn’t know or that I was not more educated as well so I could tell her.
Karl: That’s right.
Maureen: That you know it will make her less generic as well.
Karl: Well, you should definitely tell this mysterious friend that she should subscribe to the podcast and pay attention because we trying to make insurance as interesting as possible and as entertaining as possible. But at the same time we wanna be sure that you’re picking up some valuable information along the way.
Maureen: Yeah, absolutely, very valuable.
Karl: Well I thank you all for listening again today and we will chit-chat again next week. And if you have any question, feel free to reach out to us. You can reach us at the office, 310-820-5200, or of course online at susmaninsurance.com. Thanks again for joining us Maureen.
Maureen: Excellent. Thank you.
END [10:36]

Protecting What’s Valuable

When you look down, so you see a beautiful, sparkling diamond on your finger? Perhaps there is an amazing piece of jewelry hanging around your neck? Maye you have heirloom earring that always catch everyone’s attention? How about one-of-a kind fur coat, silver serving utensils, or unique patterned china?

Maybe your most prized possessions differ from that list, but regardless of what they are, they need to be insured. I am sure you would be devastated to lose any of those items, but knowing you have at least some protection will provide you with HUGE piece of mind.

Don’t just consider getting valuable items insurance – actually get it!

Okay – you might be thinking to yourself that you already have homeowner’s insurance and/or renters insurance. That is great and you should have those policies, but often times even those policies have limits on coverage – especially if there is theft.  A major dispute can erupt between you and the insurance company if your home gets damaged and the property inside, including the valuables, aren’t properly documented and inventoried.  While you can’t replace one-of-a-kind items, there is still opportunity for you to receive some sort of financial payout for the valuables lost.

This type of insurance offers additional protection for your most valuable possessions – diamond rings, fin art, collections, and more. The coverage provides the protection you need if there is loss through theft, accident or natural disaster. There is usually some type of coverage for such items offered for personal property under the typical homeowner’s policy.  However, that inclusion to the basic policy may not cover some types of loss that may be important to you. Most homeowner’s policies set dollar limits on the amount of protection offered.  It is optional to you to get add-on coverage to the homeowners and expanded protection for special property.

You can get Floater Insurance – A type of insurance that covers property that is easily movable and provides additional coverage over what normal insurance policies do not. This can cover anything from jewelry to expensive equipment.  You can also look at getting Blanket Insurance which is a single policy on an insured property that covers more than one type of property at the same location, the same kind of property at more than one location, or two or more kinds or property at two or more locations.

If you still feel like your valuable items aren’t protected enough, then you need to seriously speak to your insurance agent (SUSMAN!) about getting a specific policy for those items.

Protect Your Valuables
Protect Your Valuables

How to save money on car insurance

Every day we are bombarded with advertisements telling us how to save money on car insurance. There is a good way to save money and a bad way. The good way does just that – save you money without taking away valuable coverage that you need. The bad way is, well, not listening to this show and learning how to do it right! This week, Karl Susman and guest Maureen discuss cost savings tips for auto insurance policies.

BEGINNING OF TRANSCRIPT

Karl: This is Karl Susman. Today we are going to be discussing tips and tricks for saving money on your current insurance. And today we have long-time friend and client Maureen on the line. How are you today?
Maureen: I’m good. I’m great Karl. How are you?
Karl: Excellent, excellent. Thanks for taking the time this morning on to be with us. I, it’s funny to say that you are going to be our generic consumer for the call today. So does it feel to be the generic person?
Maureen: I don’t know that. I’ve never been called generic in my life. But I’ll take it [unintelligible 00:54 – 00:55]
Karl: Generic, you’ll have to be, you’re going to be the common person today. What can I tell you –
Maureen: Got it, got it.
Karl: We’ll jump right in and we’re going to talk about today is ways to save money on car insurance which is pre near and dear to many people’s hearts, I think.
The first tip I want to give is to tell people that they need to shop around for auto insurance which seems obvious but it’s not necessarily the easiest or the, there are different ways to do it correctly. How do you, let’s just say if I told you shop around for your car insurance, what does that mean to you?
Maureen: Well, looking at [unintelligible 01:27 – 01:27] places that I have to tell you, shop around to me I [unintelligible 01:31 – 01:31] hopping online, selling out an information [unintelligible 01:36 – 01:37] and then literally just choosing like that’s the cheapest one so, let me take that one instead of looking a little bit more deeper into it more than just prices
Karl: Well you were the, you were the perfect generic person today because that is the, that is what majority people do. They just jump online, whatever looks to me the least expensive, they just grab it. And the truth of the manner is auto insurance is much as its people like to say it. It is not a commodity. It’s not one size fits all. It’s not an appliance that you buy in a whether you get the TV at Costco or you get the TV at Walmart or you order it online then you’re going to get the exact same model make in branded product. Auto insurance is a lot more complicated than that and unfortunately, a lot of people are sort of falling into that trap in assuming it’s all the same.
Let me give you the right and the correct answer to [unintelligible 02:25 – 02:25] car insurance, it’s not just you go online, randomly pick the least expensive number. What you wanna do is you wanna work with an independent agent or broker. And the reason for that is independent agents or brokers have the ability to actually shop around for you. So they’ll actually go to the open market and they’ll check with all the top insurance companies and then they’ll come back and they’ll say “ok this company will give us this coverage, and this price. This company will give us this coverage and that price”. And then another show will talk about different coverages and why it actually makes a difference that we’re just talking about saving money in this particular case, the agent will be able come to you and say “this is the best price that we’re able to find for you with the coverages that you need.” And it’s almost always going to be the, the best options for you versus randomly going online and just picking number out of hand.
Maureen: Alright, I can tell you that I, being the generic person that I am and having pick a random number [unintelligible 03:20 – 03:20] internet that I haven’t even spoken with an insurance agent except for the one time I had a call because I forgot my lock and password. So –
Karl: Shame on you.
Maureen: I don’t know all the details, any of the information, what’s covered, what’s not so there is definitely [unintelligible 03:27 – 03:27] it’s not the only [unintelligible 03:39 – 03:39] using an insurance agent.
Karl: Right. For sure. You know the thing is that I have to just correct you because it’s like, it hurts my brain. We pronounce it insurance not insurance. I don’t know why it was just one of my [unintelligible 03:50 – 03:50] So I have to get that correct from you or it’s gonna drive me crazy.
Maureen: In – one more time.
Karl: Insurance. There’s no –
Maureen: Insurance.
Karl: There’s no emphasis on Insurance.
Maureen: [Laughing]
Karl: What can I tell you? Let that be my [unintelligible 04:05 – 04:05] right. Alright.
Maureen: Got it.
Karl: So the first thing is when you’re looking to save money on car insurance, go to independent agent or broker, have them do the shopping for you because you’re getting the added bonus of a person, you’re going to get a better rate, and most importantly you’re going to know what you have and what you’re going to have and advocate for your going forward. So that’s the first thing.
The second thing is, a lot of times people are carrying a deductible on their vehicles, deductibles for the physical damage for their vehicles. You sometimes prefer to [unintelligible 04:33 – 04:33] or collision other than collision. And that’s basically the amount of money you’re going to pay to fix your car in the event of the accident. You’ve heard of that with that sort of terminology you’re used to hearing?
Maureen: Yes [unintelligible 04:47 – 04:47] collision as what I used to hearing.
Karl: So, normally there is a deductible. People will carry a deductible from $250 to $500 sometimes. And here’s a little secret for you, well, let me give you the obvious first. You assume that the higher the deductible, the lower the premium, and the lower the deductible, the higher the premium, right? Which makes sense if you’re going to be out of pocketing more in the event of an accident, then the premium you’re paying all along will be less and vice-versa. That makes sense, right?
Maureen: Right.
Karl: Okay. So everyone said well I want a large deductible. But I don’t necessarily want to have be out of pocketing that much money in the event of an accident. So here comes the magic. Did you know, did you know, I have wish i have sound effects, maybe I can get some of my sound effects, drum roll. But did you know that the only time that you would be responsible for the deductible on your vehicle would be in the event you have an accident that was your fault?
Maureen: No, I did not know that. I thought that your deductible is your deductible, is your fault or somebody else’s, you still have to pay all of that out before you get the initial amount.
Karl: That’s what everybody thinks but let me explain it to you.
Maureen: Yeah.
Karl: So, let’s say you have an accident with somebody and let’s assume again that’s not your fault. So what’s going to happen is the damage to your vehicle is your vehicle is going to get fixed and the other insurance company insuring the person you have an accident with is going to have to pay for. Make sense, right?
Maureen: Right.
Karl: Now let’s also, let’s assume that you have an accident and the other car doesn’t have insurance. Then there’s a specific coverage that we can add on to your auto insurance it’s called waiver of collision which basically says in the event you have an accident and the other person does not have an insurance, they will wave your deductibles. So you don’t pay and being out of pocket. Your insurance company simply fixes the car. So whether the other car you have an accident with has insurance or not, you’re not paying for the deductible for your car. The only time you would be responsible for that would be in the event you have an accident and the accident is your fault, then you will be responsible for that deductible. So knowing that, if you think you’re a good driver, right?
Maureen: Right.
Karl: You more likely will be able to go with a higher deductible now because you figure well. If it’s my fault, ok I’ll have to stand that money for the deductible. But if it’s not my fault, it doesn’t matter what my deductible is.
Maureen: Absolutely with a higher deductible knowing all of that, yeah.
Karl: And it makes sense. A lot of people don’t realize that and they think that, like you said that all deductibles are deductibles and I have to pay it [unintelligible 07:19 – 07:19] Incidentally knows good insurance company is if the accident is not your fault, not only will they repair your car and wave your deductible, but they’ll turn around and go back to the other insurance company for the person driving the other car and then they’ll subrogate, meaning they’re going to collect the money they pay to fix your car to reimburse themselves in. And once they have done that then they won’t even have to charge you to a higher premium for having been involve in an accident.
Maureen: Wow.
Karl: That’s another important thing to be aware of the all insurance company is not created equal. Some of them will say “it’s not just our process or we don’t go, or we don’t spend the time and the money to [unintelligible 07:57 – 07:57] or money, we’ll just trace the premium that you’re paying instead.” But the better companies, they wanna be able to maintain a better rate for you so the way they do that is by subrogating and going to the other insurance company for the other driver and collecting the money back.
Maureen: That’s awesome.
Karl: That’s the way –
Maureen: [unintelligible 08:16 – 08:17] information, I had no idea. It’s awesome.
Karl: You see, miss generic person, now you know, you’ve learned something else. Another thing –
Maureen: I’m becoming less and less generic as we go on.
Karl: That’s right. Now you’re going to become the insurance guru. Another tip that I can give is a lot, is people need to fondle together their auto insurance with their property insurance. Now I say property insurance because a lot of people think that it’s just home and auto, home and auto, that’s what they have trained to hear from all of the messages. Bundle your home and auto together and save money. Well it’s not just home owners insurance. You can usually get a discount on your auto insurance by bundling together your home insurance, if you own a condominium your condominium insurance. Even if you’re a renter, and you’re renting an apartment, you can bundle your renter’s insurance along with your auto insurance, and you can save money on both of those policies as well.
Maureen: That’s something else I definitely didn’t know either of each. Right now I have my car covered to one organization or one company [unintelligible 09:16 – 09:16] insurance completely somewhere else. I thought you have to own your home or you own your property that it could be rental combined as well.
Karl: Alright, that’s what most people think. They think the only discount is available of your home owner but it’s not. You can be a condominium owner, you can be a tenant and an apartment building. And if you bundle that together, you’re going to have the benefit of a discount there. And again, some of the better companies they won’t just give you a discount on your auto insurance, they’ll give you a discount on the auto insurance and on the property insurance, whether be a home owner or a condo or renter’s policies. So you’re really be able to double the discount on both ends.
Maureen: [unintelligible 09:50 – 09:50] discount.
Karl: Tada! That’s right. Everybody –
Maureen: Yeah.
Karl: Everybody loves to save money and if you’re looking –
Maureen: Absolutely.
Karl: If there’s a way to do it, we’ll find it. The last little tip I want to give you today is since we’re talking about discounts is to let you know that you can find discounts for your car insurance that you probably didn’t know existed. There is no standardized formula or name for different auto insurance discounts. You hear good driver, excellent driver, prefer driver, extreme driver, those are all discounts, but they’re just marketing names that different insurance companies that come out with for that with the exception in California [unintelligible 10:27 – 10:28] good driver doesn’t have definitions based on California proposition 103 many years ago. But having said that, you can get discounts for everything. From being a college graduate to being with a certain profession, to being a member to a credit union. You can even get a discount with certain carriers that I know of if you’re a member of a college alumni association. There’s even a company that I know that would give you a discount in the event that you’re a civil servant, meaning if you work for government agencies, they’ll only give you a discount if you have a family member that works for a government agencies.
Maureen: Wow.
Karl: So there are –
Maureen: I –
Karl: Go ahead.
Maureen: The discount that you’re naming nobody has ever named those stuffs to me before. It’s all we hear in the driver, great driver, maybe [unintelligible 11:19 – 11:19] but never the discounts that you’re listing right now.
Karl: Yeah, good driver discounts and good student discount that’s another issues. Well if you’re a full-time college student there’s discounts out there if you’re a 3.0-grader discount student, there’s a discount for that 3.5. I mean, again, there’s no standardization for it. Whatever one particular insurance company says is going to be a discount, they can offer that and they do. This is another reason why it’s important to go to an independent agent or broker because once you’ve give them your personal information, they can say “ah, you’re this, you’re this, you’re this, I know a company that would give you discounts for that”. And they can turn around to get your rate that’s probably better than you were finding just go online by yourself and [unintelligible 11:59 – 11:59] around. So –
Maureen: That’s definitely nobody online just gonna ask that kind of personal information when it’s just computerized. Well, another benefit of speaking to a human being.
Karl: There you go, I agree, I agree. Well listen, those are the tips for today that I wanted to go over for saving money on car insurance. If you have other questions or you wanted to talk about anything more specific about discounts or maybe you would talk about some companies and what their discounts are, we can do that in another show.
Maureen: Excellent.
Karl: But if you have any questions in general about the discounts that I’ve talked about, or do you have any other questions in general about discounts for car insurance?
Maureen: We know it. My only question will be [unintelligible 12:36 – 12:37] and finding me for more discounts?
Karl: There you go. And you can think [unintelligible 12:41 – 12:41] to say that. So perfect, right?
Maureen: [Laughing]
Karl: We will definitely do that for you, we’ll definitely do that for you. Well again, thank you everyone, thank you everyone for listening and thanks for subscribing to our podcast –
Maureen: Yeah, thank you.
Karl: And we will walk with you, we’ll talk next week.
Maureen: Sounds great.
Karl: Thanks.
END [13:13]
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