In this recent case study- our clients are a middle-aged married couple (with kids) a good credit score, homeowners, and owns two vehicles. They made a claim in 2016 but no payment was ever made. They also had a recent water loss (the most common type of loss) that resulted in over $9,000 in damages in 2017.
We started by increasing their limits to protect against a catastrophic loss. The current policy shows 50/100 limits. At TWG, we never quote a policy for less than 100/300 if they are homeowners. One of the great financial benefits of homeownership is equity. Low limits do not absolve the injuries caused or liability if at fault for a loss. Homes are often the first asset lawyers look at when trying to recover for their clients.
When it came to Uninsured motorist coverage- we do not write policies that insure other people for more than we insure our clients. (To read more about Uninsured motorist). This allows us to ensure that our insureds have coverage for themselves should another party not have the coverage to help them after a loss.
The previous rental car coverage at 30/900 was simply not enough. When I was an adjuster ten years ago, $30/day left many clients with out of pocket costs after coverage. While often not a deal-breaker, in our experience after clients pay their deductible, they do not expect to be nickeled and dimed by low limits with a rental car. Further, to increase the coverage 30/900 to 40/1500 is often only a few dollars a month. Most people purchase larger vehicles, SUV’s or minivans because of the utility when it comes to kids! This is where we find value through context.
When it comes to Glass coverage- the Mercury policy will charge $1000 to have the glass replaced. With other carriers like Safeco, this deductible is waived, and Travelers will replace the glass for only $50. When it comes to insurance, we want policies to say yes, when a client asks for help.
For the Homeowners policy, we saw a varying opinion on the rebuild cost of the home between Allstate and Travelers. While having high limits does not necessarily mean that will be the claim settlement will be higher, it can often mean that the agency overestimated the rebuild cost of the home, leading to a high premium. After quoting this home with four other carriers, along with years of building homes as a claims adjuster, I felt confident that the 2000 sqft home did not cost 300,000+ to rebuild.
Liability was set only at $100,000. With many carriers, the pricing increase over $100,000 is often pennies. No, seriously, pennies. We write standard $300,000. We have yet to lose the trust of our clients over a few cents.
Medical Payments pay for injuries sustained while on the property but do not restrict those injuries based on liability. Accidents happen, and this coverage allows our clients to make sure their guests are taken care of.
The Allstate policy deductibles are very high in this case. The underwriting standards for the mono line (when clients choose to only have one line of coverage with a company, normally because the other lines are too expensive) require the Allstate Agent to have VERY high deductibles in this case. The average wind/hail loss on this kind of home is roughly $10,000. In this case, should a named storm damage the home, the homeowner is left paying the loss up to $15,998 before they get the benefit of their homeowners policy. This is unacceptable at TWG. Even if the policy premium reduction was significant (which it often is not), we warn insureds against this risky behavior as the average client does not have $15,998 dollars just laying around. The premium decrease would have to be more than $1000/year cheaper, and it would take 14 years to break even should they have a loss.
All clients with TWG have $5000 in the water back up. Standard, no quote goes out without this coverage. Water back up is a common loss that is often excluded when agents focus on price. I cannot count how many times I have walked into client’s home as an adjuster with no intention of making the payment but using that time to get proof for the denial should it go to court. Please note that $5000 in the water back up will only likely cover the removal of sewer water, but we feel some coverage by default is better than no coverage. Many of our clients may elect for more coverage depending on their risk tolerance. As much as we love insurance- not everyone wants to be insured against every little occurrence at the cost of price. Remember- Losses are rare, premiums are monthly.
Building code- All homes over 15 years old should have building code coverage. In the most recent years, California has seen an increase in news coverage regarding their drought and forest fires. As the reports suggest, many homes did not accompany building code coverage. The average denial for building code increase is costing 10-25% of the value of the home. Leaving homeowners with 400,000 home with $100,000 2nd mortgage if they qualify. While we may not be able to cover all of those expenses, having some coverage will make a massive difference for our clients should they ever have to make a claim.
After all, this discussion on increasing coverage Travelers felt they could offer this client more coverage at a lower premium.
We focus on building a profile that meets the client’s needs for this exact reason. Finding the right carrier who thinks our clients are rock stars. That is how we save the client’s money. Not by chopping up coverage and leaving clients with denial letters at their time of need.
Here is a prime example of why we build our own profiles and avoid comparing “apples to apples”. After we decided to partner with Travelers, this client admitted to never even meeting or speaking with his current agent and was no explainable reason for their prior coverages.
If you have recently received a bill from your insurance company, felt you are paying too much, or do not know what you are paying for, give us a shout at 678-921-3601 for a free insurance profile. Even if we cannot help you, we will give that profile, free of charge. We want everyone to be properly insured, even if it not through us!