My daughter recently got her Learner’s Permit. She may now legally drive if she has a licensed driver over the age of 25 years old. This event got me to thinking about when I was just about her age. Back then, getting a driver’s license was a rite of passage, and every young person could hardly wait to get out on the road! Whenever my parents needed some milk picked up at the supermarket, I was their guy! As I got older, I learned about things like car payments and insurance. When I first started paying for it myself, the most important thing was to get it as cheap as possible! Unimportant little things like coverage were not for me! Just get that price down! As a result of these skewed priorities, my initial insurance policy was at the State minimum. Uninsured Motorist? Nope. That costs extra. Gotta keep that price down! When I got a newer vehicle, I had to learn about full coverage. I learned about this thing called a “deductible,” and that created a whole new level of consideration. What if I were in an accident? I didn’t have $1000 laying around, so I decided that I would keep my liability limits low, and decrease my deductible to $250. I might be able to scrounge up $250 if I were in an accident, or if my car were stolen. Fast forward a few years, and I am now a married man with a mortgage. While price was still an important factor, coverage moved WAY up on my list of priorities. When I first got into the insurance business, I came to realize that State minimum for a homeowner was a really bad idea. If I were in a very serious accident, I could very easily find my home ownership in jeopardy. I started to make some changes to my policy based on my newfound knowledge about how insurance works. I also increased that $250 deductible to $1000. I saved more on increasing the deductible that increasing my liability cost me. I had finally graduated from “high school insurance.” A few years later, I caught up with a friend I knew in high school. He heard that I was in the insurance business and wanted me to take a look at his program. Like me, he was now married with a child and one on the way. He actually had TWO homes: the one he was living in, and the one he used to live in, but kept as an income property. I was very happy to see that he had done very well for himself. I asked him to send me over his insurance declaration pages and I would see what I could do for him. I was quite shocked to find out that my friend still had State minimum for his liability coverage with $250 deductibles. While his home insurance program was okay, he was grossly underinsured with his auto coverage. When we spoke next, I asked him when he had last reviewed his auto coverage. He told me that he had never really reviewed his coverage since he had bought his first vehicle in high school. He had just replaced his vehicles with his insurance agent and kept the same coverage every time he swapped vehicles. He figured that since everything had been going okay, there was no real reason to change. My friend and I had a great conversation about graduating from high school! He had quite a bit of equity in his income property, and he had quite a bit saved up in his retirement program. He was astounded that his current insurance agent had never suggested that he increase his auto liability coverage (as was I!). We immediately increased his liability limits as well as his deductibles. He ended up with a vastly superior program, and he also bought some life insurance for himself and his wife.
The moral of this story is that it is very easy to just kind of let things go if there is never any reason to consider changing your policy. My friend had a clear record and had only had a minor accident. While he got off lucky, many other people find themselves in a bad situation because they never moved on from “high school insurance.” If you think you are still stuck in high school, it’s time to graduate! Give my office a call and we’ll make sure you get your diploma! You may reach me at (661) 946-4224, or you can shoot me an email at dave@thedaveowens.com. I or my licensed staff will be happy to go over your program and give you a graduate degree in insurance!
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AuthorDave Owens, Owner/Agent. I have proudly served in the Insurance Industry for over 20 years. Archives
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