As part of our series on “what if,” today I will be discussing “What to do if your house is on fire.” I know some wiseacres are immediately going to say, “Um, Dave, shouldn’t we call 9-1-1?” I would say that you wiseacres are totally correct! The first phone call that you should make if your house is on fire is indeed 9-1-1! Believe it or not, people have had their house on fire, and the first call they made was to their insurance agent! While I certainly appreciate their faith in our ability, putting out real fires is NOT a skill of an insurance agent! Call 9-1-1 (preferably from a cell phone OUTSIDE of your home) and let the professionals deal with it. Saving life is the first priority, saving property is second. After you’ve called 9-1-1, and everybody is safe and accounted for, THEN call your insurance agent. There are several things that we can get started right away. If your house is unlivable, most likely your insurance policy has a provision to cover additional living expenses. In the event of a large-scale loss, your insurance company will probably be able to get you into a hotel room and provide upfront money to cover clothes and other essential items. Your insurance team will immediately swing into action to make sure that you have a place to stay, clothes to wear, and food on the table. The next few days can be a bit tricky. If you have a large fire, you will probably have a bunch of people called “public adjusters” who will camping around your doorstep. They will be trying to get you to sign with them to “help” you adjust your claim. They will claim a percentage of whatever your settlement is (oftentimes 10 percent), and they will try to get you to sign up right away. I recently had one of my insureds have a major fire at their home. They had FOUR public adjusters standing on the sidewalk trying to get their attention while they were trying to salvage some of their family photos. They stay on the sidewalk because they are not allowed to step into your yard uninvited. The public adjusters stayed in front of their house for hours trying to get them to sign the agreement. My advice is, don’t sign ANYTHING regarding settling your claim for a fee for the next three days or so. You will be in such a state of distress that you it is almost impossible to make a rational decision. Literally, wait until things cool down. In very large claims involving commercial property with several million dollars at stake, a public adjuster may be a good person to consult. In the event of a house fire, you along with your insurance agent should be able to handle everything so that you get the maximum settlement possible without having to sign over settlement rights to a third party. The thing to do next is refer to something that you hopefully took care of before, and that is making a list of your belongings. After the claim, the adjuster will have no problem paying for everything that is covered in the policy. There may be certain limits to some things like cash, jewelry, or firearms, but if it relates to your personal property or the structure itself, your adjuster wants to help you get back to where you belong. They will, however, need to be able to justify what they pay. If you had a high-valued entertainment center, remembering the type and features may be difficult. Also, all of the collectibles that you spent years gathering will be hard to replace if you don’t know what you had. Take some time BEFORE the fire, and document everything that you have of significant values, like computers, etc. With modern technology, storing all of your personal property information to the cloud is very, very easy. If you put all of it on a memory stick, you can put it in a safety deposit box, or even store it at your insurance agent’s office if he or she is amenable. It’s just a good idea to have it in a place OTHER than your home. You may have a “fireproof” safe, but many of them don’t stand up to the massive heat associated with a house fire. As you go along, you will remember certain items. It may be handy to carry around a pen and paper, or memo on your cell phone to write things down as you remember them. As far as the structure itself, you have several options. One of the things that many people get worried about in the event of a large fire is the deductible. My advice: don’t worry about it. There are many ways to take care of the deductible in the event of a large loss like a fire. Contractors are often able to find ways to cut costs in a variety of ways that won’t lessen the value of your home and even staying under budget. A good contractor who wants to job will find ways to save you money. Finally, realize that it will take a while to get everything back in order. Having a fire that destroys your home and personal property is very traumatic. Some people seek help from a trusted counselor or clergy member to help walk through the difficult time. Don’t underestimate the personal toll that something like this can have on you and your family. Also, keep your insurance agent on speed dial. He or she can help you understand some of what’s happening during the claim. You may have people approach you offering to “help,” but they may be trying to take advantage of you during a crisis. Let your insurance agent be a resource for you. While I hope you never have to deal with this type of loss, it is my wish that this information will help you to be a little forewarned about what may happen. This post is not meant to replace information provided by an insurance professional. Also, refer to your policy, and/or consult with your insurance professional if you think you may have some gaps in your insurance portfolio. If you have any questions at all about home insurance, please feel free to contact me or my licensed office staff at (661) 946-4224. You can also email at dave@thedaveowens.com.
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A few years back, I was having some construction work done on my property. I asked the contractor a few “what if” questions. “What if he can’t finish the work?” “What if one of his employees gets hurt?” “What if the building burns down during construction?” After a few of these questions, it was pretty obvious that he was getting tired of this “what if” game. He said, “I’m not really into ‘what ifs.’” My response was, “I’m sorry. I’m an insurance guy. ‘What ifs’ are my stock in trade!”
Insurance is all about “what ifs.” What if something bad happens? What if I’m hurt? This article, while not covering every single “what if” might be out there, will hopefully give you a little guidance on what to do if some of these “what ifs” become reality for you. In A Car Accident The first “what if” I’ll deal with is what if you are involved in a car accident? There are two different types of auto accident: a solo accident (with one car) and a multiple-vehicle accident. If you happen to have an accident, there are a few things you can do to make sure that all bases are covered, and that your interests are best represented. THE VERY FIRST THING TO DO is to make sure that everyone is okay. If anyone is injured, call 911 immediately. Seconds count. I have actually had situations where someone was in a car accident in which someone was hurt, and they called me first. When someone is injured, medical help needs to be secured right away. The vehicles can wait. Once everyone is taken care of, it is important to find out who all of the parties are. Find out who all of the drivers and passengers are in the respective vehicles. Make every effort to get their insurance information and their personal information. In the event that someone is unable to give you their information because of injury, or if they’re unwilling to give you the information, use your phone to take some pictures. Whether or not some claims get paid can hinge on those involved getting information at the scene of the accident. While it is really difficult to keep your head when you’re in an accident, making sure that you have a game plan in place will help you to get the maximum amount of information to your insurance company. If you have youthful drivers, have a conversation with them about what they need to do in the event of an accident. Young people can feel intimidated and scared when confronted by an aggressive person after an accident. Talk to them about the best way to handle those situations. Once the injured people have been taken care of, all of the vehicles are off of the road, and you are in a position to talk, THEN call your insurance representative. It is not necessary that you call your insurance person immediately after the accident. Sometimes adrenaline is flowing and the rush starts to wear off after the accident. Take your time. Collect your thoughts. It will be okay! When I speak to folks after an accident, I will want to know 1) was anybody hurt? 2) who was driving? 3) were there any passengers? 4) what happened? 5) when did it happen? 6) who was in the other vehicle (both driver(s) and passengers)? 7) what was the year, make, and model of the other vehicle(s)? 8) who is the other party(ies) insurance providers? And 9) were the authorities contacted? If so, which agency? (usually CHP or local sheriff/police). If you get all of this information, you are WAY ahead in getting a claim handled quickly and professionally. Once you’ve collected this information, a claim is then submitted to your insurance company. In the case of a multiple vehicle accident, there are several things that start happening all at once. Your insurance company starts gathering and verifying the information submitted to them. They normally initiate contact with the other party(ies) insurance company and they start comparing notes. The other insurance company may or may not have spoken to their insured, so they need to get their side of the story. They will also try to secure a copy of any police report to see what they have to say about the accident. This process can take a few days. It can often be frustrating when you’re trying to get your life back to some semblance of order to wait, but it’s an unavoidable part of the process. The way to help speed up the process is to make sure that you quickly respond to your insurance company when they request information. Failure to give timely information can slow down you getting your settlement. In the event that you were found “not at fault” in accident, your insurance company will initiate a process called “subrogation.” Subrogation is essentially the process of them trying to get both their money back, and your money back. If you had a deductible, your insurance company will make every effort to get it back for you. They also go after the money that they paid to you to either repair your vehicle or pay medical bills, if applicable. Lots of stuff goes on behind the scenes! During the process, an agent can be a great resource. They can oftentimes help explain what’s going on, and they can also be your advocate in the event that there is some confusion between you and your claims adjuster. This is part of the value of having an agent. People who have had claims with an agent, and those without an agent GREATLY prefer the security of knowing that someone is in their corner watching out for them. In the coming days, I’ll be doing a few more “what if” articles. Hopefully this will give you some guidance on how to handle situations that could otherwise be VERY trying. If you have questions about claims procedures, contact your insurance professional. If your insurance agent is not willing to spend a little time answering your “what if” questions, it’s time for a new agent! This article is not meant to replace advice from an insurance professional who knows your specific situation. If you would like more information about how we can help you handle the “what ifs,” give us a call at (661) 946-4224. What the Heck is a “Swoop and Squat?” Recently, I posted on my personal Facebook page letting people know that I was going to write an article on a practice known as a “Swoop and Squat.” I got some very imaginative responses as to what people thought this might be. One person asked me privately if this is what happens when you REALLY need to use the restroom after traveling for some distance. While they definitely get kudos for creativity that is NOT what a “Swoop and Squat” is. For as long as there has been insurance, there has been insurance fraud. Today, insurance companies have many, many resources available to them to protect themselves and you, the insured, from being taken advantage of by unscrupulous people who have no problem being dishonest. Some people think that insurance fraud is a victimless crime, but for those people who have been the victim of it, they can see increased premiums, or even loss of insurance if the people are not caught! While the vast majority of people are honest, there is the small minority that will gladly set things up so that they can take advantage of an unwitting driver. The “Swoop and Squat” is one of the most common methods these fraudsters use to take advantage of you. By following a few simple steps, you can guard yourself from being the victim of the “Swoop and Squat.” The “Swoop and Squat” is normally carried out by a two-part team. There are normally two vehicles involved, but not necessarily. Sometimes one vehicle is used, but the end result is the same. A common target of this type of fraud is mini-vans or large trucks. These vehicles are targeted because the criminals know that they most likely have levels of insurance higher than State mandated minimum. Most family and business people follow the law and have a respect for the value of insurance. Because of this, the criminals know they potentially have the opportunity to get more money from their victims. They are especially prone to target “soccer moms” with kids in the car. The rationale will become clear in a moment. Here are the mechanics of how it works. Vehicle one is the vehicle driven by people who fully intend to be rear-ended by unsuspecting victim. They normally drive a large, older-model sedan. While they have no concern for other people, they go out of their way to protect themselves by driving a vehicle with lots of metal! They often fill the trunk with spare tires to help cushion the blow. There is almost always more than one person in the vehicle, sometimes as many as four or five. They maneuver themselves in front of the victim’s vehicle and then watch to see if the driver is paying attention. Vehicle two will pull up alongside the victim’s vehicle and try to catch the eye of the driver. When the driver looks away, the driver of vehicle one will slam on the brakes. The victim has no time to react and rear-ends vehicle one. The occupants of vehicle one will often run out of the vehicle, all of them claiming bodily injury. They surround the vehicle demanding to know who the victim’s insurance is and asking for identification. Soccer moms with kids in the car will often be intimidated by the sheer number of people and fear for the safety of their children and will start handing over information very quickly. They may neglect to get the information of the other parties because they just want the unpleasant episode to be over. Sometimes, “Swoop and Squat” fraudsters will be part of an organized ring. Attorneys and medical providers will often be involved, http://bit.ly/1wlBLj6. Insurance companies have become much more sophisticated at rooting these offenders out, but it still happens. The question is, what can YOU do to avoid this insurance fraud scheme? The main thing is, use common sense. Make sure that you are maintaining safe distances from the vehicles in front of you. The “Swoop and Squat” schemers will sometimes speed up prior to initiating braking to fool the victim into thinking they have plenty of room to stop. Be aware of the vehicles in front of you at all times. Also, realize that distraction is the great ally of the “Swoop and Squatters.” If they can distract you, they have gotten most of the way to implementing their scheme. Everyone already knows that texting and driving is a really bad mix. This practice just makes the fraudsters’ job that much easier. Finally, if you believe that you have just become the victim of a “Swoop and Squat,” STAY CALM! If you can quickly get someone on the phone, let them know where you are and what is happening. If your friend could stay on the line, that would be useful in that they may be able to hear what’s going on. Also, let the people around your vehicle know that you have someone on the line, then calmly give them your insurance information and identification. Don’t forget to ask for their information and insurance as well. THEN call your insurance agent to find out what the next step is. If you suspect that you are a victim of this type of fraud, let your agent know and why you think that this is the case. While we will probably never eliminate insurance fraud, we can do our part to make sure that we don’t become a victim of it. Also, educate youthful drivers in your household about this type of fraud. Better yet, schedule an appointment with your insurance agent to meet with your youthful drivers and he or she can educate them on safe driving tips. Sometimes it’s better when someone other than mom and dad give them this type of information. (If you have a teenager, you know what I mean!) If your insurance agent won’t do this, it’s time to look for another agent. If you have any questions on how to avoid becoming the victim of a “Swoop and Squat,” feel free to call my office at (661) 946-4224 or email me at dave@thedaveowens.com. I or my staff will be happy to answer any questions you may have. This post is not intended to replace the advice of an insurance professional who has a thorough knowledge of your situation. Thanks for reading! This is the second part of the series on saving money on insurance the RIGHT way. I hope you find something here that you can use and help ease the pain of budget strain! I’ll admit it. Insurance is a very tough line item on a budget. When you look at a house payment, you can look around and see the beautiful house that you are paying for. When you make a car payment, you can look out in the driveway and see that nice new car. Even school loans, while you can’t really see an education, you can certainly see the benefits of an education, so that payment is a little easier to take! Insurance, on the other hand, is a very hard item to purchase. We see the money going out of our checking account month after month after month, and all we see is a big blank spot where money used to be! If you’re lucky, your agent might send you a thank you card or a holiday card, but for many people who never have a claim, that’s all they get! It can be very hard to see the need for insurance when you never have a claim. For people who have had a claim, however, the need for insurance becomes immediately pressing and obvious. While some of us may never have made a claim on their insurance, we know people who have and we can see the benefits of it. With all that being said, it is still difficult to see the money going out into space! So what can we do to save money on insurance? Is there any way to do it? I’m glad you asked because there are several ways you can save money on insurance without leaving huge holes in your risk management profile. I will list a few that you can hopefully put to good use. Number 1, make sure that your insurance information is accurate. For many people, insurance is one of those things that they’d just like to “set it and forget it.” While that idea may be convenient, it could also be costly. I have often seen situations where a youthful driver moves out and the parents never call to have them removed. These situations can potentially cost thousands of dollars in overpaid premium if not dealt with. Also, people make take jobs closer to home. This reduces the amount of miles driven every year, which could potentially create a lower cost of insurance. Not only that, some people get new jobs that may qualify them for what’s known as an “affinity” discount. People in law enforcement, registered nursing, credentialed teachers, or architects may qualify for this discount. If you own several vehicles plus a home, this discount alone can be pretty hefty. Number 2, Bundle! Some people don’t like the idea of bundling because they feel that they are “putting all their eggs in one basket.” They feel that it is better to have their home insurance with one company and their auto insurance with another company because they somehow won’t be “overloading” the insurance company if there are several of one type of claim. Let me dispel that myth. Admitted insurance companies in California will be able to handle your claim, even if it’s catastrophic. They are regulated by their various states just so they ARE able to pay those claims. The savings you can realize by bringing everything together far exceeds any risk management benefit someone might perceive. Once again, bundling could save several hundred dollars a year. Don’t forget life insurance as well. Many companies offer an additional discount on top of the other bundling discounts for life insurance, so make sure you check out that possibility as well. Number 3, Deductibles. If there’s one thing that I have more discussions about with insurance (other than billing!), it’s deductibles. If you were to ask the average person, “what’s better? A high deductible, or a low deductible?” Most people would answer a “low” deductible. Before I get too far in, let me explain that a deductible is the amount of damage that must occur before any money is paid out on a claim. For example, if you have a $1000 deductible on your auto insurance, there needs to be $1001 worth of damage before a claim payment would even be possible. Very few people would bother making a claim for $1, but hopefully that illustrates how deductibles work. So, to get back, it makes sense to have a low deductible since that will really good in the event of a claim, right? Most likely, WRONG! To help you to understand, think about this. When was the last time you had a claim? When was the last time you had a homeowner’s insurance claim? For most homeowners, the answer is “never.” Most homeowner’s will never have a homeowner’s claim. So how does that translate to saving money? The difference between a $500 deductible and $2500 deductible as far as annual cost is concerned is often several hundred dollars. I’ve seen situations where the difference in cost was over $700 per year. That’s a big savings! Multiply that $700 over 10 years with no claims, and we’re looking at $7000 worth of savings. That’ll get your attention! The same concept works on the auto side. The difference between a $250 and $1000 deductible could be several hundred dollars per year, especially if you have several vehicles. It doesn’t take long to save your deductible in cheaper premiums! Having used these principles, I have regularly saved people 20-25% on their insurance premiums. All it takes is being accurate, bringing everything together, and adjusting your deductibles. If you have any questions on how you can take advantage of these money-saving tips, please feel free to give me a call at (661) 946-4224. You can also email me at dave@thedaveowens.com. I or my licensed staff will be more than happy to go over your insurance program with you. As always, this posting is not meant to take the place of advice from an insurance professional who knows your situation personally. Thanks for reading! Something often asked of me in discussions of insurance is, "Dave, how can I save money on insurance?" I'm sure many of you reading this have either asked your agent or insurance representative this exact same question. I'm going to devote this space today to the two-part topic of "Cheaper" versus "Bargain" and how it relates to saving money on insurance. First of all, there are an infinite number of ways to save money. First of all, someone can cancel their insurance all together. I have seen people on more than one occasion who just looked at the insurance line item on their budget every month and decided that this expense was just more than they thought necessary. They reasoned that nothing bad has happened to them, so nothing probably will. This logic is totally sound........until something bad happens. At that point, the resources they have in their possession (that didn't burn down!) are the only resources they have available to pay off whatever damage occurred. If this damage happens to be to your house and it's burned down, Hopefully you have a fairly large bank balance! Rather than asking the question "how can I save money," the better question is, "how can I get the best VALUE for my insurance." I will compare insurance shopping to shopping for breakfast cereal. There is a 24 oz. box of raisin bran, and a 36 oz. box of raisin bran. The 24 oz. box of raisin bran is cheaper, so it MUST be the better buy, right? We all know that "cheaper" is not the same as "value." We have to look at how much each box costs per ounce. Almost every time, the 36 oz. box, though costing more, is the better value because you get more cereal for less. They still sell the smaller boxes because for some people, they don't eat that much cereal, so some of that 36 oz. box would go to waste so it's NOT the best value. With insurance, this same discussion needs to be had. What type of policy you need is not only based on price. I'll give you an example of how two policies that seem exactly the same from the Declarations Page can be very different in the actual policy language. On the Declaration's page, the two companies have liability levels of 100/300/100. Seems very straightforward. This means that whoever is driving the vehicle will be covered for $100,000 for any one person in an accident for bodily injury, $300,000 for bodily injury for the entire accident, and $100,000 for property damage. Piece of cake! Just pick the one that's cheaper, and we're done! Not so fast. When reading the policy language, we look in the "liability" section and see a very interesting little section in one of the policies. The policy says that anyone who is named a "named insured" on the policy who is driving the vehicle will only have liability coverage of state minimum legally required. In California, that's 15/30/5. Here's how the scenario plays out. Cousin Al from Pennsylvania is visiting on vacation. He asks if he can borrow the car for a day trip to the beach. You say, "sure, Al! Here are the keys! Have fun! Don't worry, I've got 100/300/100 liability insurance, so if you hit one of those expensive vehicles in Santa Monica, no worries! I'm covered!" Cousin Al goes to Santa Monica and guess what? He hits a $60,000 Infiniti causing $40,000 worth of damage. You're thinking, "Wow! That's tough! But I'm not worried, I've got $100,000 property damage coverage!" Think again. Only $5000 worth of damage to that vehicle is covered. You'd better hope that "Cousin Al" has a policy that isn't a "cheap" policy and will cover the difference. If not, it's going to get very complicated between family members as to who is responsible for the other $55,000. This is the first part of my "cheap" versus "bargain" series. Next time, I'll go into how to actually save money on your policy while not sacrificing value. Remember that this article is not designed to replace actual advice from an insurance professional who knows your personal situation. If you would like to get more information on YOUR insurance package and how you can get the best value possible, give my office at call at (661) 946-4224 or email me at: dave@thedaveowens.com. I'll help to keep things good between you and "Cousin Al!" |
AuthorDave Owens, Owner/Agent. I have proudly served in the Insurance Industry for over 20 years. Archives
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