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Maximize Your Insurance Dollars in 2010; Avoid the Five Biggest Insurance Mistakes
Tuesday, March 30, 2010
There are several ways to save money on insurance, but consumers should be careful about the ways in which they cut their insurance costs, according to the Insurance Information Institute (I.I.I.).
“Money is tight right now and many people are looking for ways to cut costs,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. “However, there are smart ways that savvy consumers can save on their home and auto insurance, and there are mistakes that can result in being dangerously underinsured.”
Following are the five biggest insurance mistakes consumers should avoid:
1. Insuring a home for its real estate value rather than for the cost of rebuilding. When real estate prices go down, some homeowners may think they can reduce the amount of insurance on their home. But insurance is designed to cover the cost of rebuilding, not the sales price of the home. You should make sure that you have enough coverage to completely rebuild your home and replace your belongings.
A better way to save: Raise your deductible. An increase from $500 to $1,000 could save up to 25 percent on your premium payments.
2. Selecting an insurance company by price alone. It is important to choose a company with competitive prices, but also one that is financially sound and provides good customer service.
A better way to save: Check the financial health of a company with independent rating agencies and ask friends and family for recommendations. You should select an insurance company that will respond to your needs and handle claims fairly and efficiently.
3. Dropping flood insurance. Damage from flooding is not covered under standard homeowners and renters insurance policies. Coverage is available from the National Flood Insurance Program (NFIP), as well as from some private insurance companies. Many homeowners are unaware they are at risk for flooding, but in fact 25 percent of all flood losses occur in low risk areas.
A better way to save: Before purchasing a home, check with the NFIP to check whether it is in a flood zone; if so, consider a less risky area. If you are already living in a flood zone area, look at mitigation efforts that can reduce your risk of flood damage and consider purchasing flood insurance.
4. Only purchasing the legally required amount of liability for your car. In today's litigious society, buying only the minimum amount of liability means you are likely to pay more out-of-pocket—and those costs may be steep.
A better way to save: Consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident.
5. Neglecting to buy renters insurance. A renters policy covers your possessions and additional living expenses if you have to move out due to a disaster. Equally important, it provides liability protection in the event someone is injured in your home and decides to sue.
A better way to save: Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto and life will generally provide savings.
“By taking a few simple steps, it is possible to cut costs and still be protected should disaster strike,” pointed out Salvatore. “When money is tight, it extremely important to be financially protected with the right amount and type of insurance.
The I.I.I. Web site has information has consumer information on insurance, as well as tips for saving money on homeowners and auto insurance.
As Weather Warms, Property Owners Urged to Buy Flood Insurance
Sunday, March 14, 2010
Having flood insurance will be increasingly important this year as spring rain combines in many parts of the U.S. with the melting of record snowfall, according to the Insurance Information Institute.
"Many states on the Atlantic seaboard were hit with record amounts of snowfall only a few weeks ago, creating a situation where already overflowing bodies of water are placed under additional pressure," said Michael Barry, vice president of Media Relations at the I.I.I. "Homeowners and renters who reside near small streams and creeks should already have flood insurance but, those who don't ought to secure a flood policy because this will continue to be an issue into the spring season."
Flood damage is excluded under standard homeowners and renters insurance policies. The optional comprehensive portion of an auto insurance policy includes coverage for flood damage.
Flood coverage for homeowners and renters, however, is available in the form of a separate policy from the National Flood Insurance Program (NFIP) and from a few private insurers. There is typically a 30-day waiting period -- from date of purchase -- before a new NFIP policy goes into effect. Consumers can get more information on the NFIP at www.floodsmart.gov.
The National Oceanic and Atmospheric Administration (NOAA) specifically cited Virginia, Maryland and New Jersey yesterday as three of the four states nationwide that received precipitation at levels "much above normal" for the winter season (December 2009-February 2010). South Dakota was the fourth state NOAA mentioned. Iowa, Illinois and Minnesota, particularly the areas of those states along the Mississippi and Missouri rivers, are also seen as vulnerable to flooding over the next 90 days, according to a recent National Weather Service report.
"When it comes to floods and the damage they can do, many people are complacent. Fortunately, flood insurance is easy to get, whether you're a homeowner or a renter," Barry noted.
A 2008 I.I.I. poll found that only 17 percent of Americans have a flood insurance policy, with the take-up rate higher (20 percent) in the Northeast than in other parts of the U.S.
The NFIP makes federally backed flood insurance available to communities that agree to adopt and enforce floodplain management ordinances to reduce future flood damage. However, it is worth noting that many floods also occur in areas that are not designated flood plains.
The NFIP provides coverage to its policyholders for up to $250,000 for the structure of a home and $100,000 for personal possessions. Private flood insurance is available for those who need additional insurance protection, known as excess coverage, over and above the basic policy or for people whose communities do not participate in the NFIP.
Some insurers have introduced special policies for high-value properties; these policies may cover homes in non-coastal areas and/or provide enhancements to traditional flood coverage.
Source: www.iii.org
Millennial mentality keeps agencies from aging to irrelevency
Saturday, January 30, 2010
From Nicholas Brown on InsuranceCampus.org (link):
The thought of suiting up, commuting and sitting in an office for eight hours a day is the definition of agony for many young professionals. Millennials, Generation Y, people born from 1974-1980; whatever you want to call them, this segment has been exposed to the internet and mobile communication for most of their professional lives. And for many, this exposure has instilled a sense of connectivity carried from work to home to play.
In referring to Millennials, an article on Brighthub.com states:
“The influence of this new and completely different workforce will bring with it a tsunami of change. These workers are not cube-dwellers, they are an instant gratification, naturally multi-tasking, technology-eating/breathing and consuming force that will join the voices of the older Baby Boomers who are also demanding flexibility in their work opportunities.”
From an insurance business perspective, whether you’re seeking new talent or trying to hold on to existing team members, understanding this paradigm shift and surrounding yourself with the right people is key to growing your agency. A staff that clocks in at nine, clocks out at five and takes a one-hour lunch break in the afternoon is an archaic model.
Flexibility works both ways however. While you may not feel great about an employee sauntering in at 10:30 a.m. on a Tuesday; the client email they respond to at 10:30 on a Saturday night can make up for that extra hour of sleep. The key is having the right insurance technology solutions and infrastructure in place to monitor productivity and make communication efficient.
Social media is creating new portals for 24/7 communication but can also introduce privacy risks when personal information is available. While social media tools are excellent for support, a virtual insurance office that is constantly generating leads and offering visitors a “storefront” experience is the first step towards streamlining your agency for the next generation of insurance professionals.
Lead generation is obviously important, but from the Millennials perspective, the virtual insurance office must provide access to client and policy information. Work is done from laptops at children's doctor’s appointment or on smartphones while at the local coffee shop, and not necessarily in a poorly decorated cubicle. What’s more? This on-the-go business execution can generate more leads just by having agents out in public.
Is your agency prepared to handle the demands of Millennials, who, consequently, will make up the bulk of new insurance policy buyers in the coming years? You are if you use their tools and play by their rules.
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