Avant-Garde Insurance Advisors

Halloween Fun & Safety!

Tomorrow is officially Halloween 2019. Many kids are eagerly awaiting this big day. In preparation below are some tips for keeping the holiday fun and safe.

Tips for home owners:

Keep walk ways clear of debris and leaves to reduce the chance of slip and falls.
Have the walk way to your home clearly marked and if possible lit.
Keep pets crated or in another room to reduce the chance of your pet escaping or a child being injured if your pet nips or jumps.
When giving out candy to small children you may wish to confirm with the parent if the child can have hard candy that may cause choking and/or candy with peanuts or milk that could cause an allergic reaction
When traveling go extra slow in communities and where you see trick or treaters.

Tips for trick or treaters:

Keep costumes at ankle length or shorter to prevent trips and falls.
Wear a light or other device to make others aware of your presence when walking sidewalks, walkways, driveways, roads, etc.
Remove face masks and covers when walking from home to home to reduce injury.
Make sure you monitor your small children with their candy to make sure they do not consume it before you have had the chance to inventory it.

The photos above are my minions over the years. I am excited to capture an image of them for my collection tomorrow. Stay tuned!

Why Do I Need Renters Insurance?

For many their first home is a rental unit or an apartment. I also did this for a few years. When you go to sign the leasing agreement the leasing office will require proof that you have renters insurance. This is the main reason you purchase renters insurance.

The second reason to purchase reason is to protect you, the renter. There are a few coverages that are important for a renter of a unit or an apartment to have.

Contents or Personal Property – This is all the stuff you put into the unit/apartment; furniture, clothing, pots/pans/dishes, electronics, etc. If you lose everything in a fire will you have the money to replace all of your personal belongings?
Loss of Use – If you have a covered claim and you are unable to live in your unit/apartment. This coverage will cover the cost of a hotel, apartment, etc. temporarily. You will still be responsible for the rent on your unit/apartment unless the leasing company decides to let you break lease.
Personal Liability – If someone slips in your unit/apartment and decides to sue you for medical costs and/or inability to work, etc. this is coverage to pay for the damages or to settle the suit. If found liable for a traumatic event your wages can be garnished by the courts if necessary.
Medical Payments – If the same person that slips in your unit/apartment needs medical attention this is good will dollars to get them necessary emergency care.

In addition to these standard coverages you should consider the following additional coverages.

Replacement Cost Coverage for Contents/Personal Property – After a covered claim you will want new furniture, clothing, etc. not used.
Personal Injury – If you are accused of libel, slander, defamation of character whether true or not you will want coverage which can be provided through this endorsement.
Identity Fraud – Now that you are taking on more responsibilities you have a higher exposure to an identity fraud event, which can have long term consequences if you are unable to undo the damage.
Water Back-Up – If a drainage system in your unit/apartment backs up into your home you will need coverage for the repairs and personal property damaged. You must add this endorsement to yours renters policy in order to have coverage for this type of loss. This is the #1 cause of home claims across the country.

Many renters assume the leasing company or property manager will cover the cost of a loss to your unit/apartment. The leasing office/property manage can still hold you responsible for the damages and they will not cover you for the loss of your personal belongings or your liability as the occupant of the unit/apartment.

Overall the cost of renters insurance is minimal at around $200 a year or $15 monthly. While renters insurance may feel unnecessary it is important in order to maintain your financial independence.

Why you need an insurance agent

At the end of July I had what I would call a traumatic insurance event. I was woken up one night by my husband saying the police were knocking on our door. It turns out an impaired driver had struck my SUV while parked outside our home. As I glanced out my window I could not see damage to my SUV but what I found shortly there after was my vehicle was a total loss.

My SUV immediately following the collision at 4am on July 24th.

I don’t know about other people but I loved my SUV. It took me a month to commit to buying her and I was diligent in maintaining her. I invested my time and money in maintaining the condition of my vehicle. I also enjoy the independence of having my own vehicle at my disposal at all times.

As an insurance professional I thought it would be smooth sailing but it was not. Between negotiating vehicle values to the rental car shuffle, nothing went as I thought it would. I was in four different rental vehicles while trying to get back to where I was before this claim began.

I am finally at the tail end of the claim and this is what I have learned.

Get towing coverage, whether through your auto insurance policy or a AAA membership. Get it! To drag my SUV onto a flat bed tow truck off of the curb the cost was over $400. Also, have the number of a tow company you trust for those 4am tow emergencies.
Get rental reimbursement coverage and buy it up to a minimum of $50 per day. For someone like me that drives a full size SUV with two small children in carseats and a 6’2″ tall husband you need more than the $30 per day limit. A full size SUV today is $90 per day if you are not the insurance company.
Know the value of your vehicle when you are reporting the claim and research similar vehicles as comparables so you are not surprised by the value the insurance company estimates.
In my case my gut told me my vehicle was totaled. If you have any inkling that your vehicle is totaled start finding a replacement vehicle as soon as possible. I did not want another vehicle. I delayed the process and had a hard time committing in the end.

The shock and suspension falling off the undercarriage of my vehicle.

If you have a good insurance agent they will help guide you through the claim process and give you tips and tricks to help make it as smooth as possible. Some claims will go smoothly and others will not. When the big claim comes along you will want someone on your side to help you along the way, if not just to vent to. I don’t wish claims on any one but if a claim happens I want to be there for them.

What you need to know about selecting a home deductible.

When looking at insurance quotes our eyes automatically drift to the bottom line premium quoted. But what about all the stuff above it? Not all home quotes and/or policies are created equal. One of the key parts of a home quote and/or policy is the deductible. Below is a list of things to keep in mind as you consider a home quote and/or policy.

Some deductibles are flat and some deductibles are percentages. Percentages are typically used in coastal areas where there is a higher probability of wind, hurricane, etc. A percentage deductible is based on the dwelling value listed in the policy. If the dwelling value increases the deductible increases as well.
Some deductibles are specific to a type of coverage; Water Back-Up, Water Damage, Hurricane, Tropical Cyclone, Named Storm, Wind/Hail, etc. You may also see the term All Other Peril which means where a specific deductible is not identified the All Other Peril deductible applies.
A home policy can have multiple deductibles which can be a problem if a claim triggers more than one deductible. Understanding how each deductible applies at the time of a claim is important.
Some deductibles are dictated or required by the insurance company. This decision can be based on where the home is located, such as coastal. One insurance company may require a higher deductible than another insurance company.
Some home policies waive the deductible for large claims or a total loss claim. Knowing when a deductible waiver applies is important. This can be beneficial in deciding on a high deductible.
Some companies offer a reducing deductible if you remain claim free.

It is important when you are reviewing a home quote that you be aware of the deductibles. While a high deductible will reduce the policy premium, a high deductible can be detrimental if you can not afford the deductible at the time of a claim or the losses that occur are below the deductible. An insurance agent can help you review all the deductibles applicable to a quote and/or policy. An agent can also help you select a deductible that fits your financial situation while providing you the most advantageous premium.

National Insurance Awareness Day, June 28th

This Friday, June 28^th is National Insurance Awareness. The day was created to encourage everyone across the nation to review their insurance policies.

Below are some tips to help you observe the day:

Home:

Review the home value. The value of the home should be based on current construction costs, not market value. You should review the home value every 3 to 5 years.
- Review the home credits. If you have installed an alarm or have turned your alarm service off you should update the home policy accordingly.
- Review the deductible. The higher the deductible the lower the premium. Also a higher deductible will discourage you from filing small claims which can impact your ability to obtain coverage in the future.
- Review the endorsements included in the policy. If you have switched insurance companies recently a coverage may have been dropped during the process.

Auto:

Review drivers listed on the policy. All licensed drivers residing in your home should be listed on the auto policy. Failure to do so could result in a denied claim for unlisted drivers.
- Review ownership of the vehicle. If the loan or lease agreement has been satisfied update the policy. This will prevent delays in payment at claim time. Any change in titled ownership should also be reflected on the policy or a new policy purchased for the vehicle.
- Review deductibles. Insurance companies continually increase the price breaks for higher deductibles. As with the home insurance a higher deductible will save you premium and discourage you from filing small claims.
- Review usage of each vehicle. Vehicles used for Uber or Lyft services do not have coverage while being used for this purpose. Vehicles used for business purposes may also not have coverage if used for business at the time of a claim.

Schedule:

Update items to be listed along with values. Appraisals should be completed every 3 to 5 years to keep up with market values. Use an inventory such as Collectify to manage your collection easily.

Umbrella:

Update properties, vehicles, drivers, recreational vehicles, boats, etc. at each renewal. Failure to update could result in no coverage under the umbrella.
Make sure the underlying insurance policies for each of the above meets the minimum liability requirements to avoid a coverage gap.
If you do not have coverage for the underlying insurance policy for each of the above obtain it at your earliest convenience.

With the help of a Trusted Insurance Advisors they can help you review your policies at any time, not just this Friday or at renewal. A Trusted Insurance Advisor is there to help you every step of the way. Call your agent today!

Insurance for Your Investment Property

Recently I had a client purchase a new investment property. He had valid concerns regarding the coverages for that investment property. Below are coverages to consider for maintaining the profitability of your investment property.

Contents – Many owners of investment properties forgo coverage for contents or personal property kept at the investment property. They assume the tenant will provide all coverage for the tenant’s contents. What if the property owner has to re-carpet the home or puts new appliances in the home? These types of items can be considered contents by the insurance company. What if the property owner uses the basement or attic for storage? These are considered contents. Contents coverage is not automatically included in all investment property policies. You must request it and indicate a limit needed to cover all contents of the property owner.
Fair Rental Value – If the property owner is unable to rent the property due to a covered loss the property owner will not be able to generate a profit from the property. Depending on what the cost of rent is will dictate the limit for Fair Rental Value. You should aim for 6 months of rent or more after a covered loss, which can also be impacted by time of year or location of the home.
Water Back-Up – This is a very hot topic when it comes to home insurance but many property owners overlook it when owning an investment property. An investment property has the same exposure to water back-up as a primary home; sump pump, back-up generators, toilets, tubs, sinks, etc. To make matters worse not all insurance companies offer water back-up on investment properties. Make sure to ask for it or your insurance agent may overlook it during the quoting process.
Ordnance or Law – In some cases especially with older homes there may be a need for additional money for updating an investment property to meet new codes or compliance requirements, such as sprinklers, smoke detectors, elevation, safety glass, etc. Not all policies are created equal. You may have 10% of the dwelling value which may or may not be enough depending on the property. An increase in the limit may be necessary for homes that are coastal, older, located in the city, etc.
Loss Assessment – Some investment properties are located in communities that have a Homeowners Association (HOA). As a home owner in the community the association has the right to assess fees back to home owners. Not all investment property policies provide Loss Assessment and if they do it may not be enough. It is best to understand what the HOA can assess for and how much they can assess. Once this information is known you can adjust the insurance policy accordingly.

Ultimately the plan for owning an investment property is to generate a profit or a return on your investment. Without the appropriate insurance you could lose money due to unexpected issues. A full assessment at the beginning of your endeavor reduces the chances of problems down the road. Talk to your independent insurance agent today about your investment property insurance needs.

Why is my credit score used when buying insurance?

This is a common question with clients and it is never an easy conversation. Like many of my clients my gut goes sour when I need to discuss or request information regarding credit reporting. There are a few things to know.

State of Maryland has approved the use of credit as a rating factor for auto insurance. Credit is not used for home insurance in Maryland. Almost all insurance companies doing business in Maryland will want to obtain a credit report in order to provide an auto insurance quote. There is only 1 or 2 insurance companies in Maryland that do not.
Your insurance agent will never see a credit score or credit report when quoting your auto insurance. For this reason your insurance agent will also not be able to provide specifics about what was contained in the report, and will direct you back to the insurance company quoted to obtain more information.
Your insurance agent will not know specifically how your credit impacted your auto quote. Insurance companies have rating structures based on hundreds of rating factors. As information is entered into an insurance company’s quoting system the rate changes. Credit score is only one factor for rating.
The process of obtaining your credit report will not impact your credit score. Unlike when you are applying for a loan or line of credit, we are not looking to confirm if you are a good applicant. For this reason you can not be turned down for auto insurance based solely on your credit score.

While the thought of your credit score being run for an auto insurance quote has you sick to your stomach, your insurance agent is doing their best to meet your insurance needs. Your insurance agent will not pry into your financial situation but will guide you on the best auto quote for you. Maintain an open dialogue with your insurance agent and voice your concerns to help settle your nerves.

Call your independent insurance agent for more information on the auto insurance quote process.

Do you need Rental Reimbursement on your auto insurance?

The short and sweet answer is yes but I am not the short and sweet type when it comes to insurance. So let’s dig a little deeper.

Many individuals dont think they need it and many times forgo it to save money. Honestly this coverage is only about $30 to $40 per vehicle annually, if not less. That’s not alot when you consider it’s an annual cost and what it means for you.

Recently I had a client find out the hard way how important Rental Reimbursement is. Another vehicle hit my client’s vehicle while parked and unoccupied. Initially the client attempted to have the claim handled by the responsible party’s company. However the adjustor was indicating the vehicle was a total loss and that decision made the client uncomfortable. Add on the client had paid extra money for Replacement Cost coverage on the totaled vehicle on their own auto insurance policy. The client attempted to go back to their own insurance for Replacement Cost coverage but it was determined they had no Rental Reimbursement on their own auto policy. The claim process would start over with the client’s own insurance company and leave them out of pocket for another rental vehicle.

In the end the client settled with the responsible party’s insurance company to reduce the amount of stress and move on ultimately.

Had the client opted for Rental Reimbursement when the policy was purchased the client would have had a completely different result.

Yes, you can shave off a few dollars on your auto insurance by not including Rental Reimbursement but it can have a severe impact at the time of a claim.

So purchase Rental Reimbursement for all of your vehicles. I recommend a limit of $40 per day based on the average cost of a small rental vehicle. You can certainly bump it up if you will need more rental vehicle, such as a mini van or SUV.

An independent agent can help you pick the right limit and find a competitive auto insurance policy for you.

Why you should shop your insurance.

Previously I gave reasons why you should not shop your insurance. My goal is not to discourage people from shopping their insurance but to help people be smart about managing their insurance. There below are valid reasons for shopping your account.

Major lifestyle changes are a valid reason. Marriage, divorce, a child getting licensed, a child moving out, starting a new business, retirement, etc. Your current insurance company may not have the most competitive pricing once these changes are applied to your account.
Purchasing a new home, condo, etc. Selling your home and renting. Again the current insurance company may not be the most competitive based on your new home situation.
Change in net-worth or value of your assets. If your net-worth has increased significantly the current insurance company many not be providing you the broad coverage you now need. They may also not be able to provide you the coverage or policy limits your financial advisor, attorney, or accountant are now recommending.
Change in the coverages desired. If you now want full glass coverage or GAP coverage or Agreed Value on your vehicle you may need to change insurance company. If you need workers compensation insurance you may need to change insurance companies. If you sit on boards or volunteer your time to associations or committees you may need a different insurance company.
Bad claim experience. If you find that your insurance company was uncooperative, lacking in communication, difficult to work with or any other reason and your insurance agent could not help you work through it there is no reason you should torture yourself again in the future.

Ultimately you should not shop your insurance frequently or even every year. You will lose out on valuable coverages, benefits, features, etc. Your program should be reviewed annually but only shopped every 3 to 5 years. If you feel your need your program shopped talk to your insurance agent about why you should or should not shop your insurance program. Your agent will have a good sense what you can do with your current program and if having your program shopped is warranted.

Why You Shouldn’t Shop Your Insurance

Now that the New Year has begun many individuals and families have resolved to improve their finances. This includes reducing their debt, reducing monthly expenses, saving more money, or saving more for retirement. This plan almost always leads people to shop their insurance policies. I do not encourage this decision 100% of the time. Below are reasons not to shop your policies.

Before you shop your policies you should look to save premium on the policy you already have. The insurance company you are with will have a different opinion of you then the company you are looking to switch to. A new company has stricter guidelines for new customers than for existing policyholders. If you have driving history or are a bad pay history you may not qualify for the new company.
If you do qualify for the new company you may pay more premium. All reports the insurance company uses will be run for a quote. This includes credit history if your state allows credit history as a rating factor. Also Motor Vehicle Records (MVR) for tickets, citations, violations, and license status. A Comprehensive Loss Underwriting Exchange (CLUE) report will also be run to disclose accidents, driver and vehicles in the household, and claim payments made by prior insurance companies. If your credit history has declined you may not be eligible for the best priced tier. Based on your overall driving history you will be tiered with the new company. Your current insurance company may not have a violation or accident rated due to failing to verify reports or possibly violation/accident forgiveness.
You may be receiving a longevity credit with the current insurance which you will not get automatically with a new company. Also if you have little to no tenure with your prior insurance company you may lose out on valuable credits on the new policy.
You may lose a violation or accident forgiveness benefit if you switch your insurance company. For some companies you need to be with them 3, 5, or even 6 years to gain this benefit and you may be giving it up if you have a major accident after switching insurance companies.
Not all insurance policies are created equal. Each policy and insurance company has a different insurance contract. When you switch insurance companies you may be losing valuable insurance coverage or policy language. Although limits and deductibles may be identical on the policy declaration page it does not mean all the same benefits and features are in the new policy.

If you must shop your policy you should not shop your policy more than every 3 to 5 years. Insurance companies make major changes to their insurance products and pricing in this range. When you do receive a quote make sure you complete a through comparison of your policy against the quote.

Always use an insurance professional for this process. Insurance professionals know the policies they sell better than anyone else. They also will know if the product you are looking to switch to will provide you similar coverage as your current program and the tricks to getting your best price. An insurance professional can also help you review your current policies to save money so as to avoid losing valuable coverages and benefits by shopping your policies.