Are you confused on how changing insurance companies affects your escrow account? We hope this infographic will help clarify the process!
With temperatures predicted to be back up to the 40s next week, it will feel like a relief after this week’s persistent snow storms. While the roads will finally be clear of snow and ice, can the same be said about your house?
If an ice dam has formed along the edge of your roof, you may be in trouble as the warmer temperatures melt the ice and snow that have accumulated behind it. The ice literally acts as a dam, trapping the water resulting from the melted ice and snow. As temperatures drop overnight, the water freezes and expands, lifting your roof’s shingles in the process. When it unfreezes, the water penetrates the roof deck and leaks into your home. Do you have coverage for the damage?
In general, a home insurance policy will cover damage caused by an ice dam, as long as the damage is to the home itself. For example, if the ice dam pries the shingles off your roof or causes water to leak onto your walls, ceiling, or insulation, then your home insurance policy will cover the loss. Don’t forget though: the deductible always applies on home insurance claims.
Although damage to your home caused by an ice dam generally is covered, damage to your personal property is not. Keep that in mind if you store valuable personal property in your attic as it’s usually the first area damaged by an ice dam.
The cost of removing an ice dam is likely less than your homeowners deductible, so if you see one forming on your roof, it’s best to contact a snow and ice removal company as soon as possible.
This article was written by Derek Boer & Tori Roughley. Please email questions or comments to Tori at firstname.lastname@example.org.
We made it past last month’s holiday season without the hassle of a typical Michigan winter, but with the snow and ice storms predicted to continue, we know that the dreaded winter season is finally upon us.
Therefore, it is time to ensure that you have the proper winter (and spring) related auto insurance coverage and that, more importantly, you understand how that coverage protects you.
As roads worsen, there is usually an increase in the number of collision claims as the risk of car accidents increases. But what about non-collision related losses, such as hail damage?
If you have comprehensive coverage on your vehicle, your auto insurance will cover hail damage to your vehicle. However, if you only have liability coverage (commonly referred to as “PLPD”), then this type of coverage is not included.
Like collision coverage, comprehensive coverage typically has a deductible that applies to each claim. Comprehensive coverage deductibles can range from $0 to $1,000 (or higher), depending on the policy. This deductible reduces the amount that the insurance company will pay toward the repairs to your vehicle and will be your out-of-pocket cost for the repairs.
For example, assume you have comprehensive coverage with a $100 deductible on your Honda Civic. When a storm rolls through town, your Civic is dented by hail. A body shop prepares a repair estimate of $1,900 to fix the hail damage. Your comprehensive claim would be calculated as:
Amount of damage: $1,900
Comprehensive claim: $1,800
Comprehensive coverage tends to be less expensive than collision coverage, which is why we generally suggest using a lower deductible for comprehensive coverage than collision coverage. This helps keep insurance costs reasonable, yet minimizes the amount of out-of-pocket cost in the event your vehicle suffers hail damage (or any other comprehensive claim).
This article was written by Brian Boer and Tori Roughley. Please email any questions or comments to Tori at email@example.com.
Michigan is about to join the list of states that have legalized the recreational use of marijuana. Although public support is high, 64% according to a 2017 Gallup poll, this bill does not come without questions or concerns, which mostly revolve around the issue of driving under the influence. Just one more complex factor to further complicate the insurance industry, right?
Two 2017 studies reported that there was an approximate 6% increase in car accidents in states where the recreational use of marijuana is legal, and another 2017 study reported that recreational marijuana led to 3% more insurance claims. If these early statistics hold true, how will the legalization of recreational marijuana affect auto insurance rates?
Does today’s hype around autonomous vehicles remind you of the flying car predictions we heard back in the ‘90s? There is much debate about the timeframe for widespread adoption of autonomous vehicles, from Silicon Valley promising five years to Detroit predicting five decades. However, something of little debate is the societal benefits that autonomous vehicles will provide. A few include:
Reduced frequency of auto accidents and the injuries and deaths that accompany them
Increased mobility for the elderly and those with disabilities
Reduced transportation costs due to vehicle sharing
Despite these benefits, there are several questions to consider, including:
How will we protect vehicles from hackers? Whose responsibility is it to do so?
How will autonomous vehicles interact with human drivers, pedestrians, and bicyclists?
Will autonomous vehicles function properly in heavy rain, sleet, and snow?
While these questions may seem difficult to answer, the most difficult question may be the one that is least discussed: who is liable when an accident involving an autonomous vehicle occurs? The answer will likely change as the technology used in vehicles advances from driver assistants (adaptive cruise control, automatic braking, lane keeping assist) to semi-autonomous (human intervention required in limited instances) to fully autonomous (no human intervention needed) and the percentage of vehicles on the road that are fully autonomous increases from .001% to 100%.
Let’s first address one of the easier liability questions. Who is to blame when an accident occurs with a fully autonomous vehicle? It’s hard to fathom a court assigning liability to a “driver” in these instances, so the liability must fall on the automaker. However, that leads to a deeper question that’s nearly impossible to answer: how should autonomous vehicles be programmed to operate when an accident is unavoidable?
For instance, if a tree falls in the road and an autonomous vehicle must decide whether to hit the tree or swerve onto the sidewalk and hit a pedestrian, which does it do? Would it be programmed to consider the age of the driver and pedestrian and take the action that preserves the youngest life? Would all automakers be required to program their vehicles to act in the same way? In the best case scenario, society will collectively decide how autonomous vehicles should be programmed and each vehicle will act accordingly. In the worst case scenario, certain automakers will program their vehicles to always preserve the life of the “driver.” If those automakers charge a premium for such vehicle behavior, the preservation of life would essentially be determined by wealth.
If assigning liability for a fully autonomous vehicle seems nearly impossible, it must be easier for a vehicle that is semi-autonomous, right? Not necessarily. What happens when a vehicle notifies its “driver” that human intervention is necessary? If that notification occurs three seconds before a crash, would it be up to a court to determine if three seconds was sufficient warning? What if a crash would have resulted regardless of the “driver’s” involvement? How will a court evaluate the adequacy of the evasive action the “driver” took?
A final liability question surrounds the inevitable period of time autonomous vehicles will share the road with human-driven vehicles. Autonomous vehicles will be programmed to behave cautiously and, in most instances, that’s a good thing. However, can you imagine being stuck behind an autonomous vehicle that’s trying to make a Michigan left on the East Beltline during rush hour? It could take hours for it to find enough space to pull out. A human-driven vehicle has the distinct advantage of using eye contact and body language to communicate with other vehicles as it forces itself into the flow of traffic.
Also, driving styles vary wildly across the country. An autonomous vehicle programmed to fit in with drivers in New York City would cause quite a ruckus on the streets of Holland, MI. Humans can adapt their driving techniques when needed – something autonomous vehicles won’t be able to do. Who is responsible when an autonomous vehicle causes an accident not because it broke a driving law, but because it just didn’t quite fit in with traffic?
However the determination of liability plays out, one thing is for sure – insurance will follow suit. In the meantime, let’s all do our best to achieve the main thing autonomous vehicles promise to accomplish – reduced car accidents. After all, for the foreseeable future, we’re all still liable!
This article was written by Derek Boer. Please contact Derek with questions or comments at firstname.lastname@example.org.
Based on how fall played out this year, it looks like we could be in for a long winter! If you’re planning to take a break to someplace warm and sunny, you’ll need to know if, and how, your insurance travels with you.
Renting a car? If your personal auto insurance policy has Comprehensive and Collision on at least one vehicle, those coverages will also apply to a private passenger auto you rent short-term in the United States or Canada (as well as territories of the U.S.). The deductibles that apply to your own car will also apply to a rental car. So, if you have a $500 deductible for Collision coverage on your car, that same deductible will apply to collision damage to a rental car.
The liability and other coverages on your auto insurance policy will also apply to your use of a rental car. But remember, your auto insurance policy covers you only in the U.S. and Canada. If you rent a car outside the U.S. or Canada, check with the car rental company to see what coverage they offer. If you have an Umbrella Liability policy, it may provide liability coverage for your use of a rental car outside the U.S. and Canada. This would protect you against lawsuits for bodily injury and property damage caused while driving the rental car, but not for damage to the rental car.
Car rental agreements usually hold the renter responsible for three costs that may not be covered by your auto insurance policy:
1. Loss of use. The rental company will charge you for their lost rental income while the damaged car is being repaired. Depending on the amount of damage, the time required to make repairs could be several weeks, so this expense can add up.
2. Diminished value. Even though the rental car may be repaired to perfection, the mere fact that it was involved in an accident may cause used car buyers to pay less than they would for a vehicle that was never in an accident. As a result, when the rental company sells the vehicle they may get less than they would for a similar vehicle that wasn’t damaged. This is when you get a bill, which can amount to hundreds, or thousands, of dollars.
3. Claim administration fees. The rental company will incur expenses for the time spent administering repairs to the vehicle and pursuing reimbursement, so they’ll charge you a fee to cover this expense. We commonly see claim administration fees of $250 to $500. In addition, they can charge you for towing and storage if the car is damaged while in your possession.
How can you avoid these potential additional expenses? You can purchase a “loss damage waiver” (LDW) from the car rental company. This will relieve you of responsibility for damage to the vehicle (as long as you use the vehicle in compliance with the provisions of the rental agreement) and will normally include coverage for the three items noted above. Check with the car rental company to be sure. Or, you may be able to add coverage to your own auto insurance policy for minimal cost to provide coverage year-round. This way you’ll have coverage anytime you rent a car in the U.S. or Canada. Check with us if you’d like to know more.
What about your personal belongings, such as skis, golf clubs, and clothing? If you have a home, condo, or renter’s insurance policy, chances are, your personal belongings will be covered anywhere in the world. The same perils (the causes of damage or destruction) that apply to your property while it’s at your home will apply while your personal property is traveling with you. This usually includes coverage for damage caused by fire, smoke, theft, wind, hail, lightning, vandalism, explosion, and several other causes. If your property is stolen, the provisions of your policy will require you to report the theft to police before you file a claim on your insurance. What about the airline losing it? Sorry, that’s not covered.
If you plan to travel, we hope you have a safe and enjoyable trip. And, please bring some sunshine home to share with the rest of us!
This article was written by Dave Boer. Please send comments or questions to Dave at email@example.com.
Uninsured motorist coverage and underinsured motorist coverage are both some of the most critical coverages on your auto insurance policy. Do you have these coverages? Do you have enough of each one?
In this video, we'll use a claim example to explain how these coverages would come into play and why you should have them.
Keep these things in mind this hunting season:
Extend your liability coverage. In general, the personal liability coverage on your home insurance policy will follow you away from your home, including while you are hunting. However, if you own or lease the property you are hunting on and don’t have an insurance policy on that hunting property, be sure to tell your insurance agent. In most situations you can extend the liability coverage from your home insurance policy to your hunting property in order to protect yourself in the event of a lawsuit resulting from a hunting accident. The charge for this liability extension is minimal (usually less than $15/year).
Add your expensive guns to your home insurance policy. Guns, bows, and other hunting equipment typically is covered by a home insurance policy, but subject to certain limitations. The best way to adequately cover your expensive guns is to schedule them on your home insurance policy. This provides coverage for nearly all types of damage, including dropping your bow from a tree stand, dropping your gun over the side of the duck boat, or someone stealing your gun out of your truck. This scheduled coverage for guns is inexpensive at about $15 per $1,000 of coverage.
Plan ahead and be safe. There’s always the next day, the next week, or the next season to get back in the field or on the water. If the conditions aren’t safe or something doesn’t feel right, head back to camp and relax by the fire.
Whether you’re hunting ducks, deer, or discounts on Black Friday this season, be safe and have fun!
You know you’re made for the insurance industry when:
Every time you hear "Especially in Michigan" by Red Hot Chili Peppers you can't help but think how appropriate that song title is for auto insurance in Michigan.
Medical coverage is critical (especially in Michigan...).
Liability coverage is important (especially in Michigan...).
No-Fault insurance is confusing (especially in Michigan...).
We've created a short video to explain, in simple terms, how auto insurance works, especially in Michigan. Check it out here:
Your grandfather. Your aunt. Your mother-in-law. We all know someone who requires significant assistance with the daily activities of living in the latter stages of life. Some of us are even the one who is tasked with providing the care our loved one can no longer provide for themselves. Yet very few of us plan for the likelihood that we will be in that position someday, too.
According to the U.S. Department of Health & Human Services, about 70% of people over age 65 will require at least some type of long-term care in their lifetimes, and 40% are likely to need care in a nursing home. A serious injury, illness, or the onset of Alzheimer’s or dementia can quickly lead to the inability to fully care for ourselves, and sometimes we simply lose the ability to fully care for ourselves as we age. And, if the person responsible for caring for us, such as a spouse or other family member, passes away, moves, or develops an inhibiting condition of their own, we will be left to fend for ourselves. These are not pleasant thoughts, but it is the reality for many.
For-hire assistance is available, but the cost of long-term care is staggering. These were the average annual costs in Michigan in 2016:
Nursing home: $103,164
Home health care: $47,720 (skilled care from a nurse is more expensive)
Assisted living facility: $44,658
These expenses have the potential to wipe out savings and put an extra burden on family members, who are often forced to provide daily care or help with long-term care expenses. While many people assume that government programs, such as Medicare, will pay for long-term care expenses, it’s unfortunately not true.
Medicare and most health insurance plans pay for acute medical services, but they don’t typically pay for long term custodial services. They won’t pay for help with activities of daily living, such as eating, bathing, dressing, continence, toileting, and moving from place to place. If you’re not able to perform these activities on your own, you’ll need help. The same is true if you develop severe cognitive impairment, such as Alzheimer’s or dementia, and require continuous supervision.
There are three ways to address long-term care expenses:
Be rich (so you can afford to pay these expenses yourself)
Be far from rich (so Medicaid will pay)
Be insured (for those in the middle)
The best time to consider long-term care insurance is when you don’t need it. You’ll probably never be healthier than you are today, and you’ll definitely never be younger! Long-term care insurance requires an applicant to meet certain standards of health in order to purchase a policy, so it’s important to apply before your health deteriorates. And, the cost of a policy increases with age, so it makes sense to purchase a policy sooner rather than later. The age bracket when most long-term care policies are purchased is 50 to 60, but most insurance companies will consider applicants up to age 80, assuming they are in good enough health to qualify.
If you’re considering ways to manage long-term care costs, we can provide benefit and cost illustrations for traditional long-term care insurance and for a hybrid policy that combines life insurance with long-term care insurance. A valuable feature of the hybrid policy is its return of premium guarantee, in case you ever decide you want your money back. With this policy, you’ll get your money back one way or another… either by using the long-term care coverage, receiving the life insurance payment, or by cancelling your policy before using any of the coverage and getting back every dollar you paid for it. It’s hard to go wrong with this type of policy, since you’ll never get back less money than you paid (following an initial five year graded surrender charge).
We know planning for long-term care expenses can be a daunting subject, and I’m sure you have some questions about it. Please call or email and we’ll be happy to provide insights for your specific situation and help any way we can.
The vast majority of people pay their bills, especially for insurance, on time, which is great because it’s becoming more important than ever to do so. On top of avoiding late fees, cancellation notices, and the risk of a lapse in coverage, rumor in the industry is that insurance companies will start using on-time payment history as a rating factor for insurance policies, providing a discount for those with good payment history.
Insurance companies subscribe to a service called CLUE (Comprehensive Loss Underwriting Exchange), which is used primarily for sharing claims information, driving history, etc., among insurance companies to ensure each company is privy to the same information when determining how to price a policy. More and more information is being gathered by the CLUE service, including prior coverage limits, length of time a policy was in force, and, you guessed it, payment history.
Following up on late payments and mailing cancellation notices is expensive for insurance companies, and analysis of massive amounts of data shows that people who consistently pay their premiums on time are less likely to have a claim. Therefore, we suspect that insurance companies will eventually reward those who regularly pay their insurance invoices on time with improved policy rating.
To encourage paying on-time, most insurance companies offer the option to have payments automatically withdrawn from a checking account or charged to a credit or debit card with little or no fees. Automatic payments are easy to set up and can be done online or by calling our office. If you don’t currently use automatic payments but feel it’d be advantageous to do so, please don’t hesitate to let us know.
We think it’s important to provide this insight before the potential rating change takes place because there is still time to improve payment history and, therefore, take advantage of the corresponding discount that will likely be associated with it in the future.
Michigan’s auto insurance has been a topic of interest to many for a long time, often due to its cost relative to auto insurance in other states. While our no-fault law is viewed negatively by some consumers that haven’t been involved in a major auto accident, the Personal Injury Protection benefits provided by Michigan’s law, which far exceed those of any other state, have helped many who were seriously injured in auto accidents avoid bankruptcy and receive the care they need.
All auto insurance policies issued in Michigan provide medical and rehabilitation expense coverage with no time limit or maximum dollar limit for individuals injured in auto accidents, as well as replacement of lost income up to $65,000 per year for up to three years. Over half of the claim expenses paid in 2017 were for attendant care for individuals who were unable to care for themselves following a serious auto accident.
As a case in point, we have a client who was severely injured in an auto accident in 1994 who is still receiving medical and attendant care benefits paid by his auto insurance policy. So far, almost $7,000,000 has been paid by his insurance company for these expenses. In any other state, his coverage would have been exhausted long before receiving the care that he needed.
Because a claim of this size could threaten the financial stability of some insurance companies, a non-profit fund known as the Michigan Catastrophic Claims Association (MCCA) was established in 1978 to provide a form of reinsurance to all insurance companies writing auto insurance in Michigan. Currently, an insurance company’s medical expenses over $555,000 for any single claim are reimbursed by the MCCA.
Each year a board of directors for the non-profit MCCA reviews past claims and expenses, as well as projections for future injuries and related expenses, and adjusts the MCCA charge accordingly. Each insurance company is required by the state of Michigan to collect the MCCA charge as part of auto insurance premiums and remit the funds to the MCCA.
For the period of July 1, 2018 to June 30, 2019, the annual charge is increasing from $170 per vehicle to $192 per vehicle, a $22 per year increase per insured vehicle. This charge of $192 is the same for each vehicle regardless of the type of vehicle (old vs. new), the coverage on the policy (PLPD vs. full coverage), or the driver of the vehicle (experienced vs. youthful). Insurance companies do not determine the charge and may not use the funds for their own business. The actual charge shown on your policy will be slightly higher because the mandatory charge also includes a few dollars to fund the Michigan Auto Theft Prevention Authority.
You can find the charge listed on your policy where premiums for the coverages are shown. Each insurance company uses slightly different language when describing the charge, but it is generally noted on an insurance policy as “MCCA/MATPA”, “Programs Required by State Laws”, “State Mandated Assessments”, or something similar.
We know that changes in insurance costs can be disruptive to your budget and think it is important that you understand the source of this change. We feel there are reasonable ways the state of Michigan and the MCCA can better manage these rising expenses (see here), but that’s a story for another day.
Most people know that Michigan has a weird auto insurance law called "No Fault." But what does No Fault actually mean? How does it impact you if you're involved in a car accident? Whose insurance policy pays for what? Watch this short video for a summary of the auto insurance law in Michigan.
Boer Insurance Group is proud to be an Independent Agency, which means we aren't tied to any specific insurance company. This affords us the flexibility to find the right combination of coverage and price for you by comparing multiple options and helping determine which one best meets your goals. Being an Independent Agency allows us to stay updated on coverage enhancements, underwriting trends, and pricing variations. This allows us to provide unbiased advice to our clients and our community.
You're probably thinking that all sounds good but are wondering what it actually looks like. Well you're in luck! Our pro-bono graphic designer (i.e. Brian's wife) prepared the following, which we think sums it up quite well. The difference is subtle but the impact is significant. Which looks like a better model to you?
Most of us are restrained by a budget, which may make selecting the “cheapest” auto insurance policy attractive at times. However, this is not an advisable insurance strategy for a number of reasons. Instead, consider the following ways to manage the cost of quality auto insurance without taking unnecessary risks or putting your financial future at stake.
Factors (Somewhat) In Your Control
1) Improve your credit score. Seems strange, but it’s true. All insurance companies use Insuring Scoring when developing insurance rates. Your Insurance Score is a version of your credit score, modified for a number of factors each insurance company feels best reflect your likelihood of filing claims. Insurance Scoring was approved by state regulators a number of years ago and has proven to be an accurate factor when rating insurance products. Improving your Insurance Score can significantly reduce your insurance costs. There are a number of free resources available online for improving your credit score (and consequently, your Insurance Score).
2) Keep a clean driving record. When you are issued a ticket, insurance companies re-assess your likelihood of being involved in an accident and adjust your rates accordingly. Statistically speaking, drivers with tickets are more frequently involved in accidents than drivers without tickets, so keeping your driving record clean will help to maintain stable insurance rates.
3) Join an industry association. Many insurance companies have sizable discounts for members of certain professional organizations, like the Michigan Association of CPAs (MICPA), the Michigan Education Association (MEA), and a number of Engineering Societies.
4) Choose vehicles with top safety ratings. One ride in your Uncle’s beat up rust bucket makes it obvious why safer vehicles should be less expensive to insure. Vehicles with top safety features better protect the driver and passengers from injury, thereby reducing medical expenses associated with an accident.
5) Use higher deductibles. Insurance companies reward drivers that choose higher deductibles. Choosing a higher deductible eliminates the urge to file a small claim, which reduces claim expenses incurred by the insurance company. Most of these claim expense savings are passed along to the client in the way of reduced premiums.
6) Consolidate. Insuring your auto, home, umbrella, and other insurance policies with the same insurance company often creates the best total value.
Factors (Mostly) Out of Your Control
1) Gas prices are (relatively) low. Sounds like a good thing, right? It is, in terms of the cost to fill up your tank. But lower gas prices allow more people to drive more miles, which tends to result in more car accidents. An increase in car accidents places upward pressure on insurance rates.
2) Medical costs are on the rise. Have you noticed the increase in your health insurance cost this year? Your health insurance plan probably costs between 18% and 30% more than it did last year. An auto insurance policy covers medical expenses incurred due to a car accident, so auto insurance companies are feeling this squeeze as well.
3) Vehicle repair costs are rising. Have you taken your car to the shop recently? If so, you probably noticed that labor and material costs are rising. In addition, the increasing amount of technology included in even base model vehicles can add thousands of dollars to a seemingly simple repair. These repair costs are passed on to insurance companies, which means they need to charge more for insurance in order to cover the increased repair costs.
4) Distracted driving is catastrophic. Insurance companies expected driver-assist safety features to cause a decrease in car accidents, and therefore a decrease in insurance costs. However, distracted driving has caused the reverse to occur: there are more car accidents than ever and the severity of those car accidents is unprecedented. Claims data shows an alarming number of car accidents where the at-fault driver didn’t even tap the brakes before impact. These types of accidents cause serious damage to vehicles and significant injuries to drivers.
This article was written by Brian Boer. Please reach out to Brian (firstname.lastname@example.org) or any member of our team to discuss any of these tips that interest you.
You may have read or seen on TV that our state legislature is taking another crack at reforming Michigan’s no-fault auto insurance law. Over the past ten years there have been multiple failed attempts to pass reform legislation. It appears, at least at this juncture, that this time around the proposed legislation may have a better chance of going somewhere.
What are the issues? Michigan is the only state in the country that requires owners of all registered vehicles to have unlimited medical coverage on their auto policy. This coverage, known as Personal Injury Protection, pays for medical expenses (regardless of who caused the accident) without any maximum time or dollar limit. Because of this extraordinary mandated benefit, auto insurance premiums in Michigan are some of the highest in the country.
What are they trying to change? There are actually two competing legislative bills being debated, but the main points of both include the following proposed changes:
- Allow policy holders to choose an amount of medical benefits. Options could include unlimited (like all policies are now), $1,000,000, $500,000, and $250,000. Choosing a lower coverage amount should reduce claim costs and premiums to some extent, but some studies indicate premium savings from allowing drivers to choose lower coverage limits would be minimal.
- Implement a medical fee schedule. Currently, there are no limits on the fees medical providers can charge an auto insurance company for services provided to people injured in auto accidents. Other types of medical insurance, such as Medicare, workers’ compensation, and group health insurance, have fee schedules that limit how much is paid for specific medical services. The lack of a fee schedule in auto insurance allows medical providers to charge several times the amount they would charge under other medical insurance plans. For example, fixing a broken arm might cost $2,000 if paid by a group health insurance policy, but it could be billed at $8,000 under an auto policy. Implementing a fee schedule probably has the best promise of actually reducing claim costs and premiums.
Who opposes these changes? Groups that oppose these changes include trial lawyers, medical service providers, and groups who believe the unlimited coverage currently provided is instrumental in saving and improving the lives of people who are critically injured in auto accidents.
We feel that giving consumers a choice in how much coverage they buy is a positive change, as long as the unlimited coverage option is still available. But we think a more impactful change would be to allow insurance companies to negotiate prices with medical providers and implement a fee schedule on medical services.
Any legislation is far from approved, and many prior attempts to reform no-fault auto insurance have failed, so stay tuned for future updates.
This article was written by Dave Boer. Please send questions and comments to Dave at email@example.com.
The U.S. is no stranger to natural disasters. However, the cumulative damage resulting from Hurricanes Harvey and Irma and the California wildfires is unprecedented. Insurance claims in the U.S. from Hurricanes Harvey and Irma are expected to reach $55 billion and insurance claims related to the California wildfires are anticipated to be in excess of $6 billion.
As much as we Michiganders like to compare the Great Lakes to an unsalted ocean, we’re unlikely to ever experience a true hurricane. And although over 50% of Michigan is covered by forests, it’s unlikely that Michigan would treat us to a prolonged dry spell that usually accompanies a wildfire. So how should the recent natural disasters impact our insurance here in Michigan?
First, they’re a reminder of the importance of keeping detailed records of your property. No home is immune to the destruction a tornado or fire can cause. If your home was entirely destroyed, do you have adequate information about it? Many people will find details about their home on the Kent County website (click here to search for yours). However, it’s important to have your own pictures or video to validate your home’s size, build quality, number of bathrooms, etc.
Detailed records of your personal property are equally, if not more, important. Do you know how many suits you have? What about the value of your jewelry collection? In the event of a total loss to your home and everything inside it, a personal property inventory list is crucial. Your inventory list should include the following for each piece of property: a detailed description, the estimated cost to replace it, and the purchase date. If you consider that overkill, we suggest keeping detailed records of your most valuable items and recording a video once per year that captures the majority of your belongings.
Second, the recent natural disasters are a reminder of the importance of having the right insurance. Do you have enough coverage on your policy to rebuild your home if it were totally destroyed? Most policies include an inflation guard that increases the policy’s coverage each year, but building costs may outpace inflation. Does your policy provide enough personal property coverage to replace all of your belongings? Keep in mind that, unless disaster strikes in early November, you likely won’t be getting any Black Friday deals. Most people assume the personal property coverage automatically included on their policy (which is a fixed percentage of the coverage on their home) is adequate. However, most claim representatives agree that personal property coverage is one of the two most commonly understated coverages on a home insurance policy (water back-up coverage being the other).
If you’d like to review the amount of coverage your home insurance policy provides for your home and personal property, please let us know. We’re happy to discuss the specifics of your policy in more detail.
This article was written by Derek Boer. Please email Derek with questions or comments at firstname.lastname@example.org.
As convenient as it may be to compare products and services on an “apples to apples” basis, comparing apples to apples in the insurance industry is impossible. Why? Three principal reasons are:
1) Different language within each policy. Your policy “declarations,” which contain information like name, address, coverages, deductibles, premiums, etc., are followed by a legal policy that is generally 30+ pages long. The language in this policy is what determines how those coverages shown on the declarations actually apply when you need to use your insurance. Very few insurance companies use the exact same language in their insurance policies. Instead, each insurance company makes their own modifications to policy language based on their desire to provide (or restrict) coverage in certain areas. Each insurance policy is a legal contract that is interpreted based on the policy language, so small differences in policy language between insurance companies can have a large impact on the usefulness of an insurance policy when a claim needs to be filed.
2) Claim processes and procedures. Even with the exact same coverages and identical policy language, the claim experience from one insurance company to another will vary greatly. This depends highly upon the culture of the insurance company that trains and employs the claim representatives. Each claim representative is trained extensively by the insurance company on how to pay (or not pay) claims. Some companies have a reputation of paying claims fairly and quickly, whereas others have a reputation for fighting claims and dragging the process out for months.
3) Different methods of valuing property. Have you ever haggled over the price of a used car? Each insurance company uses their discretion when settling claims. This often yields claim payments for the same damaged property that are thousands of dollars different between insurance companies.
For these reasons, we are intentionally selective with the insurance companies we represent. We’ve been around long enough (100 years!) to know that insurance is not a commodity and, although it would be convenient, can’t be compared on an apples to apples basis.
This article was written by Brian Boer. Email Brian with questions or comments at email@example.com.
Millennials face many changes as they move away from home, one of which is finding their own insurance. Once millennials move out of their parents’ home, they are no longer eligible to be insured on their parents’ insurance policies because they do not meet the definition of “resident relative.” We think the following three topics are critical for millennials to consider as they start planning their own finances, including their insurance protection.
1) Liability, liability, liability. This is just as important to insurance as “location, location, location” is to real estate. Millennials may not have accumulated significant wealth yet, but they often have substantial future earning potential. These future earnings can be garnished as part of the settlement if a court awards a lawsuit judgement that exceeds the liability coverage limit on a millennial’s insurance policy. Instead of risking their future earnings, millennials should simply carry higher liability coverage limits on their insurance policies. The cost is often minimal.
2) Life Insurance. Your health is what truly buys the policy; your money just pays for it. Millennials may not have a large budget for life insurance, but they generally have an asset much more valuable than money: health. Just ask a 40 or 50 year old that needs a new life insurance policy but can’t qualify for it because of a medical condition that developed later in life. Millennials should apply for life insurance while they qualify for the best rates available. It will only become more expensive to buy and more difficult to qualify for as millennials age.
3) Long-term perspective. Although millennials spend significant time doing independent research online, studies show that they value the advice of an expert more than any other generation. Millennials should find an insurance agent that will be around for another twenty or thirty years to advise them as their financial position and the insurance products protecting it change.
This article was written by Brian Boer. Email Brian with questions or comments at firstname.lastname@example.org.