But I paid for 6 months...

If you are shopping around for insurance or have been approached with a better policy and with a lower premium, many people find themselves thinking they are in a contract with their current carrier.  What many people I run into do not know, is that you can cancel your current policy whenever you want with no repercussion, you can even get all of your unused premium back.

I wanted to quickly share some information about policies and what happens when you pay for your annual or 6 month policy all at once. Signing your agreement with your insurance company isn't a binding contract that holds you in until the expiration date. It can be cancelled at anytime per your request. A lot of people don't realize that when you decide to cancel a policy, even if you pay monthly, your prorated unused premium will be refunded to you. A ton of customers feel like they are trapped in a policy and can't start saving money on a new policy because they already paid for their policy upfront. Everyone should be aware that if you are not happy with your policy and are searching and find a better policy, you can switch at any time! If you call into your agent and tell him or her you are canceling, chances are it will get done fairly quickly and jump start the process of returning your premium to you. Most companies can get this done relatively quick and before you know it you could be with your new carrier and better policy and have nothing to worry about.

Just a short piece of information for all customers to be aware that they do have options and can always make a change, should the right opportunity present itself! Post some comments and questions below so I can know what you guys need answered!

Personal Story About Being Under-covered

I recently wrote a blog about how important it is to know what your apartment complex will and will not cover. In addition to that you should be very aware of what your coverage limits really are, if your apartment complex is providing the insurance to you. In my post about renters policies found here I was writing about the differences in my coverage from when I had the apartments insurance vs my current renters policy. I was drastically off on my guesstimate of coverage that I was receiving from the apartment.

I found our old declaration page today while sifting through a bunch of junk papers and I was absolutely stunned by what I had seen. I will post the comparison photo below to show just how off I was on my guessing, but I'm going to break it down here as well.

Current coverage from my renters policy:

• Personal Property: $25,000
• Personal Liability: $300,000
• Loss of Use: $5,000
• Deductible: $250
• Monthly Payment: $14

Previous coverage from the apartment:

• Personal Property: $5,000
• Personal Liability: $25,000
• Loss of Use(Additional Living Expenses): $1,250
• Deductible: $100
• Monthly Payment: $11

As you can see from my blurry photo, I was severely under-covered. And I had absolutely no idea. this happens everyday to people. They pay a fee and expect that they are being taken care of and are covered the way they should be, but sadly that's usually not the case. Sometimes as a consumer you need to be proactive and make sure that you have the right coverages and limits, don't be afraid to ask questions. You should ask lots of them! I essentially now have; 6x more personal property coverage, 12x more liability coverage, and double the loss of use coverage. I took my limits up this much and only pay three extra dollars a month and have a slightly higher deductible. Sure I might not need the $25,000 dollars in personal property coverage but that liability coverage can dwindle down fast. Just like I talked about in my umbrella post, your liability coverage can be wiped out extremely quick. If I burnt down my whole complex imagine the amount of liability on my shoulders... 

Just wanted to share my personal story about how this kind of thing happens to everyone and we all need to make sure our agent is taking care of use as well as you taking care of yourself. 

ALL TOWNHOUSE/CONDO OWNERS MUST READ

There is quite a bit of uncertainty here in Utah when it comes to how you insure your condo or townhouse. I've ran into potential clients that have reached out for a comparable quote for insurance only for me to discover that they were being wrongfully insured. 

When someone goes to buy a townhouse or condo the HOA is most likely involved. This community you are buying into can have some weird stipulations and requirements, which can change and cause some confusion surrounding multiple issues. The insurance of your unit always seems to pop out at me when getting quotes for my potential clients. My clients either don't know how their unit is insured, or they don't know how they want it insured. 

In 2011 Utah State Legislation passed a law titled, “Condominium and Community Association Revisions”. This is something all agents should currently be aware of, because this law directly affects your insurance on your unit. The HOA calls the policy required by law a "master" policy which the HOA is required to provide to you. The policy essentially covers the building, including the "betterment's" and "improvements" installed by you the unit owner. What is NOT covered is your personal property and your exposure to liability claims. 

Simple enough, where is the confusion? The problem lies with agents who are unaware or choose to ignore these new requirements. The way the insurance used to work is the HOA would cover the outside walls and you had to cover all of the inside walls in addition to the personal property and liability. I know, it sounds ridiculous. "We will cover the outside walls" how dumb does that sound? Anyways, now that the law requires the full building to be covered you need to make sure you are paying for the right insurance! 

Now a days if you have an HOA policy you would want a unit owner policy on your townhouse or condo. This policy is very similar to a renters policy in the way that you don't actually cover the building but rather the contents inside and your liability as the owner or occupant. The only difference is you can add additional endorsements to this policy which are not found in a renters policy, and most importantly, you own the building. 

The importance of being aware of this, is subjective. If you don't mind paying more money for an old policy that is double covering you for what is already covered then there is really no problem. But most people I know want to pay for only what is necessary and don't like to overpay. The situation I have found is an agent gives a policy to the unit owner and they give them the requirements of the old policy. So now the owner is covered by the HOA for the whole building in addition they themselves are paying to cover the inside walls, which is already covered... Please be aware of this requirement and make sure you are paying for what is needed and that you aren't paying more money for something that is already covered, it could save you a couple of hundred of dollars every year!

To read more on the Utah Legislation head over to this Utah.Gov PDF. 

Why your Agent raises your rates!

Have you ever gotten your 6 month or annual renewal papers and seen that horrific rate increase? It is that thing that evokes anger, distrust and leaves you as a customer asking, why me? I think most people can agree that no one likes to pay more money for the same thing. How would you like it if every year your loan on your car changed and increased?

Many customers see themselves as a very responsible and safe driver or home owner. This is why when you have no tickets, accidents or claims filled you feel betrayed when you see you will now be paying 5 or even 20 dollars more every single month for your same coverages and service. What most people don't know or understand is that your agent isn't to blame.

There is a huge misconception that your agent can raise your rates, when actually we have no control over the rates. We the agents want you to get the best price, coverages and as many discounts as possible. But we can only do so much. The company as a whole will have logistics and teams making calculations to determine if group A needs a rate increase, or if group B is getting older and gets a decrease. Its just an example of how your agent isn't really to blame. Although your agent isn't to blame for the increase he or she could be to blame for poor attention to your policies and not covering every discount under the sun and more importantly making sure you are covered the way you need to be covered. An agent should be someone who has your best interests at mind. They make sure you understand a coverage and make sure you know what is available to you at any time if you choose to pursue additional coverages or products.

To make the subject short and simple, whenever you get that letter saying your premium is going to be increased, either there have been claims or tickets as a result of you the customer, or the company has simply issued a rate increase, which is fairly common. The company wants to stay competitive and charge the right prices, even though we might not agree with them. All in all I think next time you get those pesky papers showing your increase you shouldn't ask yourself why the agent raised your rates, instead ask yourself is your agent is truly taking care of you, your family and your assets. If your answer is yes, you might be okay with those extra dollars each month.