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!

The information your agent doesn't tell you!

I come across quite a few customers who think they have a really great rate. They know exactly how much they pay and they know it hasn't been steadily increasing too much, but mainly they know its pretty cheap. What some people don't realize is that their coverage is pretty cheap too. There are way too many people left in the dark about what the different coverages actually are. All they really know is that they are, "covered". But are they really? Is it just enough to have the absolute state minimums for where you reside? These are mostly put in place to make sure you're at least doing something and not driving around with no coverage at all. I would say 9/10 times the state minimums are not enough coverage, not even close.

For Utah the minimum coverage is 25/65. Now most people don't know what this actually means. 25 represents $25,000 of coverage per person in an accident and 65 represents $65,000 of coverage per accident. This may seem pretty substantial but I assure you it is not as high as you think. Say you are driving down the road in a huge beefed up truck and you unfortunately look down for a couple of seconds only to look up and see you are heading straight for that little sedan. There is no time to brake before you hit and boom, accident. Now lets assume you were going a fairly decent speed and caused some serious damage. The person(s) injured in the other car are rushed to the hospital and stay for a couple of days. Then they have lasting injuries that require rehab and because they have been in so much pain they have been taking time off work and losing wages. Not only have they been losing wages but also racking up debt from all of the bills piling up. We all know how expensive things can be and you can see your $25,000 can be gone before you even realize. Now imagine that the most tragic thing happened, in this accident someone died as a direct cause of the incident. Lets say this person was the primary source of income for their family and they want future earnings and lost wages as a result of what you caused by being in that accident. $25,000 dollars certainly isn't going to pay for the next 10 years of someones income even if they were making the average salary in the US. There are so many things that can happen as a result of an accident that will dwindle that $25,000 down to nothing and now they can come after your wages, your assets and your bank account. This is something that is unlikely in most peoples life but certainly something that could happen and you would want to be prepared.

The coverages increase as follows:

• 50/100: $50,000 per person/$100,000 per accident
• 100/300: $100,000 per person/$300,000 per accident
• 250/500: $250,000 per person/$500,000 per accident
• 500/500: $500,000 per person/$500,000 per accident

I usually try and recommend at least 100/300 as it is quite a bit more coverage than minimums and can save you in serious accidents where you are responsible. Remember that these coverages are for the Liability portion of your policy, meaning they cover any Bodily Injury you may cause as a result of an accident for which you were responsible. It is covering others bodily injury caused by you, it is not  covering yourself. Coverage for your own bodily injuries should be covered by the other person if they are at fault, but if they are not properly covered you want good coverage for yourself that would step in. I will cover Uninsured and Underinsured coverage in my next post to show what exactly those break down into. 

So maybe your premium is low, but maybe your coverage is low and putting you at serious risk in the event of an accident. Make sure you are covered properly and that you know how much coverage you have. 

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.