What the heck is an Umbrella?

The average everyday person is not always as educated as they should be when it comes to their current insurance. Whether that be in the form of their auto insurance or life insurance. But more often than not I find people who have never even been informed about an umbrella policy. I mention the policy and ask if they have one or have had one, and many times the customer is confused by the question. "Whats an umbrella?", is what most people respond with. As an agent it is my responsibility to cover all possible situations that you could encounter throughout your life. These situations are often analyzing what loses you could sustain in the event of an incident caused by your negligence. An umbrella is one piece of the puzzle to keep your future secure and safe for your and your family.

An umbrella policy is a policy that is put in place as a backup coverage policy that will cover all policies currently held by a household. The name umbrella literally describes what the policy does. Imagine your car, home and any other policy you own, such as an ATV. Now picture each of these policies as separate but still part of the same household. My car has $200,000 of liability coverage, but my house has $500,000 of liability coverage. I own both of these policies, so they are in one household but I cannot use part of my $500,000 of liability coverage from my homeowners policy to pay for an incident caused by my negligence in my car. But with an umbrella policy you can. Typically umbrella policies start at $1,000,000 of coverage and increase by 1 million as you go higher.  What that million does is cover all of your current policies held in your household, such as auto, home, boat, motor home, and it covers it like an umbrella. This coverage would kick in if you were to use up all of the available amount of coverage in any one of your other policies. 

Lets say I have a home that has $300,000 of liability coverage. If I burn down my own house and that fire spreads to my neighbors house I am liable for the damage caused to the neighboring homes that sustained damage. This $300,000 could get wiped out fairly quickly, leaving you with hundreds of thousands of dollars of damage to pay for because of your liability in the situation. The homeowners would have a right to seek compensation for the loss as well as compensation to rebuild the home. If I happen to burn down two homes around me that once large sum of $300,000 is quickly diminished. But if I have planned ahead and have a 2 million dollar umbrella policy this will kick in and help pay towards the damages and reconstruction of the homes. This is the same for any other policy you own. The umbrella would kick in the same way in a auto claim where you owe more money for medical payments, lost wages or property damage that cannot be paid for because it exceeds the limit of coverage for that specific policy.

The umbrella is essentially a backup plan in case of a dire situation where your current coverages cannot cover the amount of payments for which you are liable for. It is your ultimate backup coverage in any situation. This policy can be the deciding factor between you losing all of your retirement money or being completely covered by your insurance policies and not having to pay out one penny of your own. It can save your wages from being taken because you weren't prepared for injuring a driver so bad that he totaled his brand new Ferrari and is now missing work for the next 6 months from being hospitalized. This is the ultimate backup plan that can save your assets and secure your future income from being taken from you for usually around 100-300 dollars a year. 

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. 

Do I need Life Insurance?

Is life insurance really necessary? Does my family even need life insurance? How much life insurance do I need? What kind of life insurance do I need? These are some of the most commonly asked questions either to an agent or simply questions you would ask your spouse or even yourself. Life insurance like many insurance policies are often times not as well known as they should be. Everyone who has a house, a car, a family, assets and much more, should be aware of what exactly life insurance is and if you need it.

Most people I come across often times inform me that they already have life insurance through their
company they work for or that their spouse already has life insurance. The thing that they don't often know is how much life insurance they have, what kind of life insurance they have and for how long that life insurance will last them. Just knowing you have life insurance isn't quite enough. We are talking about the security of your assets in the future and more importantly your families security. With so much at stake why is it that we don't put more importance on something that can have a radical impact on your future? I think the reason lies within the fact that people don't want to buy things that don't give them something tangible or instant gratification or possession of the item. But people who have life insurance and are well educated know how important it is and know what they have, what they don't have and know why they need life insurance and always will. 

Because term life insurance is generally the most popular I will briefly cover it and the reason I believe you need it and should want it. Term life insurance is insurance that you choose for a specific amount of time to be covered, typically 10, 20 or 30 years. You also choose how much coverage you want. This is where people should recognize that your needs are different than Joe next door. If Joe has a mortgage twice the amount of yours and has thousands of dollars of debt, he will most likely need more "face amount" coverage than you. The face amount is the amount of money that you are insured for and the amount that would be paid out in the event of your death. Uh the "d" word. This is one of the reasons most people avoid life insurance and don't give it too much thought or time, because it reminds us that we all will inevitably die at some point. People put themselves in a, "that won't happen to me" category. One where they know that they won't get cancer, or have a severe and life threatening accident, because they just won't. But we never know what is around the corner and we should be prepared no matter what surprise we are faced with. It is better to be prepared for the worst than to be surprised by the worst. That's essentially what life insurance is for, preparation. Preparation for uncertainty and the unknown.

Sift through the obituaries one day and you will undoubtedly see the phrase, "in lieu of flowers". As an agent this breaks my heart. This shows me that the family of the deceased was not prepared for this unfortunate and tragic event. It tells me that they need financial help because they did not plan ahead. Instead of receiving beautiful flowers and not worrying too much about anything except saying goodbye to their loved ones, they have to look ahead and reach out for financial help because they are in a dire situation. One where their home and family security could be at stake. Even though none of us want to think about tragedy it is a completely logical thing that could happen to anyone at any time.

I believe life insurance is more necessary than even auto or homeowners insurance. Instead of covering just your house, or damages to your vehicle, life insurance covers yours assets, mortgage, debt, future income and most importantly your family. Remember that each person needs the right amount of coverage for them, so if your agent suggests a face amount without asking questions about income, mortgage, debt, future plans for college or anything related to those, you might want to sit down with someone who is looking at your situations and putting your interests before their commission.

Don't forget to post some comments suggesting future topics and hope on over to my Facebook page to connect and contact me with any insurance related questions. 

Ridesharing, am I covered?

The Ridesharing issue has been out and about for quite a while now depending on where you are. For those who don't know drivers for Uber, Lyft and other companies like sidecar, were out of luck when it came time for a claim while operating as a contracted rideshare driver. The issue arouse simply because rideshare is growing tremendously and everyone is trying to play catch up, even the insurance companies. Simply put it outgrew the market as far as support is concerned.

Mainly the issue has been that some carriers were dropping their customers or even worse not paying claims because the operator was driving as a rideshare driver. Now I am nowhere near the expert that  The Rideshare Guy is, but I have slowly been learning about this huge community. Essentially when a driver picks up his or her passenger the respective rideshare company they are contracting with will take over as their insurance carrier and give 1 million dollars in coverage to the driver. This has been great so far, as drivers are covered substantially. The issue lies in the grey in-between stages of
picking up your passenger. What has been happening is a driver logs into the app to see if there are any potential passengers in the area looking for a ride. At this point the driver may be sitting in their car or just patrolling the roads waiting for a passenger to request a pick up, this is where things became unknown. Lets say that you as a driver are logged into the app and you are cruising the streets, maybe even driving to the store. Now lets assume the worst, you get into an accident, and its your fault. When, not if, your insurance company discovers that you were logged into the app they will assume you were operating as a business and not as personal auto policy holder. Leaving you without any coverage at all and potentially hundreds of thousands of dollars in debt, in medical payments to others or in property damages. This is where some companies are doing the right thing and covering you when you need it.

Some companies have stepped up to the plate and implemented an explicitly stated policy that clearly states YOU ARE COVERED. This is huge considering its a guessing game with some other insurance providers. I have heard stories of certain companies issuing nationwide memos to agents stating that clients will be covered in the event of an accident, but if it were me, I wouldn't risk my assets and my future by believing a memo. What if the company decided they actually have been receiving too many claims and withdraw their statement in that memo? There is no proof or explicitly stated material that you have in your own possession that guarantees coverage.

There is also the issue of how will my company even know if I was logged in? My opinion on that is simple. No insurance company wants to pay claims that they don't need to pay. If you have ever had a claim you know that both companies will thoroughly investigate every minute detail of the accident. This is for the reason I stated above, no company will pay a claim that they legally do not have to pay. Its money out of their pocket and if they can keep it in their pocket they will. Another opinion I have is that it is information that can be tracked. I don't know the specifics or logistics of how the apps work or how they can track where you are or things of that nature. What I do know is that even a Facebook post that has been deleted can be tracked. Once its online, most people agree it can be found. I would assume that you as a driver being logged into the app and then not picking up your passenger because of an accident would be tracked. Like I said, I don't know the whole logistics of everything but I would rather err on the side of caution and just assume they can track what happened and the insurance company could find out that I was indeed a driver and I also was logged into the app. Now I have had some people act like their insurance company won't find out that they were logged in because, "why would I tell them?". Well if you withhold that information when your insurance company asks you a specific ridesharing question, and you lie, you have now committed insurance fraud. Which can be a felony, not something you would really want.

My honest advice is that if you are actively driving as an rideshare driver, and you do not have a commercial policy, you should get a document that explicitly states your coverage in the event of an accident while you are logged into your app and not yet covered by the Rideshare company. The drivers out there need to have a secure policy to insure they are covering their future for themselves and their loved ones. Post your questions below and drive safely!

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.

Introduction into Insurance And All

Welcome to my blog Insurance And All! I am starting this blog in the hopes of spreading knowledge regarding "Insurance And All" the ins and outs that every person should know about. I come across hundreds of customers who have never really had their coverages explained, limits explained or even what certain things in your policy mean when it comes time for a claim. I want to help the community become aware of all of the misconceptions and misunderstood myths about insurance. I want this to be a place of knowledge, discussion, and build a strong community for everyone to be apart of.

I am currently a Farmers Agent in the state of Utah. As a child and teen I always had a small idea with my sister that one day we would have our own Insurance Business and run it all ourselves. When it came time for college I was enrolled in the Pre-Business Undergraduate study but quickly found I really had no interest to go into Marketing, which is what I had decided I would bring to the table for our business. After going into Exercise and Sports Science I realized I was in school for all the wrong reasons. I wasn't striving towards a bigger picture and often was faced with the, "what will you do with your degree?", question and often times I had no idea what to even say. An opportunity presented itself and I jumped on it. My sister had recently become a Farmers Agent and thought that I should also become and Agent. Long story short, we don't own our own business per-say but she owns her own agency as do I. I guess all along it was just meant to be. Although I am not enrolled as and ESS student any longer I still love Fitness and the human body and continue to strive to be better physically and mentally. 

Now that everyone knows just a little bit about me I want to connect with people and know who they are and what they have questions about. I don't claim to know everything, who can, but I do know that I will do my best to help everyone out there get their questions and concerns answered with careful guidance and information. I look forward to helping out my community and helping families keep their hard earned assets secure! 

If you would like to connect with me on Facebook head over to my Page.