Archive for the ‘theft insurance’ Tag

4 ways NOT to save on your insurance (and what you should’ve done!) – part 1   4 comments

expensive insurance

Got those payin’ too much blues? Sammy’s here to help!

Hello one and all, and happy Fourth of July!  Today we are going to start a four part series addressing common mistakes people make while attempting to save money on their insurance.  Rather than quick blurbs, Sammy’s idea was to go a bit more in depth each week.  Off we go!

This week we are going to cover one of the main ways that we all attempt to save money – by adjusting the coverages on our policies.  We’re going to cover both general and specific tips, and we DEFINITELY would like some feedback – questions and comments are invited!

Sammy suggested that we should title this week’s installment “Adjusting the wrong coverages,” and while it may be a bit negative, it does hit on our central focus.  There are many changes that you can make to your policy to save money.  The problem arises when the money that you save, versus the reductions in coverage you are accepting, do not make it worth while.

In general, when reviewing potential reductions in coverage, always consider what you are losing.  Does the amount of premium you are saving really pay for itself, when compared to the coverage you lose?  For example, if you are increasing your deductible from $500 to $1,000 to save $50 annually, is it worth it?  In order to make up for the extra $500 you will pay in the event of a loss, you would have to save $50 a year for ten years to make up the difference!  And that’s just to break even!

In addition, if you are looking at removing a coverage completely, make sure that you are comfortable that if you were to have a loss, you would be able to pay for it out of pocket.  For example, if you remove comprehensive coverage on your car, and it’s stolen – could you afford to buy another car to replace it?

Other things to consider BEFORE making changes:

  • If you are going to increase your deductible on your auto policy, make sure that you increase the right one.  Increasing your comprehensive deductible, in general, will not save you NEARLY as much as the collision deductible.  In addition, it will dramatically increase your out of pocket cost on smaller claims like cracked windshields.
  • If you are going to remove physical damage coverage completely, consider at least leaving comprehensive on the policy.  It doesn’t cost much, and provides lots of good coverages for the price – repairing cracked windshields (usually for free) or replacing them if necessary, hitting an animal, if your vehicle is stolen, vandalized, or catches fire.  It also covers unusual claims like if your vehicle is damaged or lost in a flood, hail damage, trees falling on vehicles, animal damage (such as a rodent taking up residence in your vehicle!), or if your vehicle gets painted accidentally by a line crew.  If you heard about the paving truck on the PA turnpike who leaked tar all over the road and damaged hundreds of vehicles – comp claim!
  • If you are considering reducing the building limit on your homeowner’s policy, you might do better by increasing your deductible.  Oftentimes, when you jump from one deductible level to the next, the building coverage rates drop dramatically more than if you just reduce your coverage.  Thus, you will accomplish two things – save more money on premium, and have better coverage in the event of a total loss – you will pay more for the deductible, but will not have diminished limits to contend with!  And, there is the nasty possibility of a co-insurance penalty – which I can address in comments, if you have questions!
  • If you are considering reducing the liability limit on your homeowners, look at a smaller reduction, but on the auto policy instead.  This one is “hairy”, though – it’s not often a good idea to reduce your liability limits – this is the protection you have in the event someone else sues you.  If you are dead set on reducing liability limits, get information on how much you would save by taking a smaller reduction on the auto policy.  In other words, you will likely save more money by reducing your auto liability limit by $50,000 ($100K to $50K) than reducing your homeowners by $200,000 ($300K to $100K).  Again, though, this is a LAST RESORT recommendation ONLY.

This is a lot of information.  Bottom line when looking to save money on your insurance, spend an extra 20 or 30 minutes to discuss your options with your agent.  Most agents are more than willing to see what they can do to keep their clients happy!  And if you end up saving money, while not losing much coverage-wise – all the better!

insurance savings

I’m tuckered out! That’s a lotta typing!

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3 coverages you’ve never reviewed (but have to have) – Business Edition   1 comment

business insurance

Sammy says these coverages are no joke!

Hi hi!  I’m back this week to see what we can do to help our local business owner’s out.  Last week we went over some basic insurance annoyances.  This week we are going to take a look at how to avoid some of that pain come claims time!  The three main coverages we are going to review apply to virtually every business – but I’m also going to go over a special one just for contractors & one for restaurant owners!  It’s a busy week!

Employment Practices Liability (EPL) – The first coverage I’m going to dig into is quite possibly the most relevant one for any business owner with employees.  It’s also one that many people never heard of!!   Coverage is going to vary from company to company, but I’ll give you a basic break down – if you have employees, and one of them sues you for wrongful termination, sexual harassment, EEOC violations or discrimination, failure to hire/promote, etc, EPL will cover two things – the cost of defending yourself against the suit, and any settlement or award that’s granted (up to policy limits, of course!).  There are other coverages that can be added (such as making wage or overtime errors, or harassment of a client or vendor), but that’s the general idea!  Even with a lower limit, you can at least hire an attorney to protect you with minimal out of pocket cost.

Employee Dishonesty – While we are on the topic of employees, why not look at it from the other direction?  Let’s say that you have an employee who is stealing money or goods from you – how would you cover that loss?  Obvious answer here – Employee Dishonesty!  “Wait a minute,” you might say, “that’s already covered on my policy!”  “Well, yes and no” says Sammy.  You might have policy that includes a throw-in amount of this coverage, but it’s usually minimal – $10,000 or $25,000.  If you have a larger operation, or sell higher valued items (cars, machinery, jewelry etc), it may not be enough!  What if an employee at a jewelry store decides they are quitting, and on their last day walks out with a handful of diamond rings?  Or, consider this – there was a case recently where an employee of an auto dealership had been stealing smaller amounts of money from each sale, and ended up getting caught after stealing MILLIONS!  $10,000 is a drop in the bucket in cases like these – and you have to cover the rest of the loss yourself!  Basically, take a look at what you’ve got and make sure you are comfortable with it!

Business Income & Extra Expense (BI/EE) – Are you running an operation that depends on a building, or the contents within?  Who isn’t!  Virtually everyone could have a BI/EE loss, but not everyone is carrying the coverage.  To make it simple, BI/EE provides you with the income that you lose out on in the event of a covered loss (a fire, theft, etc) that prevents you from operating your business for any length of time.   For example, you run a store that sells widgets, and you have a fire that destroys your location – the building and all your contents are gone.  Not only have you lost those goods, but you are also losing income while the business is rebuilding!  BI/EE protects you against this loss!  It’s complicated to explain, and would take a lot more space to go into in depth.   Basically, business income protects the actual income that’s lost, while extra expense provides you the ability to do what you can to start earning income again ASAP.  It’s the extra expenses you incur to start earning income again – for instance, renting a second location to sell widgets while your original one is being rebuilt.

Phew!  That’s a good start!  Now, on to coverages specifically for contractors or restaurant owners!

Voluntary Property DamagesContractors:  Do you ever find yourself moving a client’s TV, furniture, appliances, etc in order to complete your work?  Happens all the time, right?  Guess what – if you drop or break any of those things, that’s almost never covered by your general liability policy!  Boy, I’m chock full of good news today….!  However, there is a quick and easy remedy for this situation – add Voluntary Property Damages!  For most smaller operations (1-5 employees), $5,000 or $10,000 of this coverage should be sufficient, commonly includes a $250 or $500 deductible, and is relatively inexpensive.  Better to have and not need……

Utility Services Off-Premises Power Failure – Direct Damage & Time ElementWhew, that’s a mouthful, eh restauranteurs?  But make sure you can say it to your agent – it’s a crucial one!  “But I’ve got spoilage coverage” says you.  “Not if the food spoils due to an interruption of power off your premises” says Sammy.  If someone crashes their car into a telephone pole a quarter mile from your building, for instance, that loss would be excluded under your ordinary spoilage coverage – you’d need the coverage above.  Direct Damage provides for the food that’s lost, while time element is for the income you lose while replenishing your stock.

Well, I hope that you made it through all of this information alive and well!  If you have any questions, you can always feel free to comment, email, or call my daddy – he loves telling people about insurance coverages!

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