3 things you need to know before buying insurance
Insurance is something everyone needs but no one wants to pay for. I get it. Even as an agent I hate sending off that check every month or having to type in my credit card number to pay for something that gives me no immediate value. I mean, if I go to a store and buy a new polo, I get the immediate gratification of wearing a nice new shirt. People compliment me on my style. Insurance, not so much. Most of the time, people don’t even know what any of it means. They feel like an elementary student reading a law book. It might as well be a different language. That is why I try to simplify things for anyone with questions about their coverage or what any of the jargon means.
1. Car Insurance – “What are liability limits and what do they mean?”
First off, this is a common question. Don’t feel bad for not knowing the answer. Everyone knows to drive in Oklahoma (Any state in fact) you must at least carry liability insurance. Liability insurance is used as “Mess up Coverage”. It is there to cover your butt in case you do something wrong. The minimum required amount to carry in Oklahoma is 25/50/25. No, this isn’t high school algebra and that’s not a mathematical equation. Lest break it down per number. The first number “25” represents the bodily injury, per person limit. This means, in a covered accident, your insurance carrier will pay up to $25,000 per person injured in an accident if you are found to be at fault. The second number “50” is the total bodily injury pool. Meaning, if multiple people are injured, the most they will pay total for bodily injuries is $50,000. Last, the third number, often the same as the first, “25”. This last number represents your property damage liability. This $25,000 pot pays for the other party’s property and even municipal property in an accident. Remember, these are just the minimum. You always get what you pay for and having the minimum can leave you exposed to lawsuits in some cases. Always consult with your agent to be sure that you are carrying the correct amount of coverage. It’s literally our job to make sure you are covered.
2. House Insurance – “What is Replacement cost, and do I need it?”
This is a good one, pay attention. If buying a house is the most expensive purchase you ever make, then having replacement cost coverage may be the most important purchase you make. So, what is replacement cost? Replacement cost coverage is there to first, calculate what it would cost to replace your home by building a new one and second, pay you that amount in the case of a full loss (minus your deductible). Essentially, replacement cost is there to buy you a new house if your current house is destroyed by fire, vandalism, or any number of other things that are covered under your insurance. “But what about all my stuff inside?” Don’t worry, your 85-inch TV and walk in refrigerator are all covered. When you extend replacement cost to personal property, or “Contents” in insurance talk, it covers the cost to fully replace the things in your house. Clothes, furniture and more are all taken care of if destroyed by a covered loss. Sometimes it is smarter to put really expensive things on what’s called a “Floater policy” like wedding rings or artworks. I’ll talk about what a floater policy is in a later blog. To sum it up, if you value your home and the things inside of it, replacement cost may be the best way to go. Always consult with your agent to make sure that you have coverage for the specific risks you may encounter like a fire or hailstorm.
3. “How can I save on my insurance?”
Money. You need it to do just about anything and everything you want to do. Food cost money. Rent and mortgage payments are always going up. Cars are getting more and more expensive. Everyone wants to cut costs and save money anywhere and everywhere they can. Most importantly, everyone wants a good deal! Most people will tell you that saving money on car and home insurance is all about building credit, driving safe and making sure that every agent knows you have you bachelor’s degree in frugality. While most of this is true, and it can save you money, the best and most effective way to save is to simply shop. Carriers are always adjusting they’re formulas on how they calculate premiums (as evident by your ever-increasing insurance bill). This also means that, while your bill may be going up, someone else’s may be going down. Time with a company and loyalty to them only gets you so far. As an independent agent, I cannot tell you how many times we have quoted someone who is currently insured with a captive company like State Farm or Farmers; Who say they have “an amazing rate but go ahead and give it a try to see if you can beat it”. In fact, one of my last clients who made the leap to J Bentley saved nearly $1,500 a year. I don’t care how good your driving record is, it’s not going to get you a $1,500 discount. Just like when your looking for your new big TV for the game or the next pair of Louis shoes to go out in, you shop around and look for the best deals. TV’s go on sale right after the super bowl. That’s when you shop. Insurance never really goes on “sale”, but I recommend shopping it around every two years or so. This will do one of two things for you. It will either find you a better rate so you can save money, or you won’t find a better rate than what you already have, and you’ll know you already have the best deal.
As always, talk to your agent before you decide to make any changes. Insurance is such an individual and personal thing. Because of that, when it comes to “what to buy”, there are no true hard and fast rules. Every person has different needs and different things that need to be protected. The best thing you can do is find an agent that will listen to what those needs are.
Thanks for your time and if you ever have any questions, reach out and let me know!
Your Agent,
Drake Harness