Tuesday, February 27, 2018

Tracking Driving Behavior

Should You Let "Big Brother" 

Track Your Driving?

If you have shopped for Auto insurance recently, chances are you have learned about Telematics devices that track your driving for the carrier. Progressive has Snapshot, Safeco has RightTrack, State Auto has Safety 360, to name a few.  
We get people pushing back, telling us they don’t want “Big Brother” spying on them. But this isn’t spying, namely because they cannot get the information without your consent and participation (You have to intentionally plug the device in or download an app). And it is a good idea, especially if you are in the less hazardous group of drivers.  Let me explain why.

Why is this a good idea?

Auto insurance is changing. Distracted driving has driven claims payouts over the carriers’ budgets.  According to the CDC, 9 people are killed each day and 1,000 more are injured in Distracted driving accidents. Aside from the human life/pain factor, there are the financial factors. Both the people involved in the accidents and the carriers are affected financially by claims. So it makes sense for Carriers to want to know what type of driver you have been before they decide what kind of pricing to give you.They will be the ones paying out the claims, which generally pay you much more than you have paid in insurance premium. 

Low gas prices have encouraged more people to drive more often and longer distances.  Growing cities (and their populations which means more traffic) have added to stop and start traffic accidents. Cell phone usage (while driving) has added exponentially to distracted driving. In recent years, distracted driving has caused 400,000 people to be injured in car accidents annually, with over 3500 resulting in death. 

But I'm a good driver, why do they need to track my driving?

Carriers now want to look at not only your driving history, but your current driving behavior as well. In today's "instant" world, they can do this in real time through Telematics devices. This new trend of giving discounts for good driving, tracked in real time, can be a possible deterrent in distracted driving. It will definitely give the carriers real time information about how their clients are driving. 

Remember- bad drivers affect everyone's rates, not just their own.  In recent years, seven of the top ten auto insurance carriers (based on market share only) have paid out more in claims than they have charged in premiums. This means they must raise their rates just to stay operational. Rates are increased across the board in these situations.  Everyone will be affected, but someone with tickets or accidents will receive larger increases. And if you allow the carrier to track your driving and you are in the pool of low risk drivers, you are eligible for deeper discounts. 

So what do these device actually track for the carriers?

There are four things the telematic devices usually track. 
* Late night driving (between Midnight and 4 am)
* Number of miles driven
* Amount of high speed driving
* Amount of Hard braking

All four of these factors are indicators of hazardous driving, often leading to frequent accidents. Tracking these can show a carrier in real time how safe a driver you are. Carriers track these factors for different lengths of time, ranging from 90 days to a full year. They offer an initial discount for agreeing to the tracking (5-10%) with a possibility of a larger discount of 30-50%, depending on the carrier. You can see how you are driving during the tracking period through the carrier's site or a mobile app. 
These are optional devices for now, but I believe they will become mandatory down the road. (Since they can track your driving, why wouldn’t they?)

But let me be clear, they are not tracking where you are driving or who is driving. They can only read the car’s data. I assume a good hacker could hack a car gps and track location, but that is not the goal of the carriers. They want to see if you are a safe risk to insure. Like most companies out there, insurance carriers are trying to be competitive and profitable. Writing less hazardous people accomplishes both of those goals.

The device only takes a moment to plug in and then you don’t have to do anything else until the carrier tells you to unplug it and send it back. That’s it. And you can get up to a 50% discount, depending on the carrier. Not bad for plugging in a flash drive. No one wants to pay for insurance, so if you can get some savings, why not do it?
If you have questions, call your agent. If they won’t answer your questions, call us.

We can explain that!

There are three ways to request a quote for your insurance needs: 
* Visit our website
* Call Brockman Premier Insurance at 877-987-8683  

Monday, February 19, 2018

Loan/Lease Gap Coverage

How Can You Cover the Gap?

 You just bought your dream car 6 months ago. You have been oh so careful. No one is allowed to eat or drink in your car. You stop fully at every stop sign. You stat a full car length behind every car you drive behind. Until one day you don’t stop at the stop sign.
Your dream car is totaled. Then you find out that not only is your dream car gone, but the insurance isn’t going to cover the full amount you owe on your loan. They say something about not having Gap insurance. What is that? Why would I have had it? How can I get it? How much will it cost me? We can explain that!

Want a better scenario?

   When you buy a new car, many carriers (and dealerships!) offer Loan or Lease Gap coverage as an optional coverage. With this coverage, if you have a total loss, you are covered for the difference in the your now totaled cars value and what you owe on the loan.  The market value for your car isn't necessarily the same amount as what you owe on your car loan. Carriers pay out Actual Cash Value on your car, unless it is a certified classic automobile or you have a special policy that pays a specified amount for the car. Usually the adjuster will use the Market value of your car, at the age it is and the shape it is in. One way you can decide if the Gap coverage is worth the premium, is to ask yourself if you can pay off that loan difference out of pocket?

Where can you get Loan Gap coverage?

      When you buy a brand new car, the dealership will usually offer you this coverage. Before you take it, call your insurance agent. (You need to call them anyway to add your new car!) They should offer the Gap coverage to you, but if they don't, ask about it. It is usually inexpensive to add this optional coverage. I just added the coverage to a policy yesterday and it only added $17 annually. That is a great price to save you possibly thousands down the road. It is important to note that most carriers I know offer this coverage on cars less than 2 years old. Some may go up to 3 years, but that is it. It isn't worth it for the carrier to offer to pay out on older cars. If you have Gap coverage on your policy, the carrier will drop it at the renewal once a car is over their allotted age. You will want to look for it on your renewal. 

What about Lease Gap coverage?

   If you are leasing a car, ask if your contract includes this coverage. Many do, which is convenient! If not, most carriers offer the coverage on lease cars also. Keep in mind, this coverage only applies in the case of a total loss.  As always, it is up to you whether or not you add optional coverage. Take a look at the premium vs. the gap and decide which one you can live with. The same basic guidelines apply to Lease Gap coverage as for Loan Gap coverage.

There are three ways to request a quote for your insurance needs: 
* Visit our website

* Call Brockman Premier Insurance at 877-987-8683  

Tuesday, February 13, 2018

Home Insurance Claims

To Claim or Not to Claim- 
That is the Question

Why do you have insurance? Insurance is meant to make you whole again in the case of a loss. That is the entire reason why you have insurance. But just because you file a claim, does that mean you will automatically be "made whole"? Quite often the answer is No. And on top of that, your rates will most likely go up because you filed that claim; even if the claim doesn't pay out. This can be so frustrating!

   There are several pieces to the claim puzzle that must come together before a carrier will pay out a claim. It is in your best interest to know those pieces before you make the decision to file a claim. If you don't have all of the claim puzzle pieces, your claim will not pay out. Now, you can complain and switch carriers, but chances are, it won't be any different with the next carrier. Insurance is one of the most regulated industries out there. They cannot just decide what they will and will not cover. There are rules they have to adhere to (or pay the legal consequences). And whether you know the rules or not, you are subject to them as much as the carriers are. Here is what you need to know before you file a claim:

1. Is it a covered loss? Different types of home insurance policies cover different perils.
   Basic form policies cover fire/lightning, windstorm/hail, explosion, riots, aircraft, vehicles, smoke, vandalism and theft. 
   Broad form policies cover all of the basic perils, plus falling objects, weight of ice/snow, accidental discharge of water, cracking/burning, collapse, freezing and sudden electric current.
   Special form policies cover every peril except what is specifically excluded

What type of policy do you have? If you do not know, contact your agent. 
This is good information you want to know.

2. What type of deductibles do you have? There are many options! 
     The deductible is the amount you will pay before your carrier will pay out the remainder of your claim amount. Your home insurance policy most likely has a deductible that is a percentage of your dwelling value(the cost to rebuild your home in the case of a total loss). Common deductibles are 1% or 2%, but you can go higher. Your home policy can have a flat rate deductible instead, but these are not very common and can cost more if they are low. The lower your deductible is, the higher your premium will be. There is one deductible for your wind/hail claims and a different one for everything else (All Other Peril (AOP)). For example, if your dwelling value is $250,000 and you have a 1% deductible, you will pay the first $2,500 of any claim. 

3. Is it worth it to file that claim?

   Before you file a claim, you want to have a certified contractor come, survey your damage and give you an estimate of the cost of repairs. If you have repairs in a lower amount than your deductible, it makes no sense to file a claim. You will not receive any benefit from the carrier and your rates will go up at your next renewal because you filed a claim. For example, if you have a tree hit your house and it just damages a piece of your roof, chances are it will not cost $2,500 to repair a section of the roof. You would not file a claim. On the other hand, if you have a fire and your entire kitchen has to be rebuilt, it will most likely cost more than $2,500. In this case, you want to file the claim.  You will pay only $2,500 for repairs that could possibly cost more than $10,000.    

   There is quite a bit more that goes into if or how a claim is paid out. There are too many scenarios of what is and is not covered for me to try to explain the particulars here. Plus, I am not a licensed claims adjuster so I am not the expert on your claim. Each claim, with each policy, with each carrier will be handled separately (and differently). But when you are deciding whether or not to file a claim, examine the three 3 things I’ve explained before you even consider calling the carrier. I would call your agent first if you are unsure. Many carriers will file the claim after talking to you; even if you just called with an inquiry and never said the words, "I need to file a claim." But if you have done your homework and you are going in with your eyes open, then your chances for a beneficial outcome increase! 

There are three ways to request a quote for your insurance needs: 
* Visit our website
* Call Brockman Premier Insurance at 877-987-8683  

Monday, February 5, 2018

Agency Fees

Should You Pay Agency Fees? 

Some states allow Insurance agencies to charge an additional agency fee. Texas is one of them. It is up to the discretion of the agent. Many agents charge fees to offset the "cost" of running quotes. You should know the rules about charging agency fees. 

The Texas Insurance Code states:

Sec. 4005.003.  FEES.  (a)  A general property and casualty agent or personal lines property and casualty agent may charge a client a fee to reimburse the agent for costs the agent incurred in obtaining a motor vehicle record or photograph of property described under Section 4005.002.  The fee may not exceed the actual costs to the agent.
(b)  For services provided to a client, a property and casualty agent described by Subsection (a) may charge a reasonable fee, including a fee for:
(1)  special delivery or postal charges;
(2)  printing or reproduction costs;
(3)  electronic mail costs;
(4)  telephone transmission costs; and
(5)  similar costs that the agent incurs on behalf of the client.
(c)  A property and casualty agent described by Subsection (a) may charge a client a fee under this section only if, before the agent incurs an expense for the client, the agent:
(1)  notifies the client of the agent's fee; and (2)  obtains the client's written consent for each fee to be charged.

So what does that really mean?

Blah, Blah, Blah -right? Insurance speak. Let's break it down a little. It states in (a) that an agent may charge a fee as reimbursement for costs incurred for a motor vehicle report or a property photo. The fee may not exceed the cost incurred. In (b) it states the agent may also charge  a reasonable fee for various costs (listed) and in (c) it states an agent can only charge these fees if they notify the client of the fee and obtain written consent for each fee.
Before you agree to pay an "agency" fee, please make sure the agent has fulfilled the above listed obligations. You can refuse to pay the fee if they have not. You have the right to ask what services you are paying for, just like you have the right to ask what coverage your premium buys you.
   Keep in mind, you will pay a policy fee to the carrier. These are fees to cover the cost of underwriting the policy (evaluating the hazardous risk) and for the process of putting a legal policy in place. These are non refundable and non negotiable fees. This means that if you buy an insurance policy from a carrier and then cancel it soon after, you will not get a full refund. You will forfeit the agency fee because it is "fully earned" from day one. Many independent agents do not charge an agency fee on top of the policy fee. Agents receive commissions designated by the carriers. These commissions are based on the premium minus the policy fee. In other words we do not make money off of the carrier's policy fee. This is one of the reasons some independent agencies charge their own agency fee; to replace the fee the carrier gets. Legally, agencies have a right to do this, but within reason. I think charging a $195 agency fee on a $600 policy is excessive. I think charging the fee again to re-shop someone is excessive. It just has never sat right with us. But that is our decision and another agent may decide to charge agency fees. That is their decision. As long as they are following the rules listed above, they are legally able to charge agency fees in the state of Texas.
Agencies have the right to charge these fees, but not if they are not telling you exactly what they are for and getting your written permission to charge them. You, the consumer, have every right to ask for this fee disclosure. Please don't throw that right away. You may be paying quite a bit more than you need to!

 There are three ways to request a quote for your insurance needs: 
* Visit our website
* Call Brockman Premier Insurance at 877-987-8683  

Thursday, February 1, 2018

Insurance renewals

Old Insurance vs. New Insurance

So 2017 has begun. Like many people, I usually take a long, hard look at my life at the beginning of the year. You know, clean slate and all. It's easy to get caught up in starting anew. But when it comes to your insurance, this is not always the best idea. It is good to evaluate your insurance at your renewal. Sometimes it makes sense to re-evaluate mid term. But switching is not always the smartest option. There are many things to consider when looking at your renewal.

Have you had any lifestyle changes?

Did you get married? Divorced? Did you have a new baby? Or did one of your kids move out on their own? New job? New contact information? Did you move? (seriously, I have had clients forget to tell us they moved!) These changes can affect your pricing as well as the type and amount of coverage you may need.
   If you get married, your spouse is not automatically covered on your home insurance policy. If something happens and you are unable to take care of things, you want your spouse to be able to handle a claim for you. You will need to request they be added to your policy. If you have a new baby, you need to think about life insurance. Do you need a new policy or do you need to add coverage to the policy your currently have? If one of your kids moves out on their own, do they need renters insurance? Or it may be cost effective for them to be on their own auto policy. Many factors can affect your coverage. Please talk to your agent about any changes to your lifestyle.

Did you premium change?      

It happens. Premiums change. Often they increase, even if you don't have a claim.This is not because of your agent. Please hear me when I tell you this, your agent has no say in your insurance premiums. They did not raise your rates because they don't want your business. (I have actually had a client accuse me of raising their rates because I wanted to lose their business.) Who thinks like that? If your rates go down, you may look at increasing your coverage or lowering your deductibles. This can save you money in the long run and most likely won't cost you more that you were already paying in the short run. 
Carriers take rate changes. These rate changes have to be filed with and approved by the state Department of Insurance before they can be processed to the public customer. Again, your agent has no say in this process. If you are with an independent agency, your agent can re-shop your quotes. There may be some lower rates out there. Or you may find your carrier is still the best pricing for you. It isn't only about the cheapest insurance though. People often find a lower price. Just because your agent is an independent broker, doesn't mean they have the lowest pricing every time. But be weary of just going with the lower rates. Make sure the new quote gives you the coverage you need, not just the price you want. You want an agent who believes in this.

How is your insurance carrier's financial stability?

All insurance carriers are rated on their financial stability, based on their sales, customer service and claims history. You can search for your carrier's rating through Demotech or AM Best You want a reputable carrier with a good rating. There are reasons carriers have unfavorable ratings, so be aware. Be careful about looking up comments online about carriers. You can always find something unfavorable someone said about any carrier. Some people will have great experiences with a carrier, while others will have a bad experience with the same carrier. I would look at the financial rating if you want a professional opinion about the stability of your carrier.

What you need to do at your renewal

 Your agent should be able to answer any questions you have about your coverage and your carrier. But you need to be aware of what coverage you need and make sure you have that coverage.  You need to know when your policy is renewing so you can be on the lookout for your renewal. When you get your renewal from your carrier, review it. Write down any questions you have and go over it with your agent. If you don't receive one within 30 days of your renewal date, contact the carrier or your agent. You don't want the renewal to go by without at least looking at your coverage. It is ultimately your responsibility to make sure everything is set for a renewal. Some carriers inform the agent that a policy has not been paid, but unfortunately some don't let the agent know there is a problem. Look at emails and mail from your carrier so you don't miss any notices. Renewing your insurance policy (or policies) doesn't have to be an awful experience. But you need to be aware of what you need to review and decide what you want to change (if anything). Partner with your agent. If they are not being much of a partner, find a new agent!
There are three ways to request a quote for your insurance needs: 
* Visit our website
* Call Brockman Premier Insurance at 877-987-8683