COUNTING DOWN THE BIG FOUR - #2 GEICO

JUST 15 MINUTES TO SAVE 15%

Logging in at #2 this year after taking over from Allstate, Geico is steadily putting pressure on the number one spot.  The ease of creating a policy online makes them a favorite of the younger generation and those who are not into face to face interaction. The Geico Gecko is a very familiar presence, keeping the brand relevant for over 15 years since its appearance in 1999.

Geico at a glance: 

• Established in 1936 by Leo and Lillian Goodwin.
• Columbia University business student, Warren Buffett, makes his first purchase of GEICO stock in 1951.
• New headquarters opens in 1959; Chevy Chase, MD.
• Passes the 1M policies-in-force (PIF) mark in 1961.
• Insurance premiums reach $150M; net earnings double to $13M, 1965-66
• Introduces 24/7/365 telephone customer service in 1980.
• Warren Buffett purchases outstanding GEICO stock in 1996, making GEICO a subsidiary of Berkshire Hathaway, Inc. 
• Today, GEICO's assets have reached $32B
• Parent company (Berkshire Hathaway) currently #4 on the Forbes Fortune 500; $182.15B
• Employs more than 30,000 associates; Maintains 14 major offices around the country. 

COUNTING DOWN THE BIG FOUR - #3 Allstate

THE ALLSTATE STAND

Topping the list at #3 (was #2 last year) is Allstate.  When I'm making sales calls, many of my potential clients tell me I sound like the "Allstate Man" (Dennis Haysbert) and actually mistake the company I work for that very reason.  Most folks recognize Haysbert as well as Dean Winters (The Mayhem Guy), but may not know much about the history of one of the more reputable insurance companies. 

Allstate at a glance: 

• Founded by General Robert E. Wood in 1931 (Sears, Roebuck, and Co). 
• Trained women to be insurance agents in 1942 (military leave for men). 
• Opened first claims office in 1952.
• Allstate Foundation started grants program to train driver's ed. instructors. 
• Neighborhood Office Agent Program launched in 1984. 
• Began publicly trading in 1993. 
• Currently #92 on the Forbes Fortune 500; $123.5B in total assets.
• 12,000 Agent offices in the US and Canada; 70,000 employees/staff.
• Allstate branding includes Encompass and Esurance. 

COUNTING DOWN THE BIG FOUR - #4 Progressive

Ever wonder where insurance companies rank with the rest of the business world? Many think of insurance as a scam and therefore look for the cheapest way to make sure they have the minimum amount of coverage needed by law.  We've all been there; price is the determining factor for lots of shoppers.

Don't forget to think about company history, assets, net worth, etc. when choosing an insurance company.  Also, think of the access you have to live people should you need to file a claim or simply get an insurance document you may need.

The "Big Four" insurance companies pretty much offer the same basic products, but not all coverages nor companies are the same in how they actually protect you.

PROGRESSIVE

Quick facts about Progressive Insurance:

• 1937 - Created by Joseph Lewis and Jack Green 
• 1991 - 1st to use consumer's credit history; more accurate policy premiums
• 1995 - Website launch; 1st major insurance company to do so
• 1997 - Real time insurance offered online; another 1st
• 2009 - Name your price introduced
• 2010 - Android App released
• Currently #157 on Forbes Fortune 500; $24.4B in total assets
• 450 offices country wide; 25,000 employees

DEDUCTIBLES - HIGH OR LOW?

CHOOSING YOUR DEDUCTIBLES

When deciding on your insurance deductible, a general rule of thumb to remember is to choose the highest insurance deductible amount you can afford. If you can only afford a $500 deductible, don’t choose a $1,000 deductible in hopes of saving money on your auto insurance policy. If you were to get into an accident, you will have to pay the $1,000 deductible before your auto insurance would kick in.

In fact, I very rarely advised customers to go with anything higher than $500 unless they are older with older cars and still want full coverage, but don't drive very often. The difference in the monthly premium is not nearly worth the amount you pay out of pocket in the event of an accident, which is the reason for insurance in the first place.

It actually angers me when co-workers advise people (especially younger, uninformed drivers) to go with a higher deductible (like $1000 for instance) to make the monthly premium cheaper. Personally, I tell young drivers I give them the same advice on coverages I would give my own daughters, who are 25 and 19, just as I would hope their insurance agent does for them.

In the end, the choice is solely left to the customer (of course) but if you do the math, the long term savings are really not beneficial should you have an accident requiring a claim to be filed in a five year period. Again, just my #twocents.

TERM VS. PERM - The Debate Goes On

People often cringe at the thought of not being around anymore, i.e. death.  What should be more scary is what happens to your spouse, children, and estate WHEN you don't come through the doors one day. There are many ways to take care of your loved ones from the grave. Life insurance is a great way to provide large sums of money without "on the cheap."  

The growing debate is whether to buy permanent (whole or universal) life insurance or temporary (term) insurance and invest the difference of the two.  Here's my two cents: 

The younger you are, the wiser it is to purchase permanent life insurance.  Those with young children should also purchase a policy for their child not for the death benefit (although you never know) but for the living benefit and financial growth.  That's another topic altogether.  

My suggestion is to have both types of life insurance, but to not "over-insure" yourself.  Think about it like this, would you want your loved ones to have to pay off a car and home if you owe on both when you expire?  

A 30 year term policy is a cheap way of covering both your home and auto(s) should you die unexpectedly.  If you own your  home outright, but have a loan on your vehicle, a 5 year term policy makes sense should anything happen to you during your loan period. 

Younger people who may actually take a moment to read this, you're getting older each day and the cost of insuring your life gets more and more expensive each year.  #thinkonthat

ASK THE RIGHT QUESTIONS TO MAKE THE BEST DECISION.

COMPARE BEFORE YOU SHOP, Part 4 ~ Renter's/Tenant's Insurance

Do Your Homework - RENTER'S/TENANT POLICIES

Ever stop to think just how much the stuff you've accumulated would actually cost to replace?  Go "shopping" around your apartment or rental home/condo one day and you would be surprised.  Ever stop to think about someone slipping and falling on your stairs or in your kitchen and you being sued?  What if you're cooking a fabulous meal for you and your significant other and the kitchen goes up in flames?  Do you have coverage if the neighbor (either upstairs or next door) causes a water leak that leads to your apartment being flooded and they have no renter's insurance?  

These scenarios are very real and could happen to anyone, yet could be avoided for merely pennies a day.  Most renter's insurance policies (depending on the amount of personal property you insure) run about $15-$25 per month and usually cover a minimum of $100,000 for your personal liability should you damage your rental unit due to negligence on your part.  Your liability coverage would also cover you should someone injure themselves at your residence and attempt to collect damages from you.  Most renter's insurance policies also provide you with some minimum coverages for jewelry, furs, computer items, silverware, etc. as well as basic medical expense coverage (usually $1,000) should you need it.  

Be sure you compare products and get the best possible liability coverage to protect your personal assets.

COMPARE BEFORE YOU SHOP, Part 3 ~ Condo Unit Owner's Insurance

Do Your Homework - CONDO INSURANCE POLICIES

When insuring your condo, make sure you know exactly what your Home Owners Association (HOA) Master Policy covers.  Coverages may vary from association to association, but typically the owner of the unit is covered in one of three ways: 

1. Coverage for the basic building, which includes walls, roof, floors, etc., but the unit owner is responsible for the appliances, carpeting, cabinets, wall coverings, and other items in their unit, including the interior walls in some instances.  
2. Coverage for both the basic building as well as items within each unit, other than the personal property of the unit owner. 
3. Coverage for both the basic building as well as the unit owner's fixtures and improvements. 

When the HOA Master Policy covers the structure, a condo unit owner policy is usually written to cover items that are the responsibility of the individual owner/tenant such as:

• The value of building additions/upgrades made at the expense of the unit owner.
• Value enhancements like an upgraded quality of carpeting.
• Damage to the unit that might not otherwise be covered because of the master policy deductible.

Doing your homework is critical.  Be sure to ask about additional endorsements 

for situations your master policy may not cover. The endorsement for water 

damage is a must add!