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! 

COMPARE BEFORE YOU SHOP, Part 2 ~ Homeowner's Insurance

Do Your Homework - HOMEOWNER'S POLICIES, TX

Many times when I'm quoting homeowner's policies, the cost of the premium scares people away. Buying a home is a very tedious process; takes time, money, patience, and more money.  Why should insuring a home be any different?  

When insuring your family's lifelong memories, one must consider more than what it costs to insure the home, but what it would cost to rebuild in the event of a total loss? Of course nobody wants to think of losing "everything" to a fire or natural disaster, but insurance exists for a reason.  

It's never as simple as choosing the lowest bidder.  What is the insurance policy actually insuring? Are you getting dwelling foundation and water damage endorsements or not?  Most companies (and I'm speaking of Texas) allow you to choose those options when you start your insurance plan (at an additional cost of course), but you can't add it on later should you decide you want it.  

Is your home being insured to value (100%) or just to 80% where you are responsible for the other 20% under the co-insurance provision? Do you have replacement cost or actual cash value coverage?  What about your loss of use coverage?  

All of these are things you definitely need to discover by doing your due diligence, asking questions, and taking your time while deciding on home insurance provider.  Price alone is not enough. 

COMPARE BEFORE YOU SHOP, Part 1 ~ Auto Insurance

Do Your Homework - AUTO POLICIES, TX

Ask ten friends what they want in an insurance company and more than half will say "good price!" One or two will say "best company!"  There may be a loner or two that chime in with "best customer service and availability!"  You see, we all value different things when it comes to our own personal, customized needs. 

Some folks like to be left alone to the research online, then enter payment info and go about their merry way.  Others like to "shop" their coverage yearly or every policy period, looking for the best possible price.  Then you have the "relationship seekers" who literally want to know exactly who is taking care of them, their needs, and their assets.  Once you get 'em, you got 'em as long as you continue to serve their needs.  

Regardless of which of those customer segments you fall into, be sure you do some research prior to getting online, making those calls, or visiting your local insurance agent's office.  The most awkward moment is usually when I ask my potential customers "What amount would you like for us to pay in the event you caused a major accident with injury and perhaps death?"  Silence fills the room or the other end of the phone for a brief moment, and then I get "Well, what do you mean?"  

If you do your comparisons up front, you'll have an idea of what the legal limits of liability coverage are in your state and why it is you may want to purchase more than that, depending on what you stand to lose in an at-fault accident.  You will know more about how each company stacks up against others and which ones you should stay away from; which ones have the best claims departments and customer service centers after hours. 

Not everything should be solely based on how inexpensive it is for you to purchase.  #yougetwhatyoupayfor

PROTECT YOUR ASSETS!

HOW'S YOUR COVERAGE?

How many are currently aware of the amount of money your auto insurance company would pay out in the event that you caused a multiple car accident with injuries or fatalities? 

Your limits of liability (and they vary from state to state) determine the amount of damages (both property and bodily) your insurance company would pay in the event you are at fault in an accident.  

Think about that the next time you look at your insurance ID cards or policy, then think about what your net worth is and/or how much you and/or your spouse bring home each year in salary.  

If your liability limits are not at the point of protecting your net income, you may want to schedule an insurance and financial review with your insurance agent ASAP!  Don't have one, then it's time to re-think that as well.  When it comes to insurance, cheaper usually doesn't mean better and having a local agent is much more beneficial than spinning your wheels speaking to an insurance novice at a 1-800 call center.