In case you just missed it, May was an insurance planning month on your annual client experience calendar. But if we didn’t get the chance to connect, you’re in luck! In this blog, I’ll go beyond property and casualty insurance basics. So get ready to take your insurance know-how a step further. I’ll show you what I did behind the scenes last month — and how you can do it, too. 

… or you could securely upload your insurance policies and send me a note requesting an insurance comparison. I’ll follow up by filling out your very own P&C comparison spreadsheet. It’ll also include personalized recommendations and numbers you can easily plug into online insurance quoting tools. When you’re set with two to three sets of quotes, just upload them using that same link. I’ll dive back into your spreadsheet to compare and recommend the best insurer for you. You can also put me in touch with the agent you received quotes from, and I’ll request tweaks to the coverage levels on your behalf to save you even more time.

But if you’d prefer to go it alone, go for it! And allow me to share some of my favorite tips and tricks with you. Just don’t forget to send me your new policies once they’re in place. I’ll keep a copy in our records and use them to update your financial planning app (RightCapital).

Start Here.

With your current insurer, that is. Just because you have an active policy doesn’t mean you’re locked in until it runs out. You can change your insurance at any time. So if you find a better deal, you can cancel and receive a refund of unearned premiums. (Hey, that’s kind of like your relationship with us here at FPFoCo!) And if you do find a better deal than the one you have now, just start your new policy before you cancel the old one. I even like to have a 24-hour policy overlap just in case. It’s likely a very nominal fee for a single day of double coverage. And although you wouldn’t receive a payout from both insurers if you filed a claim, it’s worth it for the peace of mind. 

So start by reviewing your policies with your current insurer. Here are some common auto insurance coverage areas where I tend to see opportunities for updates …

Deductibles
Been with your insurer for a while? Your vehicle has gotten older as the years have gone by, and it might be time to drop comprehensive and collision coverage. Is your vehicle 10 years old or older? Could you easily replace or upgrade your vehicle in the event of a total loss? If you answered “yes” to one or both of these questions, you may want to drop comp and collision coverage … and save some premium dollars. It’s all about a diminishing return on the dollars you pay in premiums on a depreciating asset. If, however, you have a newer vehicle or would rather pay the insurance company so they’d cut you a check for a replacement vehicle if yours was totaled, that’s fine, too. It’s all about managing your risk.

If you decide to keep your comprehensive and collision coverage, you could still save some dollars by increasing your deductibles. $100 or $500 deductibles are great — if you’re building your emergency/opportunity fund. It’s a balancing act: You’re simply paying a higher premium now on the regular for lower out-of-pocket expenses in the (hopefully unlikely) event of a claim. Pro tip: I like to see $1,000 or $2,000 deductibles if that emergency fund is healthy. Just know that you’re on the hook for the full amount of that deducible in case of a claim, and make sure you’re comfortable with it. 

Uninsured and Underinsured
Are you paying for someone else’s insurance? You probably are, and you might not even know it. If you carry high levels of uninsured or underinsured motor vehicle or motorist coverage — and most of us do — you’re basically buying insurance coverage for someone else. Insurers like to include this often pricey coverage in, and most people don’t think twice about it. I’m certainly guilty of it. And when you buy insurance for somebody else, you’re paying for it, too.

It is what it sounds like: Insurance you pay for that covers a driver without insurance or without enough insurance. It comes into play when that uninsured or underinsured person is responsible for an accident that you’re involved in. Insurers often include it in policies at the same levels as your own liability coverage. So why do insurers like to include just as much coverage into your policy for some rando out there as you have for yourself? It’s all about the dollar signs, and those dollars add up with each policy renewal.

It’s literally like adding insult to injury. So make sure your health and disability insurance policies are in place, then drop the uninsured/underinsured coverage down to state minimums for liability coverage, usually $25,000 per person / $50,000 per accident. It’s not a state-mandated coverage, but I suggest having some, even though it’s not required. You take care of you … and let everyone else take care of themselves. 

But wait, there’s more! Here’s what you might want to address on your homeowners insurance. 

Dwelling
Has your property value gone up recently? By a lot? If you live in FoCo, probably. I’ve noticed that some of your homes have nearly doubled in value in the last few years! So take a look at your home value today, and make sure your insurance covers 80% of it. That’s the amount that most insurers require to cover damage in full after the deductible. If you don’t have 80% coverage, your insurer won’t pay for 100% of your cost to rebuild or repair your home in the event of a loss (after you pay your deductible, of course).

An easy way to check: Go to Zillow, check out the Zestimate, and multiply it by 75%. Why 75% and not 80%? You wouldn’t need to pay to rebuild the land your house sits on; just your house. You can future-proof this by adding a few thousand dollars in dwelling coverage beyond what you need today, and know that you can always update it in the future if need be. An extra $10,000-$20,000 should do it, so just round up. For example, if 75% of your Zestimate is $755,000, go for dwelling coverage of $775,000. It’s likely an insignificant increase in your premium for plenty of peace of mind. 

Deductible
Here’s that deductible again! Would you file an insurance claim for $1,000 in damage to your home? Probably not. You’d likely for it out of pocket, rather than risk your insurance premium going up. That’s why I like to see homeowners deductibles around $2,500 or higher. But it’s important that you consider what’s right for you and your emergency/opportunity fund. Think whether you might want to beef up your deductible and save those premium dollars.

Medical Payments
Last but certainly not least, let me cover medical payments to others. Medical care in the U.S. is not inexpensive. And $1,000 most likely won’t cut it in this country if someone needs medical care … and blames you for an incident that happened on your property and led them to the ER. A slip on your sidewalk’s ice patch. Someone leaning on a railing that breaks and causes them to fall a few feet — or a story. A couple of stitches from bumping a nail sticking out of your mailbox post. I often see coverage levels of $1,000, which more than likely wouldn’t cover a trip to the emergency room. You’d probably feel pretty bad in the first place … and wouldn’t want to pay out of pocket for their care on top of it. So boost your medical payments coverage to $5,000 or even $25,000. This coverage tends not to be too pricey, and it can mean the difference between an insurance claim and a potentially hefty hit to your emergency/opportunity fund. 

With your policies in hand and a couple of changes already in mind, call or email the person listed on yours as your agent. They work for you, and they should be eager and ready to help. They want to retain you as a customer, after all! If they don’t, well, you’re already on the right path.  You’re reading this blog, after all! So set up a time to chat with your agent, or just start an email chain. I recommend being open, and that means asking open-ended questions. Here’s where you can start:

• It’s been a while, and things in my life have changed. Is it time we get together for an insurance review? (The answer should almost always be yes!)
• Do you recommend any changes to my policies?
• Could you review my discounts? How I might be able to save on my premiums?
• I know that the real estate market has been bonkers lately. What changes should I make to my homeowners policy?
• What’s a good amount to have for [insert coverage here]? 
• Are there new coverage options available that I should be thinking about? (The answer is usually no. But you might want to ask, especially if you don’t already have an umbrella liability policy!)

 

Multiple Insurers? Quote ‘Em!

You don’t have to get two to three brand new quotes. Just pit your insurers against each other to see who can offer you the best deal! If you have auto insurance with insurer A and homeowners with insurer B, get quotes. And don’t forget to bundle! You might find some meaningful savings, including discounts for customer loyalty. You’d miss out on these if you left your current insurer for a new one, so don’t overlook the opportunity to save these dollars!

Different Coverage Amounts? That’s Ok!

Different insurers’ online quoting tools will offer different preset coverage amounts. And they’ll sometimes include coverages in your quotes that you don’t need or they won’t let you add those that you do need. That’s ok. If you’ve never quoted coverage before or it’s been a while, fear not. Those insurers will bombard you with emails afterward. But don’t junk them just yet.

If you choose one, you wouldn’t want your important notifications going to spam! It’s a temporary nuisance, but you’ll get through it. The quotes you receive will usually be close enough for comparison’s sake. If they’re not, insurance agents will be following up with you, so don’t hesitate to ask them for changes and updates to the quotes the online tools generated. This is also a good time to test out how responsive the company is. If they’re standoffish, slow to reply, or just plain rude, keep shopping. It’s a good sign that their customer service will probably be somewhat shoddy, too.

Once you discover the best deal for you, go for it! That “best deal” might be stellar customer service or it could come down to the dollar amount you’d pay in premiums. (Or the best mascot or spokesperson. I’m not here to judge.) You may find that the best dollar deal is staying with your current insurer. In that case, it’s great knowing that you haven’t been overpaying for coverage. Or you could learn that you’ve been overpaying and been dealing with a cruddy agent for some time. And you could end up in a much better situation. You might even right-size your coverage and save some dough.

Whatever the outcome, it’s a meaningful exercise in personal finance. The best part? You don’t have to do it again for another two to three years — and you don’t have to go it alone.