Personal Insurance 101: Protecting The Important Things In Life

On June 7, OneGroup hosted another 101 series webinar. Experts Dave Weaver and Kim Hendrick spoke about personal insurance, what is going on in the market right now, and how you can control your costs. 

The insurance market is facing many challenges. Right now, insureds are facing 10%-15% increases due to inflation and an increased price of many goods. Customers in Florida are facing upwards of 50% increases, some even having insurance companies turn them away. 

Insureds’ premiums are affected globally with all claims that are made. This is because many reinsurers are now global. Reinsurers are companies that insure insurance companies, also known as carriers. Because carriers “flow” into reinsurers, global events can increase the premiums of insureds. For example, the losses from the recent fires in Canada are affecting premiums in New York.  

A large reason that premiums are on the rise is because of the cost of goods and labor. For example, newer cars have great, convenient features. However, they cost more to fix. Same thing with homes, a repair that used to cost a homeowner $200 to fix, now costs $2,000 when the total price of goods and labor is calculated. 

Another reason for increased costs is not only the cost of claims, but the frequency of claims. Distracted driving is one of the largest causes of auto insurance claims. Whether it be cell phones, looking at a street sign, or reaching into the back seat. It’s not just teenagers, it’s everyone! Paying attention is both cost effective and life-saving. 

How Can You Combat Premium Increases? 

Shop your insurance? Maybe. There will most likely need to be an assessment of why your premiums are increasing. Were you just involved in an automobile accident? Did you recently make some renovations to your house? Often times, your current premium is going to be the best option at this time. 

Increase deductibles. Our experts recommend deductibles from $1,000 to $5,000. At this time, many individuals are willing to assume more risk and pay the higher deductible as long discounts are available.  

If you are considering increasing your deductible, keep in mind that submitting small claims might not be worth it for your cost, such as fender benders or scratches. If possible, save that for the big claims. There may also be hidden savings programs that can be affected by smaller claims.  

It will not only save you the most money, but it will also be the best tactic for lowering your frequency of claims. 

Take an accident prevention course. Most think of new, inexperienced drivers when it comes to accident prevention courses, but experienced drivers can also benefit. Young drivers are still a higher risk to insurance companies, so our experts recommend enrolling them on your policy in an in-person, interactive driving course. 

Not only can these courses provide valuable safety information and skills, but some carriers offer up to an 8% discount for completion of the courses.  

Invest in home safety features. Like accident prevention courses, adding home safety features can lower your premium costs further. Features such as generators, security systems, smart thermometers, or water flow monitors can qualify you.  

Explore the discount programs that your carriers currently offer. Carriers have safety programs everywhere! For example, some carriers offer discounts for your children doing well in school. Contact one of our experts to review the possibilities of savings! 

Do You Find Yourself Thinking, Why Do I Have So Much Coverage?  

Replacement Cost vs. Actual Cash Value. Which is better? What will give you the most coverage? Replacement cost is determined by an estimator and covers you for what it would cost to replace your home. Actual cash value covers up to the amount of coverage you purchase minus depreciation.  

Dave and Kim used the example that if each of them bought the same house, in the same neighborhood, at the same time, for the same price and they are worth the same amount but Dave is covered replacement cost and Kim is covered actual cash value, that in the event of a claim, Dave would be covered for what his house costs to replace or repair and Kim would be covered for up to the policy limits minus depreciation.  

The insurance companies also use wear and tear on the house and depreciation on your assets to determine actual cash value. Therefore, you are more likely to receive less than what your house is worth. 

Because of this, our experts recommend a replacement cost policy to give you the most coverage in case of an emergency. 

How much coverage do you need? Our experts recommend the highest limits of liability on an auto policy. Otherwise, in the event of an accident where you are liable for more than you have, the other party can start threatening your other assets. 

What If I Need More Coverage?  

As your personal value increases, whether it is because of a gain in assets or money, increase your coverage. This will protect things that you have worked hard for. 

Umbrella policies cover additional liability under a single policy. This is a terrific way to get comprehensive coverage. An umbrella policy insuring you for two times your assets is a great place to start. 

Additional Thoughts Regarding Personal Insurance. 

Add new drivers to your policy right away. Keep in mind that children cannot be added to an auto policy before they get their license. Although they are covered while they are driving with their permit, it is best practice to add them to your policy as soon as they get their license. If not, there is a major possibility that insurance companies can deny a claim if your child is not on your insurance. 

Rideshare. If you drive for a rideshare service such as Uber or Lyft, or a delivery service such as GrubHub or DoorDash, have a conversation with your agent about how to move forward insuring yourself. Some companies have begun to cover drivers as a separate entity. 

Claims. Claims management is a large part of keeping your costs down. Insurance companies do not want a plethora of claims to keep their bottom line low and insureds do not want claims because of the stress of a claim. Before a claim, Dave and Kim recommended taking pictures and videos of everything in your home and narrating the video. This will protect you from further loss.  

OneGroup is happy to review your policy, free of charge. Our experts also have plentiful knowledge of cost saving programs with different carriers. At OneGroup, we do the leg work for you, we are here to be your ally and advocate for you. Your success is our success! 

If you have questions regarding the webinar or personal insurance, please email or submit a quote form here and mention this webinar to be connected to one of our experts.  

OneGroup is looking forward to the next webinar in the series, Human Resource Consulting 101, on August 2, 2023 from 9:30 – 10:30 AM EST. Human Resources Manager, Colleen Williams will discuss what you can do to avoid common human resource mistakes. Register for OneGroup’s next webinar here. 

This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.

Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.