From my Insurance Ninja! 5 Common mistakes when purchasing homeowners insurance
From my insurance ninja! 5 Common mistakes when purchasing homeowners insurance.
For today’s scintillating blog I am turning to my favorite insurance agent, Jennifer Coak with AAA of Arizona. Jennifer is an insurance ninja who forever answers my absurd questions, takes care of my personal insurance, and is always my first referral to clients needing insurance. I keep a rolodex (5 points if you know what that is, 10 points if you have one) packed with the very best referral partners for my real estate clients, and Jen is at the top of the list.
I recently bugged Jennifer to give me a few common homeowners insurance struggles, check them out…
1.) Understanding what you are buying. How much money do you spend each year on insurance? My guess is thousands of dollars. Would you buy a car without knowing what the features included, or how long the warranty was in effect? Ask questions until you understand. Everybody thinks, I have “full coverage” or “its insured”, but every policy has exclusions in it. Some good questions to ask might include: Is my jewelry covered? For what value? How about my guns or baseball card collection? What if my tree falls in a storm on my neighbors house? Do I have glass coverage like my car, I have more windows in my house? What exactly is liability insurance?
2.) Determining the insured value of the home. The bank wants to cover their loan, the insurance company wants to insure the replacement or repair cost. When the housing market is up, the bank wants more coverage than the building costs and they are not happy, when the market is down, the insured feels like they might be paying for more coverage than the home is worth since “they didn’t pay that much for the house”. the solution- let the insurance agent determine the insurance value. Jen has the tools to determine the value no matter what size the home. Many factors that can impact the value of the home but not the replacement cost include land- size matters to the bank, but not the insurance agent. Location- face it, some areas of town cost more when shopping for the same size house.
3.) Umbrella coverage is not an extra policy to cover your rain gear. An umbrella is used to extend the limits of liability coverage on your home and auto and fill in gaps, that may occur inside of your insurance portfolio. A good example would be person that does NOT own a boat. however, while on vacation decides to rent a jet ski. This coverage will extend above and beyond the limits you may purchase from the rental outfit covering any damage you may have caused. Cause lets face it, you’re probably going to break it.
4.) Why does it cost so much to insure my teenage driver? We both know, insurance companies are in this game to make a profit. It’s how they entertain us with lizards in their commercials and Flo comparing rates. This industry has collected so much information, all they do is analyze and predict based on recent data. The current data says, 3 in 5 drivers will have an accident before they turn 21. Now that most schools have discontinued driver education, those numbers will likely continue to trend upward. Lets answer the biggest, best idea, dad ever had to beat the system- what if I buy Jr his own policy with minimum coverage and save some money??? Well, if dad has figured it out, so have the courts and insurance companies. If Jr lives with dad or has regular access to use his car, then Dad’s coverage kicks in where Jr’s runs out and instead of having one claim, you now each have one. (ask Jen)
5.) How do I maximize the discounts like Aaron Rogers suggest? Insurance companies must file their rates with the department of insurance. They file really high rates so they can raise them on you if they want to run you off. They then give you discounts to attract the people they feel will be the lowest insurance risk in their model. The most common discounts are found when combining policies such as home and auto. There are 100+ discounts available from nearly every insurance carrier around. Finding a knowledgable agent you can trust is the key to maximizing those discounts. What defines a trustworthy agent? In my opinion it is an agent that recognizes the value of a customer, is found in a long term relationship rather than a quick, one time, sale to get a few more dollars in commission. An insurance agent makes between 5-10% of your premium. if you spend $1000, your agent makes $100. they need you to stay around for a while to make any real money
A great insurance agent can keep you out of some pretty hot water, and help you find the right coverage. If you’re in AZ I highly recommend calling Jennifer Coak with AAA of Arizona (602)285-6251 for your insurance. If you’re looking for a great realtor, Please call me. Visit my website at www.CailySellsAZ.com