The Insurance Advocate

Be thankful

2009-11-18T11:56:00.002-06:00

Thanksgiving is near and we have much to be thankful for in this country. My first thanks goes to our men and women in uniform who are serving here and abroad. Secondly I am thankful for my family and friends. Without them I fear my life would have taken a wrong turn. At this time of year stop and ask yourself what you should be thankful for. Meditation and restful thoughts go a long way in bringing peace in this very confusing world. Take care of yourself and since life is a journey enjoy the trip.

Insurance savings

2009-04-07T09:51:00.003-05:00

Well St. Paddy's day has come and gone and next weekend is Easter. God's blessings upon all this special time of year.
It takes only a little bit of homework to see savings in your insurance program. Here are a few guide points: 1.Remember Risk Mgt. rule; Never risk a lot to save a little.
2. Use deductibles whenever and wherever possible. This applies to health insurance, auto insurance and property insurance. Some General Liability insurers allow deductibles. Review your cash position and consider the General Liability deductible. 3. Control losses through the use of safety programs. Lower losses lead to lower premiums. At least once each year review all losses with your agent to be sure they have been handled properly and close claims that have been settled. Far too often insurers leave settled claims open with reserves that go against your loss ratio even after the claim has settled. We once saved a client a good deal of money by reviewing the claims history with his insurance company.

Bonds Vs. Insurance policies

2009-01-12T11:54:00.004-06:00

Far too often insurance clients needing a bond or bonds believe that purchasing these contracts are just like buying an insurance policy. This is far from the fact of the matter. Insurance policies and bonds are purchased through insurance agents but there the similarity ends. Bonds are financial guarantees. Insurance policies are not! This is the big and major difference.
Too often clients will call an agent and say write me a bond.They then become irritated when the agent says that quite a bit of financial information is required. Bonds are underwritten to a zero loss ratio. This means that the insurance company never plans on paying a claim. This is especially true of contractor's performance bonds. Insurance policies on the other hand are written with the anticipation that losses will occur. Insurance companies do write bonds but require a financial statement from the client along with a company history including resumes on the owners. The insurance companies are very strict in their underwriting on bonds.
So when in the market for a bond or bonds get your material ready and be patient.

Legal defense inside your liability policies

2008-10-22T13:38:00.003-05:00

When business owners purchase liability policies they often overlook one of the greatest benefits under the policy and that is legal defense cost. Policies state that the insurer agrees to defend the named insured against all claims brought against the named insured under the policy terms no matter whether such claims are false fraudulent or groundless. That's right the policy pays for defense and today that cost can be out-of-sight.
One client was named in litigation even though the client only had machinery on the job site and had no employees there.The cost to finally receive an instructed verdict whereby our client was dismissed from the law suit was $45,000. Thank heaven the General Liability policy paid for the legal fees. Another big plus is that insurance companies employ the best lawyers in the business.
So think about the defense cost aspect when analyzing the policy cost.

complaints against insurance agents

2008-09-09T10:31:00.004-05:00

When dealing with clients over the years complaints about their insurance agents are discussed.
Following are the largest complaints insurance buyers have with their insurance agents:
1. The agent will not return my phone calls. Yes, in this age of instant communications this remains the number 1 complaint. My advice to clients is: People are what they do not what they say. When someone in a service industry will not return your phone calls what are they telling you. The answer is; they do not value your business much and as such you should consider finding someone who will value it.
2. The renewal quotes are delivered to me a day before the current policies expire. This is a agent trick to insure that they retain the account. Tell your agent that if his renewal figures cannot be delivered a week prior to the renewal you will find another agent who can meet your time line.
Always remember that you the insurance buyer are in charge. Agents cannot buy groceries or put gas in their cars without your commission dollars.
If problems persist contact us.

annuities

2008-07-09T13:40:00.002-05:00

Hello folks! It has been a few months since my last post and much has happened. The big event was my daughter's wedding in Kerrville,Texas on June 21. She and her new husband have accepted positions at Mississippi State University in Starkville, Mississippi as college professors. I'm a very proud dad.
On the insurance front several people have asked me about annuities lately. Frankly, I'm not a big fan of these largely as a result of the high commissions paid to agents who sell them. How high you ask? The first year commissions can run as high as 40-50% of the money you deposit into the annuity. This is why these financial vehicles lock you in for a number of years. That is right. Often you cannot withdraw your money for 5-7 years should you want or need a lump sum of money. If you do insist on a withdrawal the company that issued the annuity contract will hit you with a large withdrawal penalty.Once again exercise caution when buying annuities. Agents make money selling and the more they sell the more they make.
Have a safe, great summer.

The cost saving Section 125 plan

2008-04-29T14:58:00.003-05:00

Well tax time has come and gone. We really don't miss April 15 do we? One way to cut taxes is by installing a section 125 plan. Section 125 is under the tax code and was first established in 1978. This type plan installed by an employer allows all eligible employees to deduct what they pay for employee benefits before taxes. Employee benefits can include premiums paid by the employee for health insurance, dental insurance, vision, cancer plans, accident plans and term life up to $50,000. The employer benefits because the matching that the employer is required to meet is lowered when benefits are deducted before tax is applied. The installation of the 125 plan is a win-win for all parties involved. I have assisted many clients in this area and have not had a single complaint yet. The employer can also set up a medical spending account under the 125 plan along with day-care expense.
Need more information in these times of rising health care cost? Contact me and I'll be happy to help. Please remember that The Insurance Advocate does not sell insurance. We work on a fee for services basis.

For all the Irish and those who wish they were

2008-03-17T09:43:00.002-05:00

Happy St. Paddy's day to you. Save some green by a regular review of your insurance be it personal or business. Someone once said that the only thing certain is change. Because this is true your exposures to loss change and you should be prepared to handle the new exposures through a regular review of your insurance coverages. Your agent should be willing to assist you in this endeavor. After all that is why you pay him or her commission. One tip concerning change regards lien holders. When you pay a vehicle off be sure the insurance company deletes the lien holder. If this is not done and a loss occurs the check you receive will be made payable to you and the lien holder shown on the policy. This causes delays in you getting your money. You would be surprised how many people experience problems because of this very thing.
So wear the green and save some too.
Wes Proud to be Irish Lane
The Insurance Advocate

Saving $$$$ on business auto insurance

2008-02-16T12:19:00.002-06:00

We often find business owners paying for Personal Injury Protection coverage under their business auto policy when all vehicles are being driven by company employees who are covered by Worker's Compensation insurance. This is a duplication of coverage and should be avoided. One client in Houston, Texas was paying $2,545 per year for the PIP[Personal Injury Protection] coverage. When shown the duplication aspect of having both he elected to immediately drop the PIP coverage.
Many times, not always , insurance agents simply copy the previous agent's coverage when writing a businesses account. Watch this carefully business owners and you will save money in most situations.
Questions about your coverage? Contact The Insurance Advocate-Serving the consumer since 1993.

Risk Management Rules-Know before you buy Insurance

2008-01-18T09:40:00.000-06:00

Anyone individual or company needs to understand the basic rules of risk management before purchasing insurance products. Risk management is a "buzz term" which relates to how exposure to risk of loss is evaluated. The three[3] simple rules of this art are: Never risk more than you can afford to lose; Never risk a lot to save a little and; Know the odds facing you.
Many people over the years grasp the first two principles but struggle with the third one. Perhaps an example will help clarify the third principle. Once I owned a small sail boat that was purchased for the sum of $1,600. The liability on this boat was picked up under my homeowners policy so that risk of loss was covered. I did not insure the boat for damage or total loss. I was willing to risk this exposure because the total cost of the boat was low and it was stored when not in use in my garage.
The odds of a loss were small. This is how you understand or know the odds.
If you operate a vehicle or a fleet of them as is the case with a business the odds of having a loss are high indeed. The vehicles operate daily and in all kinds of weather.
So before you buy insurance apply the simple rules of risk management and you can usually save money.

Seasons Greetings

2007-12-23T08:02:00.000-06:00

I would like to wish everyone Seasons Greetings 2007 and extend my wishes for you to have a Happy New Year. I'll be setting up my web-site in 2008 and link the blog to the site.

Insurance agents from direct writers to independents

2007-12-14T09:12:00.000-06:00

Many clients ask me: What type of agent do I need and where do I find them. There are three types of insurance agents in most states. These are: Exclusive agents, direct writing agents and independent agents. Here are general descriptions. Exclusive agents write for one company such as Allstate or State Farm. They cannot by contract place business with another company. These agents write a large portion of what is called personal lines insurance that is homeowners or personal auto. Direct writing agents are employees of the insurance company and generally are paid a salary in lieu of commission. Wausau Insurance Companies utilize this system as does Liberty Mutual. These agents can write both commercial and personal insurance. The last category is the independent agent. This agent works on commission and can represent numerous insurance companies. They can write both personal insurance and commercial or business insurance. Currently about 55% of all commercial insurance in the United States is written by independent agents. Next; Where do find them. I recommend utilizing friends and associations if you are a member. Using the Yellow pages is really like shooting dice. You don't know what you are going to get. Remember some agents specialize in small businesses while others will not touch a small business. You need to ask direct questions of any agent you might consider. How long have you been in business and can you supply references in the area. If you need additional help please contact me.

Effective Shopping for Business Insurance

2007-12-04T15:25:00.000-06:00

Many clients ask me where they should begin in shopping for insurance coverage for their particular business. Here are a few simple rules : 1,Really analyze your business and all of your operations to identify all exposures to risk.2, Write down your findings.3, Discuss the findings with key employees.4,Talk with competitors about particular things they may have found in setting up their own insurance program.5, Utilize your associations if you have this available to you.Many associations have very good insurance plans and suggestions about coverage.6, Use outside consultants if you want unbiased information. Please check references on all consultants. Some so called consultants are in reality insurance agents. The old wolf in sheep's clothing can really bite you. Remember, insurance agents have a built in conflict of interest; the more they sell you the more they make.

2007-11-18T16:10:00.000-06:00

I received an e-mail last week about a claims problem a friend/client experienced on their auto. Their car was legally parked on the street and was struck by a vehicle that had lost control. The client's vehicle was deemed a total loss by the other party's insurance carrier but the offer the insurance company made to my client was far short of what their vehicle was worth. The insurance company said that they had found two vehicles in a town 245 miles away that could be purchased for what they were offering my client.
Here is my advice. Call a local dealer and describe your vehicle in detail including mileage and accessories. It is best if you speak to the used car manager when doing this. Always get that person's name and title. Ask that person that if your vehicle as described was on their lot what would they ask for it if someone wanted to buy it. You might want to call more than one dealer if that option is available You then have ammunition if you will to discuss a fair deal with the insurance company. What a vehicle will cost in a city 245 miles away has little bearing on this situation and should not even be considered. I have used this technique several times over the years and have always been able to get my client a better deal.

Auto insurance pitfalls

2007-11-04T09:42:00.000-06:00

Far too often people purchase auto insurance at the lowest liability limits required by the state of residence. This can be a very bad mistake. Todays autos with all their gadgets cost a lot of money. If you damage one it can cost you more than you might imagine. That is just the property damage to the auto. The cost of human injury can and usually is much higher.Today a hospital stay may cost upward of $2,000 per day. Courts also award pain and suffering damages to individuals who may be injured by your negligence. Solution: Buy higher liability limits and play it safe.
These higher limits are generally much cheaper than people realize but you need to ask an agent to provide a quote for you. I have one client who increased his liability limits from the state minimum to $100,000/$300,000/$50,000 for about $75 more each year. That's right; the cost can be small indeed when you consider the level of risk that you are taking on when you drive an auto.
One other point; always ask your agent the A.M. Best rating of your insurance company. Look for companies rated A- or higher. Insolvent companies don't pay claims. These type companies leave you, the insured, holding the bag.

3 Mistakes Homeowners make on their coverage

2007-10-28T11:11:00.000-05:00

Agents rarely tell you three important points to consider when purchasing homeowners insurance. Point 1: Your deductible is 1% of the total value insured. That's right; If your home is insured for 200,000 then your deductible at the time of a loss is 2,000. This can be lowered to 1/2 of 1% for very little money but you generally will need to ask about it and get the pricing. Also ask about even lower deductibles. Point 2: Jewelry is covered up to a max of $500 or $1,000. The way to increase this is to either; a-schedule the jewelry by having appraisals done and submitted to the insurance company. or b-ask the agent to increase jewelry limit to $5,000 without an appraisal. Point 3: Check your liability limits before you accept the policy. For years agents simply put $100,000 liability limits on policies and bad things resulted. Persons who are guests in your home can and will sue you if they are injured on your property. Don't settle for low liability limits. Ask for the highest limits available especially if you have a swimming pool. A personal liability policy may also be need if you are a high net worth individual. This policy can provide liability limits over and above the limits on your homeowners policy.

Help for insurance buyers

2007-10-25T09:54:00.000-05:00

Today The Insurance Advocate arrives to provide help to the end user of insurance products. We do not sell insurance as we were founded to provide unbiased information on insurance products provided to both individuals and businesses.
We have been in business since 1992. Look for our views and updates weekly.