Save money by combining policies with the same company.

 

You will hear agents tell you that you can save money by combining your policies with the same company. While that is true, it does not mean you will get the lowest rate by combining them with the same company.

Now that I am independent and represent multiple companies, I am seeing first hand that putting all your insurance with the same company does not mean your getting the best value possible.

Every insurance company has what’s called an “appetite guide”. This is how they describe what kind of business they are looking for. For example, a company that sells just auto insurance may have a different appetite than a company that sells auto and home insurance. While your auto insurance needs might fit that company’s appetite, your home policy may not. In that case your not getting the best rate available. If you do not fit the appetite, then higher rates are charged.

If you place your insurance with the company that wants your type of risk, you will get the best rate possible. An independent agent has access to multiple companies, and can find the right fit for you.

I recently quoted a prospect that had their home and auto with one of the big three (Allstate, Farmers & State Farm). They were getting the auto/home discount and were happy with their rates.

I quoted them with MetLife for the auto, and Safeco for the home. They saved $600 a year on the auto, and $400 a year on the home by splitting their insurance to two separate companies. I was also able to give them higher limits and broader coverage. The best part is, they still have one point of contact, me.

What does, “there’s a different between having insurance and being insured” really mean?

Don’t waste your money on minimum coverage. Here’s why,


Let’s start with the required state minimum liability and property damage limits. In 1967, the state of California decided to make liability and property damage required coverage. They set the limits at $15,000 per person, $30,000 per accident, and $5,000 property damage.

This means, if you caused an accident and injured someone, the insurance company would pay up to $15,000 for bodily injury per person. If you injured multiple people, the most they would pay is $30,000. They would also pay up to $5,000 in property damage.


In 1967, these limits were adequate. Now, let’s put this in perspective. In 1967 gas sold for .33 a gallon. In 1967, you could buy a really nice car for $5000. In 1967, $15,000 would have paid for a hospital stay of over two weeks.


Now let’s fast forward to 2011. Gas is $4.27 a gallon. The MSRP for a Smart Car is $17,690.00. We all know how expensive medical care is today, so to say the $15,000 required by the state will not cover much is a given.


The problem is, the state never adjusted the required coverage to keep up with inflation. If you carry the minimum coverage, you have insurance, but your not insured. You have way too much exposure. Remember, the insurance company will only pay up to the policy limits, regardless of how much damage has been done.


If you hit a $100,000 Mercedes, and have $5000 of insurance, where is the difference of $95,000 going to come from? Not the insurance company, I can tell you that.


Let’s take this scenario to the extreme. Let’s say the driver of the Mercedes is a surgeon. Because of the accident, he lost an arm and can no longer perform surgery. Will $15,000 be enough coverage?

Should You Add Roadside Assistance To Your Insurance Policy?

A lot of people ask about towing and roadside assistance and whether or not they should add it to their auto policy.

Here’s what you should know. Most new cars come with towing and roadside assistance, at least during the warranty period. This is normally offered free. Check with the dealership where bought your car to see if you already have this coverage.

When you add towing and roadside service to your auto policy, there is normally an extra charge. Some companies offer it free, but many others charge for it. If it’s free, obviously you should take it. If there’s a separate charge, consider the following.

The towing and roadside endorsement on an auto policy only covers the car on that policy. If you have friends like mine, there’s a good chance some of them do not have this coverage, and if you're with them when their car breaks down, you're going to hoof it to the nearest repair shop with your friend.

I have a Southern California Auto Club membership, which covers towing and roadside service for any car you’re in. In the scenario mentioned above your service would have towed your friend’s car.

It costs a little more than the endorsement you can add to your policy, but like I said, it covers any car your in, not to mention you get discounts on admission to places like Universal Studios, Sea World, Knott’s Berry Farm and many others. Those savings can add up fast.