Friday, November 30, 2012

Broker or Agent?

So aside from titles, what is the difference between and Insurance Broker and an Insurance Agent?

An Insurance Agent generally can only write business for one carrier or for a limited number of carriers due to contract restrictions.

A Insurance Broker can write for any carrier that they are appointed for or for Managing General Agents.

The question to ask is: Can that Agent / Broker write all of the policies you need?

An Insurance Agent can usually write several types of insurance with the same carrier. So if you needed landlords, homeowners, auto, renters and a commercial liability policy they should be able to provide you quotes with the same carrier.

But say you need homeowners in a high fire area, landlords, flood, and vacant property, a Broker might be able to provide better options. I've ran across situations where the carrier the client had been with would not write high fire, flood or vacant property. Or after providing coverage for years, the carrier canceled the client simply as a business decision.

Another difference can be in how they get paid. Some Brokers charge a broker fee over and above the amount of the policy. For example, Ted and Mary buy a homeowners policy from Benny Broker. The cost is $860 for the year. When Ted and Mary look at the quote they see a line that says broker fee: $150.00. This means that the policy from the carrier costs $710.00 for the year. The $150.00 all goes to Benny, plus Benny gets his commission from the carrier based on the $710.00 premium. Generally if a broker fee is charged it must be disclosed to the client  in the quotation and / or a separate disclosure. The rules on this vary from state to state.

An Agent could be paid on commission or on salary plus commissions or sometimes on salary plus a bonus per policy. Their agency may or may not charge a broker fee.  It all depends on the professionals contract with the Broker or the carrier.

In short, it pays to shop around for your insurance. Compare quotes and coverage  make sure you understand what is covered and not covered. Just because you think you can't get insurance on a property, does not mean that you can not get it insured if you are willing to pay the price. An insurance Broker can provide more options, personalized service and more pricing options than an Agent that can only write for one carrier will be able to.

Friday, October 5, 2012

Tis The Season (Almost)

It never fails to amaze me how early retailers start the holiday season. With Halloween coming at the end of the month, then Thanksgiving the month after, shelves are springing up with Christmas decor right after you pass the gauntlet of costumes, candies and tombstones.

Another thing that starts springing up is the even scarier scam artists. These frightening fiends will do whatever they can to separate you from your cash, personal information or piece of mind.

Here are a couple of tips to hopefully save you from falling victim to these desperate demons.

1. Don't click on links in emails from "your" bank, credit card carriers or the folks that picked you to win the Uganda Lottery. If there is a problem with your financial accounts, your bank will call or send you a letter. They will never e-mail you. If you have doubts, go to the website for your financial folks that you have used before or call them.

2. Medicare open enrollment starts on October 15th and ends December 7. There are some scammers that will advertise themselves as "Medicare Agents". There is no such thing. Say no thank you and shut and lock the door. A call to the police may be a good idea if you live in a senior housing development or complex. If they are an insurance agent, their card and any flyer's must have their license number on it. If it's not there, they are a fraud or at the very least have disobeyed the state regulations. That goes for estate planners to. They should be a licensed attorney, insurance agent or sometimes a CPA. You can check them out on the web or over the phone.

3. Sales calls that try to make you feel desperate to protect yourself by buying their product. I've heard of all kinds of fakes on this one from insurance to overdraft protection, office supplies and alarm systems. I tell them I already have someone for that (since I do) and hang up. Some of these calls may be ok, but I don't buy anything by phone. If they start asking for social security numbers, banking info, drivers license etc., hang up. You don't know who called you or who you are giving this info to.

4. Mail offers for credit, insurance, and other financial services should be shredded before being thrown out. I have trash divers looking for "cans and bottles" on my street too. That does not mean they could not find that application for a new bank account and decide to fill it out and change the mailing address.

Above all, have fun and relax. Yes, these fiends are out there. They will try to get you excited or upset so that you will give them what they want just to make them go away. Don't. Take a deep breath, calmly say no thank you and hang up, shut the door, delete the e-mail and enjoy the company of family and friends.

Thursday, September 20, 2012

Landlords, tenants and Insurance, oh my!

Everybody knows they need insurance to protect their belongings and property to keep from getting wiped out financially. But insurance can also help in other ways.

If you are a tenant, renters insurance can make you look better to a landlord that is screening applicants. It shows that you care and might keep the landlords property in good condition while you live there. If you decide to move, renters insurance policies are often transferable to another property, so you would only need to talk to your agent about updating the policy, not canceling and getting a new one. Renters insurance also provides additional liability protection in case you are sued or damage the property of the landlord or a neighbor. Also, remember that the landlords policy does not cover you at all. If there is a break in or a fire, all your things could be destroyed and would need to be replaced. Without renters insurance, you would pay for everything out of your pocket.

If you are a landlord, having a tenant with renters insurance benefits you by giving you another layer of protection should your property be damaged by the tenant or if a guest of the tenant gets injured on the property. Their policy would provide liability coverage for damages caused by them.  Additionally, since the tenant is taking the time to insure themselves, they have an interest to avoid a claim and may take better care of the property. If you allow dogs or other pets, making sure that the tenant has animal liability is a good way to screen potential renters.

Another thing that some landlords will do for tenants that provide and maintain renters insurance is offer to reduced rent for those tenants. This could provide more applicants to chose from.

All around, renters insurance benefits both the tenant and the landlord. Contact an agent in your area or visit to request an quote for renters, landlords or homeowners insurance. It's free!

Tuesday, July 24, 2012

I'm Looking To Rent. Do I Need Renters Insurance?

In a word, yes. Many renters feel that they don't have enough valuable property to insure. The question you should be asking yourself is do I have the cash to replace EVERYTHING I own?

Renters insurance covers only your personal property. It does not cover the house, apartment, mobile home or room you are renting. It just covers your stuff. Dishes, clothes, sofa, bed, kids toys, jewelry, table chairs, stereo, Ipod, Ipad, eye-ware, etc. When you add up all the money you spent buying that stuff, it really adds up.

Also, some landlords prefer a tenant that has insurance over one that does not. That can really help if they have to sort through several applications.

Now imagine there is a fire one night. You and your children get out of the house with just the night clothes you are wearing. Everything else is gone. Where are you going to stay? How are you going to replace your stuff? Renters insurance will provide for your living expenses while you are displaced from where you live. Hotel room, meals, and other things can be reimbursed and paid for. There are also other coverages for liability and medical payments to others, even pets can be covered.

That's just one scenario where renters insurance pays for it's self.

If you would like to get a no obligation quote, please click here to go to my web site. It never hurts to look and it may be the best thing you've done.

Thursday, July 5, 2012


If a fire breaks out and you are buying or selling your home, it could delay your transaction. Insurance carriers will declare a halt or moratorium on issuing or changing any policies in the area of the fire until it is out. Different carriers handle this differently, but most of them go by zip code and the location of the fire. I have had some carriers declare a moratorium in a zip code and others have been ok with that zip code. It pays to check around.

Also, carriers do this when a large fire has occurred and is not put out with in a day or if it grows quickly. If there is a brush fire in your area and it is under control quickly and put out, carriers in general will not put a halt to policy writing activities.

Would you like to pay for a house today, put all your stuff in it and have it burnt to the ground tomorrow morning? Neither would your insurance carrier. That is why they put these moratoriums in place.

If you are in a wild fire area and forced to evacuate, your homeowners insurance can provide reimbursement for expenses while you are away. Hotel rooms, food, and some other expenses may be covered even though your house did not burn. Check your policy for additional living expenses coverage or call your carrier.

Are you ready for fire season? Get a grab and go kit ready, dust off the one you have and update it.

Check out this great video from CALFIRE by clicking here

Tuesday, June 12, 2012

I Need Insurance When?

I have clients that are buying homes or renting a new home. Some of them are or are going to be landlords, others are first time home buyers, just moving closer to work, or getting a change of scenery.

One thing they all need to have is insurance. The lender will require it. If you are paying cash for a property, you really need to insure it right away to protect your investment.

The question is timing. Here in California, for example, we have escrow. That means that the paperwork and money go through a neutral third party which then sees that title to the property is switched over and sent to the county recorder for recording, money is disbursed to the appropriate folks, loan is funded, and much more. They also often make sure that insurance is in place on the property as a condition of the loan or they may recommend that a cash buyer get insurance at  or a little before the close of escrow.

The date you close escrow, or take possession of the property, is the date you own it. Lenders will often request insurance shortly before the close of escrow so that they have proof that the property is insured when the loan documents go back to underwriting. This way the lender can review everything at once and give the ok for the transfer of funds from them and escrow can close.

Often, the closing date changes due to various circumstances. Sometimes it closes earlier, sometimes later. Your insurance agent must be made aware of these changes. The lender will need an updated proof of insurance to reflect the new dates. If you are paying cash or renting, you will want to make sure you have insurance before you move anything in. People have had possession's stolen from their homes when they are moving in or moving out.

Remember, a little communication with your insurance agent can save a lot of frustration and time.

Tuesday, May 22, 2012

So There's A Fire! Why Can't I Buy Insurance?

Fire season is here for most of the country. One thing that happens when a large fire occurs is that carriers place a moratorium, or to put it more practically, they stop writing policies in the area until the fire is out.

Makes sense. They don't want to insure a house today and then have to rebuild it tomorrow.

But what if you are trying to buy insurance? You are in escrow on a house and about to close when a large wildfire breaks out. Your agent tells you that there is a moratorium and that they can't provide proof of insurance or bind the policy. Or you paid cash and did not get insurance on the property.  In short, you wait and hope the house is ok.

Or you can call around. I work with different carriers. Where one carrier will not write during a moratorium, another may. They usually block out by zip code and each carrier determines what they want to do in these situations. You might pay more, or you might pay less, or you might not find anyone at all until the moratorium is lifted. At least you tried.

Sunday, April 15, 2012

Spring is Here! What's blooming?

Spring. Plants are blooming, people are starting to plant gardens, lawn mowers and hedge trimmers come out of the back of the garage, we start enjoying the longer days.

And then the blooming scammers pop up. In our e-mails, on the phone, in our mailboxes, even in our taxes.

One scam that has sprung up already is tax refund fraud. The blooming scammer goes through your mail box, your trash, or finds out as much as they can about you off the web. They then go to a tax preparer or use tax software and file a return in your name. They then have the refund deposited to a debit card and start spending. With  the IRS and most state tax collection agencies mandating the use of electronic filing, nothing is checked by a human until months or even years later and often times only if there is something that flags. It all runs through a machine that has less intelligence than a a head of lettuce.  Click here to read an article from CNN on this scam.

I received an email from Blooming Bank saying I need to log in using this link and verify my account info since it may have been compromised. I don't have a blooming account at Blooming Bank.

In short, be careful of the blooming scammers. If you think it may be a scam, it probably is. Don't be afraid to say no thank you and hang up, close and lock the door, call the police, or  toss that letter in your shredder. If they are selling insurance door to door, really watch out. Get their card and tell them you will call them later, but you have to do something. Lock the door, see if there is a license number on the card. If not call the police, if so, call or go online to the dept. of insurance and look up the number. See if they are licensed.

Your bank will never contact you by e-mail to tell you something is wrong with your account. They will mail or call. Use websites and phone numbers for your bank that you already have to contact them. Be careful what you mail from your home mailbox. If possible take it to the post office, outgoing mail at work or put in in a post office drop box. Be careful what you put in the trash. Get a shredder and use it. Shred anything that has your credit card, social security, sign up forms, or other personal info. I even shred blank credit card applications I get in the mail.
And one of the best ways to avoid Blooming Scammers, if you have access to your account online, check your summary twice a week and look at each transaction. Report any charge you do not recognize, no matter the amount. Blooming Scammers will often make several small transactions before they make a major one and clean you out.

Friday, March 30, 2012

Do I Really Need That?

Often when I do a quote for a client I hear such things as: "Can't we lower the personal property coverage? I don't have that much stuff.", "I don't have any other structures! Why can't I remove it?", "Can I lower the dwelling coverage? The house is not worth that much." and many, many, many more.

Well, to start with you should ask questions about your coverage. It will give you a better understanding of what is covered, it gives your agent a chance to answer questions that you may have and you may need other coverages based on you discussion. And it makes you a smarter insurance buyer.

Keep in mind that insurance is there for when your things are stolen, the house catches fire, a drunk driver runs into your garage at 3 am, etc. It's pretty important to find out now if you have the right coverage, rather than being told that you don't when you are standing in the yard surrounded by fire trucks and police.

You may think that the property is way over insured now. When you look at the costs associated with building a home, the fire department fees, hotel or rental costs, and replacement of your things, it tallies up fast. Click here to see what carriers have to take into account under California's regulations. While you can also choose the lowest cost policy with the least amount of coverage you can get away with, would it be worth it? Maybe. Are you willing to accept a large loss, or do you have a hoard of cash to make up the difference?

Thursday, February 16, 2012

Do they really have to inspect my house every year?

This one of those questions I get on a regular basis. Insurance carriers inspect the outside of the homes and buildings they insure when you start a new policy and every year when you renew. These inspectors are independent companies that are contracted by your insurance carrier to go out and write a report on what they observe about the outside of the structure.

"I told that inspector to stay out of my yard!" or "I live in a gated community. They won't be able to get in. I'm set!"  Good for you. Your policy is now going to be canceled. Your insurance policy is a contract between you and the carrier. It outlines what the carrier will and will not cover and that they must perform under the contract. It also outlines what your obligations under the contract are. That's right, you have some things you need to do. One of them is to allow an exterior inspection of your home.Would you write a really big check without seeing what you are paying for?
"But nothing has changed. My house is the same as it's always been." Well, yes and no. Inspectors are looking at your home differently. They look for peeling paint and damaged stucco which could let in moisture and cause damage to the entire wall. They look at roof shingles to check for peeling, cracked or missing shingles which can cause leaks or worse come off in the wind and cause more damage. Has your tree grown in the last year? Is it overhanging the roof? Those branches move in the wind and can damage the roof and trim of your home. Is there debris around the home and yard? Items leaning against walls can damage them. Items around the yard can be a fuel source for fires, breeding ground for insects and pests, not to mention a good way for someone to get hurt by tripping on them. A home that is not maintained causes claims, injury and can be a target for thieves and squatters.

These are just a few things inspectors look for. They are not there to pick on you or your home. They are there to insure that the underwriters conditions for them to insure you are met. They also are there to point out repairs that need to be made now, while they are minor, rather than putting it off and it is now a huge amount of work to be done later.

For most of us, our homes are our biggest investment but consider that they not only provide shelter. They give us a place to rest at the end of a long day, a place to enjoy the company of friends and loved ones, a place to raise our family, and a place to enjoy our hobbies. Home is a big part of our lives, not just a building. Taking care of it is more than just a requirement of insurance. It's an investment in our peace of mind and quality of life. Insuring them properly and maintaining them will help protect you from avoidable claims and if something happens, you have coverage to help put things back the way there were.

Friday, February 10, 2012

Watch your renewals this year. New regulations have insurers, agents, and clients up in arms.

When you go to renew your homeowners and other property insurance policies this year, you could be in for a bit of a shock.

Last year California Insurance Commissioner Dave Jones enacted regulations about how insurance carriers figure replacement cost on structures. The goal of these regulations was to make sure that carriers where not issuing polices that underinsured property. Needless to say, they are being challenged in court.
OK, I know, the first thing you are going to say is "My house was insured for more than it's worth to begin with! How can I need more insurance?!". When a disaster occurs, our goal in insurance is to rebuild your home, rental, office, etc.,. Worst case the entire building is destroyed and we have to rebuild from the ground up. That means new materials, hauling off the remains of the old structure, getting permits, architectural plans, hiring workers, paying fire department fees, paying city, county and state building fees, building code upgrades, and more. Real Estate market value varies greatly from the rebuild cost of a home based on the market factors at a particular moment in time.

If there is a large scale disaster, the cost of materials and labor can skyrocket since they are in high demand and there may be a shortage. Carriers have to try to take this in to account too. As I said before, the goal is to rebuild your building hopefully with out having to go to you and say "Oh, Mr. and Mrs. Homeowner, we are 70% finished with your home, but the insurance coverage has all been spent. We need you to come up with $84,000 so we can finish the job." I hope your motel is near a good bar.

Now, back to the regulations and what they mean to you. Many carriers are interpreting these rules differently and applying their calculations and formulas accordingly. In California, it is up to the insured (you) to make sure you have enough coverage. While they are required to send a copy of their analysis to you with your renewal, you can also request one, free of charge from your carrier or agent. I recommend that you read it closely. I have run across some "assumptions" that carries have made that did not fit the property. For example, the flooring was rated as having 70% carpet, 10% vinyl, 20% tile. They do not have any vinyl in the home.  They may have rated your bathroom as custom, or have down that you have a partial wood or wood laminate floor. If these items do not apply, you should speak to your agent about how to get the analysis corrected. It can lower your rebuild cost and the amount of money you pay.

Just be sure that the amount of insurance is still enough to rebuild your property. Your underwriter will still have to review the new valuation and approve it. After all, they are writing the check. If it is not reasonably close to rebuild cost, they can (and usually will) reject it.

Thursday, January 19, 2012

It's a New Year. Here's a few things to check on.

A new year often brings hope. Hope that we can start over, reset our lives, lose weight, make more money and go after those goals we missed last year. With a Presidential election occurring, this year should have lots of pomposity, theater, bickering and laughs.

Fresh starts are great. 2012 hopefully is off to a good start for you. There are a few things you will want to look at and get out of the way so you can get busy achieving your goals for this year.

1. Review your current insurance policies.

   Did you remodel last year? Did you have a new baby? Have a break up? Find your soul mate? Sell the property? You may need to update your homeowners, auto, life, health and other insurance policies to reflect these changes. It often is very simple to do and while you have the documentation ready (receipts, marriage certificate, divorce decree, babies ssn, etc.) you should make the call or e-mail you insurance agent.

2.  Make sure your insurance agent, employer, and friends have your current contact info.

     If you have moved during the year, changed phone numbers, e-mail address, etc., you should update your insurance agent so they can have the correct info should you need to file a claim. Your employer will need to have it before they can print your w-2's, 1099's etc. so that they are correct. It can often take several days to correct them once they are printed. Make sure they have this info ahead of time.

3. Make an appointment with your Lawyer or Estate Planner.

     No matter your age, you should review your will, trust, powers of attorney, etc. at least once a year. If there have been no changes ( marriage, divorce, births, deaths, grandchildren, property sales, etc.) then you can just smile and catch up with your professional for a few moments. If there are changes, you should make them as soon as possible after the event or at least review them on a yearly basis.

     In some cases, wills and trusts have not been updated in years. Everyone you intended to leave stuff to and handle your final arrangements may have gone to prepare your room ahead of time. You may have a new family member that might be excluded from the will since they were not part of the family when it was written. The other Trustees may have moved, passed on, or changed their status within the trust. Update these important documents now so that everyone has their part clearly defined when you move on.

4. Shred old documents once they are updated and your Estate Planner or Lawyer has given you the green light to do so.

     The confusion that occurs when your heirs find 10 versions of granny's will, many of them undated. In one, Jenny gets the good china, in another, Martha gets the plates, Jenny the tableware. Granny never did like Jenny's husband. Make your wishes clear.

5.  Get your receipts, year end statements and account balances ready for your tax person.

     I keep a file all year long and as I do things that could or will be needed for my taxes, I put the documents and receipts in a plain large brown envelope which already has the year and "Tax Info" written on it. It save me from having to hunt for stuff at the last moment.

6. Review your savings, ROTH IRA, traditional IRA, 401K, and other investments. Talk to your financial planner.

     Adjust your contributions. Have your investment goals changed? Are the investments you have chosen still a good fit for you? Is there something else you could or should be doing? Can you put a little more in your reserve account for emergencies?

Now is a good time to look at all these things and any others you feel the need to. Get it out of the way now and you can focus on your other goals for the rest of the year. Check with your employer to see when certain wage and tax forms will be available to you. Most of the time it will be after January 31st, but they could need more time to correct errors with the CPA or it could be earlier depending on where you live.  Call upon the appropriate professionals and make appointments as their schedules can fill up quick during tax season.

Here's to a great new re-start!