Speaker 0 00:00:02 <inaudible>
Speaker 1 00:00:08 What's up, everyone. Welcome to the finance for physicians podcast. I'm your host, Daniel Raimi. Join me as we dig into what it looks like for physicians to begin using their finances as a tool to live better lives. You can learn more about our
[email protected] let's. Jump into today's episode. What's up guys, happy new year. Hope you're having a great day today. We're going to be talking about something that probably affects every single one of you. At least any of you that drive a car or own, or even rent a home. And that's getting home and auto insurance. We're going to be talking specifically about how to save money on home and auto insurance while maintaining adequate coverage. And also how to go about this process of purchasing and owning home and auto insurance without creating unnecessary headaches and poor experiences. It can be a tricky balance.
Speaker 1 00:00:54 And I've brought in my buddy today to help us talk through this. My guest today is an independent home and auto insurance agent for energy insurance company. He currently lives in Louisville, Kentucky. However, he's able to work with customers all over the country. He's been at this for about 10 years now and has also worked with a number of our clients in the planning firm. So I've been able to see firsthand the quality of his work. We've worked with many insurance agents over the years, and what's unique about my guest today is that he's very intentional about helping take more off of his customer's plate to make life easier for them instead of harder, and to reduce the stress of having to deal with insurance all while maintaining adequate coverage at a fair price, I guess today is Andrew. <inaudible> welcome, Andrew, welcome to the podcast.
Speaker 1 00:01:35 Thanks for having me on Daniel. Definitely. So we were going to talk about insurance today and I kind of wanted it to keep it high level and talk big picture about some of the big things you should really be thinking about as you own and start to add insurance in your lives. So our audience is young physicians, mainly, and many of the clients we work with and our planning firm is in that demographic. And I know you work with quite a few, your wife is a physician. And so maybe we can get into some of the most common errors that you see, uh, as physicians are starting to, you know, purchase home and auto and those sorts of insurances.
Speaker 2 00:02:13 Yeah. So I'd say most common error I see is people usually get, you know, off their parents insurance and your audience's place. They usually get it, you know, when they're going into their residency, you know, and when you're in residency is everything's very price-driven because you're not making the physician bucks yet. You know, you're still working a lot of hours and you're a lot of times moving to a new city and you're more inclined to just go with a one 800 number. I'm just going to go with the cheapest thing. And what I see with a lot of physicians is they get in with a company when they're in residency and then they never readdress their insurance. Never take a look at it because, you know, like I said, my wife's a physician she's finishing up her pediatric residency and they have no time. Their time is very valuable. So they just know their insurances, you know, whether they cheap and good and, but they've never used it and then they never readdress it. So then when they start making that attending money, um, making the big bucks, you know, their insurance needs change quite a bit, but they're still on this bare bones policy that they paid minimum premium for.
Speaker 1 00:03:19 What's the cheapest option really look like for, you know, I guess it depends on the state, right. But
Speaker 2 00:03:25 I guess, let me dive into like what we're covering with an auto policy. And so I'm gonna use the state of Kentucky as an example, but, um, every state is at this level or a, you know, a slight variance of this. So on auto policy, there's physical damage coverage. So if your view, if you're in an accident, um, to fix your vehicle, uh, comprehensive and collision coverage. And then the, the other thing that I think gets looked over quite a bit is the liability limits. So in Kentucky, the state minimum requirements, so you're required to have insurance. The minimum limits you have to have are 25,000 for bodily injury per person, 50,000 per accident, and then 25,000 for property damage.
Speaker 1 00:04:09 So what does that actually mean? Like how does that translate to a real world scenario?
Speaker 2 00:04:13 I'll give an example. Let's give example with me and you. So, um, Danielle is great financial advisor, uh, hypothetically, maybe not the best driver come on. And let's say he runs into me, rear ends me and I have to go to the hospital. So if you have the state minimum liability limits, that's only $25,000 for my medical payments, anything that might come up from that accident.
Speaker 1 00:04:36 So I caused an accident I'm covering. So if I'm at fault of an accident, I'm covering the injuries or I guess medical bills of the people in the car that were injured because of the accident. And I cost that falls under the liability limits
Speaker 2 00:04:52 Limits. So $25,000 per person, $50,000 per accident. So everyone in the vehicle, um, and then $25,000 for property damage. Like, you know, if you hit a brand new Mercedes, you know, and you total it as not going to be enough to cover the repairs, especially nowadays with every bumper has every sensor, you know, self-driving, you know, lane sensor. So if you are in a fender bender, it's a lot more than you think it's going to be. So those are the, the basic coverages. And the thing people don't think about is so, okay, you have $25,000 in coverage. Well, what happens if it's more than that? And the answer is you have to pay out of pocket. So if you have the state minimum liability limits, you're in an accident and you cause $50,000 in medical bills, uh, for the person in the other vehicle or damage to that vehicle.
Speaker 2 00:05:45 Well, you're going to have to pay $25,000 out of pocket in order to make that person whole again, if you're at fault in then accident. Yeah. So that's a big pitfall with the, uh, that no one really talks about and where I see a lot of physicians when they're in residency, they get that bare bones policy because you're finding a new city to live in, um, call one 800 number, get into that bare bones policy, which might be fine, you know, starting out. I would never recommend having those that low limits, but then when you start making attending money and you have a house, then you're always say your, your liability limits should cover your assets in order to protect yourself. So I always say you should always reevaluate your insurance every three years.
Speaker 1 00:06:31 So, so we got the, uh, kind of under-insured or in training, transitioning in practice, not reassessing and kind of being dramatically under under-insured. What else, what other sorts of mistakes do you see?
Speaker 2 00:06:43 The main one I see in just not paying enough attention, uh, to their policy. And the main thing is, um, always suggest going with an agent. And that's another pitfall I see is a lot of times they just go on that one 800 number, they get a plan and then stick with it because
Speaker 1 00:07:00 If they are doing an online kind of like Google auto insurance option, Geico, they don't really have an agent. So it's kind of on them to pay attention to their policy. Correct.
Speaker 2 00:07:11 Yeah. And you really need to look at like, so how, how, and I have clients ask me a lot, you know, how are you making money off this, the agent? And so what did, what happens is like when you sign on with a new insurance company, uh, with an agent, you know, they get a commission for signing on the new business, but then they also get a commission every time you renew your policy. So they, you know, it behooves them to keep a relationship with you, make sure you understand your policy and keep renewing it every year. If you're just calling into a one 800 number, you don't have that relationship in someone to grow with. Yeah. So, so I would, I would suggest, you know, getting with someone, um, that you're comfortable with and then we'll go over your needs.
Speaker 1 00:07:51 Yeah. So when you're, you had mentioned in training, I guess, if so, what is inadequate? Um, I think the state minimums, like you were talking about are potentially inadequate. I mean, having just $25,000 of property damage coverage that doesn't cover most new cars driving around, but as a resident, do you just say, well, I don't have assets, so we'll take the risk or, you know, what's, what is the risk? Like what if you have no money to pay out of pocket who cares or, or do you have that mentality or do you say, no, I need to be responsible for the losses about that. So I need to get a bigger, bigger policy limit in training.
Speaker 2 00:08:33 Yeah. So, so the, the lowest liability limit that I'll sell on an auto policy, uh, is a hundred thousand per person, 300,000 per accident for bodily injury, you know, it's medical payments and then a hundred thousand for a property damage. So that's the, the lowest I would recommend anyone gets. And I've had people ask, I don't want that. I just want the state minimum bare bones and I'll tell him, like, I'm not the agent for you, you know, cause I've seen, you know, probably once a month. Cause when we're bringing on new clients, we have to look at their claims history. We see a claim that's over that $25,000 limit, I would say once a month. I see that. Um, so like I, it, you know, we see quite a bit of claims that are, you know, above that $25,000 threshold. So, so yeah, so a hundred thousand is the lowest I'd recommend going for anyone. Yeah.
Speaker 1 00:09:22 Gotcha. So, so your property damage on your auto insurance covers cars damaged your liability protection covers kind of the injuries or those sorts of costs. You know, that number, I think the liability number is the one that can get really high, right? Like is cars, property damage to me, I don't know. This is how I'm thinking of it is property damage is a little easier to quantify or think about like there's I know what that car I'm looking at right now is probably worth. Maybe I hit some, something else, like house or something. I don't know. I guess you could do that. And that would get high, but I can't see the property damage stuff getting ridiculous, but liability can get nut nutty. Right. I mean, that's the really scary number.
Speaker 2 00:10:08 Yeah. And that's why I keep bringing up the liability. Yeah. It is a harder number to kind of quantify and wrap your head around. Yeah. So, I mean, I had a client about a year ago that like hit someone in a cross in a crosswalk, just wasn't paying attention, complete accident in a person had, you know, serious injuries in a claim being well over a million dollars, you know? And luckily they had an umbrella policy, so they didn't have to pay anything out of pocket, but yeah, it's, you know, like you said, my wife is a physician often working the night shift, you know, 28 hour call shifts. You know, I worry about her driving home after a long shift, you know, trying to get home might have hit a, you know, accidentally hit a biker, hit, uh, you know, driving through a neighborhood. So that's kind of what that covers the liability.
Speaker 1 00:10:57 Yeah. That's the big kind of scary, uh, risk there is that. And I think people get it backwards. Sometimes they cover the little stuff like the, I have a fender bender and it's a thousand dollars, which is more common, but like, it's not going to crush you financially, but then they don't ever think about the $2 million claim that's going to really new forever financially.
Speaker 2 00:11:23 Yeah. And you think of the things that you do in order to better protect yourself from other financial ruins. So like life insurance, you know, you have to have it, you know, if something happens to the breadwinner, what happens to the family? You know, disability insurance people always say, you know, with surgeons and insuring their hands, they're very quick to get those insurances. And then the liability insurance on the personal auto and home is just as important because if you're at fault in an accident that can mean financial ruin. So you want to make sure you're protecting yourself.
Speaker 1 00:11:56 Yeah. So I guess that's kind of where umbrellas come in. I'm sure you guys listen in and have heard of the umbrella insurance term terminology, but just to kind of clarify what that is, maybe Andrew, can you give us a breakdown of like what it does or what, what the umbrella insurance kind of concept is?
Speaker 2 00:12:15 Yeah. So an umbrella policy starts at a million dollars and then it is additional liability coverage. So as I mentioned earlier, always say your liability limit should cover your assets. So let's say you have, you know, a half a million dollars in assets. Well, the auto policies only provide a hundred thousand for liability coverage. The home policy only provides half a million dollars in coverage. So what you can do is in order to make up that difference is purchase an umbrella policy, which goes over those limits. So as opposed to having just a hundred thousand dollars of liability coverage with buying the umbrella, you now have $1.1 million in liability coverage. So that's how you get that additional amount in order to make sure you're covering your assets.
Speaker 1 00:13:01 So it's like a backup pool of liability protection. Yes,
Speaker 2 00:13:05 Correct. Yeah. It generally doesn't cover anything, uh, like any additional coverages, it's just an extra pot you can dip into if you need to.
Speaker 1 00:13:17 Gotcha. So that helps in that kind of worst case scenario we're talking about him. I think another misconception I see is that people overestimate the cost of that kind of stuff. Like that's the good news or not, not the good news, I guess it's well, that, that that's the, uh, efficiency of that's where insurance becomes ultra efficient is on those high dollar, very unlikely situations. That's where insurance works great because they can price it really low and still make it a profitable business as an insurance company. So liability risk is a classic example of ultra efficient for insurance purposes because the likelihood of it happening is ultra low for the average person. Like the big, big time dollar claim. I mean, it is a possibility you don't know for sure what your risk is, but there is a low chance low enough. So that the cost is very, very low. I think a lot of people I talk to don't realize how inexpensive it really is. Can you give us an idea of kind of costs and
Speaker 2 00:14:14 Yeah. It's yeah. It's priced accordingly, you know, so the, the odds, you know, the chances of you actually needed it are very low. And that's why if you were to get generally, if you're like, you know, a family of two, two cars in a home, you're probably for a million dollar umbrella policy, you're probably looking in the two, $250 range to give that a million dollars of blanket coverage a year a year. Yeah. Correct. Yeah.
Speaker 1 00:14:39 Yeah. So I would consider that fairly inexpensive now in training. I mean, I think that's going to be a stretch and I'm not sure that it's necessary for everyone in training now. Some situations may be so, but, um, you know, in practice, I think that's a very serious consideration. People should be thinking about is.
Speaker 2 00:15:00 Yeah. And that's why I brought up earlier, you know, you were, you asked what are the, one of the pitfalls that young physicians fall into with auto insurance and it's getting into that bare bones policy, you know, so for me, bare bones would be a hundred thousand per person, 300 per accident. And then once you get into attending money, your assets are over that a hundred thousand dollars threshold. So you definitely need an umbrella policy. Yeah. And that's why I always say, make sure you're, you know, re-evaluating your insurance every three years. Otherwise just put it to bed, pay your premium, but every three years, get it out, look at it. Have your needs changed. Has your income gone way up kind of readdress it?
Speaker 1 00:15:37 Yeah. I think everybody listening at minimum should, if you haven't ever done this, go pull out your most recent summary of coverage and look at what the numbers are and see what the dollar amount is. And kind of really just take a second to think about it. And if it's low like that, you, you really got to think about, you know, increasing that or reassessing that, and you don't want to be driving around with a $25,000 property damage limit. I don't think that's a good idea
Speaker 2 00:16:07 And it's not as expensive as people think to increase it. But the repercussions of, if you're in an accident and you don't have adequate cover covers can be, you know, financial ruin.
Speaker 1 00:16:17 Right, right, right. So we're, we're in a no fault state. Right? Andrew, Kentucky, we were, we're both in Kentucky. What is a no fault state? How does that work or all w what what's, what if you're a no fault state? What's the opposite of a no fault state? Yeah.
Speaker 2 00:16:30 So th the, it's a very misleading term that is out there. So people think that you're in an accident. Well, no, one's at fault. Cause we're at a no fault state, which is not the case. So all that means is, um, whenever you're in an accident, it doesn't matter if you hit a tree or you hit someone else, your auto policy pays out is required to pay out the first $10,000, uh, for medical payments or personal injury, regardless of who's at fault. So that's what it, that's what it means by we're a no fault state. Other States do not have that coverage. They have, uh, medical payments, which are not as easy to tap into. So yeah, that's the, yeah, it's a very misleading term.
Speaker 1 00:17:09 Okay. So it's not like, it seems like the common conception is like nobody's at fault or get that off. Well, so like if the one thing we didn't hit on yet is what about if so in Kentucky, at least my understanding is there's a, quite a few people in Kentucky that are not insured at all or under-insured or whatever. Let's say I get in I'm, let's say I'm the one that gets rear-ended and I'm hurt. I have pretty high medical bills. And the person that hits me is I'm not injured at all. What happens, who pays for it? Am I in my mind, you know, potentially, or what,
Speaker 2 00:17:53 On every auto policy, in addition to the liability covers, there's also uninsured and under-insured motorist coverage, which should be the same limit that you have for your liability limits. And what that does is if you're in an accident with someone that does not have insurance and they are at fault, their policy would pay out like yours would, and then, uh, you know, it doesn't really count against you. And then they would, uh, recoup the cost by going after that person. Yeah. But it keeps you from, you know, if you're injured, have all these medical bills, lost wages, it helps make you whole again.
Speaker 1 00:18:29 Gotcha. So what about car rentals? I know that's if, if you've ever rented a car, you know what it's like, uh, when at the car rental desk, usually they're, they're really pushing some car insurance. So like, should you buy it? What does that even provide? Why would you buy car insurance at a car rental place? Does your current home in, or your current auto insurance potentially cover that? Some are.
Speaker 2 00:18:50 Yeah. So I would say, I would say, do not buy the rental insurance that they're trying to sell you. As long as you have full coverage on your policy, meaning comprehensive and collision coverage
Speaker 1 00:19:02 On your primary home or primary auto here.
Speaker 2 00:19:04 Primary idol. Yeah. So any vehicle you drive for, that's a rental, or you borrow a friend's car, your auto policy follows you wherever you drive. So if you wreck a rental vehicle, your policy is going to pay out as if it's yours in order to fix it, you know, minus the deductible.
Speaker 1 00:19:22 Yep. And they don't tell you that at the rental car desk.
Speaker 2 00:19:25 Yeah. But you want to make sure you have full coverage, comprehensive and collision. If you don't, if you just have liability coverage, then you do want to buy the, you definitely want to buy that because he had to pay out of pocket for any fiscal thing.
Speaker 1 00:19:37 Yup. Or add full coverage to your policy.
Speaker 2 00:19:39 Yeah. Either or yeah. Where do they get you and where would they really try to sell you on is, um, that you are technically on the hook for loss of income, so income that they could not collect because the vehicle you wrecked, the rental car, you wrecked was being repaired and, but I've never seen or never heard of them actually collecting on that.
Speaker 1 00:20:00 Yeah. Gotcha. What about like cars? I don't think a lot of people think about this when they're looking at cars. Uh, is there a pretty wide range in pricing, on different cars, like red sports car? I think it's the classical when people think of versus like, you know, minivan or <inaudible> or whatever, is there a pretty big spread or is, it does not matter as much as you might think
Speaker 2 00:20:22 Matter as much as you might think that the main thing is like, what's the value of the vehicle? Like what it costs to repair it, uh, whether that's a, you know, sports car or a, you know, high-end luxury car, um, if it costs the same, it's going to be insured about the same. Yeah.
Speaker 1 00:20:39 Gotcha. And nowadays, I guess they incorporate all kinds of stuff to pricing, like credit scores and your risk of, I guess, your driving record. What are all the things now that they use to price it?
Speaker 2 00:20:53 Yeah. So when you go and you get, uh, uh, auto and home insurance quote, they do a soft credit check. So that's the first thing, uh, it doesn't affect your credit score, but the better credit you have, the better rate you're going to get. Other factors they look at is your claims history. Some companies go back three years, some go back five years. So if you've have more claims, you know, your insurance is going to be a little higher. And then another thing to keep in mind is, um, they call it act of God. So like a comprehensive claim, like a hailstorm, uh, that damages your vehicle. If a tree falls on your vehicle or roof on your home, uh, those are not going to count against you as much as a at fault accident. Like if you backed into a tree or something like that.
Speaker 2 00:21:35 And then as far as the pricing with getting, uh, insurance and how they come up with a rate, another big factor that people don't think about is insurance companies value how long you've been with your current carrier when they're putting a quote together. So if you're shopping your insurance every year, you're not going to get as good of a rate. I find the best price break is to shop it every three years at a minimum, uh, five years is where you really see it. Cause they, they want a client that's going to stay with them. So they're going to price it accordingly. So, um, that's why I always recommend re-evaluating every three years taking a look at it,
Speaker 1 00:22:12 Just at minimum, the pricing alone. Yeah. Is the pricing low. Okay. So we talked about like coverages. So the thing you got to watch out for, I think is advertising or shopping and alternatives being, not apples to apples, like you have a good well-structured policy and are comparing it to like state minimums. It's going to be less expensive and you're not really comparing apples to apples. So that's, I think we covered a minute ago, but I guess if we are comparing apples to apples, is lowest always best or is there some point?
Speaker 2 00:22:46 Yeah. So that's a great question. People, a lot of people don't realize this, um, that there's a standard form for auto and home insurance coverages. So if you buy a home policy or auto policy from a state farm, from an auto owners, from a Kentucky farm Bureau, wherever the policy is going to be just about the same, same coverages, same everything, except for a few small differences based on the company. So what you want to do is make sure you set what your minimum requirements are when you're going to get quotes. I want this, this and this, and then have a discussion with your agent. Like, what do you think? And then set that minimum. I want, you know, a hundred thousand per person, 300,000 per accident. I want, you know, $400,000 in coverage on my home and then make sure that all the quotes you're getting all have that coverage in it. You know, if one significantly cheaper, make sure it's not, you know, leaving off a coverage. So
Speaker 1 00:23:42 Right. But as long as it's apples to apples, for the most part, it's probably better to, I mean, you said you don't want to shop every single year, but
Speaker 2 00:23:51 Yeah. It's one of those things where sometimes the, you know, a really good one of the best insurance companies out there will also offer the lowest price, lowest price. Doesn't always, isn't always a bad thing. You just want to make sure that all the coverages are accurate.
Speaker 1 00:24:06 Okay. Yeah. So we've talked a little bit more about auto insurance up to this point. I wanted to kind of hit on some home insurance and more of that, that sort of thing, I guess maybe before we get into that, what's the difference between homeowners insurance and rent, renters, insurance and DC. A lot of people not having renter's insurance that maybe should.
Speaker 2 00:24:26 Yeah. So it's pretty much the same policy. It's the same coverages and everything. The main differences on the home is you're insuring the structure and your contents.
Speaker 1 00:24:37 So like contents are my stuff, like my couch and my,
Speaker 2 00:24:40 Yeah. Everything that comes in the U hall and goes into the rental property that's covered under personal property. Yeah. And that's also covered on a home policy, um, and covered on a renter's policy. Okay.
Speaker 1 00:24:50 I'm like a resident and I have like my couch from undergrad, it's working up and then, you know, not nothing else in my entire place. Maybe I shouldn't worry about renter's insurance.
Speaker 2 00:25:00 Yeah. No, renter's insurance is extremely inexpensive, very cheap. I'd recommend that everyone get it. It's usually about 150, 200,000 or 150, $200 for the year. Um, and the main thing you're also getting with that, I keep going back to liability. Um, but that's the big thing. Um, I had a claim two weeks ago where I insure the rental property, the actual structure, and then the tenant, uh, on Christmas Eve, the, uh, hoverboard, one of those hoverboards caught on fire, burned the house down. So in that scenario, the tenant is required to pay for all damages to the rental property. So that's what the property damages, the property damages. So if you, you know, leave a stove on, cause a fire, you know, you are required to pay, um, all the damages as a result of that. So yeah. That's why, you know, 150, $200 a year, uh, for peace of mind. Yeah.
Speaker 1 00:25:58 Okay. Yeah. That makes sense. So home, home insurance, or like home owners, someone that owns a home that has an insurance, that's covering more of like the actual building structure. And so if I think I'm, I'm curious, I really haven't had ha I've never worked with somebody that's actually had this experience happened, but like in the event, let's say your home is just completely, you know, destroyed or damaged, like burns to the ground. They lose everything, all your stuff, all the house, maybe even, well, let's just stick with that scenario. So how does that work actually like with, from an insurance company's perspective, like who covers, what is it, what type of insurance covers? What thing?
Speaker 2 00:26:39 Yeah. So, so the first thing that pays out is the more obvious ones, so coverage to repair the building. So building coverage, and then there's also, as we mentioned, personal property coverage to cover your contents, but the, you know, the thing that gets overlooked a lot is, you know, there's also, you know, you're going to need somewhere to live, you know, for a while, while those repairs are being done. So the policy also pays for you to get a like home or a hotel and those repairs are done. So yeah, those are the main coverages on the home policy. How do they know your contents? That's a great question. And I always tell people to just like, just take a picture of every room, just yeah, just to remember. And then another big thing to look at on your policies is to make sure you're insuring everything for replacement costs, not actual cash value. And we see that a lot. Sometimes, you know, someone, a client, Hey, I got a cheaper quote somewhere and they'll send me the quote and I'll take a look at it and it'll be, Oh, well this is at, you know, actual cash value, which means the, you know, the street value for that item. Uh, not the replacement costs. So you want to make sure that's on there. Yeah, yeah, yeah.
Speaker 1 00:27:50 Okay. So the, um, home rebuild process and then housing during the rebuild process, is there, is that, uh, limited, like the housing replacement, like place to stay? Do you get like six months at a hotel kind of a thing or,
Speaker 2 00:28:06 Yeah, it's, it's different. It's usually a percentage of your coverage amount usually around yeah, yeah. 50%. And then some are, you know, whatever the cost is that can vary, like whatever it costs, you know, it doesn't matter if we're working on it for three months or three years, we're going to pay however much it costs to put you up in a hotel or, you know, a rental property until it's fixed. So,
Speaker 1 00:28:26 So in the, in the catastrophe scenario, my home home burned to the ground. Does that like crush me for pricing forever? Like what happens to my pricing?
Speaker 2 00:28:33 No. The only way that it, where it really crushes you is if, as I mentioned earlier, there's a difference between we call them like act of God, uh, claims and then like not. So, um, if you have a lot of like, uh, pipe bursts or like things that are kind of in your control that caused the claims, if you have a lot of those over five years, like, you know, and when I say a lot, I mean, like two or three, um, that'll kill you when it comes to your premium things that you can control that you still have a claim on
Speaker 1 00:29:03 Pipe bursting. What else? Like, um, don't replace your 40 year old roof. Is that
Speaker 2 00:29:08 So like roof and like, like hail claims, like when claims like those don't count against you as much as things you can control.
Speaker 1 00:29:16 I'm just trying to think of what are those, some of the things you can control.
Speaker 2 00:29:19 Yeah. It's mainly like interior water leaks. So like in like when you see it on the claims report, they'll say water, like non weather related. That's a big one. Yeah.
Speaker 1 00:29:28 W what about like, uh, cooking, uh, frying your, a Turkey inside in a big dryer and it blows, blows up that's ignorance. Most people would say, and
Speaker 2 00:29:42 Yeah, so that would hurt. That would count against you more than if you had a lightning strike that hit your house, and that caused the exact same amount of damage. When you get your renewal premium, the lightning strikes going to be a lot lower than the fryer inside. Yeah. Okay. Yeah. Insurance companies want to see that you're responsible and then you're taking precautions to prevent claims. If they see a claims history that has a lot of like, you know, Oh, the, the faucet was leaking, we didn't do anything about it. And then we just realized, you know, there's a ton of damage in the, in the guest bedroom. And then another thing I was going to bring up is there's also a lot of coverages on, especially on the home that a lot of people think are covered that are not in the main one being like earthquake, earthquake.
Speaker 2 00:30:30 You have to specifically ask for it. It's not automatically included on all home policies. And then I always, the way I go about it is I rec I, you know, send people to home quote, and then also let them know what the additional premium would be to add earthquake. I would say about 20, only 20% of my clients go with it. And it's, you know, one of the, it's one of those hard things to kind of wrap your head around, like, you know, like it's a lot more expensive in California than it is. Here is always a possibility. What is like that too, right? What's another one flood is automatically not included on any home insurance policy.
Speaker 1 00:31:07 I've also seen it in Florida. I think like sinkhole coverage maybe is that
Speaker 2 00:31:11 Yeah. Yeah. Depending on what state you're in and it's very state specific, um, uh, sinkholes are also excluded, you know, when you get your renewal, when you look at your deck page, when you get your renewal, there'll be a list of, uh, excluded coverages. So I always suggest going through those just to make, you know, just to make sure there's not anything that really pops out at you. So something might pop out at you. What would be the sinkhole like that coverage of that's not included. You might want to look into getting that and then also, uh, cosmetic damage. So that would be like, um, if you're, if there's a hailstorm in your roof looks really janky, but it's still water tight, the insurance, company's not going to pay to replace it because it's just cosmetic damage. Yeah. So that's another one I would make sure that you do not have on your phone.
Speaker 1 00:31:57 So we had talked about, we've talked about property damage on the home. I think he hit on a little bit of the liability stuff, but I'm curious. So like the scenario I think of is most people have pets. So let's say you have friends over your dog, for some reason goes nuts and attacks one of the kids or something that causes a lot of injuries. That sort of scenario who's covering the medical bills. Is it?
Speaker 2 00:32:19 Yeah, that's a great question. I usually default to the auto liability, cause it's a little more cut and dry like, Oh, you ran into him, he's at fault. You're injured his pace. So on the home equally as important. Um, yeah, that's a perfect example you just gave then the most common liability claim we see is dog bites and you know, most dog bites, we, you know, I'll read the claim report and it'll say like, you know, fluffy has never been anybody. Well, he did now, you know? Yeah. So that's the, so every auto Paul, our, every home policy in addition to the coverage for the structure also has liability coverage in the lowest I recommend going with is a half a million, 500,000. It's about like eight to $10 a year to increase it from the minimum of a hundred thousand. So just peace of mind, I would recommend increasing it to that. And then also like people also ask, well, when should I have an umbrella policy? In addition to the assets, if you own anything fun at your house, you absolutely need a plane. Both. Yeah. Trampoline pool.
Speaker 1 00:33:24 I have a fence in my yard. Like, well, the, actually the children know how to open the door.
Speaker 2 00:33:29 Well, the thing is, even if you have like a friend over or your kids' friends over, you know, if they dive into the, you know, the five foot into the pool break their neck, you're still on the hook.
Speaker 1 00:33:41 Yeah. I had, we were out of town and the, we get the security camera notifications and this was the one from the backyard. And we look on it and like, there's five kids jumping on our kids' trampoline. Like where did they? Uh, it was our neighbors and we knew, knew them all. And it was all good. But, uh,
Speaker 2 00:33:59 Insurance term is an attractive nuisance.
Speaker 1 00:34:03 Yeah, it is definitely. It's. It's fun though.
Speaker 2 00:34:06 Yeah. So if you own a boat, definitely want to umbrella policy, anything fun. And then also if you have a teen driver also want to have one. Yeah.
Speaker 1 00:34:12 I hear a lot of people talk about or run into water damage. It seems like water. You never want water in your house. That's that's dicey, but it seems, uh, I have had more than a few people I know of have come across water damage unexpectedly and they didn't know it was happening. And sometimes that ends up being an insurance claim. Somehow I don't quite, how does that work and why, why should that be an insurance claim?
Speaker 2 00:34:39 So home, uh, home insurance pays for, um, a claim for an event. So like I had someone that called in once they said, Oh, uh, we need a new roof. Cause we had wind damage. And I was like, Oh, well like, like when it happened and I'm like, I don't know, last year it was just a windy year. Like that's not, that's not covered. That's not gonna be covered. Like you got to be able to point to a specific time and date like, Oh, the wind storm was on this date. So, you know, home policy did not cover for wear and tear. So that's where, you know, what you just brought up like, Oh, is this water we just found? Is it covered or not? That's a lot of times where that gray area kind of falls in. So if you like, you know, if you have a skylight and you know, you notice that there has been water leaking in there for, you know, years and causing damage in dry. You know, a lot of times that's not covered because it's a, it's a maintenance thing. But if it happens because of one rainstorm, you get a lot of rain in and there's a lot of damage then that is covered. So I always think of, you have to be able to point to a specific date, uh, in order for it to be covered event. Yeah. Certain event. And that's not to say that it's absolutely never covered. Sometimes it is. Um, but generally wear and tear, not noticing something, um, that generally is not covered.
Speaker 1 00:35:59 I was talking with a friend the other day and they were talking about other, they got a new roof recently and they had roofers going door to door and they happened to talk to them and they, they said, you know, we've had a lot of damage in the neighborhood. And do you mind if we go take a look at your roof? So they're like, okay, whatever, they came up, went up on the roof, came back down and said, Oh, we found that you have wind damage and we think you need a new roof. And she said, uh, okay. Uh, okay. Uh, what? And they're like, well, we can deal, take care of it completely. All you gotta do is just say, you can do it. And she said, fine, if you can replace my roof. We're great. And according to them, they said it played out to where they had to do nothing and it was replaced completely. It sounds too good to be true to me. Like what's up with that.
Speaker 2 00:36:46 Yeah. So in that scenario, I would say, um, file a claim and have a claims adjuster. So whenever you file a claim for, let's say, you know, in the example, uh, hail or wind claim, you know, call your insurance company, file a claim. They'll send a claims adjuster out to the property to look at it and they'll determine, you know, if there's damage or if there's not. Um, and then if they say, yeah, there is damage, you know, then call that contractor, call that roofer back and say, you know, rock and roll. You guys are good.
Speaker 1 00:37:14 So should you talk to a roofer first? Cause like I have no idea how to determine if I have damage on my roof, you know?
Speaker 2 00:37:19 Yeah. You can talk to a roofer first. I would just also make sure that your insurance company comes out to look at it. They
Speaker 1 00:37:26 Have to eventually
Speaker 2 00:37:29 To determine if they're going to. And sometimes, you know, this is another valuable, this is another reason I think everyone should have an agent is a lot of times I'll have clients they'll call me and say, Hey, this claim was denied. You know, I filed it. They didn't. And I was like, all right, well, let's look into this. So in that scenario, let's say, you know, the roofer says, Oh, there's damage. And the insurance company comes out and says, Oh no, there's not damage. We're not going to pay this claim. So what you can do, and this is in every home insurance policy, you can get another opinion. So if you can get another roofer or two to come out and look at it and say, yes, you know, there is damage to this. Um, and then send that to the insurance company. Then they will pay the claim a lot of times. So even though they say no, right at first, you know, you can always push back and get a second opinion and get that covered. I see that a lot. And I think that's the benefit of having an agent is you have someone to work with in your corner to kind of get that paid.
Speaker 1 00:38:24 Is the agent have a, I guess the incentive is to keep the customer happy, even though you get dinged, if you have claims, right? Yeah. Well,
Speaker 2 00:38:36 So when you, when you file a claim, you know, if there's zero paid out, if you just consult with the claims adjuster, have someone come out and look at it, it doesn't count against you. It only counts against you if it's paid out. And then, uh, as far as the agent goes is, as I mentioned earlier, you know, if you call a one 800 number, you know, they just want to write the business and be done with it. If you have an agent, they get paid every time you renew your policy. So they want to make sure you're happy to make sure you're taken care of. Yeah.
Speaker 1 00:39:03 Another thing I've noticed about what pricing is, seems to be a little bit different for homes. And I have noticed some strange pricing with home insurance, for example, we've had clients get, um, you know, especially with people that are, um, kind of doing it themselves. They're talking to like USAA, Geico, progressive, an independent insurance agent, a state farm agent, like the really aggressive do yourself as looking at like 10 different companies. And I've noticed in those situations, sometimes the spread is like huge and they're not, they're not far off apples to apples. Like some companies sometimes are just insanely way more expensive. I saw it recently with USA because USA is like a kind of has good financials and they seem to be a well regarded, uh, insurance company, but they were just like triple or quadruple everybody else. And I was like, what is up with that? Do you know? Yeah.
Speaker 2 00:39:57 So it's, it's so the way it works is, you know, they call it bind some of the market. So like Erie insurance came into Kentucky, you know, not a couple of years ago, five years ago and had, you know, they wanted a lot of business, so they priced it accordingly and then were very cheap. And then, you know, that lasted maybe a year or two, and then the rates went up, you know, and then they had a lot of claims, you know, weren't as profitable on that business. So then they, you know, increased their premiums and it's like that with every insurance company, like, you know, for like a year or two, you'll be, you know, really hot, can't beat them, you know, best premium out there. And then there'll be ice cold, very expensive, you know? Um, so that, that's again, why I say, look at it every three years, you know, just see what the market's doing, get quotes and you know, and also that's why I like being independent is because when I was a captive agent, just riding for one company, if someone's rate went up, I was like, well, you know, we had a lot of claims last year, sorry, but with the independent agent, you know, uh, as an independent agent, if someone's not happy about their rate going up, you know, I can shop around with another company that might be hot trying to buy some business in the, in the, in the market.
Speaker 2 00:41:10 So,
Speaker 1 00:41:10 Yeah. So, so we talked about home, we talked about auto. I kind of wanted to wrap up with some, some bigger picture sort of discussion around kind of managing this. And I think working with an agent versus doing it yourself, or working with like, like the person I was using, the example of how you talked to three different agents, one was captive, one was independent. Uh, they, they went to, uh, you know, consumer direct route and maybe a good starting point is what, what are your channels you can go to, to get insurance and how do each of them differ?
Speaker 2 00:41:44 Yeah. So the first one is like, you know, your Geico, your direct, you know, you're winning a hundred numbers. Um, we just call, they want to sell you a policy, right. Then that's the, you know, direct, you know, online market. I would not recommend that. I'm just to think an agent is important. I am very biased. I think the independent agent is the best way to go. Uh, just cause they have, you know, multiple companies they can work with. Uh, but there are, um, a lot of good state farm agents stay farms, the biggest, you know, auto insurer in the country in a very good company. So it's not to say that, you know, they're bad. Um, I think the most important thing is that you're working with someone that's not just trying to just sell you something real quick. They're saying, Hey, let's look at your situation and put together something that's best for you. So that way, you know, if you're in residency, that's going to look different four years from when you're out of residency. Um, so that way you can grow with the same agent and they're not just, you know, selling you something and then just kind of putting you off.
Speaker 1 00:42:44 Yeah, I think, uh, and so if you're shopping, looking around, uh, I think I've seen people talk to multiple independent agents. I'm not sure that's, that seems like kind of overkill because maybe it's better to look at what the independent agent, ideally you work with an independent agent that has a very big market where they can use multiple companies. And if, if that's the case, we're talking to three different independent agents is, is not really gonna differ or is it
Speaker 2 00:43:11 It's not really going differ? Uh, you know, they might have two or three companies that one has the other doesn't. But the, I think the most important thing is to make sure that you're comfortable with that agent. And if you start working with them, they're slow to get back with you. They're never answering your calls. Someone else's always calling you back then maybe try another independent agent is what I recommend, but yet it can be a little redundant to get quotes from. I would just pick, you know, one, maybe two independent agents get quotes from,
Speaker 1 00:43:37 Yeah, I think we here are in our planning firm with clients, they kind of get annoyed by, it seems like transaction points is where they have to deal with this kind of thing. And they're like, Oh, I bought a car or I, you know, selling and buying a house. And, um, it seems like when they're working with, um, you know, consumer direct options, that's annoying. Or if they work with bad, like not bad agents, but very poor servicing agents that it becomes, uh, it seems like it almost makes it harder on them when they're working with that kind of people. They're like, it's annoying. I don't want to have to call them. They're going to put it on me to get all this stuff done and it's going to be painful. And they're, they're not looking forward to it versus like our clients that work with you. They're like, it was easy. Some he made it easy. How, you know, how are you making it easy? And what does that look like? And why is it important?
Speaker 2 00:44:27 Yeah. Well, I view like when I bring on a client, I'm like, I want this to be a long-term relationship. And I expect, you know, you know, if a client goes with me, they can expect quick service, quick turnaround in just like being easy to get in contact with. So I give all my clients, my cell phone number, you know, if they buy a new vehicle, just send me a text with the new VIN number. I'm just making it as easy as possible for them. So that's very easy. Yeah. And a lot of agents make it. Yeah. Like, well email, you know, Becky, she's our account manager and then you gotta, you know, email back here then. So I find just the quick as you can get it done, the ease of doing business is transferring of information. Um, the better. So, um, yeah, so, like I said, I give all my, uh, my cell phone call me, email me anytime and just get in, take care of
Speaker 1 00:45:17 Yeah, no that's that's. Um, and I think, uh, our, our clients and the people we both mutually tend to work with are typically like super busy people. So it's kind of a, something, you know, you don't want to have to ideally you're saving time instead of losing time by working with somebody. So I think when you're working with a good agent, you should be having a more efficient time. Sammy time-savings less stressful, you know, experience versus the alternative. Yeah, exactly. Well, if people want to reach out to your have questions or that sort of thing, what's the best way to find you or reach out to you?
Speaker 2 00:45:54 Yeah. I would say my phone number is (859) 797-4384. He may call and then my email is a <inaudible>. So a w E T H a L
[email protected].
Speaker 1 00:46:09 And that is his cell phone folks. Right.
Speaker 2 00:46:11 That's my cell phone. I'll give you my work email, but it's a very annoying yeah.
Speaker 1 00:46:16 Okay. Hard to say. Yeah. Awesome. Well, thanks for Jeremy and Andrew. Always
Speaker 2 00:46:20 Good. Thanks for having me on and thanks for putting this all together.
Speaker 1 00:46:23 Yeah, man. Good talking. We'll talk to you soon as always. Thank you so much for joining us today. If you found this valuable, please give us a review on iTunes and share with a friend. Also check out our
[email protected] for all sorts of additional content. See you next time. Finance for physicians is not an investment tax legal or financial advisor. All content included in this podcast is for informational purposes only and should not be considered financial tax or legal advice. Material presented. It is believed to be from reliable sources and no representations are made by finance for physicians as to another parties, informational accuracy or completeness, all information or ideas provided should be discussed in detail with an advisor accountant or legal counsel prior to the implementation. You don't have an advisor or would like a second opinion. Feel free to check out our website for recommended advisors.
