Your Most Valuable Asset? You!
What is your most valuable asset? It is not your car. Or even your home, or any other personal possession. The most valuable thing you possess is your ability to continue to earn income.
So why do we often take the time and pay the premium to insure our homes and our cars, but not that which is most valuable? Oftentimes, it is because homeowners insurance is required by the mortgage company, and automobile insurance is required by law. But since there is no corresponding requirement to purchase Disability Income insurance, it is overlooked.
Life insurance has long been marketed not as insurance for yourself, but for those you’ve left behind. They depended on you—and your income—in order to be able to pay the bills. But if you’re disabled, you are no longer able to make an income, and those same people are still depending on you to be able to pay the bills. Luckily, products such as Disability Income insurance exist, and are able to pay you if you should ever be in the situation where you are no longer able to work. If the need for Disability Income should arise, you’re still alive—there won’t be a Life insurance payout to help make ends meet. In fact, the financial burden may be even greater than if you had died, because they will now have to take care of you, too.
No one wants to imagine life after suddenly being disabled and not being able to work. And no one financially plans for it. But you might want to think about it, because between the ages of 25 and 65, you are about four times more likely to somehow be disabled than to die.
Protect your family, loved ones, and current life style by purchasing a Disability Income policy. It’s the smart move, even if you’re in your twenties, and even if your employer is already providing some kind of disability insurance. It gives you income to take care of your mortgage or rent, the car payment, buy groceries, and more, even if you can’t work. An employer-based policy may make you feel protected, but it likely won’t transfer to a different employer, and the benefits may face taxation. Getting your own policy gets you access to tax-free benefits.
There are a variety of disability policies available. The cost varies, as well, but should be about 2-3% of your current income. Work with a professional agent to find out which policy is best for you and your situation. Here at American Advantage – IFS, we are always ready to anwer any questions you may have about not only Disability Income insurance, but any type of insurance policy. Call us today at (262) 696-5800.
Don’t just take your chances. All insurance is to protect you in the event of loss. You never planned to be in that car accident, but you sure were glad you had insurance covering you when it happened. You didn’t plan for that storm to damage your house, but it was nice to get that check from the insurance company when it happened. You will be glad that you looked into Disability Income insurance if something were ever to happen to your most valuable asset.
Why choose an Independent Agent?
There are typically three ways you can purchase insurance coverage:
1) On the internet
2) A captive insurance agent
3) An independent insurance agent
On the internet, you are generally being offered coverage from only one insurance company. That company is not located in your neighborhood. It is not part of your community. It does not know you, or your needs. It may not be asking you the right questions or offering you the right product. It is not able to provide personal support and service.
And oftentimes, in an effort to offer you a better price than their competition, a company that is selling you coverage in the internet may not include important or recommended coverages in their quote.
The punchline is that most of the time, we can add those coverages to your policy and still get you a better price. Just because you bought that coverage on the internet does not mean it’s the cheapest available.
A captive agent, by definition, works for one insurance company, and they will typically offer you coverage only from that company. They can only represent to you that one company’s products. This forces them to make your needs fit within their company’s policies and products instead of the other way around.
In addition, a captive agent will not—and likely will not be able to—advise you of better options that may be available through other companies.
Enter the independent agent.
When you hear independent, you should think flexible. Independent agents represent multiple companies. At least several companies—usually more, and sometimes many more.
Independent agents are members of the local community. You are not just a policy number, you’re a neighbor. We provide personal support and service. We get to know you and your situation, so we can better answer your questions, and then suggest a company or companies and coverages that meet your needs. We want to build relationships with you, hopefully for the long term. We want to earn your trust and have you feel comfortable recommending us to your family and friends.
We offer you choices. We don’t try to make you fit. Different people and different situations require different kinds of insurance. All of our companies are quality ones. They all offer different policies, differing pricing structures, and optional endorsements.
Because we shop your coverage to multiple carriers, we can typically offer you lower prices than you can find elsewhere—and for a far superior insurance product.
We are independent agents. At American Advantage – IFS, we work with more than forty insurance companies, including MetLife, West Bend, Travelers, Acuity, Progressive, and more, to match you to the best combination of price and product. We can meet all of your insurance needs, whether those needs are for your business or they are personal, such as for your home, your car, or your life or health.
Are you with a captive? Call us today and let us free you!
What Does “Totaled” Mean?
What does it mean when an insurance company tells you that your vehicle is “totaled?” And how much are they going to give you for it? These are common questions. Here we offer some answers.
First of all, let’s talk about your car. Every car has an Actual Cash Value. The actual cash value is determined by a lot of factors. How old the car is, the make and model, the mileage, the condition, the features, its claim or loss history, things that have been added to it—there is a long list of things that affect the actual cash value.
When you buy a car from someone, whether that’s a dealer, another private owner, or even a relative, you exchange some sort of financial consideration for that car. You may pay exactly the actual cash value, or you may pay above the value, or below. Usually the seller of the car is trying to make some money on the sale, so the price starts above the value, and the buyer is trying to get a good deal, and wants to pay a price below the value.
Sometimes there’s confusion about retail prices. A Manufacturer’s Suggested Retail Price (MSRP) on a car will always include costs such as advertising, dealership maintenance, commission for the salesman, and a host of other costs. An insurance company will pay to make the owner of the car whole, but not the dealership or whoever sold the car, so they are not going to cover those costs. They are not going to pay Retail Price for a car, only Actual Cash Value.
There are many web sites dedicated to helping a prospective buyer determine what that value is, and how much they should pay. An important point is that regardless of how much is paid for the car, the actual cash value is the same. If the Actual Cash Value of a car is $10,000, and you paid only $8000 for it, well, then, you got a good deal. But maybe you paid $12,000. In either case, the Actual Cash Value of the car is still $10,000.
If that car is then involved in an accident of some kind, it is going to cost a certain dollar value to fix. Let’s continue to use our $10,000 Actual Cash Value car. In most cases, once that car exceeds a certain dollar value—usually around 70% to 80% of its Actual Cash Value—the car is considered “totaled” or “the repair costs of the car exceed its total value.” The percentage used varies state to state and from insurance company to insurance company.
So it only takes $7000 or $8000 of damage to our car for the insurance company to “total” it. At this point, instead of paying to repair the car, they are only going to pay the Actual Cash Value of the car—$10,000—to you in cash (minus any deductible as noted in your policy) and they will take the car and most likely sell it at auction for parts. It is important that sometimes the damage can be less, but the car still can be written off as a total loss. For example, in cases of flood damage, or if the car cannot be restored to a safe operating condition, it may still be “totaled” even if the damage is less than the threshold.
Note that for many older cars, those that are worth only $2000 or $3000, it doesn’t really take all that much damage to a vehicle to exceed this Actual Cash Value. It is very likely that even minor damage could result in the car being considered a total loss. It is for this same reason that many people drop the collision and other-than-collision or comprehensive coverage on an older car. It saves you money on your car insurance premiums, and it is likely that the car will be “totaled” if it were damaged in any significant way.
It is oftentimes preferable for a car to be “totaled” after an accident. A repaired car may not operate as well or as safely. You may have heard that a car will never be the same after an accident and this is often true. Having your car “totaled” isn’t always a bad thing. You will be able to get a car similar to the one you had—one that has about the same Actual Cash Value. It will likely be similar in age, mileage, and condition to the car you were driving prior to the accident.
You may also have the option of keeping the wrecked car. Normally, once the insurance company has given you a check for the Actual Cash Value, they will take possession and title of the wreck. If you want, you can keep the wrecked car—because you want to sell the parts yourself, for instance—but in this case, the check you get from the insurance company will be smaller. In other words, part of the dollar amount was to buy the wreck from you. If you keep the wreck, they keep that part of the money.
That should answer most of your questions about a car being “totaled.” Later, in another post, we will talk about some other considerations related to car values, such as OEM parts, gap insurance, and Wisconsin law as it pertains to salvage titles. Make sure to bookmark us and keep coming back for more insurance information!
Insurance Scoring Explained
Why does your insurance agent ask for your social security number?
It has been proven that there is a definite correlation between people who are a credit risk and a higher than average incidence of insurance claims. An insurance score is based on your credit and the likelihood that you will file a claim within a given period of time in the future. With insurance scoring, instead of everyone paying the same rate, fiscally responsible consumers are given better rates.
Credit-based insurance scores are “blind.” They do not account for income, ethnicity, religion, gender, nationality, marital status, disability, or even where you live.
Each insurance company has their own scoring method, based on information received from the three national credit bureaus. These methods are required to be filed with the state department of insurance. Insurance companies and agents only get to look at the final score and will not be able to examine details of your credit history. No private information is disclosed to the company or the agent.
Your social security number is safe with your agent. Agents are held to the same high standards as all other custodians of your social security number and are required to safeguard that information, keeping it protected and private.
An insurance score and a credit score are not the same, though they are both derived from information on your credit report. The two scores predict different things. Insurance scores are based on payment history, bankruptcies, collections, outstanding debt, and length of credit history. A high number of credit inquiries can have an impact on your score, so only apply for credit when you need it. When shopping for a house or a car, you may have several applications in a short period of time—these are all treated as one inquiry for scoring purposes. Similarly, inquiries that result from shopping for insurance are not considered in your score.
Most people have good credit scores, so most people benefit from insurance scoring. When your agent asks for your social security number, it’s a good idea to let them check and see if you qualify for better rates!
Not All Policies Are Created Equal
It happens all of the time. You’re frustrated with the cost of your home or auto insurance policy and start looking around. Eventually you get a quote either from an agent or on the internet that looks like it will save you money.
What exactly did you just buy? How does the policy you found compare to the one you’re replacing? This is when the expertise of a professional insurance agent can help you.
Our agency represents fourteen insurance carriers for home and auto insurance. All of which offer a couple of different homeowners insurance products. Within each product, many coverage options are available. Obviously, these options involve different costs. We are also aware of the policy provisions and limitations of our competition.
A professional insurance agent will develop an insurance program that is designed to include coverage focused on your individual needs. They will explain what options are available to you, and how your current policy stacks up against what they are recommending to you. This allows you to decide which of those options are important and if you want to pay for it.
Compare purchasing insurance to purchasing a vehicle. If you need a pickup truck for its utility capabilities, but you’re sold a less expensive compact car because it has better fuel economy, did you make a smart buy? Fitting your needs is definitely more critical than spending less and not getting what works well for you.
On a daily basis, we can always quote a policy for someone that costs less than what they currently have, including those of our own customers. When we sit down and explain the differences in the policies, our customers realize the value of working with a professional insurance agent. They appreciate the expertise we convey in our field, and don’t feel like they’re in it alone. They have a trusted professional to rely upon.
By the same token, we appreciate the customers that value our expertise, and feel confident they won’t leave us the first time a cheaper quote is flashed in front of them. They’ll ask us for our opinion and they get honest, professional and knowledgeable advice from their trusted insurance advisor.
Not all policies are created equal, and neither are insurance agents.
Hang on to your hats……….
Consumers in Wisconsin are in for a bumpy ride. Homeowner insurance rates have been climbing steadily among all insurance carriers and are expected to rise even further. Insurance carriers throughout the Midwest have experienced unprecedented losses paying for severe and frequent wind storms, hail storms, heavy rain, tornadoes, etc. over the past several years, and premiums simply do not provide enough funds to pay for all the losses experienced. Wisconsin has always had very low home insurance rates compared to all other states in the US and we’ve been spoiled. Insurance carriers, for that matter, have too, because they have always been able to make money doing business in Wisconsin, but that’s definitely not been the case for a while.
There are several things one can do to help control the cost of their insurance without jeopardizing quality protection. It’s best to work with an Independent Insurance Agent who can provide you with coverage options and cost containment ideas, as well as products offered by various insurance carriers. The flexibility available to an Independent Insurance Agent is due to the fact they represent many carriers, which allows the agent to tailor your coverage to your needs. The agent should educate you so that you understand what you are protecting, what options are available and at what cost. Finally, the agent should offer you the opportunity for you to decide what you feel is important to include in your policy, and what you feel you may not need.
As a consumer, it’s also important to revisit your perception of insurance protection. It’s no longer beneficial to file a claim for $600 or $700 damage to your wood floor from a leaking dishwasher. Insurance rates increase if claims are submitted, and carriers can cancel policies when multiple claims are submitted. This leaves the consumer in a position where they are left trying to replace coverage in a market that doesn’t afford coverage to them given their prior claims. Further they can be forced into a very high cost product if they do. Reserve your insurance protection for catastrophic losses. Include high deductibles of $1,000 or $2,500 on your policies to save on premiums in the meantime.
Insure Your Cheer This Holiday Season
Gatherings with family and friends, picking out the perfect gift, traveling to meet that special someone, and celebrating a religious tradition are all activities that make the Holiday Season a time to remember. Sadly, there are individuals in our society that will make this Season a time to forget for unsuspecting and unprepared homeowners and consumers. Read the whole story »
Get Prepared – WI Insurance Law Changes November 1
Wisconsin auto insurance laws are changing effective November 1, 2011. The changes repeal certain provisions enacted in 2009 by then Governor, Jim Doyle. One important change, is the reduction of the minimum Bodily Injury Liability limits back to $25,000 per person, $50,000 per Accident and a $10,000 Property Damage Liability. The change is significant, as many consumers were not able to afford the higher limits and increases passed in 2009. Going forward, the updates offer more affordability and choice for the consumer. Read the whole story »
Life Insurance Education
A 2010 LIMRA study reports that “only 44% of U.S. households
have individual life insurance,” which is a 50 year low. September is Life
Insurance Awareness Month. During this month, start the conversation about the
value of life insurance. Read the whole story »
Introducing: American Advantage – IFS
We are excited to introduce the new web home of American Advantage IFS. With over 100 years of combined insurance industry knowledge on our team, we are looking forward to educating consumers on the do’s and don’ts of purchasing insurance products. Read the whole story »