Understanding The Insurance Claims Process Part 1. Deductibles.

Eventually, no matter how careful you are, just about everyone makes some sort of insurance claim. If we are lucky, the only kind of insurance claim we will end up with on our “permanent record” if that time our family makes a claim on our life insurance policy. That one, unfortunately, I cannot help you with – I don’t sell life insurance, and I sure as heck don’t know what happens when you shuffle off this mortal coil. Maybe I can’t help with that, but I can help you understand your property claims a little better so that if or when you make a claim, you won’t wish that death was an option.

[i] I don't care what color Mercedes calls it, you are still at fault[/i]
 I don’t care what color Mercedes calls it, you are still at fault
I want to start of by putting this right out front – I am not here to tell you that you should not make a claim. You pay for insurance to protect you and your stuff, and that’s what it’s there for. That being said, if you want to be able to make a claim anytime, anywhere, for anything,  then be prepared to pay for the privilege. It’s not that the companies don’t want to pay you, or that they want to get all their money back right away – it’s just that you need to understand that insurance is for a disaster. While it may seem like a disaster that your sister in law spilled her red wine on your white carpet, it’s not something you want to claim on your homeowners insurance.

First, I will explain deductibles.  The deductible is the amount of the claim you must pay for yourself. Auto insurance deductibles generally range between $0 and $1000. Sure, you can go higher, but if you do that, your car had better be worth quite a bit of money. Most clients in our insurance agency generally carry a $500 deductible. We find that to be generally the best value, insurance wise. Most times, the savings in premium switching between $500 and $1000 is pretty negligible, and not enough to make the higher deductible worthwhile. Be sure to go over your deductible options with your insurance agent, but be smart. If your car is worth $2000 and you carry a $1000 deductible, you are saving a few dollars but losing most of the value of your car in the event of an accident. Yes, getting $1000 is better than a kick in the teeth, but on a car of that value, the price of a $100 deductible isn’t going to be very high, so maximize your return, should something happen.  Likewise, if you have a brand new S class Mercedes, then maybe going with the $100 deductible isn’t the best way to spend your money. Presumably, you are doing alright, and a $1000 deductible on your very expensive car isn’t going to put you on the street.

Home insurance deductibles are a bit different, and are generally a percentage of the insured value of your home, at least here in Texas. For most clients, 1% is the sweet spot, premium wise. Be sure to discuss the options with your agent though, as sometimes a fixed dollar amount deductible can be purchased. $500 – $1000 – it’s your decision to make, ultimately. I would advise you to choose as high a deductible on your home as you can afford, and in the next blog post, I will explain why. Making a claim can be a big decision, and one you should not take lightly. I will explain that as well in the next insurance blog post.

Autorama Dallas 2015

Every year we look forward to the Autorama show here in Dallas – it’s one of the best times, because it’s such an intimate show – we know most of the exhibitors (and do insurance for quite a few of them) and we get to hang around custom cars that are the best in the nation. Here a few pictures of our favorites.

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Dallas Autorama 2015

The car show season really kicks off with a bang at Autorama here in Dallas in February – we get to see all of the fiends that have been holed up for the winter, check out their new projects, and get to meet plenty of new folks. Here is the first gallery of photos from the 2015 Autoarama.

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What is Liability Insurance?

Sure, most of us buy insurance to protect our stuff. Obviously, you must have nice stuff to protect  – why else would you be reading a blog about insurance? Yes, a big part of what we sell is property insurance, but what about the other part of insurance  – the one that protects you above and beyond the specific dollar value of one piece of property That, dear reader, is called “liability insurance”.  Most personal policies that you pay for already have liability insurance, so isince you are already paying for it, you may as well understand how it works.

Generally, the largest amount of liability coverage most people have is attached to their home insurance policy. In our agency, we generally try to steer our clients to buy the most liability insurance that they can on their home; not because it raises the premium, but for the amount of value per dollar spent. The difference in premium between the minimum liability amount of $100,000 and $500,000 is generally in the range of $100 a year. This is an incredible way to invest your insurance dollars – where else can you buy $400,000 extra worth of anything for $100? Nowhere but insurance.

Liability coverage, at its core, protects you from lawsuits that may be filed against you. Yes, if your negligence causes injury like if the tile you keep meaning to fix finally breaks and your neighbor breaks his leg. However, the big value in liability insurance is in your legal defense. Talk trash about your neighbor and get sued? Liability coverage to the rescue. The standard amount of liability insurance on most policies is $100,000, but if you have priced a lawyer lately, you understand how much more coverage you really need. It’s the cheapest part of your home insurance, pound for pound, so you should bump it has high as you can. You never know when you will need it – or exactly how much trash your wife talks about the neighbors.

Auto liability is the liability coverage most people are familiar with – and like home insurance, it really shouldn’t be skimped on. Auto liability coverage is generally divided into three numbers – ex. 100/300/50. These three numbers represent $100,000 bodily injury per person/ $300,000 bodily injury per accident/ and $50,000 in property damage to others per accident. State generally set a minimum amount of coverage that is acceptable; in Texas it’s 30/60/25. Should you ever “rock the minimum”? No, for two main reasons.

1. It’s too low. If you are in a major accident and are left short, the damages you cause still have to be paid. If you total one Mercedes, or even a brand new Ford F150, you will come up well short on property damage. That money still needs to be paid. Guess who is responsible?

2. Higher limits of liability can actually save you money in the long run. Even if you are never in an accident, carrying high liability limits shows insurance companies that you are a concerned driver. One of our main functions here at The Phoenix Insurance is to shop your insurance for you when (not if, but when) your insurance premiums go up. It’s easier to get a better deal if you carry higher liability limits. Insurance companies like to insure responsible drivers, and nothing says “responsible” to an insurance company like high auto liability limits.

Remember up there where I said that home insurance is “generally” where people carry most of their liability insurance? I said generally because some (sadly not all) people carry an excess liability or “umbrella” policy. An Umbrella policy generally covers you for $1 million in excess of the liability coverage on your home and auto insurance. If you have been picking up what I have been laying down in the rest of this blog, you are starting to realize that higher liability limits are always better. With higher limits your assets are better protected. Yes, I said assets. While liability insurance does not specifically cover a specific piece of property for a certain value, it is there to prevent you from having to sell that piece of property off in order to defend yourself in court. You are already paying for liability insurance. Is it enough? An umbrella policy on top of whatever you have is generally cheap – usually under $300. Isn’t your peace of mind worth at least that much? Even if you choose not to get an umbrella policy, make sure you carry high enough limits on both your home and auto insurance at least. Call one of our agents today and continue the discussion about liability coverage.

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2015 Phoenix Insurance Charity Championship First Round Recap.

Thank you for joining us again on TPN for our coverage of The Phoenix Insurance Charity Championship.  I am your host, Lance Cannon. We had a lot of great matchups in the first round so lets get right to the action. Cody’s Friends just ganged up on City House of Plano. They will move on to the second round facing off against Doctors Without Borders. Really there is no limit to what they can do in this competition. 2nd Chance Farm absolutely trampled the competition; they’ll move on to the second round and face off against iKandy Foundation. Score of that game – 41-2. Rockwall Pets absolutely mauled Volunteer Center of North Texas. They’ll move on to the second round and hope to take a bite out of CMA Youth. Out West we had a great defensive battle as the Dallas Volunteer Attorney Program put up an objection to Dare to Dream. Lets see if they can sustain this motion in the second round against Snowball Express.  I tell you nobody – not one bracket had Dallas Volunteer Attorney Program moving on to the second round, but here they are. Let’s see if they can keep it up. Service Packs made a difference in their first round game, overcoming Make a Difference 8-2. They’ll move on to the next round where Guns N Hoses are waiting, hoping to extinguish their fire. We had a great local matchup as the OU Club of Dallas faced off against the Russ Martin Foundation and the OU Club proved that they do in fact know how to use computers in Oklahoma. They’ll move on to the next round and face off against Throwaway Ponies. We’ve got some great matchups coming up. Stay tuned as we’ll come back and explain the East side of the bracket on TPN.