Author Archives: Taylor Payne

What’s Your New Years Resolution?

Happy New Year! Many of us are thinking about our resolutions for the new year. As you think of your goals and aspirations, it’s important to consider your insurance and make sure it is ready for the upcoming year.  Many of us set goals for our physical health; however, it’s important to also evaluate your financial health. A major part of this is revisiting your insurance and how it suits your needs.

A lot can change in a year. Have you remodeled your kitchen? Finally gotten around to renovating the bathroom that you kept putting off? Maybe you finished the basement during COVID for a little more space. All of these changes could affect your homeowners insurance and the amount of coverage needed.

If you purchased an e-bike to help you get into tip-top shape, there are serious liability limitations for these. We should discuss this immediately.

Now is also a good time to think about life and disability insurance. This helps ensure your loved ones will be taken care of in the event something happens to you. If you already have life insurance, now is a good time to review your beneficiaries and make sure they are still accurate.

We wish you the best in the New Year and we are here to make sure you are appropriately protected in the year ahead. If you would like to review your current insurance and make sure it fits you and your family’s needs, please reach out.

What’s Driving Higher Auto Insurance Rates?

You may have noticed the cost of basic items at the grocery store are up quite a bit. I just looked back at the cost of eggs before the COVID pandemic. In 2019, I paid just 99 cents for a dozen eggs. That same pack of eggs is now $3.99. Unfortunately, the insurance industry is not immune to these increased prices either and we are seeing higher premiums for auto insurance.

The chip shortage has severely impacted the production of new vehicles. As a result, more people are having to purchase used vehicles which are priced higher than ever before. If you can wait the sometimes months-long wait for a new vehicle, you could be paying less than what a used vehicle costs in the current market. Since used car values are so high, insurance companies are having to pay even more in the event the vehicle is totaled.

If your car is in an accident and needs repairs, you are likely going to wait quite a while for the necessary parts (which are also more expensive now by the way). This means that you will need more, if not all, of your rental car coverage while your vehicle is out of commission. Don’t forget that the body shop is incurring higher than ever labor and parts costs, so they have to pass these costs onto the insurance company to pay.

Apart from the cost of claims going up, the number and severity of claims are both going up as well. Think of Hurricane Ida just last year here in PA and all the cars in the area that were flooded. You certainly heard about the devastation of Hurricane Ian and all the damage it caused. Aside from weather events, more people are speeding and the severity of auto accidents is increasing.

All of these factors lead to more money being paid out by insurance companies and in turn increased rates. We encourage you to call us to review your auto policy with us to ensure you have the appropriate coverages and discuss possible options to offset the higher premiums.

Fall Home Maintenance Tips

While spring is a common time for many homeowners to spend some extra attention on upkeep and maintenance, autumn is just as critical a season for preparing your home to withstand the potentially harsh winter weather and temperature conditions that may await you. By making maintenance part of your annual fall routine you can identify potential problems before they arise, and help prepare your home and property for what Mother Nature has to offer.

Following are some home maintenance tips from our Risk Control professionals to help you prepare for the coming winter:

  • Have your heating system cleaned and inspected annually by a qualified technician.
  • Replace your furnace filter in accordance with manufacturer’s instructions.
  • Insulate water pipes in areas exposed to freezing temperatures.
  • Check gutters for damage and confirm they’re securely attached to the house.
  • Clean gutters and downspouts to keep debris from accumulating. This is especially important during the fall season when leaves may collect in gutters.
  • Check and repair caulking around doors and windows that show signs of deterioration.
  • Have your chimney cleaned and maintained by a professional.
  • Clean the clothes dryer exhaust duct and space under and behind the dryer. Remove lint and dust that may have accumulated inside the dryer in accordance with the manufacturer’s recommendation.
  • Check electrical outlets for loose-fitting plugs or receptacles. Be sure not to overload electrical outlets.
  • Keep a multi-purpose fire extinguisher accessible. Confirm that it is fully charged and ready for operation.
  • Inspect your smoke detectors. Make sure you have a smoke detector in each bedroom or sleeping area and also, a smoke detector in the hallway outside each sleeping area. You should also make sure you have at least one smoke detector on each floor of your home, including your basement. Test them monthly, and change the battery annually or as needed.

The steps you take during the fall can help protect your home and property from more potentially expensive damage and emergency repairs in the colder months to come.

Original post can be found here at the Travelers website.

Borrowing & Lending Cars

The school year is quickly approaching and many students are leaving for their college dorms and apartments. If you are living at college, it’s important to know the implications of borrowing a friend’s car or lending your car to others. If your child is off to college, be sure he/she is also aware of the associated risks of sharing cars. It is a common misconception that the insurance follows the driver; however, insurance actually follows the car. In order to avoid an uncomfortable situation with your friend, try to avoid sharing cars altogether.

For example, your roommate needs to run to the grocery store to pick up a few items and borrows your car. On her way to the store, she rear-ended another vehicle. The primary coverage that would pay for damages to the other driver is your own auto insurance. This means you’d have to:

  • File the claim with your insurance company
  • Pay your collision deductible
  • Accept any resulting rate increases

If the damages exceed your available limits, only then would the roommate’s coverage step in as excess coverage. 

Be sure to think twice before lending your car, otherwise you may be looking at a much higher premium and a strained relationship with your friend or roommate.

Call us to discuss.

Rental Cars: Buy the Insurance?

It’s that time of year again… As people begin to travel again and plan their spring break trips, we always get the question about insurance for rental cars. This is one of our most common inquiries, but like with most questions in insurance, there is no simple answer. Renting a car on vacation can be one of the most confusing issues because of the exposures, rental contracts, and driving “territories.” The simplest answer is to buy the coverage. Not satisfied with that? Read on.

Let’s start with the easiest question first. Do I need to buy coverage if I travel outside the United States or Canada? The answer is ALWAYS yes. Automobile insurance policies in the United States have a territorial limitation that provides coverage ONLY in the US and Canada. Going to Australia? Buy the coverage. Going to Zambia? Buy the coverage. (Get it? A to Z. Who says insurance isn’t funny.)

Now, you may be asking, what do I mean by coverage? There are two types of coverage that you should always consider. The first is liability. This protects other people if you injure them and property if you damage it. Your car insurance MAY extend this coverage, but you may not want to use your car insurance, especially if you are traveling with another family or other people. Do you want to expose your car insurance to your friend’s accident? Probably not.

In addition to liability, there is the question of coverage for the rental car itself. Your car insurance MAY extend coverage to a rental, but ONLY if you have collision and other than collision coverage on your policy. These protect the car if it is damaged and you are responsible, or if you are involved in a hit and run. It would also pay if you broke a windshield or hit a deer.   If your rental gets backed into in a parking lot and the tail lense is broken and it costs $450 and you have a $500 deductible, you are paying for the loss and your deductible would apply to the rental. The coverage that the rental car agency will sell you is call Loss Damage Waiver, LDW, or Collision Damage Waiver, CDW.

I mentioned the car rental contract. Typically, this contract is between YOU and the Rental Car Company. Some contracts state that they will not deal with your car insurance since the contract is between you and them. They may place a hold on your credit card for a deductible if you do not purchase their coverage. You would be required to pay them directly and then sort it out with your insurance company in order to be reimbursed. Why should you buy the LCD/CDW? Like with the liability coverage, do you want to expose your coverage for something your friend did while driving? A better way to look at this is to think of buying this coverage as “Trip Insurance.” After you are done buying airline tickets, paying for a hotel or condo rental, why would you want to spend your time on the phone with the insurance company sorting out a claim instead of laying by the pool, or on the beach? Buying the coverage on the car allows you to return the car to them, NO questions asked.

If that isn’t reason enough to consider buying the coverage, there are two other exposures that your car insurance will NEVER cover. The first is Loss of Use. If you have rented a convertible Mustang in Florida and are paying $50.00 a day for the experience, the rental car company will not be pleased if the car gets damaged and requires 20 days to be repaired. They are going to ask that YOU pay them the $1,000 they lost for NOT being able to rent that car.

The other issue is a relatively new concept, and it is rather complex, but there is NO coverage for “Diminished Value.” When rental car companies buy cars, they know that they will be able to sell them for a certain amount when they are done with them. If that car is in an accident, they cannot sell it for as much, so they can assess you for the diminished value of the car. There are only a limited number of states where this exists, but is is an exposure for which your car insurance will not respond.

So, in the end, what do I recommend? Buy the coverage. If not, be prepared to deal with a potential mess.

Still have questions? Call us.

Speed Kills

2020 was memorable for all sorts of reasons. In a move I have never seen in my 34 years in the insurance business, automobile insurance companies refunded premiums because people were driving less. (They refunded the money without being asked.) So while we all drove less, about 430 billion fewer miles, the number of fatalities increased by about 7% from roughly 36,000 to an estimated 38,680. How could this happen?

Increased speed. Impaired driving. Distracted driving and not wearing seatbelts.
Let’s wear our seatbelts, stop texting, and pay attention.

How to Obtain Flood Insurance

After Hurricane Ida, local residents now have a better idea of how Noah must have felt. Upwards of eight inches or rain fell in about four hours. That created quite a mess with street, home, and yard flooding. What makes this situation even worse is that most of the people involved did not have flood insurance.

Typically, people think of a flood as the overflow of a creek, river, bay, or ocean. By the insurance definition, it can also include the accumulation of water that affects you and an adjacent property. 30% of all flood losses fall outside what is normally considered a flood zone.

Home and Business property insurance policies all exclude any surface water so if you want coverage, you need to buy a flood insurance policy. Even if you do not live along a creek, river, bay, or ocean, you can buy coverage that would help to pay to repair damage from the unexpected.

In the past, you were only able to secure flood insurance from the National Flood Insurance Program, NFIP. Now, private insurance companies are selling coverage directly to customers. One site we found to be helpful is an insurance agency called Private Market Flood. Interested in getting an estimate on the cost of coverage? Check this out for yourself. Questions about coverage? Call your insurance professional. Don’t have an insurance professional? Call us at 610-933-4950

Insuring Aging Cars – Pt. II

Last post, we wrote about the cost of insuring old cars when it comes to the factors that go into repairing an old car if it is damaged. But the collision and other than collision coverage are just part of the premium you pay. The other parts of the policy included liability and uninsured, UM, and underinsured motorist, UIM protection.

Liability pays others if you damage their property or injure them. The reason the cost of insuring old cars for liability doesn’t decrease is because you can injure someone just as easily with a 1978 Chevy Impala as you can with a 2021 Toyota Camry. 

The UM/UIM coverage is really the opposite of liability. Where liability pays others if you injure them, UM/UIM protects you if you are injured by someone without any coverage, uninsured, or someone with insufficient coverage, underinsured. Again, driving an old car puts you at just as much risk as driving a new car when you are struck by someone else.

Insuring Aging Cars

One of the most common questions we get is why doesn’t the cost of insuring my aging car ever go down? In order to answer that, we should first make sure everyone understands when a policy pays and how the age of the car impacts the cost of the coverage. In this particular post, we will deal with the part of the insurance that pays to repair the car.

Collision pays to repair your car if you damage the car by hitting something or over-turning the car. The Other than Collision coverage, OTC, pays if there is a deer hit, glass breakage, flood, fire, or theft. The thinking generally goes like this… “My car is worth less, so why doesn’t that cost go down?”

The simple answer may sound a bit snarky, but does your mechanic charge you less to work on your car since it is older? Of course not, so the cost of the labor involved in repairing a car is the same. What else goes into repairing cars? Paint is involved with most repairs. The cost of paint is the same whether it is a new or old car. How about parts? New parts for old cars aren’t any less expensive and if you are lucky enough to be able to find used or after-market parts, those may save a few dollars.

Fewer than 2% of all car accidents result in “total losses.” A total loss means that the car costs more to repair than the car is worth. This might be the only reason you might see a small reduction in the cost of your collision or OTC.

“Sell Only What You Need”

GEICO and Progressive spend a combined $1.5 billion a year on advertising. We have gecko lizards, cavemen, Flo, Jake, and now an emu as the pillars of these ad campaigns. One of the more confusing ones I have heard lately is a carrier that says “We will only sell you what you need.” I wish someone would tell me what that means. Is that like asking the barber if you need a haircut?

I have 39 years experience in the insurance world. Everyday I think I have seen and heard it all, until the next day. When I started in business, the concept of replacement cost for property was brand new. ID Theft had not even been contemplated in 1982. The insurance industry is dynamic, adjusting and adapting to the coverage concerns as society changes.

What you need today is not what you needed yesterday and certainly isn’t what you will need tomorrow. It is the job of your insurance professional to keep you apprised of the new offerings and balance that against your exposures AND your insurance budget. Insurance isn’t what you pay, it’s what you buy.

Having an insurance professional will help you understand the risks that exist and the best ways to handle the exposures. Frees Insurance provides an annual review, complete with the coverage options that are available and what coverage you currently maintain. If you have any questions, or wish to discuss any aspect of your coverage, please give us a call at 610-933-4950.