Frees Advice: Auto Insurance

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.

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.

Non-Owned Auto Coverage

So, I don’t own a car. Do I still need coverage?

When you own a car and carry car insurance protection, the policy typically has two very important sections of coverage. The first is liability and physical damage. Liability protects you in the event you are sued by others for injuring them or damaging their property. Physical damage is also known as collision and other than collision and these protect the car in case you damage it. These coverages follow the car. If you are driving, you are protected. If you loan the car, you are still protected for what others might do. Hit a parked car and the liability pays for the damage to the car you hit and collision pays to fix your car. If you loan your car and the other driver strikes a parked car, the same claim settlement occurs. (If you have loaned the car, the other person’s insurance does not get involved.)

The second area of protection follows you. This includes the coverage for medical bills related to car accidents and Uninsured, UM, and Underinsured Motorist, UIM, coverage. Pennsylvania is a “No-fault State.” This means that regardless of who is at fault for an accident, you are responsible for your medical bills. You must have the first $5,000 under your car insurance and can buy coverage up to $1.1 million. Uninsured and Underinsured Motorist protection provides coverage for you if you are seriously injured by someone else who has no coverage, uninsured, or insufficient coverage, underinsured.

If you don’t own a car, you probably don’t need liability coverage or physical damage coverage. But if you EVER ride in a car belonging to your children, the neighbor, a fellow church member, Uber or Lyft, you have the potential exposure of being injured and needing the medical coverage, or needing the uninsured and underinsured if you are seriously injured.

Remember, I started by saying you need to weigh the risk of exposure against the cost of coverage. Fortunately, the insurance industry has a policy designed to protect people who don’t own cars but still have the medical and UM/UIM exposure. Believe it or not, it is called “Non-owned Auto Coverage.” On average, it costs about $150-$175 for $500,000 of UM/UIM and the maximum medical. (This can vary based on locations and drivers).

Want to learn more about this important protection? Contact your insurance professional. Don’t have an insurance professional? Please call us at 610-933-4950.

COVID-19: Dude, Where’s My Car?

We’ve all seen the photos of the lack of smog and pollution over Los Angeles since the COVID-19 Stay-at-Home orders were put in place. Those who have quarantined may not have driven anywhere except the grocery store, if you even did that. So, what does all of this mean for your car and your car insurance? Most insurance carriers are providing monthly refunds since people are not driving. These have typically been issued for April and May with carriers reviewing this for any additional credits that may be issued because of the lock-down orders. What else should you be doing?

For some, you continue to drive to and from work without any changes. You are experiencing less traffic on the road and less congestion. (I grew up and learned to drive around here in 1976. Traffic levels now are similar to what I remember all those many years ago.) For some, you may be driving more. Healthcare workers, people in the medical fields, and others are working more to help protect us, keep us fed, and make sure we remain safe. (A big thank you to all of you.) Others may not be driving at all. Does any of this matter? Be sure to call your insurance professional to review all options on your coverage to see if you can make any additional cost saving changes, especially if you are no longer commuting.

Don’t have an insurance professional? Give us a call at 610-933-4950. Be safe. Stay healthy.

Children Moving Out of the House

Details. Details. Details…

They can be annoying in life, but they are VERY important in insurance. Who is an insured is defined within all policies. Most policies define an insured to include the named insured and “resident relatives.” This eliminates the need to add all of your children, aunts, parents, etc. But it also excludes coverage for children when they move out and establish another residence (typically, this is not while they are simply students away at school).

If your son or daughter moves out and takes one of your cars with them, you are still covered, but they have NO protection. There is no coverage for their medical bills and no coverage for their uninsured or underinsured motorist protection. What should you do? Put the car and the insurance in their name. What if they move out and don’t take a car? They should buy coverage called “Non-owned” coverage to protect them while riding in taxis, Ubers, etc.

What if they move out? Renters insurance provides them coverage for their personal liability exposure, protection for their personal belongings, and coverage for them to live someplace else if their apartment is damaged by a covered loss.

Questions about this? Call your insurance professional. Don’t have an insurance professional? Please contact us or call us at 610-933-4950.

COVID-19: Ways to Save

This year has gotten off to quite in interesting start with the COVID-19 pandemic. Cancellation of school, weddings, sports, and even the Olympics makes for challenging times. While these times have certainly been difficult, I like to think that they have also brought out the best in people.  We continue to look for ways to support the residents of Phoenixville and our local economy. This will certainly have a financial impact on many of the local businesses. It has also caused some of us to review our personal finances and find ways to save some money when possible. Here is a list of things that can be done to save money on your auto policy…

  • Electronic Funds Transfer: EFT payments don’t carry a $5.00 or $7.00 a month installment fee when billed by mail.
  • Recurring Credit Card: Most companies offer a discount for placing your auto policy on recurring credit card payments.
  • Paperless Document Delivery: Some companies, like Progressive, are providing small discounts for paperless delivery. Not to mention it is more eco-friendly.
  • Paid in Full: Our companies offer anywhere from 5% to 15% discount for paying your auto policy in full. If you can take advantage of this, it is the easiest way to save.
  • Multi-Policy Discount: Let us provide your homeowners, condo, or renters insurance. Every company provides a multi-policy discount for insuring your home and auto together.
  • Defensive Driving: If you are 55 or older, you can take a defensive driving course for a 5% discount on your auto policy.
  • Telematics Programs: Think you’re a safe driver? Insurance companies offer discounts for safe drivers through smartphone apps that track driving habits. Your discount is based off of your driving performance.
  • Review Collision and Other than Collision Deductibles: Increasing deductibles is an easy way to reduce your auto premium.

While you may be taking advantage of some of these discounts already, they are all great options to save some money. If you would like to setup Recurring Credit Card payments or Electronic Funds Transfer, or if you would like to discuss any of these money saving options, please give us a call.

Excess UMUIM

That could never happen to me, right?

For the first 30 years of my career, we have had insureds involved in serious accidents. Some paid the total amount of liability coverage under the policy. In those cases, it was $300,000 or $500,000. There was one loss, from about 10 years ago, that the total paid out for our insured was $4.5 million. Fortunately, they had a great insurance professional who made sure they had a liability umbrella and they were protected. But, how much is enough? If the judgment from 10 years ago was worth $4.5 million, how much would that settlement cost today?

In the last 5 years, the amount of litigation from car accidents and slip-and-falls has increased dramatically. At this time, we have 3 different claims where the demand is in excess of the policy limits even with a liability umbrella. The largest demand is $8 million. Most liability umbrellas have a maximum level of protection of $5 million. What is you want more coverage than that? You can buy what is called an excess umbrella. It is an additional policy designed to pay after your house or car policy, and umbrella have paid.

Buying liability coverage is one of the easiest decisions anyone can make. How much is enough? Buy what you can afford but understand that there could always be a claim in excess of your coverage. Run into a school bus and injury 42 children, the $500,000 of coverage you have on our auto policy will not be enough. Even if you had an additional $1 million, you still would not have sufficient protection.

The average cost of a $5 million policy for 2 cars, 2 drivers, and a house is about $600. The cost for the additional excess umbrella costs about $150 for each additional $1 million of protection. Ask your insurance professional to review all of your liability exposures and coverage options. Need an insurance professional? Call us at 610-933-4950.

Never Assume

As 2019 quickly comes to a close, we thought it would be good to revisit this year’s annual insurance review letter. The points addressed in the letter remain just as important as they were when we wrote this. Please come to us with any questions as we are happy to answer them before any issues arise.


Never Assume. (We all know what happens when we do…)

The insurance world is dynamic. Your life is dynamic. It is vital that you understand what coverage is available and how your coverage works. The purpose of this review is to let you know what you have and what is available. We ask that you review this and let us know what is changing in your life.

  • Never assume that there is coverage for renting a car while on vacation. Going on vacation and renting a car? Contact us to discuss the potentially uninsured exposures.
  • Never assume that the car dealer called to tell us you got a new car. Getting a new car? There are many new coverages that are available including Loan Gap and Replacement coverage we need to review.
  • Never assume your home or auto policy covers everything. For example, there are significant coverage exclusions for flood and surface water. You cannot even buy coverage for some exposures.
  • Never assume that your Uber, Lyft, VRBO, or Airbnb is covered. Do you earn money in the “sharing” economy? Call us to discuss the huge gaps in your protection.
  • Never assume your newly finished basement is protected if the sump pump fails. Renovating any aspect of your home should prompt a call to us to review the possible coverage change.
  • Never assume the level of liability protection on your home or car policy will give you enough protection in a serious loss. Have you spoken with us about an umbrella?
  • Never assume that your hair stylist, neighbor, plumber, butcher, or dentist know more about your insurance than we do. Call us if you have questions about what protection you have or what you need.
  • Never assume that your engagement ring and jewelry are properly insured. Homeowners insurance affords VERY little coverage for stolen jewelry and NONE for broken jewelry.

Thanks for taking the time to review all of this. Hopefully, it provides you with a better understanding of your
protection. We appreciate your business.

The Future of Insurance – Pt. III

“The only constant is change.” – Heraclitus
The future of insurance will be greatly affected by everything, and in my opinion, nothing. Insurance deals with the sudden and accidental loss both in your car and in your home. There are emerging technologies that will make for a “smart” house or they tout “accident avoidance.” It is important to recognize that it isn’t called a “brilliant” or “genius” house. Maybe they should call it “Just smart enough.” The auto technology is called “accident avoidance,” not accident prevention or elimination.
When losses occur, there can be two sides to claims. The first is when property gets damaged. There are new water meters that register how much water you use and when you use it throughout the day. If you spring a leak and extra water starts flowing the water meter shuts off the water in the house until you identify what is happening. Basically, you do not come home to an indoor pool. This is terrific and reduces water claims, but technology will never reduce lightning, wind, or hurricanes. Will the new technology reduce the cost of your insurance? Maybe. Will the cost of adding this new technology to homes increase the cost of home ownership? That’s almost a guarantee.
Self-driving cars. Back-up cameras. Accident avoidance radar. These are all wonderful innovations. They will REDUCE the likelihood of a claim, but not eliminate it. Trees will still fall on cars. Deer will continue to run into the sides of vehicles and no technology in the world can stop that. In spite of all of these advances, the frequency and severity of claims is on the rise. The cost of all of this technology has increased the average cost of an American made car to just over $28,000. Technology and safety features drive some of this increased cost, but the accidents just keep occurring. The costs of repairs of these increasingly advanced technological vehicles will continue to climb and continue to drive up the cost of insurance. The collision and other than collision costs will be directly affected.
 Even when “self-driving cars” do show up on the road, we will not escape being liable for things that happen with the cars. This is the other side of the coin when it comes to losses. These are the liability claims that will continue to occur with people texting while they are driving, or walking out into traffic while they are on their phones. All of those nifty words like reduction, avoidance, and prevention never translate to ELIMINATE. Until then, expect the cost of your insurance to continue to be subject to rising due to the amount of money that is paid in claims.