While insurance agents are very good at suggesting the kinds of coverage we should have for our homes and autos, have you ever spoken to one who personally faced the consequences of wildfires or other natural disasters? If so, what impact do you think this has had on the advice provided to their clients?

Meet State Farm agent Irene Henry

Chicago native Irene Henry was in law school when approached by State Farm insurance and offered a job as an agent. “I wanted to become a lawyer to help people, and realized that as an insurance agent I could do that as well, and it seemed a perfect fit for my personality, so after graduation, I took the job and haven’t looked back.”

In 1987 she opened her own office in Santa Barbara, later moving to Ventura, and has personally been through a number of fires including the December 2017 Thomas Fire which ravaged Ventura and Santa Barbara counties.

“It was a massive wildfire, the largest in California history. I know our family knows from personal experience what it means to have been evacuated,” Henry states in a tone of voice that, even months later, still rings of fear, adding, “Most insurance agents do not experience these things, but they bring you closer to your clients, because you truly understand what they face. Having been there yourself, you are better able to provide practical advice.”

Having adequate limits of coverage is absolutely critical

Henry offers money-saving advice to renters.

“Insurance sold by most companies which covers a renter’s belongings is an incredible bargain. $25,000 limits costs as little as $15 a month. But studies show that most people have personal property which, to replace, would cost well over $30,000, so having adequate limits of coverage to protect your family in the event of a total loss is absolutely critical, offering peace of mind, and compensation to help you recover, including living expenses.”

And for condominium owners?

“If you are buying your home and making payments — including for a condominium — homeowners/condominium insurance is required. Having adequate limits of coverage in place makes this a very important purchase.”

Smartphone photos and videos prove what you owned

So you’ve purchased good coverage limits, but in the event of a total loss, how do you prove what was in the home? Henry answers that question with two words: Smartphone inventory.

“Preparing for a loss means taking your smartphone, performing a detailed photographic inventory of all the contents of each room — including inside of drawers and closets – and coming up with a total of what it would cost to buy new. By saving all of this it to the cloud, this makes for a much smoother claim process.”

Preparation = having a to-go box

Henry and her family had to leave their home three times due to fires and the risk of landslide. “We have one to-go box which contains all important personal information, such as passports, insurance documents, auto registration, medication, and so on. It is in a closet, ready to-go at a moment’s notice,” she explained.

“And, we have another box which contains food, water, basic essentials, including a non-electric can opener, we can grab and out the door we go. Having these things in place meant that were able to load our car and leave in less than 10 minutes, and we had pets – two dogs. This preparation proved to be so valuable.”

If a total loss and no inventory or proof of contents?

We asked Henry how insurance companies deal with a total loss where there are no photos or inventory of what was lost, and the policyholder is now homeless. What can our readers in these fire zones expect?

“While amounts paid will vary, company by company, in a total loss claims adjusters will often pay a significant portion of the policy limits for contents up-front. We have to remember, these people have nothing left, so adjusters will assist in finding them a place to live and pay additional living expenses. This means a roof over their head, food on the table and clothing on their back.”

Irene Henry’s clients are fortunate indeed that she did not become a lawyer.

“I am just so proud of the people in my industry who are there to help in the worst of times.”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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It is impossible to avoid ads on television, radio and the internet for home and auto insurance from companies wanting us to drop who we now have and come to them.

Geico boasts, “15 minutes could save you 15% on car insurance;” Liberty Mutual tells us to, “Only pay for what you need;” and Farmers suggests they will pay even the strangest, oddball claims imaginable, such as birds flying through your windshield.

But just ask Larry Josephs of Saint Paul Minnesota or Los Angeles-based Karl Susman about these ads, and each will tell you the same thing: “While they might be technically correct, in reality this type of advertising is deeply misleading.”

Josephs has been in the insurance field over 30 years, training agents for the major insurance companies. And Susman – a longtime friend of this column -in addition to running his own insurance brokerage for over three decades, serves the Los Angeles County Superior Court as an expert witness in agents and brokers standard of care issues.

Both focused a spotlight on several of these advertising claims that will also help business, renters and homeowners make better informed choices when buying insurance.

Don’t make These Mistakes

Josephs: Falling for the rate trap, thinking that shopping for insurance is akin to buying a car and therefore, you want the lowest price possible.

Buying insurance coverage that is inadequate for your potential needs invites financial disaster. The lowest cost rate generally translates into the worst coverages.

Cause an accident that kills someone and you can lose much of what you have acquired over a lifetime. Maintain a dangerous condition at your home or business that leads to serious injury, and while your insurance company must defend you, it is not required to pay beyond the limits of the insurance you paid for.

Susman: The fallacy of spending 15 minutes to save $500 is assuming that the variables and coverages will be the same, which in most instances they are not.

Example: The ad will say you will save this much money. But it is based on owning a different car than yours. It is impossible that everyone watching the commercial has the same risk exposure – the same driving record – and therefore would save the same amount of money.

The dangerous consequences of falling for these ads is believing that all insurance policies are alike and therefore the only thing that matters is price, combined with an implied representation that no matter what limits of insurance coverage you have purchased, still, you will be protected from personal exposure.

Insurance policies are all different and do not provide the same coverages. This comes as a big shock to most people. So it is flawed thinking to assume you are comparing apples to apples.

Josephs – If offered medical payments insurance and uninsured/under insurance coverages, refuse to buy it, believing an agent who says, “If you have medical insurance, then you do not need to purchase auto med pay.”

But one in eight drivers has no insurance. If you are hit by one of these people, your only recourse are your limits of med pay, UM/UIM.

The importance of med pay is that all occupants in your vehicle are covered. Physicians and health care providers in general prefer to bill auto insurance as opposed to private health care. Med pay costs pennies on the dollar. It is one of the best bargains in the world of insurance. If your occupants are hurt and the accident is your fault, med pay will be tremendously valuable. Opt for high limits!

Susman – “Only Pay for What You Need!” This suggests the company will not over-sell you (while others will) without answering the important question, “How do I determine what I need?”

Ask yourself, “What is the worst-case scenario. What can happen to me?” The insurance agent most likely does not know your personal financial situation and has no legal obligation of inquiring or suggesting coverages or limits.

So you need to determine your potential loss and be concerned about being underinsured. This is where your attorney, accountant and financial advisor can be of great help.

Is There a Benefit in Remaining with One Company?

I asked, “Is there an advantage in remaining with an auto, homeowners or commercial policy for a long time?”

Both Josephs and Susman strongly believe that by remaining with a company over the years – provided you are being charged fair rates and have the right coverage – can have a real benefit.

“Say your claim is in a gray area, where it could be accepted or rejected,” Susman notes, “The carrier is more likely to give you the benefit of the doubt and cover the loss.”

“However, closely related is the advertised implication that your company does everything possible to pay extremely unique and odd claims when other companies might not.

“Farmers Insurance does this brilliantly with commercials that present the most bizarre accidents, and the closing line is, ‘And we covered it. We know a thing or two because we’ve seen a thing or two.’

“But guess what?” he says, “All other auto, and property carriers would cover the loss! They’ve also seen a thing or two.”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post When shopping for insurance don’t make these mistakes appeared first on Dennis Beaver.

Returning to her apartment from a night out with friends, Chicago reader, “Joan,” opened the door and walked straight into a nightmare, discovering “The curtains were open when I left, but now were all closed. The back door was wide open. There was also the smell of marijuana, and I am not a user.”

Not taking one step further, our reader called the police. When asked by the officers to come in, “It was to a scene I will never forget. The place had been burglarized, cleaned out, my new furniture, television, music system, computer, almost everything was gone.”

Ironically, among those items which remained was a copy of Joan’s rental agreement. She faxed us a copy, phoned, and tearfully said, “I thought that management was insured for things like this, but they told me it is not their responsibility, that I should have had Renters Insurance. Is that right? You mean they are not responsible?”

The majority of young renters do not have renters insurance

If you rent a house or apartment and do not have Renters Insurance, “Then you are in the majority of tenants who lack this extremely important insurance coverage, placing your belongings at risk,” New York-based Patrick Briggs, VP of Growth for Jetty Renters Insurance told You and the Law.

“The numbers are staggering,” Briggs points out, adding, “There are close to 44 million renters in the United States and almost 60 percent of them do not have this valuable protection. Offered by several carriers, it is the best insurance bargain you’ll ever find. Yet, surveys show that 75 percent of those without renters insurance don’t realize they can get monthly coverage for as little as the cost of two movie tickets.”

If you’ve never heard of Jetty Renters Insurance, neither did we until receiving an email from this new entry into the world of insurance whose website is truly a must-read for anyone renting or who will become a renter.

And, as you will see in a moment, Jetty does much more than simply provide renters insurance.

Why is renters insurance so important?

As Briggs explained, “Your reader discovered a harsh reality; landlords have insurance that covers damage to the actual structure, not the things that you own. So, the only way to protect your belongings in case of fire, theft, or certain other types of damage, is to have renters insurance.”

Just like homeowners insurance, “Renters insurance provides liability coverage for damage caused by you doing something which accidentally harms others.

For example:

• Accidentally causing a fire

• Your tub overflows, flooding the downstairs of the apartment building;

• Someone trips on your throw rug, lands in the hospital and you are sued. Renters insurance would cover the costs of defending the suit and paying damages.

If it’s such a good deal, why are tenants skipping this coverage?

In 2016 the Insurance Institute of America found, “Across the United States, 95 percent of homeowners have homeowners insurance but among renters, only 41 percent say they have renters insurance.”

Briggs notes that “Studies show that homeowners understand the risks involved in home ownership – of someone getting hurt, theft or damage to the property. But renters often don’t consider the scope of risk they face when renting an apartment. It’s almost as if they assume that nothing bad could ever happen.”

Is cost a factor in not having the coverage?

“Typical coverage costs less than $10 a month. When you consider what it offers, it is an amazing bargain. So, for $120 a year, you protect yourself from potential financial ruin,” he stressed.

The Jetty Deposit – Relief from all security deposits

For readers who need a money tree to come up with a security deposit and first month’s rent, a fairly new product is on the market–Security Deposit Replacement–offered by several companies and which makes renting so much easier.

The folks at Jetty call it the Jetty Deposit, and, as Briggs explained, “Let’s you keep most of the money that would normally go to a traditional security deposit.”

With the Jetty product, a tenant agrees to pay a flat percentage of the required deposit, and a surety bond is put in place between Jetty, the landlord, and tenant to cover the amount of the full deposit.

“This makes it easier to move into a new apartment by reducing costs, but if the tenant damages the rental unit we will still seek repayment from the responsible party,” Briggs explained.

We at You and the Law recommend spending time on Jetty.com. The website is entertaining, maintains your interest, explaining not only the Jetty products but answering many questions about how Renters Insurance works.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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