When it comes to auto insurance in Houston, “honesty is the best policy”. Leave out important information on your application, and you could end up incorrectly insured – which is a scenario you may come to regret if you are involved in an auto accident.
Full disclosure applies not only to new business, but to renewals as well. Your account manager at Memorial Insurance Agency will review all your policies with you on an annual basis, as part of our service. Those discussions often revolve around premium, liability limits, and deductibles – but it is also important to let us know if you have made any major life changes, changed your garaging address, vehicle use, or added a household member of driving age. So please make sure you mention all relevant information to your agent!
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When it comes to insurance, there are many common pitfalls for the unwary. Let’s examine one of these today: Actual Cash Value vs. Replacement Cost.
Actual Cash Value: In this case, if you have a claim, your insurance company will pay you the amount of your claim minus depreciation. Imagine that you have a 25-year composition roof on your home which you installed 10 years ago at a cost of $10,000. If your roof is destroyed and needs replacing, how much will you get from your insurance company? The short answer is: not enough! Your roof’s expected lifespan is 25 years, meaning it depreciates in value 4% each year, to end with a theoretical value of zero after 25 years. In this example, your 10 year old roof has therefore lost 40% of its value by the time the hurricane hits, meaning the maximum available payout under an ACV policy is $6,000. But your financial pain doesn’t end there – you also have to take into account your deductible. So if your home is insured for $200,000 and you have a 2% wind/hail deductible, you will be paying $4,000 out of pocket before your insurance company pays even one cent. Keeping up? Therefore the total payout you’ll get from the insurance company will be the $6,000 Actual Cash Value of your roof, minus your $4,000 deductible, making a grand total of $2,000 ……. just a fraction of what you will have to pay to replace your roof.
Replacement Cost: This is a much better option. Your insurance company will pay whatever it takes to REPLACE your roof to the same standard as the one that was destroyed. There is no depreciation – all you pay out of pocket is your deductible. So in this case, you would receive a lot more money from the insurance company.
Moral of the story? Now you can see why Memorial Insurance always offers Replacement Cost policies, and low deductibles! Whichever insurance agent you use, always make sure the magic words Replacement Cost are on your homeowners insurance policy! Replacement Cost is not limited to the structure of the house itself – it can apply to personal property too, usually as an optional endorsement for a small extra cost. Reputable agents should always offer Replacement Cost – for both the dwelling and the contents – as standard, but beware unscrupulous agents who may try and sell you an ACV policy to save a little premium. It’s just not worth it!
Are you one of the millions of people making a New Year’s Resolution to improve your health this January? While you’re at it, why not check the health of your insurance, too? The following three tips may come in handy!
Update your agent: Changed your phone number or email address? Make sure your insurance agent is aware. We may need to contact you if we get an alert from your insurance carrier about your policy. Also, if we’ve got your up-to-date information, we can proactively call you ahead of your renewal and let you know of any pending increases, and find you a lower-priced policy in plenty of time.
Check your coverages: Make sure your auto insurance has high enough limits, and check you have uninsured/underinsured motorists coverage. Maybe you’ve purchased a rental property – is it included on your umbrella insurance? How about that jet ski – is it covered? Give your insurance agent a call, we’d be more than happy to run a policy health check.
Review your billing information: If you’re set up on automatic draft, make sure the billing information is current. Your credit score will not thank you if a payment is declined! Similarly, make sure your insurance agent is aware if your mortgage details have changed. That way, we can process your renewal in plenty of time without you having to worry about a lapse in coverage.
Who said insurance agents don’t know how to have a good time?! Our hard-working account managers really let their hair down over Halloween week. Stephanie was the deserving winner of our office Halloween Costume Contest. Meanwhile, over in the Heights, we co-sponsored a “Howloween Yappy Hour” with Capital Title Houston which was greatly enjoyed by dogs and humans alike. Even the heavy rain couldn’t put a damper on the trick-or-treating fun! Happy Halloween from Memorial Insurance!