6 Things to Look For in Home Insurance Mailers

Ever had something like this through the mail? Most likely you receive several of them every year in the lead-up to your home insurance renewal. They may sound tempting …. but how do you know if it’s a good quote? What should you be looking for? Let Memorial Insurance be your guide!:

  1. Coverage amounts: Do these match your current policy? They are often lower, because less coverage means a cheaper price. Your agent has several tools available to work out exactly how much your home should be insured for.
  2. Bells and Whistles: On this quote, $1,000,000 in personal liability is eye-catching, especially if your current policy offers “only” $300,000 or $500,000. But if you have an umbrella policy (which you should!), you’ll already have the high liability coverage anyway. And if you want to add higher liability to a homeowners policy, it’s only going to cost a few bucks a year. So this feature is not nearly as impressive as it sounds!
  3. Extended Replacement Cost: Some agents offer relatively low dwelling coverage amounts, but add the extended replacement cost endorsement and tell you it’s additional coverage for your home. This is not true. Extended replacement cost applies when a large area is afflicted by a catastrophe (for example a Category 4 hurricane), and the subsequent increased demand for materials and contractors pushes repair costs sky-high. This endorsement allows for extra coverage but ONLY in the event that replacement cost increases in your area as a direct result of a natural disaster. If faulty wiring causes your house to burn to the ground, you’ll get only your basic Dwelling Coverage amount from your insurance company.
  4. Deductibles: This quote headlines with the 1% deductible, but notice the cheeky 5% deductible in the middle? This part is the deductible for a named hurricane. If you keep in mind that named hurricanes are one of the leading causes of insurance claims in many states, including Texas, do you really want to be on the hook for a 5% deductible the next time a major weather event blows through? In the case of this particular policy, you’d be looking at a $30,000+ out of pocket payment before the insurance company stepped in to take care of the rest. If this is something you can afford and would be happy to pay for, then stop reading here! In Houston, a 2% hurricane deductible is standard, with 1% also available in some areas. At Memorial Insurance, we’d be happy to provide several quotes with different deductibles so you can make an informed choice and NOT get a nasty surprise after the next hurricane.
  5. Total Premium: The advertised rate on this quote is NOT the final price, it is a guess based on you having the best possible credit and zero prior claims. To get the final rate, insurance carriers run an “insurance score” taking into account the above plus many other factors. More than nine times out of ten, when you call the agent to take the quote, your premium will increase.
  6. Exclusions: Sure, this quote tells you that your contents are insured for replacement cost. But how about the roof? See my earlier blog post for details of why you do NOT want an Actual Cash Value (ACV) policy. Moreover, are water coverages (slow seepage, water backup, foundation water damage) included? Most likely not, because these increase the premium, which would make for a less impressive mailout!

Moral of the story: if you’re interested in a quote you receive in the mail, make sure you get an “apples to apples” comparison with your current policy to make sure all the coverage levels match. Better still, why not give Memorial Insurance a call – we have most of the main home insurance carriers in our agency, so we will do the shopping and comparing for you, and make 100% sure you are correctly insured!

Umbrella vs. Excess Liability: do YOU know the difference?

Thanks to our friends at Safeco Insurance for their reminder about this crucial distinction!

The golden rule is: an Excess Liability policy provides additional coverage above your auto/home liability limits, BUT it only covers what is included in the underlying policy. In contrast, a true Umbrella is an OPEN PERILS policy – which means that if something is not specifically excluded, you’re covered.

Do you need examples of where an Umbrella could provide coverage, but an Excess Liability policy would not? How about these:

1) While on vacation, you rent a boat. Out on the water, you crash into another boat, severely injuring a water-skier being towed behind. Neither your home nor your auto policy would cover that …. but an umbrella would.

2) You write a blog post about a bad experience in a restaurant. The restaurant owner sues you for libel. Even if the lawsuit is thrown out of court, you still have to respond …. and that can be expensive. An umbrella would cover your costs.

3) You rent a car while overseas, but get involved in an accident which injures another driver. Your auto insurance all the way back home in Texas won’t cover his hospital bills …. but your umbrella will.

For more information about umbrella policies, or to find out whether your current policy is a true umbrella or merely an excess liability policy, give your friendly agent at Memorial Insurance a call!

Source: Safeco Umbrella vs Excess Liability

Essential Coverage on your Auto Policy

Ever wondered what the jargon on your Auto Insurance policy means? Worried that you’re not adequately insured? Let Memorial Insurance help!

Part A: Liability Coverage: The state minimum limits in Texas are $30,000 per person, $60,000 per accident, and $25,000 for property damage (30/60/25). It is a really, really bad idea to limit yourself to minimum coverages. For one thing, these amounts do not go far at all in the case of a serious or multi-vehicle accident. For another, it is relatively inexpensive to upgrade to better coverage, usually just a few dollars per year. Aim for a minimum of 100/300/100. A little-known fact? Sometimes, high limits such as 500CSL may actually be cheaper! This is because you are rated differently as a responsible driver who sees the value in being properly protected.

Part B: Personal Injury Protection (PIP): This part of the policy provides funds for medical expenses and lost wages, regardless of who was at fault for the accident. If you are retired you might opt for Medical Payments coverage instead, which includes most of the benefits of PIP without the lost wages provision.

Part C: Uninsured and Underinsured Motorists: This is an optional protection that you do NOT want to leave off. It is estimated that as many as 1 in 4 drivers in Texas may be driving completely without insurance – and the ones who do have it often don’t have adequate coverage limits to pay for an expensive accident. Getting hit by one of these drivers has the potential to turn into your worst nightmare if you do not have UM/UIM coverage.

Part D: Coverage for Damage to your Auto: To save premium, you can leave off this coverage for older vehicles, as long as you are prepared to pay for the full costs of any damage yourself. For newer vehicles, and all loan/lease vehicles, this coverage is essential. There are two parts to it, which are often referred to as Comprehensive and Collision. Comprehensive covers fire, flood, theft and similar perils, whereas Collision protection will pay for damage to your vehicle caused by an accident. There is usually a deductible, ranging from $100-$2,000, which is the part of the claim you must pay out of pocket before the insurance kicks in to take care of the rest.

Additional Protections: Roadside Assistance is very inexpensive, usually less than $10 per year. Also consider rental car coverage, which is cheap and provides for up to a month of car rental fees while your vehicle is in the garage being repaired.

Finally, for ultimate peace of mind, add an umbrella for extra liability coverage – and don’t forget to add Uninsured/Underinsured Motorist protection to it!

Stay safe out there!

Don’t Forget Your Umbrella – 5 Reasons Why You Shouldn’t Be Without It!

Dollar for dollar, umbrella insurance is one of the best value coverages you can buy. $1 million of additional protection can cost as little as $150-$200 a year. But do you need it? YES! Here’s why:

1) If you get taken to court after an auto accident, or an incident at your home, you’ll be on the hook for your current assets AND future earnings. Most auto and home policies offer a maximum of $500,000 in liability coverage – if you’re lucky. Legal fees, medical expenses and other associated costs can be cripplingly expensive, and it won’t take long to burn through your auto and home limits …. which is when your umbrella policy comes into play.

2) Everyone’s worst nightmare is to be involved in a serious accident with uninsured or underinsured motorists. Be sure to add UM/UIM coverage to your umbrella policy and you’ll boost your protection against this worst-case scenario.

3) Consider paying for your umbrella by raising the deductibles on your current policy. Increasing your auto deductibles from $250 to $1000 will save you hundreds of dollars per year in premium, which you can use to purchase MILLIONS of dollars in additional umbrella liability coverage!

4) Do you own rental property? Are you a high net worth individual? Consider investing in $2 million, $3 million or $5 million umbrella policies. A good rule of thumb is to get liability insurance limits that are at least as much as your net worth. It is a small price to pay for large amounts of protection.

5) Remember to review your coverages regularly, to make sure your umbrella policy is still offering the right protection for you. Your knowledgeable local agent can provide helpful advice about the coverage you need. Give Memorial Insurance Agency a call and we’ll be happy to assist you with the answers to your questions!