10 Insurance Terms You Must Understand

Jan Vitale Arizona Independent Life Insurance AgentIn a virtual world, your commercial insurance policy can seem like just so much more boring paperwork. However, if you’re a business owner, get over it; it’s essential you read and completely understand your policy, however boring. To get you to that place, here are some common – and important – business insurance terms you need to know:

Actual Cash Value (ACV): This refers to the cost of replacing destroyed or damaged property with like or similar property. However, depreciation is taken into account, so whatever the insurer pays to replace the property will have deductions for depreciation. For example, a surround-sound system installed in your restaurant 10 years ago is destroyed in an electrical fire. Your insurance would pay an amount to replace it with a similar or like item, less any depreciation value to account for value lost over a decade. If you have high-value items such as electronics, artwork, or antiques, consider replacement cost coverage, which allows a higher claim payout, because it doesn’t deduct for depreciation.

Act of God: These are naturally occurring perils over which policyholders have no control, such as earthquakes, devastating windstorms, typhoons, or similar events.

Aggregate Limit: An aggregate limit is the maximum amount you can receive for a specified period of time. For example, you may have an aggregate limit of $200,000 for one year, which would mean that regardless of how many separate claims you make, once your policy pays out that amount for the year, it won’t pay more. Some policies have general aggregate limits, meaning the total amount your insurer will ever pay, regardless of how many claims.

Exclusion: These are “named provisions” that specifically identify items that aren’t covered, including losses occurring from specified actions or issues.

All-Risk Policy: This policy will pay for losses regardless of the reason the loss occurred with the exception of specific policy exclusions.

Named Perils Policy: The exact opposite of an “all-risk” policy, “named perils” specifically defines what causes of loss will be covered. Usually, these include vandalism, fire, or acts of nature. This policy provides coverage ONLY for events listed in the policy

Valued policy: Also referred to as an “agreed amount” policy, this states that an event resulting in a complete and total loss will be covered up to a specific, pre-determined amount as stated in the policy.

Endorsements: These are provisions added to a policy that provide extra coverage, alter a policy in some way to account for special coverage needs, or define exclusions or inclusions. Often referred to as “riders”, they can be thought of as amendments to policies.

Real Property: This refers to things such as the land or items permanently affixed or attached to it: sheds, detached garages, permanent fixtures like fences, and sometimes heavy machinery and equipment.

Personal Property: Personal property is different from real property in that personal property is easy to relocate. If you turned your building upside down, anything that falls out is considered personal property, such as furniture, computers, and office equipment.

Jan Vitale

Independent Insurance Agent

Proudly serving her clients and her industry for 30+ years

http://www.lifetimeinvestmentsllc.com/

JanVitale@lifetimeinvestmentsllc.com

Insurance: The Pitfalls of Buying Insurance Without an Agent

Thirty years of service in the insurance industry has taught me many things – the most important of which is an intense desire to be an “advocate” for my clients. Unfortunately, there are many policyholders who are “do-it-yourselfers” by nature and especially now, with the technology that supports research, allows them to do a certain amount of JANV ADVOCATEdue diligence. I am in a position, however, to know it is the little things that make the biggest difference in selecting the right policy; it is the little things unknown that ensure the right policy is selected. There are distinct disadvantages to buying insurance as a “do-it yourselfer” rather than through an agent, and the one thing you think you are saving – money – may actually be what you lose in myriad circumstances.

With that in mind, I want to share some of the pitfalls that can be associated with doing it by yourself:

  1. Lack of Expert Advice

Unless you are an industry expert, chances are you may not fully understand the complex and confusing language used to describe various programs and alternatives when purchasing a policy.

Working with an agent provides the expertise you need to explore several different types of riders and addendums and also ensures that you get the right protection at the most competitive price without experiencing any gaps or duplicates of coverage.

  1. Lack of a Local Advocate

Insurance is big business, but when it comes time to file a claim or ask individual questions, it’s important to have a personal advocate who is able to provide a single source of contact for all your needs.

Few things are more challenging than attempting to deal with a major loss or injury while having to hunt for the right names and numbers when dealing with insurance. Instead, one simple call to your reliable local agent is all that’s required.

  1. Privacy Problems

Shopping for insurance online sounds convenient, but the reality is that it’s often far less appealing. Teaser websites, privacy problems and a flood of telemarketing calls are just a few of the common pitfalls associated with online insurance quotes.

Trying to make changes or adding specialized riders to a policy can quickly create confusion, if not outright chaos.

On the other hand, when working with a local agent it’s easy to verify the reputation of the agent and office well in advance. Plus, customizing a quote couldn’t be simpler.

Just ask your agent about the desired coverage or policy changes. You won’t have to fill out endless forms and wait for return calls from total strangers.

Obviously, the list is much longer and the stories I can share unbelievable sad, but for today, let’s focus on the positive – you understanding how important having an Independent Insurance Agent as your personal advocate in all things insurance!

I’m a big advocate of the power of positive thinking, particularly for small businesses.

~ Kevin Plank

Jan Vitale
Independent Insurance Agent
Proudly serving her clients and her industry for 30+ years
http://www.lifetimeinvestmentsllc.com/
JanVitale@lifetimeinvestmentsllc.com

Insurance: 4 Essential Rules for a New Year Insurance Checkup

The “New Year” for insurance does not fall on January 1st every year; each policyholder will experience that event individually, depending on when their policy was first initiated. Before that time rolls around for you, I want you to be aware of the value of assessing your insurance needs and determine what modifications may best benefit you in the new year. This is one of those “walk the extra mile” things I do for my clients; offer a complimentary assessment of the policies they currently have in place and determine what changes may be beneficial.JANV the extra mile

I welcome you to take advantage of this privilege. Schedule a time to speak with me if any of the following apply.

Change in marital status: Everything from auto coverage to beneficiaries on life insurance may need to be updated to reflect a change in marital status. Other policies likely to be impacted include medical, homeowners and ancillary policies. Be sure to notify agents about any name changes as well.

Relocation: It’s easy to forget to change insurance information during the hustle and bustle of moving, but auto insurance and other policies are impacted (for better or worse) by zip codes. Make sure all contact information is up to date for all forms of insurance.

Children: Whether you have just welcomed a new addition to the family or sent the last one off to college, children make a big difference when it comes to insurance. Other commonly encountered situations that impact insurance include new drivers and teens traveling on their own.

Change in employment status: Retirement, starting a new business, unemployment and other lifestyle changes require extensive re-evaluation of insurance needs. Everything from auto mileage discounts to medical coverage is likely to be impacted by employment status.

Jan Vitale
Independent Insurance Agent
Proudly serving her clients and her industry for 30+ years
http://www.lifetimeinvestmentsllc.com/
JanVitale@lifetimeinvestmentsllc.com

 

The Top 10 Insurance Blunders – and How to Avoid Them

YOU are the insured; you have home insurance, auto insurance, or even specialty and commercial policies… but do you really know the protection you have, or are you at risk of experiencing a major insurance blunder? Insurance blunders are going to happen; that is life, but when it comes to buying insurance, what you don’t know can hurt you…and your family…for years to come.

Jan Vitale, Lifetime Investments, LLCI frequently tell my clients, “Without me – all you have is insurance!” I have a long history of being a passionate advocate for all their needs.  Today, learn how to identify the top ten insurance blunders and what to do to avoid them with these tips.

Buying insurance on price alone.

Although price is a major consideration, it’s even more important to have a reliable company and agent available should a claim arise. Take time to investigate the reputation and rating of the insurance company by visiting a third-party insurance rating company like A.M. Best, Fitch Ratings, Weiss or Standard & Poor’s. Make sure the company will be there when you need them, especially before buying long-term insurance policies like life insurance.

Tip: Investigate an insurance company’s complaint ratio by visiting the National Association of Insurance Commissioners website.

Failure to fully understand your policy.

Take time to evaluate your coverage and make sure you fully understand what is included in the policy. Exclusions, addendums, limitations, restrictions and other “fine print” can make a big difference in price and coverage. Don’t be afraid to ask questions…it’s a normal part of doing business.

Tip: Actually read the policy and don’t make assumptions. For example, many people reject rental car insurance without understanding the total out of pocket expenses and other limitations that leave them at risk with standard auto insurance or credit card-provided coverage.

Forgetting to update policies or make changes when needed.

Life events require major updates to your insurance coverage; everything from marriage to taking an extended vacation may have insurance implications. Take time to plan in advance and notify your agent of any life changing events (marriage, retirement, leaving for college, new job etc…)

Tip: Don’t forget to update your name, address and phone number if you have relocated or had a change of marital status, employment or other significant life event.

Making assumptions about your coverage.

Many people “think” they have coverage when they don’t. Common situations include taking a vehicle out of the USA (Mexico – Canada), and not knowing what coverage, if any, will extend to a foreign country or relocating (homeowners coverage may not cover belongings in transit) or other common exclusions.

Tip: Ask your agent! If you have never taken the time to sit with your agent and talk about your insurance needs, assets and desired levels of protection then make it a priority to do so. Insurance is one portion of a comprehensive financial planning strategy.

Paying late and missing deadlines.

If you are like some people who might have have a tendency to ignore all those reminders and updates sent from the insurance company; after all, they begin to look the same after a while. Big mistake! Take the time to open, review and act upon all insurance company/agent correspondence. One of the most commonly encountered blunders is also the easiest to prevent – late payments! Don’t allow your auto, homeowners or life insurance policy to be cancelled simply because you forgot the payment. Not only will it leave you vulnerable to potential claims but it can increase your premiums.

Tip: Sign up for automatic payment of your insurance policies to make sure they are always paid on time. Just be sure to verify the amount due each year in the event of an increase in premiums.

Skipping the important insurance products.

Most people focus on those types of insurance required by law or a mortgage company: auto insurance, homeowners insurance and perhaps employment provided health insurance. Unfortunately, that often leaves you vulnerable to some of the most frequently encountered problems including liability claims, disability and of course…loss of income.

Tip: Talk to your agent about affordable rates for these frequently used insurance types:

  1. Disability insurance.
  2. Life insurance.
  3. Long-term care insurance.
  4. Personal liability insurance.
  5. Supplemental health and drug coverage.

Failure to insure valuables separately.

Most homeowner policies have limits on jewelry, computers, electronic equipment and other valuables including business or hobby related items. Adding additional coverage for valuables is easy and inexpensive – just ask your agent about a rider to the existing policy.

Tip: Take inventory of your belongings. Photographs, identification numbers and/or receipts or appraisals will help determine the proper level of insurance and assist In submitting a claim should the need arise.

Duplicating insurance.

It’s particularly easy to duplicate coverage or have a gap in coverage especially if you tend to use different providers for auto, home, life, health and other coverage. One of the benefits of working with one agent is the ability to coordinate coverage, have one primary point of contact for all your insurance needs and eliminate duplicate or gap in coverage (which also will save money!).

Tip: When shopping for insurance, ask your agent for multiple policy discounts if you switch all your policies to one provider. Not only will you eliminate duplicate coverage but multiple policy discounts can reduce the total cost significantly.

Buying before obtaining quotes.

Most people buy a home, car, boat or other major purchase and then shop for insurance…big mistake! Avoid unpleasant surprises and costly premiums by obtaining insurance quotes prior to making a major purchase. Not only will you have a better idea of how to budget for the new purchase but it often makes you aware of prior damages or other issues that can be hard to spot. For example, major water-related claims on a home or extensive body work on a car could be a primary reason to negotiate a lower price.

Tip: Always obtain an insurance quote on the exact home, car, boat or other major item before making the purchase. It’s a good way to learn about hidden defects and avoid unpleasant surprises!

Naming, title and other troubles.

What’s in a name? A Lot! Another commonly encountered and easily overlooked insurance blunder is how a policy, beneficiary or title is recorded. Names matter especially when it comes to legal transactions. Areas most prone to problems include beneficiaries, ownership of real estate, cars, automobiles or other major investments as well as health or personal care coverage.

Tip: Always use legal names and verify that each policy includes the item and owner(s) or beneficiary including social security number or other proper identification.

Making MORE happen for my insurance clients…

Jan Vitale

Arizona Independent Insurance Agent
Proudly serving her clients and her industry for 30+ years
http://www.lifetimeinvestmentsllc.com/
JanVitale@lifetimeinvestmentsllc.com

This article and any information contained herein is intended for informational purposes only and should not be construed as legal advice. The publisher will not be responsible for errors or omissions or any damages, howsoever caused, that result from its use. Seek competent legal counsel for advice on any legal matter.

Insurance Customer Information Security

janv img inet security

As an Arizona Independent Insurance Agent, security is always at the top-of-mind concern in my professional responsibility for the safekeeping of client information. It is a high priority, and one of the underlying elements I review before I decide to represent any given insurance provider. It is the company who adds that layer of protection for a customer’s bank and personal information. The following criteria are included as part of my decision-making.

 

Improved Security

The company must provide a process whereby bank account information is entered in a secure data storage repository, and to ensure no client information is ever assessable, it is replaced with a unique identifier that allows no breach or identity loss.

I also look for a system where quote preparation is saved only as long as it takes for me to issue them, and is purged after a 24-hour period of time if the customer does not bind the policy.

Improved accuracy

I also look for a system that increases accuracy with an enhanced data entry validation process. When bank account information is set up correctly, a potential rejected payment issue is eliminated.

The policy reinstatement process and a better explanation of billing and discounts are also high on the list of my provider review and assessment.

If you have any ideas of what additional information I might look for during this assessment, I would like to hear them; I would like to be your voice to the insurance industry.

Jan Vitale

Independent Insurance Agent
Proudly serving her clients and her industry for 30+ years
http://www.lifetimeinvestmentsllc.com/
JanVitale@lifetimeinvestmentsllc.com