June 26, 2015

Insurance in Marin County

I have written in the past about the extremes of writing homeowners insurance in and around wonderful Marin county.  Many of these factors also are true in Sonoma and San Francisco counties and really also in and around most of the San Francisco bay area.  That post mostly focused on the terrain in writing homeowners insurance, what I wold like to discuss now is other factors that make Marin and San Francisco Bay area unusual.

Other than the odd terrain in Marin county, there are other general insurance considerations that make writing home, auto, umbrella, term life, and small business insurance different.   Since the average income around here is much higher than the national average, I often find that my clients are either higher earners, high net worth clients, or potentially both and may consider reviewing price estimates/quotes from Affluent Insurance Carriers.  Therefore there are some specific considerations  and suggestions to contemplate.

Insurance in Marin County:

Flood:   Many people do not comprehend how much of a flood danger that Marin County is in.   Just because your lender did not force you to own flood insurance, does not mean that it should not be high on your list of considerations.   My personal opinion is that flood insurance should be high on your lists of needs, especially if you are mortgage free.

Earthquake:   Earthquake Insurance, unlike Flood Insurance is managed by a separate entity – the CEA or California Earthquake Authority, not a division of the federal government.  The danger to your home from an earthquake is high in and around the San Francisco Bay area.  Unfortunately many people consider earthquake insurance to be too expensive and out of reach.

Uninsured Motorist on your Auto Insurance:  With so many high earning individuals in this county, many people wrongly believe that since they have a good job and health insurance they do not need this coverage, or just a low amount.  With that sentiment you could not be more wrong.    Around 14% of the states residents have no Auto Insurance.    Another large slug of the population have extremely low liability limits (like $15K) that are unlikely to pay all of YOUR insurance bills in the event of their accident.   I could devote an entire 2000 word blog post on the need for higher Uninsured Motorist coverage in California.   A couple of thoughts on this one.  Assume that you and your wife and your kids are all in a bad accident, a really bad one.   You lose your job and your health insurance goes to COBRA.  Who is going to pay for all your round the clock nursing care, and increased daycare, and your lost wages?

“around 14% of the states residents have not auto insurance”

Higher deductibles for your auto and home insurance.   I’m amazed at how many people that I meet that still carry a $250 deductibles on their auto insurance when they are paying $2K per year in premium.  The math on this may work against you when you consider that insurance claims trigger higher insurance premiums.  In general I suggest $1K for auto and about .5% (maybe $5K on a $1MM home) on the home if people can afford it.  You will save from two directions when you do this: 1.  A lower premium from raising your deductible, which may in theory allow for 2. less insurance claims.

Umbrella Insurance:  Since most Auto Insurance carriers stop at $500K of bodily injury liability protection you will probably need an umbrella insurance policy if your net worth is worth more than say $500,000.  Umbrella insurance will also sit over your primary home, secondary home, and other personal liability policies that you have.  It may broaden the coverage, sometimes worldwide and it is typically really cheap insurance.   Clark Howard likes to call it a success tax on wealthy individuals, and I could not agree more.  There are so many reasons to consider a personal umbrella policy that I consider it a mission of mine to sell more of them.  Consider reading How Much Umbrella Insurance to get.

Home and Auto Liability Breadth:   Selecting wider options for liability coverage both from the insurance company AND when selecting insurance companies is very important.   This is one topic in which having a knowledgeable independent insurance broker or agent will help.  Not all insurance companies cover all of the exact same liability claims.  If you have a high net worth, it may make sense to buy insurance from a company who specializes in covering more broadly.

Home Rebuild Value:   Your home insurance contains something known as Coverage A.  Coverage A is really a limit to the amount of insurance to rebuild your primary structure in the event of loss.    There are a few other factors that you need to calculate into your total rebuild limit including (but not necessarily limited to) your Extended Rebuild Amount and Your Ordinance and Law.  This sum will tell you how much an insurance company will pay to rebuild your home from the ground up.  Beware, most insurance companies do not know what they are talking about when they suggest a Coverage A amount here.  Don’t believe me? ask any insurance broker or agent in Marin county and they will back up my story.   Insurance companies just do not understand why it is so expensive to build homes in Marin County, period.  Why does it cost so much more?   Have you ever seen an 18 wheeler that can drive up Summit Ave in Mill Valley?  Are you familiar with the environmental regulations to rebuild a home in San Rafael?   Any idea how much it costs to build an eight foot retaining wall in Novato?   Don’t forget to factor in Demand Surge.  Trust me when I tell you that its a lot more expensive here because of labor shortage, because of the environmental rules,  and due to the weird windy and steep roads we have, and many many other reasons.   In short, recheck your home rebuild value with a Local agent and compare it with what a contractor will tell you.

Term Life Insurance:  Marin County has one of the highest incomes per head in the United States.  With those high numbers, comes a logical higher need for term life insurance.   In the simplest sense, the more money you make, the more money you spend.  And the more money you spend means you may need higher term life insurance amounts.  There are simple ways of calculating these numbers and more complicated methods.   Also, many people consider term life insurance to cover the mortgage in the event of an early unforeseen incident.   With larger mortgages come the need for even more life insurance.

Disability Insurance:  Largely for the same reasons that you need more term life insurance you are likely to need either some or  more disability insurance.  Check with your employer first to see what is offered by your company if any and supplement from there.

Floaters:   Floaters or Coverage for High Value Items.   With higher net worth clients come more expensive extras.  Many insurance companies limit personal articles such as jewelry at limits of $2,500 and even $1,000.  Many engagement rings are easily surpassing this number, requiring a personal article floater.   Most insurers also exclude coverage for items worth more than a low sub limit for: guns, collections of almost any kinds, silverware, precious and semi-precious stones, money, art (fine or otherwise), etc.   I like to ask my clients, what do you have worth more than $1,000 and everything on this list needs to be reviewed.  Note, if you find yourself insuring things that are worth than maybe $75,000 you may want to consider getting them their own separate policy.

Coverage for your Home Based Insurance Business.   If you have a net worth of say $1MM, you need to be extremely careful that you do not risk it all with a start up and a subsequent lawsuit.   If you own a small business and it is home based, consider getting at least a liability policy to protect your personal net worth from some of the risks associated with running and owning a company.   See my post on Tiny Business Insurance.  Please note businesses are almost never covered by an unendorsed homeowners policy.

The Multi Insurer Peril:   Marin is such an unusual county that I find it sometimes hard to find one insurer to do all of the personal lines: Home, Autos, Umbrella, Second Home, and then of course the small business policy.  It is becoming more and more common to find many insurers involved in a clients entire insurance portfolio.  Personally I like to limit the amount of carriers to reduce coverage lapses, but none the less, you will need to proceed as best as you can in the times that we live in.

Insurance Company Consumer Quality:  From this I mean customer service response and ease of doing business.   The likes of Consumer Reports does a fair job of reviewing insurance companies.  Please steer clear of companies that have known poor track records.

Insurance Company Credit Rating: You can look at a credit rating from AM Best.   The credit rating becomes more of a consideration as the limits of your policy rise.  For example an auto policy of $250K is a medium risk to any given insurance company, however, a $10MM umbrella policy is a large risk for almost any insurer.  I advise my clients to carefully consider credit ratings of all companies much more than their marketing appeal.  A catchy jingle does not pay the bills.

Did you like what you read hear?  Consihttp://marindep.wpengine.com/marin-insurance-quote/der signing up for my blog update newsletter or better yet, contact me for a 360 degree insurance review.  Insurance in Marin County, Marindependent Insurance Services LLC.

Insurance in Marin County Notes:

Please note as with all information on the internet, merely reading articles is really no substitute for speaking with a licensed insurance agent.  And since each state has its own rules and regulations, speak with a broker that is licensed in your state.  Some of the information contained in this article may not be accurate for the country or state that you live in.  Please read my disclosure.

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Marindependent Insurance Services LLC – Belvedere, Corte Madera, Kentfield, Larkspur, Mill Valley,  Novato, Ross, San Anselmo, San Rafael, Sausalito, Tiburon, West Marin – CA Lic: 0K10734

Scott W Johnson, Insurance Broker Agent Marin County USA – CA Lic 0H11625 – 415-294-5454