Six Secrets of Keeping Clean Insurance

The world of insurance has never been as exciting as the world of investment.  Almost every insurance agent knows this.  People call their investment house with excitement with angst, but rarely check in with their ‘risk manager’.   Funny, really that it works out this way.  In general your investments will incrementally make you richer.  Unless you get into some seriously risky investments, investments are unlikely to bankrupt you if you are using a licensed adviser.   However, with insurance, clients are constantly accepting risks that many do not understand.  These risks, some obvious, many not, can easily financially ruin you.   The obvious ones are Earthquake, Flood, and War.  The less obvious ones include Facebook, setting up a small business, and buying a rental property.  There are many secrets of insurance, these are just six special ones.


Secrets of Insurance:

Set Up Auto Pay

Autopay is probably the single most important simple thing to you can do to mitigate your risk in the insurance world.  It truly is a secret of insurance.  Why?   Many many many clients miss insurance payments and their insurance gets cancelled.   Here are Marindependent we try and intervene and catch these, but even when we do, it can still lapse.  So do you and your spouse a favor, set up online access to your insurer right now and set up Auto Pay with your credit card.  Some people mistakenly believe that this looks them into their home or auto insurer for another year.  With California insurance companies – this is not true.  The exception to this for personal lines would be the non admitted market such as lloyds and lexington.

Set up a Conference call with your Agent ever two years:

The days of the physical meeting with clients are slowly ending, but that should not prevent you from facetiming or skyping your agent.  Personally I suggest a simple conferance call with your agent. They should have a good list of simple questions to review with you.  An agent worth their salt will probably be able to boil it down to a few simple questions based on your age, famiily size, career, etc.    Simple benefits come to mind.  If you originally purchased home insurance when you were a a bachelor then got married, its pretty obvious that you need to merge your insurances with your spouses.  What may be less obvious is that when adding children to your family, you really should revisit more uninsured motorist coverage.  Do you have a new dog?  Did you inherit a property?   These simple things can dramatically change your insurance requirements.



Ask your Insurance Agent AND Insurance Company for any advice they may have:

Some people are just too proud to ask for advice.   Many are too proud to follow what advice they are given.   Please don’t be one of those people.   When is the last time you excitedly picked up a newspaper to read about insurance?  Chances are  you haven’t.   Insurance is really not all that difficult to understand, but it is not exciting.  Take some advice from either your broker that may be receiving a brokerage fee or commission.  Ask questions of your insurance company that is accepting your auto draft each month.   Ask questions like, what are the most popular endorsements?  How else can I insure this?  What are exclusions?

Reassess Your Net Worth:

Although this advice may sound obvious and not really insurance centrick.  It is easily the most passed over process.   Let me ask you a question, how can your insurance agent possibly advise you how to umbrella insurance to buy, if you do not know what you are worth?   Add up all of your accounts and property and subtract your debts.  That is the simple way to pull it off,  There are more complicated methods for sure.  None the less, recalculate this each year.  Change your umbrella amount yearly as well.   On the flip side, if your net worth is steadily depreciating, you may decide to take actions in that direction.


Ask What If?

Look at the things you own and ask yourself, “Self – Can I afford to replace this?”   If you can, consider it a self insured item.  If you cannot- consider covering it.   Of obvious note – are big ticket items like Boats and Houses.  Of another side note would be items that expensive watches and wine collections.   If you find yourself in the situation where you have lots of little items that add up, you may consider a blanket coverage for them.  Compile this list and methodically go through them with your Insurance Broker.  Better yet, email them the list and have them confirm coverage forms and types for each.

Involve your Wealth Manager:

Why you should involve your wealth manager in your risk management plan may seem odd at first.  I just suggested to you to Calculate your net worth, how is this different?  Actually it makes perfect sense.  Involving the right hand with the left really does make sense if you think about it.  Knowing your net worth can assist you in calculating the Umbrella Insurance that you need.   But sitting down with your wealth manager will really assist you in understanding your future obligations and future financial situation.  You may decide that certain assets could be gifted earlier rather than later and thus changing your insurance landscape.


What Secrets of Insurance you Didn’t See:

You will notice that I did not recommend Re shopping your Insurance Every Three years or Recalculating your Coverage A.  You saw no mentions of Ordinance and Law, Getting Term Life Insurance.  No comments about running your small business from the home office or adding various home insurance endorsements. Why?  Well, I don’t really consider those secrets.  Those are more the ‘Semi Obvious Ways to Keep your Insurance Clean.’   Thank you for reading Six Secrets of Insurance.

Contact Marindependent for an Insurance Review

Marindependent Insurance Services, About:

Marindependent is an independent broker agent based in Marin County California.  Governed by the California Department of Insurance, CA License 0K10734.  415-294-5454.  Marindependent is a only a licensed insurance broker or agent and we are not wealth managers, CPAs, nor any other type of financial professional.  We only mean to convey insurance and insurance related information.  Please read our disclosure.

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