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This week on The Money Puzzle Podcast we are with special guest Heather McCormick, Owner of McCormick Advantage Insurance Agency, LLC. One thing that can destroy a plan faster than anything else is not having the correct insurance. When disaster happens, you are left to pick up the pieces. You could end up on the hook for hundreds of thousands for medical bills, damages, and more. Having the right insurance and the right amount is crucial to keep you protected.

 

Speaker 1 [00:00:01] All right. Welcome back to the Money Puzzle. I’m Chris Vaughan and here with Eric Douglas, my partner. Once again, we’ve got a special guest today. This is Heather McCormick from McCormick Advantage Insurance Company. Heather has been a good friend of our firm for a long, long time. There’s a lot of clients that have gone back and forth between all of us to the point that Heather actually keeps her office right here in our office. Which is why we wanted to bring her on today. We had a really interesting conversation popped up the other day. Just one of those organic things that popped up and Heather started pointing out what you call it. I believe it was a tsunami, right?

Speaker 2 [00:00:40] A little bit.

Speaker 1 [00:00:40] She said the tsunami is coming. And Eric and I were like, what do you mean the tsunami is coming? So, you know, kind of to tee this up a little bit when we’re putting together financial plans. One of the biggest holes that can happen, one of the things that can destroy a plan faster than anything else is not having the correct insurance and then, you know, having a car accident or something like that, maybe not even your own fault. It could be the other driver’s fault, but you end up on the hook for hundreds of thousands in some cases of medical bills, damages, things like that, because you don’t have the right insurance. So that’s kind of what got that conversation started. So when we say there’s this or when you say I’m sorry when there’s a tsunami coming. Right. And you were talking more about homeowners, right?

Speaker 2 [00:01:25] Well, the industry as a whole.

Speaker 1 [00:01:26] Okay. So what do you mean by tsunami?

Speaker 2 [00:01:29] Well, the tsunami is you know, you don’t see it coming. It doesn’t look it’s way far off. And then all of a sudden it’s so big you can’t get away from it. Yeah, I kind of feel like, you know, in the years of experience that I’ve had in insurance, when I first came in to insurance, we were just learning about Hurricane Andrew. Yeah. And the, you know, early nineties lady. I can’t remember exactly when that happened.

Speaker 1 [00:01:55] 92.

Speaker 2 [00:01:56] Early 92. Yeah. There were a lot of companies that just folded. They couldn’t keep up with the cost to help people be made whole again. And what we learned from that scenario caused insurance policies to completely be rewritten. We’re starting to see some things that can indicate that might happen again. And right now, even a restoration company shared with me they’ve got policies that it’s just a partial loss. And I just had a kitchen fire and they’ve already exhausted the entire policy. That’s not good if that’s happening in the industry right now.

Speaker 1 [00:02:36] Okay. So that explains it. I’m sorry. Go ahead.

Speaker 3 [00:02:39] Well, I think that was going to go the exact place where were going to go, because one of the things that sparked the conversation that we were having the other day was, you know, what’s the biggest topic in the financial services industry right now? I say financial services. And what’s the biggest topic in the world right now is inflation. Yeah, the cost of literally everything is going up. We just had an inflation report that came out, what, a day ago? Yesterday. Two days ago. Two days ago, yeah. 9.1%. Inflation year over year. The highest inflation we’ve seen since, you know, the seventies. Yeah, it’s bad. And that was kind of what triggered this tsunami. Talk about proper insurance coverage because we think so much about inflation as it relates to food, gas prices, the things we think about every day. We don’t think about inflation as it pertains to replacement of a house. If it burns down no to or.

Speaker 1 [00:03:29] Replacement of part of the house because you have a partial fire.

Speaker 3 [00:03:33] Or anything like that. And so if we’re talking about, you know, one of the things that led to this was, you know, you talk about you purchase a home ten years ago and you get coverage on the home based on the value of the home. Ten years ago when you bought it, that home’s not worth what it was ten years ago. Even more so than that, the cost of replacing that home, if something were to happen to it or any other part of that home is going to be astronomically higher than what your coverage is currently going to take care of.

Speaker 2 [00:04:00] Even before COVID, the inflation that’s built into insurance policies is only like three 4% to keep that cost of replacement up. And you have 25% on your policy, on a standard policy that has replacement cost in the event there is inflation due to a catastrophe. The problem is COVID brought a whole countrywide catastrophe, and now anything that happens over that is kind of a double catastrophe happening all simultaneously. Then you add in inflation and the cost of materials being much higher. You had add in people typically file claims more frequently when the economy is where we’re at. Right. So carriers are going to have to you know, they’re going to have to do something.

Speaker 1 [00:04:49] Okay. So let me pause you for a second. I want to go into that 25% rule, because for those of you who are listening or watching that don’t know this, I learned stuff from Heather almost on a daily basis. When she’s not in the office at work and stuff, I get mad at her because I’m not learning. And one of the things I think Eric probably learned this, too, the other day, you were talking about that 25% rule. Mm hmm. And I’ve heard you have this conversation with clients of mine, just like one of them was last night. Mm hmm. People think that they have total replacement coverage. So you say to yourself, I don’t. I don’t need better insurance. I have total replacement. But as it turns out, that’s not always true. And that’s where that 25% rule. So explain what that means, how that that is structured.

Speaker 2 [00:05:36] That it very good question because there’s two parts to replacement there.

Speaker 1 [00:05:42] And we’re talking homeowners now. We’re not this is not an auto issue. Right.

Speaker 2 [00:05:46] This Marcano issue. It’s definitely homeowners issue. They call it extended replacement cost, which means we’re not going to depreciate the amount we pay you because your home is older. We’re going to pay you what the new cost is, but you’re still limited. So there’s two parts to it. Yes, you have replacement costs. It means they’re not going to appreciate that. But at the end of the day, it’s per easy math. If your house is insured for 100,000, they’re only going to pay 125,000. And that’s it. They’re done. If they if you go over that, you’re going to have to find the cash, liquidate some assets, go to the bank, whatever you need to do in order to offset the difference. So that’s why this is so critical where we are right now. Because as to your point, a lot of people did get great deals on houses ten years ago, even seven years ago. And so a lot of people were slightly underinsured to start with. And then, you know, the industry cannot keep up with that pace. So consumers are going to have to take charge of asking the questions because agents aren’t typically going to just call their customers and tell them all we need to increase your policy.

Speaker 1 [00:07:04] A Yeah, that’s not a very fun conversation to have.

Speaker 2 [00:07:08] And if the customer, though, initiates the conversation, it’s a much easier, easier conversation for an agent to have with the client.

Speaker 3 [00:07:15] Well, something else you said struck me as well, where you were talking about in our current environment with inflation and the cost of goods and services being so astronomically high, more people are spending money on their everyday purchases. So when an event happens that they have to pay for something, normally there’s always this battle, especially I’m not even talking about a full home replacement. I’m just talking about, you know, you’re in your car and you ding someone, right? You know, you have a fender bender. You need to replace the bumper. Well, now you’re probably weighing the opportunity. Costs are the you know, the benefits of filing an insurance claim and getting that paid for versus paying for it out of pocket. When money’s a little bit stingier, they’re going to pay more. More. So instead of paying out of pocket themselves, they’re going to file claims. So then you’re basically creating a run on the insurance companies. And this is what happened for those, you know, for a lot of the insurance companies, for anyone that wasn’t around in this industry in. 0809. Right. What happened in the industry specifically, the life insurance and annuity industry was you had all of these annuity contracts that were extremely rich in benefits. And then when the market tanked, you had these guarantees. There are paying these guarantees out on a much higher rate. Well, when the market tanked, everyone said, oh, you know what, I’m going to turn on my benefits at this level when the value is down here. And so that caused a lot of insurance companies to have to reprice the premiums and the benefits that they’re putting on all of these annuity contracts. So to your point, that’s you’re you’re seeing the same thing starting to happen now in the home and auto industry.

Speaker 2 [00:08:48] Well, and here’s the thing. The reality is that actually is going to be a double. But that’s that’s part of the tsunami, too, because what is happening is industry cannot keep up with the inflation. The only way in the in the markets, in bonds are where they actually make money, which we all know where that’s at. Right. So the only thing they can do is take a rate increase or change underwriting. That’s the only way that they can adjust their manage their, you know, profitability. And how do they do that? Well, if they take a rate increase, they can only take up to 25%. It has to be qualified by the state and then it has to hit the consumer and then they have to collect the premium. You’re at least a minimal three year tail. Okay, easy. Right. In the in the meantime, what has to happen is they’re going to start not renewing clients with claims that they can get off an account that they don’t want to continue to pay on. And then the new customers coming in, they may just decide, you know, we’re not taking any new customers or we are, but you can’t have any claims. So you’re coming out of this. Market that people are going to be more susceptible following them. And then you turn around and you get canceled and then you can’t find insurance. So from the consumer’s perspective, that can be really dangerous place.

Speaker 3 [00:10:13] Well, you just made a comment as well. And I want to revisit it a little bit because at the beginning of your comment, you said what insurance companies do with the premiums that they receive from consumers, what insurance companies do. And I was you know, I’m a survivor, a survivor of being an employee at a large insurance company. So you talk about it all the time here and generally, but have the scars to prove it. But what insurance companies do when you pay an insurance company a premium, they what they do to try to make money on that premium is they invest typically in very low risk bonds or fixed income types of instruments. Right. We just did a podcast about this that aired last week talking about the biggest problem in the markets right now. Obviously, the markets have not been great. And the equity side and everyone talks about stocks, that gets all the attention. That’s been brutal. What’s been more brutal has been the fixed income.

Speaker 1 [00:11:05] We’ve got no place to go with the stock.

Speaker 3 [00:11:06] Because when you’re trying to find a safe haven for what the equity market is doing over here, typically your bonds and your fixed income, that’s your safe haven. It’s going to zig when the equity markets are zagging. That’s not happening. In a lot of cases. They’re down just as much or if not just as much, quite a bit. So you’re seeing fixed income instruments down ten, 15% year to date. So insurance companies once again aren’t making that kind of profit, aren’t making the kind of returns on their safe reserves that they’re having to hold. So going back to your point, how do they recoup that? They have to underwrite a lot of the factory underwriting.

Speaker 2 [00:11:43] That’s the quickest way. The quickest way is underwriting. Right. So that’s going to happen faster than the rate increases. The rate increases. They already have projections, right. They have enough people that are brilliant and spend way too much time and in tables and numbers that I don’t care to ever be in. Oh, yeah. But they also or.

Speaker 3 [00:12:02] Insurance companies are great at mitigating risk. They don’t get to the point that they do not take risk. They know exactly the amount of risk that they’re taking with every dollar that they allocate. You’re right in an insurance contract. But to me, what I found so fascinating, what happened in our conversation today that prompted this this episode, everything is full circle. You know, we always talk about the economy and it’s always fascinating to me. This was an angle I had not even considered. I didn’t even think about how this was going to affect property and casualty because we kind of live in our own world and we do, especially this year. It’s been you know, we’re so focused on on the investment side that we know obviously you’re focused on the restaurant side and we’re not as focused on that. And it’s always so interesting also when when clients walk in the door that work for all these different industries. Right. And this is just been something I’ve kind of enjoyed over the last couple of years. How how the economy as a whole is affecting your industry. How did COVID affect your industry? How does the supply chain issues affecting your industry? Because, you know, we’re so focused on this that we lose sight of what’s happening out in the quote unquote, real world. Right. And and this is how, you know, the it’s just funny how everything is just sequential, right? Everything is a domino. You start with one little domino and it bleeds into a bigger one and a bigger one and a bigger one. And now you’re seeing this economic collapse that’s hitting the insurance are going to be hitting the insurance industry.

Speaker 2 [00:13:24] Hitting in Florida. Yeah, I mean, that’s happening in Florida right now. The agents can’t get coverage placed. I mean, it’s it’s an issue already. And to to your point of how the trickle effect goes, it’s not just homeowners. Businesses are going to be affected as well. Your commercial insurance gets hit before usually personal loans. So it’s just it’s going to hit both sides of it. So even your business owners are going to they’re already struggling with COVID. They’re already struggling with retention, retaining employees, hiring other things. It’s just one more thorn that they’re going to have to deal with.

Speaker 3 [00:14:01] If you’re in an environment where you’re trying to figure out how to pay employees more to keep up with inflation, to keep them happy at the same time, on the other end, you’re getting hit with higher insurance premiums. It’s a it’s is this is why the economy and just the finance industry fascinates me so much, because everything is correlated, you know, everything. It’s a big circle when you think about how what happens over here eventually is going to affect something over here.

Speaker 2 [00:14:26] Yeah, absolutely.

Speaker 1 [00:14:28] So we’ve been kind of doom and gloom for a while now. We’ve I mean, this is not been a pleasant conversation if you’re listening to this.

Speaker 3 [00:14:37] You know, this is the sunshine around.

Speaker 1 [00:14:39] Yeah, this is not sunshine and roses. So the question that I would have then is, okay, you know, this is common. You were talking about that three year tail. Well, that’s the tsunami that’s off on the horizon. And we can say, oh, well, when this happens, then things are going to change. And when the economy recovers this and after the election, we can say that all we want. Three years is beyond all those things. Right? And that’s when we’re going to see that tsunami. So we know that’s coming. Mm hmm. What can we do?

Speaker 2 [00:15:08] Well, you know, the buzz and insurance, a lot of agents and you might have heard a lot about this from your war rooms, but, you know, agents used to really be down on 800 numbers and, you know, online purchasing. And all of a sudden that’s going to be even harder to do. The value of having an experienced agent is going to be more and more critical someone that can advise not just price. And really, that’s becoming less and less available, more and more training and mentorship in the industry. Plus, we’re losing a, you know, a workforce of of agents because our market people don’t. Very few people wake up in their youth and say, I want to be in insurance.

Speaker 1 [00:16:01] That’s my dream job and be an insurance agent.

Speaker 2 [00:16:03] You know, I fell into it and I just I’m I’m for the underdog. I’m always there as an advocate for the client. I’m a little bit of a weird bird because I don’t really care about how much I make. It’s more about what’s right for the right reasons.

Speaker 1 [00:16:20] Which is the reason you fit in real well with us.

Speaker 2 [00:16:24] But that’s going to be the only thing that they’re going to have to find somebody they can trust and be transparent with, and someone that has enough knowledge and expertize to really help them navigate through. The next, I would say, is well more than three years.

Speaker 3 [00:16:41] I’m just thinking about you as a contestant on The Bachelor. You’re there for the right reasons.

Speaker 1 [00:16:48] So let’s throw out some actual cases that we’ve had these discussions. These are mutual clients that we’ve worked with to kind of tell people the difference between dealing with an 800 number. Yeah. And dealing with an actual personal agent, which, you know, we are obviously big advocates of. And if I wasn’t already, you’ve definitely sold me on that over the last, what, six years or so that we’ve been working together. Eric and I actually have a client that we’ve been working with that we looked at it and we saw some potential insurance problems and Heather reviewed it for us and there was a zero claim. Well, I don’t remember the name, but it was okay. The insurance company was dealing with is a very reputable company. This is not a bad company. It’s actually a very good one.

Speaker 3 [00:17:34] Everyone would know the name if you.

Speaker 1 [00:17:35] Would know the name if we said it. We’re not going to do that. But you don’t have an agent that you can walk into their office and say, Heather, I got a question. You call an 800 number, which means you get somebody different every time you call. So you know which one I’m talking about. Yes. Right. All right. So explain that whole zero claim thing and then what happened in this situation.

Speaker 2 [00:17:55] Right. So underwriting when first of all, technically, you’re supposed to file you’re supposed to report every claim to the carrier. Right now, agents can help you mitigate meaning. Is this something that’s financially beneficial for me to file? Is it something I have to file? If there’s injuries involved, it’s no question you have to file.

Speaker 1 [00:18:17] Sure.

Speaker 2 [00:18:17] Right. But and property scenarios on homes, you know what part of it’s maintenance, what part of it is actually a claim? If you have an 800 number, the person that you talk to can not answer your question without filing the claim. Right. So therefore, you get to the next person. They say it’s not covered and nothing’s paid out, but there is a claim filed that zero pay claim. This is going to be another part that’s critical in this future because that is a claim it is underwriting. It is on their they they spent dollars of staff to actually supply your answer to your question. So even though they didn’t pay out anything to you, so it’s still a claim. However, when you go to underwrite, it can negatively impact whenever you’re trying to price shop.

Speaker 1 [00:19:08] And that’s what happened in this case. Right. The client had it was a little fender bender. There were no injuries. It was a minor damage. Right. Something that you might just take it to a body shop and pay cash and get it fixed. But because he called the insurance company and asked, they had to file it. They had to. And when they did that, even though no moneys were paid out, when you actually looked at trying to improve his rates, there was a claim on there as if he had had a car accident.

Speaker 2 [00:19:37] Correct. So two things to that. It probably didn’t impact his existing policy because they they’re going to affect his rate for a zero pay claim on a current policy. But what it did do is lock out the opportunity to find savings with other companies. Right. So another example that happened through Hurricane Ike and the power outages all in. Well, I won’t say the company, but a good company just wrote out checks to customers for spoilage. Customers were super happy they got.

Speaker 1 [00:20:11] When you say spoilage, you mean like food spoilage.

Speaker 2 [00:20:13] Spoilage because of all that. Customers were really happy. They got $500 or 250 and just depending. Everybody was happy, right. Until their policy renewal came in, their increase. And then guess what? They’re locked out from being able to find a better rate because they had a claim on their home. So, again, it’s it’s you have you’re going to have to start as a consumer paying attention to what you really what the what the cost is really going to be. Right. And you’re going to need somebody that can talk to you if you all you have is an 800 number. You’re not going to you’re not going to get that back or you’re.

Speaker 3 [00:20:46] Not going to get advice by calling that 800 number. I talk about this a lot when clients are mulling whether or not they should be filing for Social Security. Right. If you call the Social Security office, they’re going to answer your questions about, you know, you’re they’re very technical questions. If I file here for a file there. But they’re not going to give you advice on what you should do. Right.

Speaker 1 [00:21:04] They can they’re going to tell you what you can do, but they’re not licensed to tell you what you should do.

Speaker 2 [00:21:08] Same thing applies to anything on the 800 number. A lot of those people are not licensed. They have to refer you out.

Speaker 3 [00:21:15] And I can’t I can’t help but make the analogy here that you just made. The analogy you talk about, you know, the law of unintended consequences. All of those people that were happy to get the small checks in the mail. And then when it came time, you know, later on down the line, it ended up costing them money in there.

Speaker 1 [00:21:30] Probably more money than what they received, at least over a period of time.

Speaker 3 [00:21:33] I just keep thinking back to these stimulus checks.

Speaker 1 [00:21:35] That same thing.

Speaker 3 [00:21:36] Everybody got a couple seconds.

Speaker 1 [00:21:37] The same thing. Yeah.

Speaker 3 [00:21:38] And now the unintended consequences. We’re have record high inflation. It’s just everything’s everything’s a circle. Everything comes full circle. So, yeah.

Speaker 1 [00:21:48] So let’s do a couple of other things. And this is, you know, just some things that are happening in the insurance business, if I remember correctly, what actually prompted this conversation the other day was this story, and I believe it was out of Florida, where a certain company is going to have to pay out $5 million.

Speaker 2 [00:22:08] State it was.

Speaker 1 [00:22:09] Yeah, okay. It might not have been Florida. Why don’t you tell that story and it’s okay. Let me let me forecast the story. It’s sad that this happened.

Speaker 2 [00:22:19] Yes.

Speaker 1 [00:22:20] But the situation itself, we did. We laughed. Yeah, I will admit that we laughed. It’s one of those that you’re. You’re making this up, Heather. That’s that can’t be true.

Speaker 2 [00:22:29] I really wish I was. Yeah.

Speaker 1 [00:22:31] So. But the point that the point of the story was that it does kind of forecast some things, so why don’t you go ahead and tell that story?

Speaker 2 [00:22:39] So there’s a there’s a carrier that has to pay 5 million. Well, it’s still in it’s still being pushed back, still litigating, still litigating. The it’s been up a couple of levels. I think there’s only one more level to go either way. They’ve the carrier’s been told they have to pay the claim and.

Speaker 1 [00:22:59] But it’s the claim that is outside of anybody’s thought process.

Speaker 2 [00:23:03] Well, from an attorney’s point of view, it’s very creative.

Speaker 1 [00:23:05] Yeah, I’ll give them that. It is creative.

Speaker 2 [00:23:08] And from the client, I guess from the person that it was injured, you know, it might it should be justified if that was the case. But the thing is that apparently they had consensual sex in a vehicle and a transmitted sexual disease from one adult to the other. And that actually is personal injury in a.

Speaker 1 [00:23:33] Because it happened in a car.

Speaker 2 [00:23:35] Because it had.

Speaker 1 [00:23:35] An injury like a car.

Speaker 3 [00:23:36] Accident. I missed this conversation. So I’m new to this. Yeah.

Speaker 1 [00:23:39] Oh, you didn’t hear this. I must.

Speaker 3 [00:23:40] Have came.

Speaker 1 [00:23:41] This way. Oh, wow.

Speaker 3 [00:23:42] So I’m very intrigued, though.

Speaker 2 [00:23:44] Yeah. So it’s a personal injury in a car? Yeah. The person was worse enough that they had a $5 million limit. They’re going to. They’re now the carrier is going to have to pay it. Yeah. That is not your typical car insurance loss.

Speaker 1 [00:24:00] No.

Speaker 2 [00:24:01] Right. I mean.

Speaker 1 [00:24:02] Oh, my.

Speaker 2 [00:24:03] God. It’s just not.

Speaker 3 [00:24:04] And I usually don’t find that in the fine print.

Speaker 2 [00:24:07] Yeah, well, it’s not in the fine print. That’s the creative, you know, attorney coming in saying, hey, you got injured in a vehicle, right? And that’s your personal injury now.

Speaker 3 [00:24:18] Awesome.

Speaker 2 [00:24:18] But two sides to that. You know, when we were talking about it, like you said, there’s there’s two sides to it. One, if if judges and litigators can require carriers to do it, if he didn’t have adequate coverage to cover his assets, then he could have lost his assets because he would have judged for you know, they would a judgment would have been because that’s the way the limits work on your policy. If the judge is more than your limits and you have assets worth more than your limits, then they’re going to make you liquidate your assets. So if you have assets to protect and you’re not fully covered, things are just going to get more and more. Difficult for you in the litigation world because they’re going to find ways and carriers have to pay it. They’re going to make individuals pay it.

Speaker 3 [00:25:10] They’re just going to add more and more fine print every time one of these things happened. Exactly. It’s a great headline when it happens. But the end result is going to be more and more barriers around, you know, any claims that a consumer might want to file.

Speaker 2 [00:25:25] Right. But it also to the point, you know, when we talk to your clients, you know, the whole thing is about protecting your assets because you don’t understand where these things can come from. You know, insurance guys can be called the bad guy all day long, but they’re there to protect you and all your hard work that you’ve put into you to what you’ve built in your wealth. Right. So the more you have, the more reason you need to really pay attention to your policy and have a an agent that can help you with it.

Speaker 1 [00:25:57] So kind of wrapping things up so that you don’t have to toot your own horn. I’m going to. Right. And this is okay. Obviously, I love Heather to death. I mean, she takes such great care of both myself and my clients. I love her. But you need to be working with independent agents and not an 800 number. And let me give you a couple of examples that have happened just in the last week of why I had a client come in that owns multiple rental properties. That’s that’s going to be their income stream when they go into retirement. Mm hmm. And it’s actually a good one. They’ve got a great plan. We’re we’re pretty rock solid on that. And then we looked at the insurance coverage, which, when it was originally set up, was set up correctly. Yeah, but going back to that inflation thing, yeah, he hasn’t reviewed it.

Speaker 3 [00:26:49] These are properties he bought in oh eight.

Speaker 1 [00:26:51] Yes. Yeah. Most of them are ten. 12 years.

Speaker 3 [00:26:53] Old. Was kind of mid 2000. Yeah.

Speaker 1 [00:26:55] So he because he wasn’t upping that insurance and keeping it up and what the replacement cost that he had was not total replacement cost. So there’s some definitions are important. His insurance to get him properly covered went from about $7,000 a year to almost 13. Mm hmm. Right. So that’s a big ouch moment. But now he knows that the coverage is actually there. Now we know that if we do have a catastrophic loss of one of his income sources, because that’s what these are to him, he has the coverage and his life is not going to completely change in a negative way. So that was one. And that was where an independent agent can actually review that correctly. And the second one we had was last night. That’s one of most fun conversations you’ll ever have. Client came in once again. We’re building a great portfolio and we’re setting it all up. And then I go and I look at the insurance and go.

Speaker 3 [00:27:54] Oh.

Speaker 1 [00:27:55] They live in the second worst county in Kentucky for uninsured, underinsured motorist and he works in the worst county came. He’s probably about as bad a situation as you can get for likelihood of being in an accident. That’s not his fault and there’s no insurance there to pick it up. And his insurance did not cover what he needed. Mm hmm. Right. Didn’t have an umbrella, which isn’t absolute, in my opinion. There’s nobody that should not have an umbrella. If you don’t know what your.

Speaker 2 [00:28:26] Property and.

Speaker 1 [00:28:26] Call Heather, she’ll explain it. We went through all of that. Heather dramatically increased their coverage across the board, both homeowners, they went from one of those replacement and 25% scenarios to a total guaranteed replacement because you’ve got set up with the correct company for them.

Speaker 2 [00:28:46] Right.

Speaker 1 [00:28:46] For them. They were moving from a good one. Yeah. Their auto coverage went up to more than double what they have in some cases. Put an umbrella on top of that. And the look on her face when you were explaining this was, oh, my good, they’re going to how much is this going to cost me? And then Heather got to the premium and it was over $1,000 less per year because an independent agent, Heather, in this case shopped it correctly and knew what to look for and the right kind of coverage. So I’m going to sing your praises and that of independent agents everywhere. Please talk to somebody who knows what they’re doing. Don’t just call an 800 number trying to save a couple of bucks a premium. You could really harm yourself and you might end up paying more anyway.

Speaker 3 [00:29:32] Well, that’s a that’s also a very specific, you know, case. Mm hmm. I’ve had numerous cases over the last couple of years where, you know, the fees that we charge from a financial planning standpoint are basically covered by the savings being.

Speaker 1 [00:29:45] Absolutely have had that happen.

Speaker 3 [00:29:47] So it’s it is a it is astounding to me. You talked about umbrella policies. How many people do not have umbrella, but most of or how many people are already underinsured? You know, couple that with this tsunami that is coming.

Speaker 2 [00:30:03] Hmm.

Speaker 3 [00:30:03] It’s definitely something I think is really in everyone’s best interest to look at. Just taking, you know, just taking a few minutes really to look at doing a re review of your homeowners and your auto insurance and.

Speaker 2 [00:30:14] Not just to find a price. That’s unfortunate, but we’ve put ourselves as an industry in this whole where price is everything, name your own price, you know, 15 minutes or less. All of these Logans, they’re all well and good, except for it’s not helping anyone. It really.

Speaker 3 [00:30:30] Isn’t. The reality is the biggest threat to most financial plans that we put together is a lack of insurance coverage. If something bad happens. And that’s what insurance is for, is in case something happens, you know. So you need to be able to account for, you know, those bad things that could potentially happen. Right? Because you want to mitigate the risk of those things, basically derailing your entire.

Speaker 2 [00:30:53] And more is not always more.

Speaker 1 [00:30:55] That’s right. That’s right into Eric’s point. It’s amazing to me the number of clients that we’ve worked with that the the fees that they end up paying us are completely eliminated in some cases by the savings that they get in other areas. We’ve actually better insurance. Mm hmm. And it just it props that up so that that plan’s not going to fail because of something bad happening. And by the way, folks, bad stuff happens to good people all the time. I’m driving down her spawn line last night on my way home, about 15 cars with blue lights blocking the oncoming traffic. I don’t know what was going on. That kind of stuff happens, so make sure that you’re protected correctly. Mm hmm. All right. Anything else we want to wrap up? I think it’s been an interesting conversation, and I and I would say this would be my conclusion. We we went into a lot of doom and gloom and we talked about tsunami under coverage. But you know what? All you’ve got to do is just get somebody to help you that gets you in the correct coverage and you’re taken care of.

Speaker 2 [00:31:52] That’s right. Just find somebody you know and trust.

Speaker 1 [00:31:57] All right. I think that’s all we’ve got for today. Thank you for joining in. I’m going to let Eriksson is off and make sure you subscribe and all this stuff because I can’t remember.

Speaker 3 [00:32:05] Well, yeah. What Krista said. Make sure you subscribe and stuff. Thanks for watching the money puzzle or listening in on whatever device or podcast platform that you are currently enjoying our content on. Please feel free to share any of our content that you feel might be relevant to any friends or family that might benefit from anything that we have to say. We greatly appreciate it. And until next time. The information given herein is taken from sources that IFP Advisors, LLC, doing businesses, independent financial partners, IFP, IFP Securities, doing business. This IFP and its advisors believe to be reliable, but it is not guaranteed by us as to accuracy or completeness. This is for informational purposes only and in no event should be construed as an offer to sell or solicitation of an offer to buy any securities or products. Please consult your tax and or legal advisor before implementing any tax and or legal related strategies mentioned in this publication, as IFP does not provide tax and or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. This report may not be reproduced, distributed or published by any person for any purpose without AFP’s express prior written consent. Securities offered through IFP Securities, LLC doing business as independent financial partners, IFP Member of FINRA and SIPC. Investment advice offered through IFP advisors doing business as IFP a registered and investment advisor, IFP and Family Wealth Planning Partners are not affiliated. The information given herein is taken from sources that IFP Advisors LLC. Doing business as IFP, IFP Securities LLC, doing business as IFP and its advisors believe to be reliable. But it is not guaranteed by us as to accuracy or completeness. This is for informational purposes only and in no event should be construed as an offer to sell or solicitation of an offer to buy any securities or products. Please consult your tax agent or legal advisor before implementing any tax and or legal related strategies mentioned in this publication, as IFP does not provide tax and or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors.